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Which of the following is true of the Commerce Clause in present times?
A. It has become a federal power with an extensive regulatory reach.
B. It no longer blocks state regulations that hinder interstate commerce.
C. It has been preempted by the federal taxing and spending powers.
D. It allows Congress to regulate interstate commerce but not intrastate activities
affecting it.
The damages recoverable in a patent infringement case cannot be less than:
A. court costs and interests.
B. reasonable royalty for the invention by the creator.
C. reasonable royalty for the use of the invention by the infringer.
D. three times the damages actually suffered, and to be decided by the court.
Which of the following is a transfer of the right to possess and use goods belonging to
another?
A. Bailment
B. Lease
C. Deed
D. Easement
Which of the following ethical theories is a deontological theory?
A. Utilitarian theory
B. Teleological theory
C. Rights theory
D. Profit maximization theory
The Uniform Securities Act permits an issuer to register by coordination, which means
the issuer:
A. can file the 1933 Act registration statement with the state securities administrator.
B. becomes exempt from registration under state securities registration law.
C. needs to file under the state securities registration law only and not the 1933 Act.
D. need not register the securities statement once he/she has registered under the 1933
Act.
As per RUPA, if a nonwrongfully dissociated partner demands payment from the
partnership, he should be paid:
A. within 90 days from the date of demand.
B. within 120 days from the date of demand.
C. within no such specified period.
D. within such time as per the terms and conditions of the partnership.
Which of the following constrains the employee from divulging or using certain
information gained during his employment?
A. nonsolicitation agreement
B. nondisclosure agreement
C. noncompetition clause
D. deed of trust
Which of the following is true about the effect of partnership agreement?
A. The dissociations listed in the RUPA are merely default rules.
B. The partners cannot change the definition of wrongful dissociations.
C. Partners cannot require dissociation if a partner transfers his transferable partnership
interest.
D. The effects of nonwrongful dissociation cannot be changed.
The owner of a theatre negligently failed to install the requisite number of emergency
exits.
During the show of Shakespeare's Macbeth, one of the intoxicated viewers got carried
away and burned himself. The entire hall was ablaze. There was only one emergency
exit. Thus many people were killed in the stampede. Will the theatre owner be liable for
negligence?
A. No, because the intervening cause of an intoxicated viewer burning himself absolves
the theatre owner's liability.
B. No, because the viewer's reaction was completely unforeseeable by any reasonable
man of ordinary prudence.
C. Yes, because the harm was foreseeable and the owner cannot escape his liability.
D. Yes, because though the harm was unforeseeable, the owner still cannot escape his
breach of duty.
In order to safeguard the debtor from reaffirmation agreements the Court:
A. allows the debtor to rescind the reaffirmation agreement within a period of 60 days.
B. is empowered to declare all reaffirmation agreements as void.
C. may order the creditor to demand only 50 percent of the original debt amount.
D. may allow a reaffirmation agreement only if the debtor is represented by an attorney.
In case of honoring checks, a bank:
A. is liable to the customer for damages the customer suffers, if a bank fails to honor a
check because of a mistake on its part.
B. has a liability to the holder of the check, whether the check is certified or notified.
C. is not under a duty to honor all checks drawn by its customers in presence of
sufficient funds in the customers' accounts.
D. cannot charge the customer's account if it creates an overdraft.
The transfer of a right under a contract is called a(n):
A. assignment.
B. delegation.
C. affidavit.
D. bilateral contract.
Violators can only be subjected to civil penalties for failure to fulfill the hazardous
waste regulations promulgated under RCRA.
Which of the following is characteristic of exculpatory clauses?
A. Courts favor their use in leases of residential property
B. Aids tenants in recovering damages from landlords
C. Attempts to insulate landlords from negligence liability to tenants
D. Enforceable only in residential property leases
Mr. Olive and Mrs. Pickle enter into a partnership to provide IT consulting services.
The name of the business is IT Doctor. From the partnership account Mr. Olive
purchases a laptop and an iPad. Who owns the laptop and iPad?
A. Mr. Olive
B. Mrs. Pickle
C. The business IT Doctor
D. The government
According to the principle of _____, treaties are the supreme law of the land.
A. judicial activism
B. separation of powers
C. federalism
D. federal supremacy
The SEC has defined the intrastate offering exemption more precisely in Rule 147.
According to this rule:
A. intrastate resale of such securities is permitted for nine months.
B. interstate resale of such securities is permitted for nine months.
C. intrastate resale of such securities is permitted for twelve months.
D. interstate resale of such securities is permitted for twelve months.
Stella buys a car from Marble Sales for $10,000 on credit. Joel's daughter likes the car
and so Joel buys the car from Stella. Joel also agrees to pay the balance due to Marble
Sales, on behalf of Stella. Joel defaults. Marble Sales can bring a suit for breach of
contract against:
A. Stella only.
B. Joel only.
C. Stella and Joel.
D. Joel and his daughter.
Which of the following is NOT an essential characteristic of a limited liability company
(LLC)?
A. The LLC can elect to be taxed as a partnership or a corporation.
B. Members' ownership interest is completely and freely transferable.
C. Members have limited liability for the obligations of the LLC.
D. The bankruptcy of one member does not dissolve the LLC.
Congress has the power to regulate commerce among the states. In pursuance of this
power, it passed a legislation forbidding women from crossing state lines to buy or sell
goods. Will the statute be held constitutional?
A. Yes, because Congress has the power to regulate interstate commerce.
B. Yes, because Congress has not exceeded its enumerated power in enacting the
legislation.
C. No, because it conflicts with equal protection guarantee.
D. Yes, because federal laws are always superior.
Homeowners Les and Linda Wheiler live in Missouri. Working with Magnanimous
Insurance Co. agent Dell, the Wheilers submitted an application for property insurance
on their home. At the time they submitted their application, the Wheilers assumed that
when Magnanimous issued them a policy, the policy would furnish coverage for losses
stemming from floods. Magnanimous approved the Wheilers' application and issued
them a written policy covering their house. The written policy's terms excluded
coverage for flood-related losses. Three months after they received their policy from
Magnanimous, the Wheilers' house sustained damage as a result of a flood. When the
Wheilers submitted a claim to Magnanimous, the insurance company denied the claim
because flood coverage was not provided by the policy. The Wheilers have sued
Magnanimous in an effort to obtain reformation of the written policy (so that it would
provide flood coverage). Under which of the following alternative scenarios would the
Wheilers stand the best chance of obtaining a court order of reformation?
A. If Dell informed the Wheilers, after the loss but before submission of their formal
claim to Magnanimous, that the policy did not furnish flood coverage, but urged the
Wheilers to submit their claim anyway.
B. If the Wheilers' assumption that the policy would furnish flood coverage stemmed
from the fact that floods have occurred every few years in the Missouri area.
C. If Dell told the Wheilers at the time of the application that the policy would furnish
flood coverage.
D. If the Wheilers did not read their policy after receiving it from Magnanimous and
therefore first learned that their policy did not provide flood coverage when their claim
was denied by Magnanimous.
For a third person to have the right to enforce a contract, he/she must necessarily prove
that:
A. he/she was the party to the contract.
B. he/she had been given a promise.
C. the contract was made to benefit him.
D. the contract provides him/her incidental benefit.
Which of the following is true of the materiality of breach?
A. Courts generally adopt strict standards to determine materiality.
B. The magnitude of the breach is of relatively less importance.
C. There is a no concern about compensating the nonbreaching party.
D. The timing of the breach is generally taken into consideration.
Chloe took her watch to a jeweler to have it repaired. While the jeweler had possession
of the watch, a thief broke into the shop. The thief stole Chloe's watch and other items
of jewelry. Which of the following is true?
A. Because this was a bailment for the benefit of the jeweler, the jeweler is strictly
liable to Chloe for the value of the watch.
B. This was a mutual benefit bailment, meaning that the jeweler is liable to Chloe if he
did not use reasonable care to protect the watch.
C. No bailment existed between Chloe and the jeweler.
D. Because this was a bailment for the benefit of Chloe, the jeweler cannot be held
liable to her.
Bubble Wrap Co. (BWC), an Atlanta corporation, has its principal place of business in
New York. John, a resident of Florida, asserted on his website that BWC is engaged in
ongoing criminal activity, scams, and phishing. BWC sued John in the U.S. District
Court for the District of New York, alleging defamation and injury to BWC's business
in New York. John filed a motion to dismiss the case alleging that neither subject-matter
nor in personam jurisdiction existed. The court granted the defendant's motion and
dismissed the case because:
A. BWC could not meet its burden of establishing sufficient minimum contacts.
B. BWC did not have subject-matter jurisdiction.
C. BWC neither had subject-matter jurisdiction nor in personam jurisdiction.
D. publishing of those statements did not amount to defamation and thus no injury was
caused to BWC's business.
Mr. Green creates a unilateral contract with nephew Paul. Mr. Green promises to buy
Paul a laptop if he gets accepted to college. In order for Paul to accept this contract
what must he do?
A. Get accepted into college
B. Send a certified letter to Mr. Green agreeing to the terms of the contract
C. Immediately call and orally accept the terms of the contract with Mr. Green
D. Notify the Secretary of State's office that he accepts Mr. Green's contract
Helen and Casey are partners. Helen contributes capital of $20,000 to the partnership
and Casey contributes $10,000. They agree that Helen will receive 60 percent of all
profits and that Casey will receive 40 percent. They have not decided how to share
losses. The partnership makes a loss of $7,000. What is Casey's share of the loss?
A. $2,800
B. $4,200
C. $3,500
D. $5,500
A bank may lend money to a corporation in exchange for the corporation's short-term
promissory notes, which are called:
A. shares.
B. commercial paper.
C. debentures.
D. bonds.
Today, most appealable decisions from the lower courts fall within the Supreme Court's
_____ jurisdiction, under which the Court has discretion whether to hear the appeal.
A. appellate
B. certiorari
C. original
D. exclusive
_____ include expenses that the buyer incurs in receiving, inspecting, transporting, and
storing goods shipped by the seller that do not conform to those called for in the
contract.
A. Unconscionable damages
B. Incidental damages
C. Penalties
D. Consequential damages
A _____ is a contract, usually on a standardized form, offered by a party who is in a
superior bargaining position on a "take-it-or-leave-it" basis.
A. quasi-contract
B. contract of adhesion
C. executory contract
D. bilateral contract
An agency coupled with an interest is terminated if:
A. the principal revokes agency.
B. the principal tenders his obligation.
C. the principal loses capacity.
D. the agent dies.
