The rights of freedom of speech, religion, and association, granted by the First
Amendment to the United States Constitution, is an example of the “maximizing
individual freedom” function of the law.
When a seller tenders goods, some of which are conforming goods and some of which
are not conforming, the buyer must accept the conforming goods and must either reject
all of the nonconforming goods or accept all of the nonconforming goods.
The United States Constitution provides that the president may enter into treaties with
foreign governments without the advice and consent of the Senate.
Unless otherwise agreed, under the Uniform Limited Liability Company Act, limited
liability company profits are shared equally, but losses are allocated to members in
proportion to each member’s capital contribution.
Interrogatories consist of oral questions that are answered in writing and may only be
asked of the parties.
An “easement by implication” is an easement acquired by adverse possession.
The Toxic Substances Control Act requires manufacturers and processors to test new
chemicals to determine the effect on human health and the environment, and to report
the results to the Environmental Protection Agency before they can be marketed.
The Nutrition Labeling and Education Act sets standards regarding how much saturated
fat may be contained in foods.
The Federal Trade Commission Act is enforced by the Department of Justice.
When potential jurors are selected, their names are taken from tax lists, voter
registration lists and automobile registration lists and the first 12 people on the
compiled list are automatically impaneled.
Limited liability companies can enter into contracts only if the owners execute personal
guarantees.
Approximately fifty (50) percent of all lawsuits are settled prior to trial.
The federal and state governments have enacted statutes that regulate the issuance and
trading of securities.
In 1998, the length of copyright protection for an individual holder was extended to the
life of the author plus 70 years.
In an “agency shop,” workers are required to pay a fee to the union only if they choose
to join the union.
Limited partnerships may only be formed through a formal written document filed with
the Secretary of State of the appropriate state.
A perfected security interest will take priority over an unperfected security interest,
regardless of when the perfected interest attached.
Special shareholders’ meetings may be held to consider important or emergency issues,
such as merger or consolidation of the corporation with one or more other corporations,
the removal of directors, amendment of the articles of incorporation, or dissolution of
the corporation.
Compensatory damages for a breach of a sales contract involving goods are governed
by the Uniform Commercial Code (UCC).
Before the police can arrest a person for the commission of a crime, they usually must
obtain an arrest warrant based on a showing of probable cause.
The Labor-Management Reporting and Disclosure Act regulates internal union affairs,
and establishes the rights of union members.
If a tenant stops paying rent, the landlord may claim a constructive eviction and have
the tenant removed from the premises.
Courts today can imply a missing term if a reasonable term can be implied.
The common law of contracts developed from early court decisions that became
precedent for later decisions.
When the partnership agreement is silent, the withdrawal of a general partner will cause
the dissolution of a general partnership, but not a limited partnership.
Generally, neither the franchisor nor the franchisee is liable for the contracts or torts of
the other.
A party who disputes the jurisdiction of a court can make a general appearance in that
court to argue against imposition of jurisdiction.
Constructive fraud is defined as intentional misrepresentation or omission of a material
fact that is relied on by the client and causes the client damages.
A misrepresentation of law is allowed as grounds for rescission of a contract if one
party to the contract is a professional who should know what the law is and
intentionally misrepresents the law to a less-sophisticated contracting party.
The right to be paid before preferred stockholders if the corporation is dissolved and
liquidated is called a “liquidation preference.”
A party is subject to the provisions of the Resource Conservation and Recovery Act
(RCRA,) even if the party merely transports a hazardous waste.
The debtor in a Chapter 13 bankruptcy proceeding can keep more property than under a
Chapter 7 proceeding.
A supervening illegality occurs when:
A) a person fails to mitigate damages.
B) the law changes, making a once illegal offer now legal.
C) the law changes, making a once legal offer now illegal.
D) a person benefits from unjust enrichment.
E) a lapse of time occurs, terminating an offer.
Wayne is showing off by driving his Porsche at 120 mph through a school zone. Which
of the following is not a foreseeable consequence of his negligent act?
A) that he might run over a child and injure her
B) that the child might be hit with a parent watching, causing negligent infliction of
emotional distress
C) that a parent reading about the incident in the paper the next day might suffer from
actionable negligent infliction of emotional distress
D) that a child might be hit and that other students witnessing a classmate being hit by a
car might suffer from intentional infliction of emotional distress
E) that a child might be hit and that the child’s teacher witnessing her student hit by a
car might suffer from intentional infliction of emotional distress
If the United States Supreme Court decides to review a case, it issues a ________.
A) petition for certiorari
B) writ of certiorari
C) petition of absolution
D) writ of absolution
E) writ of sedition
Frank had a bicycle that he advertised for sale, honestly believing it to be a 1999 model
even though it was actually a 1996 model. There were significant improvements in the
frame material, not readily apparent, made between 1996 and 1999 to this model
bicycle. The buyer believed Frank’s statement that it was a 1999 model, and was excited
to be getting a model incorporating the improvements. After discovering that the bike
was actually a 1996 model, the buyer could avoid the contract on the basis of:
A) fraud.
B) mutual mistake.
C) unilateral mistake.
D) duress.
E) undue influence
Which of the following is true regarding trade dress?
A) A restaurant’s design has to have acquired a secondary meaning before it is protected
as trade dress under the Lanham Act.
B) A restaurant’s design does not have to have acquired a secondary meaning before it is
protected as trade dress under the Lanham Act.
C) A restaurant’s design has to have acquired a secondary meaning before it is protected
as trade dress under the Lanham Act only if “fast food” is involved, because of the
proliferation of that type of eating establishment.
D) A restaurant’s design has to have acquired a secondary meaning before it is protected
as a trade dress under the Lanham Act only if color is involved in the trade dress.
E) The term “trade dress” had no legal significance.
Which of the following lists, in descending order of priority, are sources of international
law considered by most courts in settling questions of international law?
A) treaties, customs, conventions, comity
B) treaties, customs, general principles of law, judicial decisions and teachings
C) conventions, comity, customs, general principles of law
D) conventions, treaties, comity, customs
E) treaties, customs, conventions, comity
Which of the following is true about the requirement for a holder in due course to give
value for an instrument?
A) It can be met in any way that the consideration requirement can be met in an
ordinary contract.
B) It can be met only if the holder has paid cash for the instrument.
C) In order to meet the requirement to give value, the value given must be comparable
to the value of the instrument received.
D) Acceptance of the instrument in payment of or as security for an antecedent claim
meets the value requirement.
E) An unperformed promise meets the value given requirement, so long as the promise
is performed prior to the actual collection of any amount on the instrument.
Consequential damages are ________ damages that arise from circumstances outside a
contract.
A) hypothetical
B) foreseeable
C) liquidated
D) punitive
E) nominal
Amy is the promoter of Wild Toad Corporation. Before the corporation comes into
existence, Amy leases office space for its headquarters. Amy signs the contract, “Amy,
for Wild Toad Corporation.” The corporation is formed, and all necessary filings are
completed. Despite the corporation’s formation, the board of directors never meets, and
the corporation never conducts any business. Further, it does not move into the office
space, and it makes no payments under the lease. The landlord demands that Amy pay
for the office space. Amy refuses, and the landlord sues. What is the most likely
outcome?
A) The landlord wins, because Amy is personally liable on the contract.
B) Amy wins, because the corporation is liable on the contract.
C) Amy wins because the contract is void, since the corporation never agreed to be
bound by the terms of the contract.
D) Amy wins, because the office space was never occupied.
E) Amy wins, because promoters of corporations enjoy limited liability.
Two friends, Mary and Dean, are hiking in the Colorado mountains when a dog being
walked by its owner, Wally, who is from Wyoming, bites Dean, causing injury. Mary
was not disturbed physically or emotionally, but wants Dean to sue Wally. Dean does
not want to incur the cost. Which of the following is true?
A) Mary does not have standing to sue Wally, the owner of the dog.
B) Mary will have standing only if she files the lawsuit in Wyoming.
C) Whether Mary has standing depends on whether Mary files the suit in state or
federal court.
D) Mary has standing if Dean consents to Mary filing the suit.
E) Mary has standing if Wally agrees she can sue instead of Dean.
Which of the following acts replaced joint and several liability with proportionate
liability?
A) the Securities Exchange Act of 1933
B) the Securities Exchange Act of 1934
C) the Private Securities Litigation Reform Act of 1995
D) the Tax Reform Act of 1976
E) the Sarbanes Oxley Act of 2002
Which of the following is true regarding when a member has the power to withdraw
from a limited liability company?
A) Unless the operating agreement provides otherwise, a member has the power to
withdraw from both an “at-will” limited liability company and a “term” limited liability
company.
B) A member does not have the power to withdraw from either an “at-will” limited
liability company or a “term” limited liability company without the consent of all other
members.
C) A member had the power to withdraw from a “term” limited liability company, but
does not have the power to withdraw from an “at-will” limited liability company
without the consent of all other members.
D) Unless the operating agreement provides otherwise, a member has the power to
withdraw from an “at-will” limited liability company, but does not have the power to
withdraw from a “term” limited liability company.
E) Unless the operating agreement provides otherwise, a member has the power to
withdraw from a “term” limited liability company, but does not have the power to
withdraw from an “at-will” limited liability company.
The United States Citizenship and Immigration Services (USCIS) is part of the United
States ________
A) Department of the Interior.
B) Department of Homeland Security.
C) Department of Internal Affairs.
D) Department of Commerce.
E) Department of Border Enforcement.
A transaction in which two corporations combine, such that afterwards neither of the
combining corporations continues to exist, but instead a new corporation is formed, is
called a:
A) merger.
B) consolidation.
C) purchase of assets.
D) share exchange.
E) hostile takeover.
When selling securities under “Regulation A:”
A) issuers must limit the sales of the securities to accredited investors.
B) issuers cannot sell more than $5,000,000 of securities in one year.
C) all issuers must provide an offering statement.
D) sales are limited to twenty-five unaccredited investors.
E) there are restrictions on the resale of the securities.
Which of the following is not true regarding the Occupational Safety and Health Act?
A) Its purpose is to protect the safety of workers, as well as the safety of those who
purchase the employer’s products or services.
B) Employers are subject to having their workplaces inspected under the Act.
C) Even though the Act contains numerous specific safety standards, employers are also
under a “general duty” to provide a work environment that is free from recognized
hazards that could cause death or serious physical harm to employees.
D) Employers are required to post notices in the workplace informing workers of their
rights under the Act.
E) Employees do not have a private cause of action under the Act.
A city ordinance prohibits any advertising of fur coats within the city limits. This
ordinance:
A) is constitutional because the U.S. Constitution provides no right to advertise.
B) would be analyzed under strict scrutiny if challenged on equal protection grounds.
C) would be challenged on the grounds of either equal protection or freedom of speech.
D) is not constitutional because commercial speech cannot be restricted.
E) would be analyzed under the intermediate level of scrutiny and challenged on equal
protections grounds.
Solicitation of proxies is regulated under the:
A) Securities Act of 1933.
B) Securities Exchange Act of 1934.
C) Williams Act.
D) Proxy Solicitation Act of 1968.
E) Uniform Commercial Code.
Robin developed a great soft drink marketed in the East Tennessee area. The major soft
drink companies lost their market share and sued Robin for violation of the Sherman
Act. She can prove, however, that her drink is enormously successful only because of
her skill and foresight in recognizing the market need. Assume that Robin has
seventy-five percent of the market share in the relevant market. How is a court likely to
rule?
A) Robin will be in violation of Section 2 of the Sherman Act, because a monopoly
exists regardless of whether she attempted to monopolize.
B) Robin has not violated Section 2 of the Sherman Act, but she has violated Section 1
of the Act under the “rule of reason” analysis, since the other soft drink companies have
been effectively shut out of the market.
C) Robin has not violated Section 2 of the Sherman Act, but she has violated Section 1
of the Act, because under a “per se” rule of illegality, Robin has cornered the market.
D) Robin is not in violation of the Sherman Act, because she innocently acquired the
monopoly.
E) Robin is not in violation of the Sherman Act, because no monopoly exists.
Which of the following is one of the most commonly used top-level extensions for
domain names?
A) .amateur
B) .apprentice
C) .trainee
D) .pro
E) .executive
Which of the following contracts is not considered a sale?
A) the purchase of a haircut
B) the purchase of a cow by a farmer
C) the purchase of a stereo by a consumer
D) the purchase of an oil tanker by an oil company
E) All of the above are sales under the UCC.
Aimee is a 17-year-old college student. Her parents are worried about her being away
from home so they tell her that if she goes both the fall and spring semesters without
drinking alcohol, they will buy her a new car. If Aimee does in fact go both semesters
without drinking:
A) Aimee gets the car because she performed exactly as required under her parents
offer.
B) Aimee gets the car because a quasi-contract is formed due to her parents unjust
enrichment.
C) Aimee is not entitled to the car because her benefit far outweighed her detriment.
D) Aimee is not entitled to the car because she suffered no detriment.
E) Aimee gets the care based on promissory estoppel.
Two (2.) types of bankruptcy petitions can be filed: the ________ petition and the
________ petition.
A) formal; informal
B) legal; equitable
C) voluntary; involuntary
D) express; implied
E) temporary; permanent
The objective theory of contracts is based on the premise that:
A) even offers made in obvious jest can be the basis of a contract.
B) every contract must have a central object to it.
C) every contract must have consideration given by both parties.
D) whether the intent is present is based on how a reasonable person would view the
parties’ actions and is not based on the actual intentions of the parties.
E) the intent to be bound is determined after the parties have had a chance to perform
the contract.
What are securities laws passed by states typically called?
A) “blue-sky” laws
B) “red-sky” laws
C) “dark-sky” laws
D) prohibitive laws
E) regulatory laws
Who is discharged if a holder strikes out a prior indorsement on a negotiable
instrument?
A) only the party whose name was stricken
B) the party whose name was stricken, and all prior indorsers
C) the party whose name was stricken, and all subsequent indorsers
D) all indorsers
E) no indorser is discharged
Which of the following is not a recognized source of law in the United States?
A) constitutions
B) treatises
C) codified law
D) executive orders
E) judicial decisions
Three individuals have been turned down for jobs because of their age. Alice, aged 72,
was turned down because she was too old. Betty, aged 45, had applied for a job where
most of her customers would be senior citizens, and was turned down because she was
too young. Cathy, aged 35, was turned down for a teaching job because the school
wanted a very young teacher and thought she was too old. Assuming each was
otherwise qualified for the job sought, who has a valid claim for illegal age
discrimination?
A) Alice
B) Alice and Cathy
C) Alice and Betty
D) Betty
E) Alice, Betty and Cathy
Alice has a contract with a surgeon to have a medical procedure performed on July 17.
The surgeon notifies Alice on July 5 that he is in the Bahamas and will be there until the
end of August and will not be able to do the surgery. Which of the following is true at
this point?
A) There will be no breach until July 17.
B) Alice must wait until July 17, and if the surgeon does not perform the procedure,
Alice can contract with another surgeon.
C) If Alice contracts with another surgeon prior to July 17, and this second surgeon is
aware of Alice’s original contract, the second surgeon has no obligation to perform.
D) Alice is free to contract with another surgeon.
E) Alice must give the surgeon 90 days within which to schedule the surgery after July
17.
A relatively short-term grant of permission to be on the land of another that can be
revoked freely at any time is a(n):
A) easement.
B) defeasance.
C) license.
D) abstract.
E) profit.
At common law, ________ is defined as the taking of personal property from another
person or business by the use of fear or force.
A) larceny
B) burglary
C) robbery
D) assault
E) battery
What is required to further negotiate an instrument when the payee or indorsee’s name
is misspelled?
A) The holder must get the party who made the misspelling to execute a new instrument
or indorsement with the correct spelling.
B) The holder must get the party who made the misspelling to execute an allonge that
states that a mistake was made and indicates the correct spelling of the name.
C) The holder is required to indorse the instrument in both the correct and the
misspelled name.
D) The holder can indorse the instrument in either the correct spelling or the incorrect
spelling.
E) The misspelling renders the instrument nonnegotiable, making further negotiation
impossible, and therefore requiring that any further transfer be made by assignment.
Paul is an organic biologist who teaches classes occasionally at a local college. Paul is a
wonderful professor who is liked by the students. In the third week of the semester, Paul
notified the school that he was suddenly too busy to teach that semester. Which of the
following is true?
A) The college could get an order of specific performance.
B) Paul would be obligated to pay the entire salary of any replacement that the school
was able to find.
C) Paul would be obligated to pay for the reasonable costs the school encountered in
hiring a new employee, plus any necessary increase in salary paid to the replacement.
D) The school would be able to obtain an injunction against Paul ordering him to teach
the course.
E) Paul would be discharged from his duty to teach because of commercial
impracticability.
The word “mark” collectively refers to each of the following except:
A) trademarks
B) service marks.
C) certification marks.
D) business marks.
E) collective membership marks.
A(n) ________ contract is any contract whereby a party contributes money or other
consideration in a common enterprise and expects to make a profit from the significant
efforts of others.
A) subscription
B) investment
C) securities
D) debenture
E) warrant
Bob entered into a contract for the purchase of a home, and the contract contained a
clause that said, “This sale does not include any personal property or fixtures.” Bob
noticed the provision when he signed the contract to purchase the house, but he was not
concerned about the provision, because he had heard that fixtures were always included
in a sale of real estate. When Bob moved in, he was surprised to find that the
refrigerator, a bathroom vanity, and the hardwood floor from the living room had been
removed. In addition, two trees had been removed from the back yard. Discuss Bob’s
legal rights.
Absent a specific agreement to the contrary, when do child support obligations typically
terminate? When should parents consider changing, by contractual agreement,
traditional child support obligations?
Liquidated damages clauses will generally not be enforced where courts view them as
excessive, but courts generally do not inquire into whether liquidated damages clauses
are too small. For example, when taking a roll of film to be developed, most developers
include a liquidated damages clause to provide a new roll of film, and nothing more, in
the event that the customer’s film is lost or destroyed. Why is there this difference in
treatment? Do you agree with this rule?
When is a party allowed to request adequate assurance of performance, and why should
a party not be required to simply perform the contract and sue for damages if the other
party does not perform?
Are the rules on ‘short-swing” profits under Section 16(b) of the Securities Exchange
Act of 1934 too restrictive, or not restrictive enough? Merely because one is a statutory
insider, is it proper to limit his or her ability to make a profit on the company’s stock?
Alternatively, should the six-month period be longer? What is the theory behind making
the short-swing profits belong to the corporation?
Tori is interested in developing a new business putting on dog shows for mutts and
awarding prizes. Tori believes this business is needed to give owners of dogs with no
pedigree a “fair shake.” Tori needs to find some investors, and she is also interested in
reducing her tax liability. She asks you about the advantages of a limited liability
company. What is your advice?
A company is planning to promote its services heavily via telemarketing. The company
has learned that the majority of those to be called are strongly opposed to receiving
telemarketing calls. In addition, many of the persons who will be called are elderly who
might decide to purchase the product even though they do not really need it or cannot
afford it. Discuss the appropriateness of proceeding with this plan under the different
theories of the social responsibility of business.
Bob the dentist is having problems collecting amounts due from his patients. He sells
and assigns the rights to these amounts, called accounts receivables, to Collect
Company. Bob notifies the patients who owe money to pay Collect Company instead of
him. Many patients, however, do not want to bother with Collect Company and
continue to send payments to Bob. Unfortunately, Bob spends these amounts and ends
up going bankrupt because of poor office practices and some dental malpractice claims.
Collect Company sues the patients who paid Bob assigned amounts after they were
notified of the assignment. Those patients say that they do not want to pay twice and
that they already paid Bob. They say it is not their fault that he is a crummy dentist.
Who is legally right?
Why should a holder in due course receive more protection than a holder?
Burt’s pet Gonzo has run away. He places reward posters all over the area offering a
reward for Gonzo’s return. Ernie sees the reward poster and spends all of his time and a
considerable amount of money looking for Gonzo. Meanwhile, Kermit, a friend of Burt
and familiar with Gonzo, finds Gonzo and brings him back to Burt without having seen
a poster. Seconds after returning Gonzo, Kermit see a reward poster and returns to
claim his $500.00. Is Kermit entitled to the reward? Is Ernie entitled to anything?
Why are there so many different kinds of indorsements? Why is a restriction in an
indorsement that limits payment to the named payee not effective? Should not the
parties be allowed to set these terms between themselves?
Since the same wrongful act can usually lead to both a civil and criminal liability, why
is it usually better for the victim to file the civil case after the criminal case is
completed?
Susie Designer has come out with a great line of fashions for teen-age girls. Knowing
that many of her potential customers are looking for low-cost items, Susie would like to
produce her clothing line as cheaply as possible. Also, Susie is aware that the less she
spends on production, the more she will realize in profits. Susie thinks about having her
clothes made in Mexico because labor costs would be much less there. She is also
aware, however, that unemployment is high in her community and that jobs are needed
there. Discuss how the moral theories of duty ethics, utilitarianism, and ethical
relativism would apply to her decision.
A computer manufacturer decides to require that any businesses that purchase its
computers for resale not charge over a set price. How would this arrangement be
analyzed by a court in order to determine whether there was a violation of the Sherman
Act?
Jean owns a champion female German Shepherd named Abby. Jean had planned to
breed Abby in the future, but before that could happen, Abby became pregnant. The
only two dogs who could have been the father were a German Shepherd and a Standard
Poodle. This is because these were the only male dogs anywhere near Abby’s house.
Abby was normally kept in a fenced yard but had accidentally gotten out of the yard a
couple of times. These were the only times that Abby could have become pregnant.
Abby gave birth to a litter of eight purebred German Shepherd puppies. As the puppies
became a few weeks old, it became obvious that they were championship quality. Abby
mentioned to the owner of the puppies’ father that Abby had given birth to some of his
dog’s offspring. The next day the father’s owner notified Jean that he wanted four of the
puppies and would go to court for them if Jean did not voluntarily give them to him.
Discuss his claim.
The discovery process is an integral part of the pre-trial process that serves a variety of
functions. Discuss these functions and their importance.
Mary has been hired to write courses for a Web-based training organization. Mary
works at the organization’s corporate office. She is given content guidelines, a contract
for each course that she writes, and she is paid a flat fee upon satisfactory completion of
the course. It can take anywhere from two weeks to six weeks to complete a course. The
organization wants its affiliated contractors to work in its corporate office with a regular
forty-hour workweek, unless they need to be elsewhere in order to conduct
content-related research. The organization provides a computer to Mary. Mary also is
able to use the services of other employees at the organization for the purposes of word
processing and editing. Is Mary an employee, or an independent contractor?