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Regarding the termination of an agency, the Third Restatement:
a. distinguishes between terminations based on death of a principal and terminations
based on incapacity of the principal.
b. applies the same rule to all causes of termination; it applies a reasonableness
standard.
c. applies the same rule to all causes of termination; it applies the actual notice standard.
d. applies the same rule as under the Second Restatement; a principal's death
automatically ends the agent's apparent authority.
Abby needs some quick cash, so she hits upon a scheme. She tells Frank that she is
collecting for foreign refugees, so Frank makes out a check for $100 payable to the
order of Abby. Abby indorses it and delivers it to Joanne for $90 cash. Joanne gives it to
Margaret as a present. Frank discovers Abby's deception and refuses to pay Margaret.
Will he win?
a. No, because Margaret is a holder in due course
b. No, because of the shelter rule
c. Yes, since Margaret did not take the check for value
d. Yes, since the check was not negotiated to Margaret
Sam wants to sell his Golden Retriever to Jordan. Sam tells Jordan that the dog is three
years old and that he will point, back, and retrieve. Although the dog is three years old
and will point at birds, he will not back (honor another dog's point). Jordan relies on
these statements and purchases the bird dog. The buyer has most probably been a victim
of:
a. duress.
b. undue influence.
c. fraud in the inducement.
d. fraud in the execution.
Challenges to affirmative action plans adopted by private employers are tested under:
a. the Equal Protection Clause of the U.S. Constitution.
b. Title VII of the Civil Rights Act of 1964.
c. guidelines developed under President Johnson's executive order related to affirmative
action programs for federal contractors.
d. None of the above. Due to the absence of state action, challenges cannot be made to
affirmative action plans adopted by private employers.
Which of the following is false with respect to the distribution of assets following
dissolution of a limited liability company?
a. Most statutes provide default rules for distributing the assets.
b. Generally, assets are distributed first to creditors, including members and managers
who are creditors, except with respect to liabilities or distributions.
c. Generally, assets are distributed to members and former members in satisfaction of
liabilities for unpaid distributions after distributions are made to creditors, including
members and managers who are creditors.
d. Generally, assets are distributed first to creditors who are not members or managers.
Which of the following statement(s) is/are true concerning the Montreal Protocol on
Substances that Deplete the Ozone Layer?
a. The United States and 23 other countries signed it.
b. It was not signed by the United States but was signed by 23 other countries.
c. It is a treaty that requires all signatories to reduce their production and consumption
of all chemicals.
d. It is a treaty that requires all signatories to reduce their production and consumption
of only CFC's.
e. Both (a) and (c).
Ann, a minor, disaffirmed her agreement to buy $127 worth of cosmetics from Facial
Glo Company. She had used up all the eye shadows, lipsticks, and powders. The general
rule is that she may:
a. disaffirm, but she must pay the asking price of the cosmetics used.
b. disaffirm, but she has to return the makeup that is not used up.
c. not disaffirm without paying the value of used makeup.
d. not disaffirm because she has used the goods.
When an injured party is required to elect remedies, which of the following would be
mutually exclusive?
a. Restitution and liquidated damages
b. Specific performance and compensation for incidental damages
c. Specific performance and restitution
d. Incidental and consequential damages
Failure to comply with Sections 1 or 2 of the Sherman Act:
a. is a felony and can result in imprisonment.
b. may subject an individual to a fine of up to $1 million under the 2004 amendments.
c. may subject a corporation to a fine of $100 million per violation.
d. All of the above.
William has a contract to build a new office building for Angela. The contract contains
a provision requiring William to furnish a certificate of occupancy from the building
inspector before Angela is required to pay. This provision is:
a. an express condition.
b. an implied-in-fact condition.
c. an implied-in-law condition.
d. a condition subsequent.
Which of the following is true about a constructive trust?
a. It normally contains detailed instructions for the trustee to follow.
b. The court to redress an injustice imposes it.
c. It is revocable by the trustee.
d. It carries out the intentions of the trustee.
To establish a private nuisance, a plaintiff:
a. must show that the defendant has substantially and unreasonably interfered with the
use and enjoyment of the plaintiff's land.
b. must show that, in an action for damages in conjunction with private nuisance, the
defendant's conduct was unreasonable.
c. need not show that the interference was unreasonable.
d. need only show that the quiet enjoyment of plaintiff's land was impacted.
The seller's warranty that he has marketable title to the land would be breached if the
buyer discovers:
a. a lien on the land.
b. a defect in the chain of title.
c. a lease on the premises.
d. All of the above.
e. Both (a) and (b) above are correct.
Under the UCC, identifying goods to which a contract refers gives the buyer a special
property interest which permits the holder to:
a. insure the goods.
b. immediately transfer title to the goods.
c. take immediate possession of the goods from the seller.
d. sue the seller for improper treatment of the goods.
Strand, Inc. is currently engaged in negotiations with one of its major unions. The
company is covered by the LMRA. If Strand issues a factually correct statement
regarding its financial status along with the opinion of its auditors that meeting the
union demands would require the company to close down, it is likely that Strand will be
in compliance with the act.
The 1936 Act prohibiting price discrimination in interstate commerce involving
commodities of like grade and quality is the:
a. Sherman Act.
b. Clayton Act.
c. Robinson-Patman Act.
d. Federal Trade Commission Act.
Cheryl writes checks totaling $200, but she has only $100 in her account. Check #101 is
for $50; #102 is for $75; #103 is for $25; and #104 is for $50. All of the checks reach
the bank on the same day. In what order should the bank charge them?
a. Under Article 4, it must charge them in the order in which they were drawn.
b. It must call the customer to ask which items should be paid.
c. The bank may pay them in any order it deems convenient.
d. The bank must dishonor all of the checks.
Joel's car broke down on a dark, rainy night. Along came Andy in his four-wheel drive
truck with tools and supplies in the back. Joel didn't have any credit cards and had only
$3.25 cash, so Andy told him to write a check or an IOU. Neither Andy nor Joel had
any paper, so Joel wrote on the cover of Andy's lunchbox: "If my car is fixed right by
Andy Walcott, I will pay him $150. (Signed) Joel Boyd." Andy indorses the note and
takes it to a commercial factor for negotiation. The factor refuses, saying it is
non-negotiable because:
a. it is written on a lunchbox.
b. it mentions the existence of a contract to repair the car.
c. it is conditional on satisfactory repair of the car.
d. All of the above.
e. None of the above.
Identify and describe the following types of wills.
a. Holographic
b. Nuncupative
c. Soldiers' and sailors' wills
Officers and directors of a corporation owe to the corporation the subordination of their
self-interest to the interest of the corporation and owe constant loyalty to the
corporation. This duty is the:
a. fiduciary duty.
b. business judgment duty.
c. duty of indemnification.
d. duty of diligence.
Aunt Ellie promises her 21-year-old nephew, Robbie, that she will pay him $100 if he
quits smoking for a month. If Robbie does, is there a binding contract?
a. No, because Robbie gave no benefit to Aunt Ellie
b. No, because Robbie did not suffer any detriment
c. Yes, because stopping smoking will benefit Robbie's health
d. Yes, because Robbie gave up a legal right
Which of the following will be acceptable as a witness to a will?
a. The testator's spouse
b. The person named to be executor of the estate
c. The beneficiary of a testamentary trust
d. The spouse of a beneficiary
Seventeen-year-old Todd has just received his driver's license. He is driving a little too
fast one day and slams into the back of another car, which has just stopped for a stop
sign.
a. Todd is engaging in an adult activity and will be held to the same standard as an adult
in most of the states.
b. Todd is a minor and will have no responsibility for his torts.
c. Todd's parents are responsible for any torts he commits.
d. Both (b) and (c).
Which of the following is untrue with regard to the interpretation of contracts?
a. Express terms prevail over course of performance, and course of performance
prevails over course of dealing.
b. Technical terms will always be given technical meaning even where a different intent
is manifested by the parties.
c. Handwritten or typed terms are given greater weight than preprinted terms.
d. All writings that are part of the same transaction are interpreted together.
Recovery of damages under Rule 10b-5 requires proof of:
a. a purchase and sale of the same securities within six months.
b. scienter.
c. negligence.
d. immateriality of a statement.
The person who signs and files the articles of incorporation is the:
a. promoter.
b. incorporator.
c. subscriber.
d. majority stockholder.
Identify the following relationships and parties.
a. Patricia hires Andrew, an attorney, to negotiate a contract to purchase some property.
She agrees to pay him $75 an hour for his services, and he agrees to use his own office
and secretarial staff to negotiate and draft the agreement.
b. Mel owns a retail store. He hires Sarah to work for him as a salesclerk in the home
furnishings department.
c. Carl is the general contractor for the construction of a large office complex. Carl hires
Ed's Electric Company to do all of the wiring for the building.
d. Invox Corporation hires Gary as an outside salesman and instructs him to call on
customers in a specified territory and to solicit orders for their products.
e. Marlin, who is the owner of Marlin's Department Store, hires Melissa as the general
manager of his new branch in the Hillridge Mall.
a. What warranties are given upon transfer?
b. What warranties are given upon presentment?
c. If a person has not signed an instrument, does that mean he has no liability as a result
of the transaction involved? Explain.
To certify a check, the bank must:
a. tell the one who presents it.
b. send a letter to the drawer.
c. write the acceptance on the check.
d. Any of the above will be sufficient.
The Age Discrimination in Employment Act currently protects employees between the
ages of:
a. 40 and 65.
b. 40 and infinity.
c. 50 and 65.
d. 18 and 70.
Southern Furniture Co. hired Chuck to drive a company truck and deliver furniture.
Chuck had a spotless driving record and did well on his driving test. Belinda ordered a
chair from Southern Furniture Co. and arranged for its delivery on her lunch hour.
Belinda was at home when Chuck delivered the chair. After delivering the chair, Chuck
brutally assaulted Belinda, causing physical and psychological injuries. Chuck was
convicted in the criminal courts. During the trial it was revealed that Chuck had been in
a mental institution for the criminally insane for two years because he had assaulted his
mother and other women. He also had a lengthy criminal rap sheet involving theft
crimes. Belinda sought compensation for her physical and psychological injuries from
both Chuck and Southern Furniture Co. in civil court. Discuss the probable outcome of
this case with regard to the issues of: (a) respondeat superior and (b) general tort
liability of principals for the unauthorized acts of their agents.
The Fair Debt Collection Practices Act defines the following practices as abusive,
EXCEPT:
a. a non-lawyer bill collector representing himself as a lawyer.
b. a creditor, using his own name, telephoning the debtor at 7 a.m.
c. a debt collector telephoning the debtor at inconvenient hours.
d. using obscene language.
Which of the following is not a factor used to determine whether an agent is an
employee or an independent contractor?
a. Whether the employer or the employee/independent contractor designates the person
and the tasks to be accomplished
b. Whether the principal is or is not in business
c. Whether payment is by the job or by the time worked
d. Whether the work is part of the regular business of the principal
A(n) ______ is an instrument that evidences an agent's appointment and states the
nature or extent of the agent's authority.
a. fiduciary
b. indemnification
c. power of attorney
d. qui facit per alium
An agent who makes a contract with a third person on behalf of a disclosed principal
usually is not a party to the contract.
Ratification need not be express; it may be implied from the minor's conduct.
All federal crimes are statutory.
If Gil assigns his lease to Jim, Gil has no further obligations to his landlord.
The owner of a collective mark must produce the goods it seeks to mark.
A lien must be satisfied before the property is available to satisfy the claims of
unsecured creditors.
The executor-administrator provision applies to promises of an executor of a decedent's
will to the decedent's creditors.
The modern approach follows the common law rule in holding that a corporation cannot
commit a criminal act.
A retiring partner cannot be discharged from existing liabilities of the partnership
except by payment.
The cause of action of intentional infliction of emotional distress will protect a person
from abusive language and rudeness.
Jack and Karin are cosureties on a debt owed by Lyle to Mike. If Lyle's debt becomes
due and he and Karin both refuse to pay it, Jack may bring an action in equity against
Karin to obtain an order requiring her to pay her share of the debt.
In order for Mitchell, the owner of a cement factory, to obtain a permit from the
Colorado Environmental Protection Agency in a PSD area, he must demonstrate that his
factory will utilize the best available control technology.
What warranties are given by presenters depend upon who is the payor or acceptor.
Chapter 5 involves liquidation, whereas Chapters 7, 11, 12, and 13 involve
reorganization and adjustment of debts.
Federal district courts may hear all matters collateral to the bankruptcy, even if these
matters are not normally permitted to be brought in federal court.
Marjorie has been cared for by her family physician for 35 years. She decides to assume
the mortgage on his new clinic. The contract is automatically invalid because of undue
influence.
According to the Revised Code, constructive notice through public recording is
sufficient notice to prevent a person from being a holder in due course.
The law governing assignments arises solely from the common law of contracts.
What is the trustee in bankruptcy and what is the role of the trustee in bankruptcy
proceedings? What powers and duties does the trustee have and what sorts of
transactions the trustee can attack?
Though contractual duties generally are delegable; a delegation will not be permitted if
the nature of the duties is personal in that the obligee has a substantial interest in having
the delegator perform the contract.
