In international business transactions, a documentary letter of credit:
a. is a method of payment of goods that reduces the seller’s risk from the possibility that
the goods will be shipped, but not paid for.
b. is a type of bill of lading.
c. is a guarantee by the seller’s bank that it will pay the price of the exported goods if
the seller breaches the contract.
d. All of the above.
Common problems with private causes of action to control environmental damage
include all but which one of the following?
a. Costs associated with private litigation are high.
b. Even if a private plaintiff is successful, recovery may be limited to monetary
damages, leaving the defendant free to continue to pollute.
c. Statutes typically require that only a public representative, such as the attorney
general, may bring suits to protect the environment from private and public nuisance
and strict liability for abnormally dangerous activities.
d. Tort actions typically do not provide relief for aesthetic, as opposed to physical,
injury.
Paul is working as an undercover drug agent. He enrolls in classes at State University
where he meets several students in business administration and invites them to come to
his house for a party. No mention is made of any drugs, but he does say he will have a
keg of beer. Shortly after his guests arrive, he gets out some marijuana and encourages
the group to have some. All of them refuse, except Sam, who has never tried it before.
When Sam lights up, Paul arrests him for possession of a controlled substance. Sam:
a. is clearly guilty as charged.
b. can raise the defense of entrapment, claiming Paul has enticed him to commit a crime
that he would not have committed otherwise.
c. has a valid defense of duress.
d. can raise the Fourth Amendment to exclude the marijuana as evidence that has been
illegally seized.
Which of the following would not be a voidable transfer if made within 90 days of
bankruptcy?
a. An exchange for new value.
b. An enabling security interest perfected within 30 days after the debtor receives
possession of the property.
c. A payment made in the ordinary course of business.
d. A consumer’s transfer of property valued at $500.
e. None of the above are voidable transfers.
Restitution is available when:
a. Elizabeth agrees to sell an acre of land to Vanessa, and after Vanessa makes a partial
payment Elizabeth wrongfully refuses to transfer title.
b. Lawrence makes an oral contract to provide physical training for Lee for fourteen
months and Lee discharges Lawrence after six months.
c. Gilbert uses undue influence to induce Cynthia to sell him an antique chair for $10.
d. Restitution is available in all of the above cases.
Goods are to be sent F.O.B. Buffalo, NY to Raleigh, NC by UPS. Where does tender
occur?
a. Where the goods are identified
b. Where the goods are shipped
c. Where the goods are delivered and picked up by the buyer
d. Where the goods are taken by the buyer
What is the principal source for corporate financing?
a. Debt
b. Equity investment securities
c. Both of the above
d. None of the above
Kent loaned Barbara $8,000 and took back a note secured by Barbara’s car. If Barbara
files for bankruptcy when the value of the car is $4,500, what is Kent’s status? He has:
a. a secured claim for $4,500.
b. an unsecured claim for $8,000.
c. an unsecured claim for $4,500.
d. a secured claim for $8,000.
Which of the following is correct under the Second Restatement with regard to actual
notice to a third party of the termination of an agent’s authority to act on behalf of the
principal?
a. Publication in a newspaper of general circulation in the area is sufficient if the third
party is one with whom the agent had previously dealt on credit.
b. If notice is given by mail, it is effective as actual notice upon delivery to the third
party.
c. A personal telephone call to the third party will not suffice, because actual notice
must be in writing.
d. Actual notice is not required when the agent has been specially accredited to deal
with the third party.
Doug takes a $500 check drawn by Gail to Gail’s drawee bank to cash it. Gail has over
$10,000 on deposit in her account. If her bank refuses to pay Doug:
a. Doug can sue the bank and demand payment if the check is not ‘stale.”
b. and the check is over 30 days old, the bank has a right to refuse payment.
c. the bank has incurred a liability to Gail for its improper refusal to pay the check if it
is not ‘stale.”
d. All of the above.
Which of the following is correct about the sanctions and penalties under the 1934 Act,
as amended?
a. Individuals may not be imprisoned for violation of the 1934 Act.
b. For individuals, conviction may carry a fine of up to $5 million.
c. A defendant who proves she was ignorant of a rule can still be imprisoned.
d. A corporation may be fined not more than $10 million.
A buyer’s remedies for breach of a contract for the sale of land include all but which of
the following:
a. rescission and restitution.
b. damages for loss of the bargain.
c. specific performance with a price reduction.
d. All of the above remedies are available.
Match the following:
a. Mental fault; the mental element of a crime.
b. A person who enters or remains on the land of another without permission or
privilege to do so.
c. The nonmental elements of a crime, including the wrongful physical act.
d. Standard used by courts reviewing factual determinations when informal rulemaking
or informal adjudication has occurred.
e. A statement by an agency of general or particular applicability designed to
implement, interpret, or process law or policy.
f. The duty of care required to avoid being negligent; fictitious individual who is always
careful, diligent, and prudent.
g. Right of the federal government to regulate matters within its power to the exclusion
of regulation by the states.
h. A defense to a crime that arises when a law enforcement official induces a person to
commit a crime when that person would not have done so otherwise.
i. Publication of false statements resulting in harm to another’s business or monetary
interest if the publisher knows the statements are false or acts in reckless disregard of its
truth or falsity.
j. The crime of taking another’s property by a person who was in lawful possession of it.
k. The crime of entering a building with the intent to commit a felony.
l. Injury to a person’s reputation by the publication of false statements.
m. A person privileged to enter or remain on land by virtue of the consent of the lawful
possessor.
n. A serious crime punishable by death or imprisonment in a penitentiary.
o. An intervening event that occurs after the defendant’s negligent conduct and that
relieves him of liability.
p. The nontrespassory invasion of another’s interest in the private use and enjoyment of
his land.
q. A crime that is wrong in itself or morally wrong, such as murder.
r. The intentional infliction of harmful or offensive bodily contact.
s. Rule of circumstantial evidence permitting a jury to infer both negligent conduct and
causation from the mere occurrence of certain types of events.
t. Conduct which falls below the standard established by law for the protection of others
against unreasonable risk of harm.
u. A plaintiff’s express or implied consent to encounter a known danger.
v. Division of governing power between the federal government and the states.
w. A federal statute intended to stop organized crime from infiltrating legitimate
businesses.
x. A hearing at which the accused is informed of the crime against him and he enters a
plea.
y. Intentional conduct that places another person in apprehension of immediate bodily
harm or offensive contact.
1) federalism
2) rule
3) embezzlement
4) mens rea
5) actus reus
6) felony
7) mala in se
8) arraignment
9) defamation
10) nuisance
11) arbitrary and capricious
12) battery
13) assault
14) negligence
15) licensee
16) trespasser
17) res ipsa loquitur
18) superseding cause
19) reasonable person
20) assumption of risk
21) preemption
22) burglary
23) entrapment
24) disparagement
25) RICO
Promissory estoppel is found in Section ____ of the Restatement (Second) of Contracts.
a. 71
b. 81
c. 90
d. None of the above
Seth and Maricela enter into a contract for a sale of goods for a contract price of $1,200
and Maricela has made a down payment of $200. Seth delivers nonconforming goods to
Maricela who rightfully rejects them. The best remedy available to Maricela is to:
a. cancel the contract and recover her $200 plus whatever other damages she can prove.
b. reclaim the goods and cover.
c. resell the goods and recover damages.
d. stop delivery of the nonconforming goods and recover payments made.
If Beta Corporation buys all the existing common shares of Ajax Corporation, which
has no preferred shares, in exchange for a new class of Ajax Corporation preferred
shares, the transaction is a(n):
a. merger.
b. acquisition.
c. compulsory share exchange.
d. consolidation.
The refusal to pay or accept an instrument when it becomes due is:
a. the shelter rule.
b. dishonor.
c. demand.
d. discharge.
The local supermarket has a large, glass, front door which is well lighted and plainly
visible. Nelson, who is new in the neighborhood, mistook the glass for an open
doorway and walked into it, shattering the door and injuring himself. The store:
a. is strictly liable to Nelson.
b. is not liable to Nelson.
c. is liable under res ipsa loquitur.
d. has no duty to Nelson.
Which of the following is true of limited liability companies?
a. Most states limit the duration of LLCs.
b. In most states, LLCs must file annual reports with the state.
c. The contribution of a member to a limited liability company must be cash or
property.
d. A written operating agreement governing all of the relations between members is
required in all states.
William rents a backhoe for six months from Hunter Leasing but fails to make timely
payment of the rent. Hunter Leasing may recover:
a. only the backhoe itself.
b. the difference between the present values of the rent due under the original lease and
the market rent for the remainder of the term of the original lease.
c. only the contract amount of rent.
d. the market rent for the period of time covered by William’s nonpayment.
Drapery Makers has signed a contract to make and sell to Hyer curtains for 20 windows
by March 31. Hyer, however, delays in giving Drapery Makers the dimensions it needs
to know in order to do the work. In this case, Drapery Makers:
a. may proceed to do the work when it receives the information if it performs
reasonably.
b. may treat Hyer’s failure to cooperate as a breach if it does not receive the information
by March 31.
c. has no remedies under the Code.
d. Both (a) and (b).
A seller has the right to transfer title:
a. in any case in which the seller has possession of the goods.
b. in all cases in which the seller has the power to transfer title.
c. even if the seller does not have either possession of or title to the goods, if he has
authority to sell the goods for the rightful owner.
d. only if the seller is the rightful owner of the goods.
A contract prepared on a standard form and offering terms on a take-it-or-leave-it basis
is called:
a. exculpatory.
b. a usurious contract.
c. an illegal restraint of trade.
d. an adhesion contract.
Adam doesn’t like having neighborhood teenagers walk across his yard at night. He rigs
an animal trap on the path the teenagers usually use to cross his land. One night, Tim
and his friends are walking across the yard when Tim gets caught in the trap. He is
taken to the hospital for his injuries. In this case:
a. Tim is a trespasser on Adam’s property, and Adam has the right to use animal traps to
strongly discourage anyone from trespassing.
b. Adam has no duty toward Tim.
c. Adam is not free to inflict intentional injury on a trespasser.
d. All of the above.
In circumstances under which a person is held liable as a principal even though no
actual agency has been created, there is a(n):
a. agency by estoppel.
b. apparent agency.
c. ostensible agency.
d. All of the above
A trustee in bankruptcy may avoid which of the following?
a. Fraudulent transfers
b. Voidable preferences
c. Automatic stays
d. Both fraudulent transfers and voidable preferences
To whom does a large, publicly held corporation and its management have obligations?
a. The corporation’s shareholders
b. Its employees, customers, and suppliers
c. Communities in which the corporation is located
d. Rest of society
e. All of the above
A periodic leasehold tenancy may be terminated:
a. upon expiration of the period.
b. upon 6 months’ notice.
c. at the will of the parties.
d. upon notice of one period in advance.
Accountants would be subject to criminal liability where they:
a. negligently perform an audit.
b. willfully omit a material fact on a securities registration statement.
c. refuse to turn over working papers to a client.
d. willfully breach a contract.
In order to form a contract, the parties must:
a. manifest their agreement subjectively.
b. manifest their agreement objectively.
c. indicate solely through written word their intent.
d. create a formal document called a contract.
Intentional harm to property includes which of the following torts?
a. Trespass to real property
b. Nuisance
c. Trespass to personal property
d. Conversion
e. All of the above
Which of the following is not a negotiable instrument?
a. A check
b. A draft
c. A certificate of deposit
d. A stock certificate
Answer the following:
A merchant buyer of goods receives nonconforming goods. The merchant buyer
rightfully rejects and appropriately notifies the seller, but the seller has no agent in the
buyer’s city. The goods are perishable and threaten to decline in value speedily. The
merchant buyer has no further duty to the seller other than to await the seller’s
instructions.
If goods are sold and delivered to buyer with an option to return them, the risk is on the
buyer until they are returned.
The United States joined the Berne Convention, an international treaty protecting
copyrighted works.
Although in theory there is a distinction between a surety and a guarantor, in common
usage the two terms are almost synonymous.
The firm offer provision in Articles 2 and 2A of the UCC covers only merchant sellers.
Section 1 of the Sherman Act prohibits unilateral conduct.
A written and signed promise by Miller to Baker to deliver 1,000 pounds of flour in 30
days is an example of a negotiable instrument.
The buyer’s payment or tender of payment, unless otherwise agreed, is a condition to
the seller’s duty to tender and to complete delivery.
International courts have compulsory jurisdiction to resolve international disputes, and
they have the authority to resolve an international dispute even if the parties to the
dispute do not specifically accept the court’s jurisdiction over the matter.
Under the shelter rule, a person who is not a holder in due course can obtain the rights
of a holder in due course.
D drew a $100 check on ABC Bank payable “to the order of P.” P cashed the check at
First Bank. First Bank is an agent of P until the drawee bank pays the check.
The CFPA of 2010 requires that publicly held companies annually include a provision
in their proxy statements for a binding shareholder vote on executive compensation.
An employer may not be held liable if her employee sells liquor to an underage person
if this criminal act was unauthorized by the employer.
To create a joint tenancy, all tenants must acquire title by the same instrument.
A possessory interest in real property is called an estate.
After the formation of a limited partnership, the admission of additional general
partners can only be accomplished with the written consent of all partners.
How does infliction of emotional distress differ from assault and battery? What types of
situations are covered by infliction of emotional distress that would not be covered by
assault and battery? Give an example.
A new NAAQS does not require each state to submit an SIP.
A party liable on an instrument who makes proper tender of full payment to a person
entitled to enforce the instrument is discharged from liability for the face amount of the
instrument and for any interest accrued even if the tender is refused.
Injunctive relief is a common remedy under the Lanham Act.