Strategic alliances are often used by companies to enter a foreign market.
Some states permit a mortgagee to bring a separate legal action to recover a deficiency
from the mortgagor. If the mortgagee is successful, the court will award an equitable
judgment that entitles the mortgagee to recover the amount of the judgment from the
mortgagor’s other property.
Tender is a conditional offer by a contracting party to perform his or her obligations
under the contract.
An agreement is an involuntary exchange of promises between two or more legally
competent persons to do, or refrain from doing, an act.
With a substituted contract, all duties under the original contract are discharged
immediately upon the formation of the substituted contract.
The UCC does not allow the parties to waive the perfect tender rule.
Quite frequently, an innocent misrepresentation constitutes fraud.
The UCC recognizes five types of negotiable instruments.
Nominal damages are usually awarded in a moderate amount well within the
jurisdiction of a small claims court, such as $1,000.
An offer cannot be accepted if it is not communicated to the offeree by the offeror or a
representative or an agent of the offeror.
The placement of a child with an employee for adoption or foster care is not a situation
covered by the Family and Medical Leave Act.
Federal courts have non-exclusive jurisdiction to hear cases involving federal crimes,
antitrust, bankruptcy, patent and copyright cases, and suits against the United States.
Fraud in the inception exists when a party is deceived as to the nature of a document
being signed.
Common law provides that an accountant may be called to court to testify against his or
her client.
Due to evidentiary concerns of coercion, undue influence or duress, depositions cannot
be videotaped.
“Pay to Kathy Young” is a restrictive indorsement because it confines and limits
payment to Kathy Young.
Unless otherwise agreed, fixtures remain with real property when the real property is
sold.
Because an employer is required to provide reasonable accommodations to employees
with disabilities, an employer is permitted to ask personal disability-related questions to
an applicant during a job interview.
A false arrest is also a false imprisonment, but not all false imprisonments are also false
arrests.
Work-related stress is covered under workers’ compensation laws.
Under the maximizing profits theory of the social responsibility of business, it is
improper for a business to undertake charitable acts for the benefit of society if doing so
reduces profits.
A person who willfully violates the Securities Act of 1933 Act may be fined or
imprisoned for up to five years, or both.
A deed is an instrument used to transfer ownership of real property, but does not prove
that the holder currently owns the property.
Even if one or more of the disputing parties lives in another state or states, a state court
would have jurisdiction to hear a dispute over the ownership of a piece of real estate
located within the state.
A gift causa mortis is a gift made in contemplation of the execution of a will.
A debtor must receive pre-petition credit counseling within 180 days prior to filing his
or her petition for bankruptcy.
The principal and the agent are each personally liable for their own tortious conduct.
Perfection is necessary in order for a creditor to have a valid security interest.
A creditor beneficiary cannot sue on the contract that made her a creditor beneficiary.
Once a quorum is present, the withdrawal of shares does not affect the quorum of the
meeting.
In an auction with reserve, the seller retains the right to refuse the highest bid and
withdraw the goods from sale.
The most important factor in determining whether one who performs services for
another is an independent contractor is the degree of control that the hiring party
exercises over the party performing the work.
If a person owns real property in fee simple, his or her ownership does not end upon the
occurrence of any event.
Frank has agreed to be a surety for his daughter’s loan. If she defaults, the lender must
attempt to collect the debt from the daughter first, and may only sue Frank if the
daughter refuses to pay.
Accidents that occur at a company cafeteria or while on a business lunch for an
employer are covered by workers’ compensation.
Under the Fair Labor Standards Act, if an employee works 50 hours one week and 30
hours the next week, the employer owes no overtime pay, since the employee averaged
40 hours per week during the two-week period.
One reason for criticizing Rawl’s theory of social justice is that many persons would
choose not to maximize the benefit to the least advantaged persons in society.
In determining the fair distribution of marital property, the court may not consider the
length of the marriage.
Under which circumstance would Abby be considered a merchant under the UCC?
A) Abby is a computer dealer and sells her neighbor a computer at a garage sale.
B) Abby is a computer dealer and sells her neighbor a set of tools.
C) Abby is a computer dealer and offers to fix her neighbors computer.
D) Abby is a computer dealer and sells her neighbor a computer service agreement.
E) Abby is a computer dealer and teaches her neighbor how to build their own
computer.
An integration clause is also called a(n) ________ clause.
A) merger
B) substitution
C) addendum
D) acquisition
E) modification
What is a mortgage?
A) a loan to purchase a house or other real property
B) a contract to purchase a house or other real property
C) any loan associated with real property
D) a security agreement in which real property is pledged as collateral for the related
debt
E) an unsecured agreement in which real property is pledged as collateral for the related
debt
What was the result in Zuckerman v. Antenucci, involving the medical malpractice
action in which the plaintiff sued both the attending doctor and his partner?
A) Only the doctor who actually provided treatment was liable for the judgment.
B) Both partners were jointly and severally liable for the judgment.
C) The partner who did not actually provide treatment was liable, but only to the extent
of his capital contribution.
D) The doctor who actually provided treatment was liable for the judgment, and the
plaintiff could recover partnership assets, but not the personal assets of the non-treating
partner.
E) The non-treating partner was liable, but only because there was no agreement
between the partners that the non-treating partner would be immune from liability.
Matt owns a manufacturing plant that makes widgets. Matt will manufacture the next
set of widgets on June 1. On January 2, Sarah makes a contract to buy 100 widgets,
once they are made. On June 1, Matt makes the widgets. On June 10, Matt ships Sarah’s
100 widgets. On June 12, Sarah pays for the widgets. Sarah receives the widgets on
June 15. When are Sarah’s 100 widgets identified?
A) on January 2, when Sarah and Matt entered into the contract
B) on June 1, when Matt made the widgets
C) on June 10, when Matt shipped the widgets
D) on June 12, when Sarah pays for the widgets
E) on June 15, when Sarah receives the widgets
Miranda rights:
A) are all contained in the Fifth Amendment.
B) are all contained in the Sixth Amendment.
C) are a combination of rights contained in the Fifth and Eighth Amendments.
D) are a combination of rights contained in the Fifth and Sixth Amendments.
E) are a combination of rights contained in the Fifth, Sixth and Eighth Amendments.
Which of the following is not one of the types of contracts that many states have
enacted statutes to make enforceable against minors?
A) medical care
B) psychological counseling
C) agreements for educational loans
D) purchases of computer software
E) contracts to enlist in the military
When do registration statements usually become effective?
A) twenty business days after they are filed, unless the Securities and Exchange
Commission requires additional information to be disclosed
B) thirty business days after they are filed, unless the Securities and Exchange
Commission requires additional information to be disclosed
C) thirty-five calendar days after they are filed, unless the Securities and Exchange
Commission requires additional information to be disclosed
D) sixty business days after they are filed, unless the Securities and Exchange
Commission requires additional information to be disclosed
E) ten calendar days after they are filed, unless the Securities and Exchange
Commission requires additional information to be disclosed
In fighting a hostile takeover, a “Pac-Man” tender offer refers to:
A) an offer to merge with a friendly party that promises to leave the target corporation
intact.
B) an offer to sell a profitable division that is attractive to the outside interest.
C) a lawsuit filed primarily for the purposes of delay.
D) an offer to purchase a block of stock in the employee stock ownership plan.
E) the target corporation making a tender offer on the tender offeror.
Which of the following is not a type of commercial lease?
A) gross lease
B) double gross lease
C) net lease
D) double net lease
E) triple net lease
Matt is planning to file for bankruptcy. He wants to keep some of his property, so he
gives certain jewelry to his parents, with the understanding that they will return it later.
Matt also sells his car, worth $5,000, to his girlfriend for $100. These transfers are:
A) preferential transfers.
B) voidable preferences.
C) fraudulent transfers.
D) legitimate distributions of assets.
E) void preferences.
Which of the following is a type of damages recoverable in a breach of contract action?
A) compensatory
B) tangential
C) non-liquidated
D) phenomenal
E) non-cumulative
Which kind(s) of boycotts violate Section 1 of the Sherman Act?
A) an agreement among competitors to boycott a particular supplier
B) an agreement among competitors to not sell to a particular customer
C) an agreement among competitors to boycott a particular supplier, and an agreement
among competitors to not sell to a particular customer
D) any refusal to sell to a particular customer or purchase from a particular supplier
E) any refusal to sell to a particular customer
In connection with a checking account at a bank, what is an overdraft?
A) a check that the bank does not pay, due to insufficient funds in the account
B) a negative balance caused by a bank paying a check when there are insufficient
funds in the drawer’s checking account
C) a post-dated check for a larger amount than the drawer’s checking account balance
D) any kind of loan at a bank where a customer also has a checking account
E) a deposit by a customer that is later returned because of insufficient funds
A fee simple defeasible is also known as a(n) ________ fee.
A) unconditional
B) quantum
C) fractional
D) qualified
E) usury
Which of the following is true about cross-examination of a plaintiff’s witness in a trial?
A) Cross-examination is conducted by the plaintiff’s attorney only, and can cover any
matters relevant to the case.
B) Cross-examination is conducted by the plaintiff’s attorney only, and can cover only
matters that were brought up during the discovery process.
C) Cross-examination is conducted by the defendant’s attorney only, and can cover any
matters relevant to the case.
D) Depending generally on which side called the witness, cross-examination is
conducted by either the defendant’s attorney or the plaintiff’s attorney, and can cover
only matters that were brought up in the direct examination.
E) Cross-examination is conducted by the defendant’s attorney only, and can cover only
matters that were brought up during the discovery process.
Donna contracted with Michael’s Drug Corporation to buy sedatives on behalf of Clark,
a dentist. Clark instructed Donna to use Donna’s own name, and to not disclose to
Michael’s that she was working on Clark’s behalf. If Donna signs the contract in her
name only and Clark refuses to honor it:
A) Donna is not liable on the contract, because she only acted as an agent.
B) Donna is liable on the contract, but she may sue Clark for indemnification.
C) Donna is liable on the contract, but she may sue Clark for reimbursement.
D) Donna is liable on the contract, but she may sue Clark for compensation.
E) Clark has no liability to anyone, since his name was never disclosed.
Which of the following banks are the same bank regarding an “on us” item?
A) the depository and the payer
B) the payee and intermediary
C) the collecting and intermediary
D) the payee and depository
E) the payee and collecting
Which of the following statements regarding product liability is not true?
A) One major problem with using negligence for product liability is that the plaintiff
must show some specific act of negligence.
B) Failure to warn about a generally known danger usually will lead to liability.
C) Strict liability is a “no fault” system.
D) To be held liable in strict liability, the product should not have been modified since it
left the defendant’s control.
E) Strict liability applies to both physical injury and property damage in most states.
Which of the following is true about the required notice for shareholders’ meetings?
A) The notice can be oral or written, but is required only for special meetings.
B) The notice can be oral or written, and is required for both annual and special
meetings.
C) The notice must be written, but is required only for special meetings.
D) The notice must be written, and is required for both annual and special meetings.
E) The notice must be written, but is required only when unusual items have been
scheduled on the meeting agenda.
Limited liability companies are creatures of ________.
A) local ordinance
B) state law
C) federal law
D) constitutional mandate
E) the United States Supreme Court
Section 1(a) of the Securities Exchange Act of 1934 is an antifraud provision that
prohibits material misrepresentations or omissions of a material fact in the proxy
materials.
Best, Inc. wishes to issue new stock to raise capital. Best is incorporated, and does all of
its business in Indiana. Best intends to offer and sell its new stock only to residents of
Indiana, and to restrict sales to individuals from other states for the proper time. Which
of the following best describes the status of Best’s new stock?
A) This transaction is exempt as an intrastate offering.
B) This transaction is exempt as an intrastate offering, but only if Best sells exclusively
to accredited investors.
C) This transaction is exempt as an intrastate offering, but only if Best issues less than
$1.5 million in securities.
D) This transaction is exempt as a private placement.
E) Because the securities are traded only in interstate commerce, the securities
themselves are exempt.
Under the Uniform Simultaneous Death Act, when two persons who would inherit
property from each other die together in such a way that it is impossible to determine
who died first, the property of each is distributed:
A) as if he or she had died first.
B) as if he or she had died after the other person.
C) as if the older person had died first.
D) as if the other person had not been left anything in the will.
E) as if each had half the combined assets of both parties.
Which of the following is part of the United States Supreme Court’s test for obscene
speech, as established in Miller v. California?
A) The average person, applying contemporary community standards, would find that
the work, taken as a whole, appeals to the prurient interest.
B) The work depicts or describes, in an implicit way, sexual conduct generally defined
by applicable international law.
C) The work, taken in part, lacks any literary, artistic, political, or scientific value.
D) A reasonable person, applying traditional community standards, would find that the
work, in whole or in part, appeals to the salient interest.
E) The work, taken as a whole, substantially interferes with interstate commerce.
Mike owns eight bars in Delaware, Maryland and Pennsylvania. He has decided to
grow the business by having a presence in the Midwest. If he acquired a chain of bars in
Kansas and Missouri, what type of merger has occurred?
A) a conglomerate merger
B) a vertical merger
C) a product extension market merger
D) a geographic market extension merger
E) a regional expansion merger
Bob and Company, Inc., a public accounting firm, has been performing audit work for
Slick Willey’s Art House for years. Despite making thorough investigations of the
financial information provided by Slick Willey’s, Bob and Company, Inc. has failed to
uncover the fact that Slick Willey’s’ was laundering money for organized crime. The
United States Justice Department has filed RICO charges against both Slick Willey’s
and Bob and Company, Inc. Can Bob and Company, Inc. be liable for a violation of
RICO?
A) yes, since the accounting firm helped cover up the crime by failing to discover it
B) yes, since the accounting firm could not have truly followed generally accepted
accounting principles and generally accepted auditing standards, or they would not have
failed to uncover the crime
C) no, unless Bob and Company, Inc. participated in Slick Willey’s management
D) no, because accountants are specifically excluded from liability under RICO
E) yes, if Bob and Company, Inc. provided unqualified opinions regarding Slick
Willey’s audits, but no if the opinion letters were not unqualified
What is the difference between a sale on approval and a sale or return?
A) There is no difference between a sale on approval and a sale or return because you
return the products under both scenarios.
B) Under a sale on approval you must return the goods within a reasonable time and
under a sale or return you must return the goods within 30 days.
C) Under a sale on approval the risk of loss is with the buyer, but under a sale or return
the risk of loss is with the seller.
D) Under a sale on approval the title is with the buyer, but under a sale or return the title
is with the seller.
E) Under a sale on approval a buyer cannot resell the goods unless it is consistent with
their use, but under a sale or return a buyer may resell goods as and return those that are
unsold.
Which of the following is not a characteristic of an “easement appurtenant?”
A) An easement appurtenant is created when the owner of one piece of land is given an
easement over an adjacent piece of land.
B) The land over which the easement is granted is called the servient estate.
C) An easement appurtenant authorizes a person who does not own adjacent land the
right to use another person’s land.
D) The land that benefits from the easement is called the dominant estate.
E) An easement appurtenant runs with the land.
Which of the following is a requirement of a valid offer?
A) It must be unambiguous.
B) It must be written.
C) It must follow the mirror-image rule.
D) It must be unambiguous, and it must be written.
E) It must be written, and it must follow the mirror-image rule.
Contracts based on illegal consideration are ________.
A) executory
B) executed
C) void
D) voidable
E) conditionally enforceable
Sam went to Stable National Bank, borrowed $1,000, and granted a security interest in
his sailboat to the bank. This security interest attached on March 1, and was perfected
when the bank filed a financing statement on May 15. On April 12, Sam went to Solid
National Bank, borrowed $2,000, and granted a security interest in the same sailboat.
Solid perfected its security interest by filing a financing statement on April 20. Sam
defaulted on both loans in June, having paid off none of the principal on either loan.
Both banks want to repossess the boat. If the boat can be sold for $1,200, how much of
the $1,200 would each bank be entitled to receive?
A) Stable is entitled to receive $1,000, and Solid is entitled to receive nothing.
B) Stable is entitled to receive $1,000, and Solid is entitled to receive $200.
C) Stable is entitled to receive $400, and Solid is entitled to receive $800.
D) Stable is entitled to receive nothing, and Solid is entitled to receive $800.
E) Stable is entitled to receive nothing, and Solid is entitled to receive $1,200.
Under what circumstances is a proprietorship required to file a “fictitious business
name” statement?
A) any time that there is a change in the name of the business
B) any time that the business is sold by one proprietor to another
C) when the business is operated under a trade name other than the proprietor’s name
D) All proprietorships are required to file a fictitious business name statement.
E) only when requested by the office of the secretary of state
Why is there a distinction in the law between lost and mislaid property? Should
someone who finds mislaid property in a restaurant be able to recover it from the store
if the true owner does not appear within a certain period of time to claim the property?
Henry writes a series of essays that have an environmental focus. One of these essays
contains a very detailed description of the workings of a forest ecosystem. A national
environmental organization opposed to logging in certain areas has copied this essay
and includes it in materials that the group gives to members of the public in hopes of
persuading those persons to join the opposition to logging in these areas. Henry has
never wanted his work to be forced onto people and objects to his essay being copied
and distributed like this. He is afraid people will think he is part of this organization,
and he did not want his essay used this way. Was this within fair use?
In the case where General Motors was found liable for defective design of the fuel tank
in a Chevrolet Malibu from the late 1970s, General Motors was not allowed to
introduce evidence at the trial about the car’s safety history or evidence that the driver
was intoxicated when the accident occurred. Should this evidence have been able to be
introduced?
Under the objective theory of contracts it is possible that one can be in a contract
against her will. What are the advantages of the objective theory of contract formation?
Do the wealthier nations of the world have an obligation to assist the less-wealthy
nations in the development and implementation of programs and technology to reduce
pollution?
Connie knows that you are studying the law of business organizations. She comes to
you for advice regarding what types of fees she will have to pay if she decides to
operate a franchise, and how those fees are typically computed. What would you tell
her?
As courts decide cases involving the Internet and new kinds of issues not addressed
previously, what role, if any, does precedent play? What role should it play? What
difficulties could arise?
Lance, a consumer, accesses JGBikes, an Internet bicycle products site and wants to
order 5 bicycle tubes. When he types in the number, he accidentally types in 55.
JGBike’s site shows a page with the order details and requires Lance to click accept.
After he clicks accept, another page comes up called an “Order Confirmation
Verification Page” which requires him to accept again. Lance does so. By accepting,
JGBike is authorized to withdraw the contract cost from the bank account that Lance
provided, which they immediately do. The next morning he notices the fact that he
ordered 55 tubes rather than 5. He calls JGBikes and discovers that the order has
already been shipped. He informs them of the mistaken order and offers to return the 50
tubes or destroy them at JGBike’s option. JGBikes informs Lance that the order is final
and that they will neither accept a return nor refund his money. If Lance sues, what will
be the outcome?
Why do accountants not enjoy an accountant-client privilege similar to the
attorney-client privilege?
Should a parent or guardian’s agreement to an exculpatory clause on behalf of a minor
be binding on the minor? Examples might be a parent signing such a clause on behalf of
the minor for a school field trip (thus the parent is not present and the exculpatory
agreement is signed prior to the undertaking of the activity) and when an entire family
undertakes an activity together such as skiing, snowmobiling or white water rafting.
What ethical issues are involved here?
Pat is an avid mountain biker who knows a great deal about bicycle repair. Tom is also a
mountain biker, but he does not know much about bicycles or their repair. The gears on
Tom’s bike were not working properly, so he took his bike to Pat and asked if Pat would
repair it. Pat said that was possible, so Tom left his bike with Pat for the week. Pat was
able to fix and adjust the gears on Tom’s bike so that they worked properly. Tom’s bike
was a “top-of-the-line” model, and much newer than Pat’s bike. When Tom called Pat
on Friday to see if the bike was ready for him to pick up, Pat asked to keep the bike
until Sunday. Pat said she wanted to try the bike out on Sunday on a ride with some
friends, and Tom told Pat that this was acceptable. On Saturday night, the bike was
stolen off Pat’s third-floor apartment balcony where the bike was unlocked. Assume the
historical rules are in place and that the state has not passed any specific statute
covering this situation. Discuss whether Pat is liable to Tom for the loss.
How specifically does real estate law define fixtures? Is a specific definition possible?
What implications are there for parties to a contract for the sale and purchase of real
property?
Several recent college graduates perfect a new beer that uses large amounts of garlic in
the brewing process. They form a corporation called Garlicbrew, Incorporated to
produce and market this beer. Nance buys one hundred shares of the ten thousand
shares in Garlicbrew’s initial public offering. Nance wants access to corporate records
in order to learn more about the company so she can be a more informed shareholder.
She also wants to learn as much about Garlicbrew as she can, because she is
considering starting a company to develop and market a beer that uses onions in the
brewing process. The corporate officers refuse to let Nance have access to any records
of the corporation. Can Nance force the officers to allow her access to the corporate
records?
You are researching any significant economic communities to which Japan and China
belong. What will you find regarding membership or significant involvement between
these countries and international economic communities?
In 2004, Pam writes a will leaving her 2002 BMW to her oldest daughter, Ann. In 2005,
she writes another will leaving the same 2002 BMW to her youngest son, Frank. In
2006, she trades the BMW in on a Porsche. Shortly thereafter, she writes a codicil that
states in part, “This codicil is amending my will, in which I left my 2002 BMW to my
daughter Ann. I am now changing that to read that I am leaving my 2006 Porsche to
Ann.” Assuming that both wills and the codicil meet all the required will formalities,
who is entitled to the Porsche when Pam dies in 2011? Explain your reasoning.
Ingrid works for a large wholesale operation in the finance department of a corporation.
In connection with the investigation of suspected embezzlement, her employer looked
at her saved e-mail at work. Ingrid’s employer then, from some forwarded messages,
discovered her home e-mail address and convinced the Internet service provider to
allow it access to that as well. Apparently, Ingrid has become a suspect in the
embezzlement investigation. The police have become involved. Discuss this situation.
If someone buys a piece of artwork that neither the buyer nor seller knows is a
masterpiece, this is considered a mutual mistake of value. Can the seller rescind such a
contract? If, however, a buyer and seller think the piece of artwork being sold is a
particular masterpiece, but in fact it is not, this is considered a mutual mistake of fact.
Can the buyer in this case rescind the contract? Why is the result different in these two
situations? What is different about the two situations that would suggest that they have
different outcomes?
Following the events of September 11, 2001, the government took many actions
directed at preventing acts of terrorism. One of the first and most visible was increased
intensity of searches at airports. When government personnel do the screening, the
Equal Protection Clause applies. Should government screeners be able to search
members of certain groups more rigorously than others? Is it constitutional to do so?