Unless the partnership agreement authorizes it, partners are not entitled to receive a
salary for service rendered on behalf of the partnership.
One of the two major functions of the U.S. Constitution is to limit the government’s
ability to interfere with individual rights.
To be lawful, an affirmative action plan must be narrowly tailored to achieve some
compelling interest.
With computer software, source code but not object code can be copyrighted.
The Restatement (Second) of Contracts merely requires that the terms of the offer be
“reasonably certain.”
Most states permit pro se divorces.
“Vesting” occurs when an employee has a non-forfeitable right to receive pension
benefits.
Patent infringement occurs when someone makes unauthorized use of another’s patent.
The term “instrument” means “negotiable instrument.”
A fraudulent misrepresentation made in order to receive a policy of life insurance may
result in the company not having to pay on the policy.
Disparate treatment discrimination occurs when an employer treats a specific
individual less favorably than others because of that person’s race, color, national
origin, sex, or religion.
A sole proprietor has the right to make all management decisions concerning the
business, including those involving hiring and firing employees.
The distinction between lost and mislaid property is based on how the property came to
be in the place where it was found.
When an assignor makes an assignment of a right under a contract, the assignee is
under a duty to notify the obligor that 1.) the assignment has been made and 2.)
performance must be rendered to the assignee.
Commercial or wholesale wire transfers may be used to transfer payments between
businesses and financial institutions.
There are no juries in federal District and the Circuit Courts of Appeal.
In a merger, the shareholders of the merged corporation always receive stock of the
surviving corporation.
The identification of goods means distinguishing the goods named in the contract from
the seller’s or lessor’s other goods.
Political speech is an example of fully protected speech.
An accountant’s failure to follow GAASs when conducting audits constitutes a felony.
Congress has the authority to regulate an activity that does not itself involve interstate
commerce if the activity does have an effect on interstate commerce.
Property owners have no ownership interest in the air space above their property.
Insurance and annuity contracts issued by insurance companies are exempt from
registration with the SEC.
Many spam messages are fraudulent and deceptive.
If a franchise is terminated without just cause, the franchisee can sue the franchisor for
wrongful termination.
A time draft is payable on sight.
A reaffirmation agreement need not be filed with the bankruptcy court.
A check can be indorsed multiple times before being presented for payment.
A statute of repose sets a limited time after a product is first sold that a product liability
suit can be brought.
Once created, a negotiable instrument can be transferred to subsequent parties by
arbitrage.
Common law defines minors as females under the age of 18 and males under the age of
21.
Which of the following is one of the general kinds of indorsements?
A) special
B) ratifying
C) permanent
D) nominal
E) negotiated
The one-year “on sale” doctrine is also called the:
A) public sale doctrine.
B) public utilization doctrine.
C) public application doctrine.
D) public exercise doctrine.
E) public use doctrine.
Which of the following is generally true about exculpatory clauses?
A) They are not valid with respect to intentional acts.
B) The test is if they are reasonable in time, scope and geographic area.
C) They are always found to be valid.
D) They are not valid for ordinary negligence.
E) They are never valid.
Which of the following is the usual measure of damages for a breach of a sales
contract?
A) the difference between the contract price and the market price of the goods at the
time and place the goods were to be delivered
B) the difference between the contract price and the market price of the goods at the
time the contract was entered into
C) the difference between the contract price and the market price of the previous
contract entered into between the parties immediately prior to the contract that was
breached
D) the difference between any liquidated damages provision and the amount of actual
damages
E) the difference between the market price and the liquidated damages provision
On November 12th, Mike orally agrees to sell his organ to Betty for $200.00, including
delivery. Betty orally accepts the offer and pays Mike the $200.00 on November 13th.
Mike, however, is very busy and is unable to deliver the organ until November 19th.
Which of the following is correct?
A) On November 13th, the contract was executory.
B) On November 20th the contract will be executed, assuming Mike delivers the organ
on November 19th.
C) This is an informal contract.
D) As of November 13th, this is an informal, executory contract, and it will be an
executed contract on November 20th, assuming Mike delivers the organ on November
19th.
E) There is not contract in this case, since Mike did not fulfill the “benefit of the bargain
on November 13th.
Which of the following U.S. Supreme Court decisions creates precedent for future
cases?
A) majority decisions
B) unanimous decisions
C) plurality decisions
D) majority decisions and unanimous decisions
E) unanimous decisions and plurality decisions
Which of the following is the simplest form of business organization?
A) sole proprietorship
B) general partnership
C) limited partnership
D) limited liability company
E) corporation
Which of the following is not one of the four types of tenancies?
A) periodic tenancy
B) tenancy for years
C) tenancy at will
D) tenancy under lease
E) tenancy at sufferance
Tony comes home from a night out and hangs his clothes in his closet before going to
bed. In the morning, he cannot find his keys, which he left in his pants pocket hung in
his closet. The keys are:
A) lost.
B) mislaid.
C) abandoned.
D) estray.
E) astray.
In general, what is the effect of one party being mistaken about the subject matter of a
contract?
A) The mistaken party can rescind the contract.
B) Either party can rescind the contract.
C) Either party can rescind the contract, and the mistaken party can recover damages.
D) Either party can rescind the contract and/or recover damages.
E) Neither party can rescind the contract or recover damages.
Generally, if two creditors have perfected security interests in the same collateral, only
one of which is a purchase money security interest, which has the superior right
(priority), assuming all notice is properly given within the appropriate time periods?
A) the first to perfect
B) the first to attach
C) the purchase money security interest
D) they have equal priority
E) the interest that is not the purchase money security interest
Who is the mortgagor in mortgage transaction?
A) the lender
B) the party who arranges the loan for the lender
C) the borrower
D) the party who forecloses on a piece of property
E) the seller of the property
Which of the following powers do administrative agencies typically have?
A) rulemaking
B) statutory interpretation
C) dispute adjudication
D) rulemaking and statutory interpretation
E) rulemaking, statutory interpretation, and dispute adjudication
Which of the following is not a special federal court established by the United States
Congress?
A) U.S. Tax Court
B) U.S. Court of Federal Claims
C) U.S. Court of International Trade
D) U.S. Court of Intrastate Commerce
E) U.S. Bankruptcy Court
Which of the following is true about the ability of a partner to withdraw from a general
partnership?
A) Partners always have both the power and the right to withdraw from a partnership.
B) Partners always have the right, but not necessarily the power, to withdraw from a
partnership.
C) Partners always have the power, but not necessarily the right, to withdraw from a
partnership.
D) In some cases, partners have neither the right nor the power to withdraw from a
partnership.
E) Partners always have the power to withdraw from a partnership and, under the
Uniform Partnership Act, the right to withdraw from a partnership within thirty days
after it is formed.
Little Bobby, who is 5 years old, finds his older brother’s “Extendo Sword”, a toy sword
about a foot long that is sharp and springs out to 5 feet long when a button is pushed on
the handle. The label on the sword says it is safe for children over 3 years of age. Bobby
pushes the button when the sword is pointed toward his face and, just as all properly
functioning “Extendo Swords” do, the sword shot out. Bobby is injured and under
products liability, sues the toy store that sold the toy. Bobby will most likely:
A) lose because of contributory negligence.
B) lose if he cannot prove negligence on the part of the toy store.
C) win on the basis of a manufacturing defect.
D) win on the basis of a design defect.
E) lose if the defendant can show that the sword was a state of the art design.
The Federal Reserve System, which consists of ________ regional Federal Reserve
banks located in different geographical areas of the country, assists banks in the
collection of checks.
A) six (6.)
B) twelve (12.)
C) twenty (20.)
D) twenty-one (21.)
E) fifty (50.)
According to the ________, Internet service providers are not liable for the content
transmitted over their networks by e-mail users and websites.
A) Communications Decency Act of 1996
B) Communications Decency Act of 2006
C) Communications Censorship Act of 1996
D) Communications Censorship Act of 2006
E) Electronic Communications Liability Act of 2006
Which of the following is true regarding inside directors and outside directors?
A) Neither an inside director nor an outside director may be an officer of the
corporation of which they are a director.
B) An outside director may be an officer for the corporation for which he or she is a
director, but an inside director may not.
C) An inside director is a person who is also an officer of the corporation, while an
outside director is not.
D) An outside director may not be a director of any other corporation.
E) An inside director must be a resident of the state of incorporation.
What is the purpose of a “choice of forum” clause in an international contract?
A) to give the parties a choice of nations in which to bring a lawsuit under the contract
B) to determine in advance where any lawsuit arising from the contract will be brought
C) to determine who will choose the location where any lawsuit arising from the
contract will be brought
D) to determine which nation’s law will apply in settling disputes that arise under the
contract
E) to limit the plaintiff’s choice of remedy
What is the significance of requiring that a misrepresentation relate to a “material fact”
in connection with a fraud in the inducement case?
A) The misstatement must relate to the substance that the item is made of.
B) The misstatement must have been a significant factor in the plaintiff’s decision to
enter into the contract, and cannot relate to an opinion or prediction.
C) The misstatement must have been a correct statement at some point in the past.
D) The misstatement can relate to any fact before or after the contract was formed.
E) The misstatement must not involve an issue of law.
Which of the following is true about the International Court of Justice?
A) It is the appellate court for decisions of the World Court.
B) It can hear cases involving governments, businesses or individuals of nations that are
members of the United Nations.
C) No nation can have more than one judge among the fifteen sitting judges.
D) A nation that is a party to a dispute before the International Court of Justice may
appoint one judge on an “ad hoc” basis for the particular case.
E) It is located in Washington, D.C.
Seline operates, as a sole proprietorship, a dog grooming service under the fictitious
name “Grooving to Grooming.” She specializes in preparing her canine clients for dog
shows. Unfortunately, one of Susie’s employees used a bad combination of grooming
products, causing an extreme amount of hair loss on a prize poodle. The poodle’s owner
sued Seline. Seline was not overly concerned, because she had most of her assets in her
own name, and only a small amount of capital invested in her business. Is Seline’s lack
of concern about the safety of her personal assets warranted?
A) no, Seline should be concerned about her personal assets because, as a sole
proprietor, her personal assets may be taken to satisfy any judgment resulting from
employee negligence committed in the “course and scope” of employment
B) no, Seline should be concerned about her personal assets, but only because injury
rather than property damage was involved, and she can, therefore, be sued personally
C) no, Seline should be concerned about her personal assets, but only because she
operated under a fictitious name and she can, therefore, be sued personally
D) yes, Seline is right to be unconcerned, because it is impossible for the plaintiff to
reach her personal assets
E) yes, Seline is right to be unconcerned, so long as she gave customers notice that she
was operating under a fictitious name
Can silence be considered acceptance of an offer?
A) no, not in any circumstance
B) yes, in all circumstances
C) yes, in connection with any offer that clearly indicates that silence will be considered
acceptance
D) In most cases silence cannot be considered acceptance, but there are several
situations where silence can be considered acceptance.
E) only if the parties have no express agreement that silence cannot be considered
acceptance
Assume that a law is passed that establishes airline security screening requirements for
male passengers that differ from the requirements for female passengers. In evaluating
an equal protection challenge to this law, a court would use:
A) strict scrutiny.
B) intermediate scrutiny.
C) limited scrutiny.
D) the rational basis test.
E) utmost scrutiny.
A seller’s statement of opinion, also known as ________, ________ an express
warranty.
A) puffing; creates
B) puffing; does not create
C) embellishing; creates
D) embellishing; does not create
E) embellishing; ratifies
Article 2A of the UCC does which of the following?
A) sets forth a set of uniform rules for the creation and enforcement of contracts for the
sale of goods
B) sets forth a set of uniform rules for the creation and enforcement of all contracts
C) sets forth a set of uniform rules for the creation and enforcement of contracts for the
lease of goods
D) sets forth a set of uniform rules for the creation and enforcement of “hybrid”
contracts (i.e., contracts that involve both the provision of goods and the provision of
services)
E) sets forth a uniform set of rules for the enforcement of contracts for services
In which type of franchise does the franchisor provide a ‘secret formula” to the
franchisee?
A) distributorship
B) processing plant
C) re-servicing
D) chain-style
E) area
Maurice is interested in operating an internet company in China. Maurice is aware,
however, that the Chinese government has prohibited complete ownership of internet
companies in China by foreigners. Additionally, the Chinese “connections” method of
conducting business is a hurdle. What would be a good way for Maurice to access this
market?
A) by talking with the Chinese leaders, and encouraging them to change their minds
B) by forming a corporation in China
C) by forming a limited liability company in China
D) by bringing a lawsuit in the International Court of Justice against China
E) by forming a strategic alliance with a company in China
The doctrine that imposes liability on a seller of a product only if the seller sold the
defective product directly to the injured party is known as:
A) privity of contract.
B) resolution of contractual relationships.
C) doctrine of direct commercial contacts.
D) doctrine of merchants’ liability limitations.
E) non-privity of contract.
Are advertisements offers?
A) yes, an advertisement is an offer unless there is language indicating that it is not an
offer
B) yes, all advertisements are offers
C) It will always depend on whether the advertisement states that it is or is not an offer.
D) no, most advertisements are not offers, although very specific advertisements can be
offers
E) no, advertisements cannot be offers
Which of the following is not a major form for conducting businesses and professions
in the United States?
A) sole proprietorship
B) general partnership
C) unlimited partnership
D) limited liability partnership
E) corporation
The Privileges and Immunities Clause provides that:
A) it is a privilege to be granted immunity from a criminal prosecution.
B) states must generally treat nonresidents as favorably as residents.
C) corporations receive most of the same constitutional protections as individuals.
D) the government is not subject to being sued unless the constitutional matter is a right
rather than a privilege.
E) an individual has the privilege of practicing any religion, and is immune from any
government interference with that right.
The Federal Trade Commission is an example of:
A) a federal agency created by Congress.
B) a corporation subsidized by the federal government.
C) a branch of the U.S. Supreme Court.
D) a temporary commission created by executive order that has become permanent.
E) a judicially-created subdivision of the executive branch.
In terms of patent protection the United States still follows the ________ rule rather
than the ________ rule followed by some other countries
A) first-to-invent; first-to-file
B) first-to-file; first-to-invent
C) first-to-file; first-to-perfect
D) first-to-invent; first-to-perfect
E) first-to-perfect; first-to-invent