Bob rented a lawn mower from Scott Rentals. The lawn mower wheel was loose when
Bob picked up the mower. When he began to use it, the wheel fell off, causing the
mower to tip over onto his foot. Under what theory can Bob hold Scott liable for his
injuries?
a. Breach of warranty of merchantability.
b. Strict liability in tort for a defective condition.
c. Both of these are applicable.
d. Neither theory is applicable to leases.
The contractual duties owed by a principal to an agent are the duties of:
a. compensation.
b. reimbursement.
c. indemnification.
d. All of these.
e. None of these.
An aggrieved seller who resells wrongfully rejected goods is accountable to the original
buyer for any profit made on the resale.
a. True
b. False
Ratification does need to be express; it may be implied from the minor’s conduct.
a. True
b. False
Where goods are in the possession of a bailee and are to be delivered without being
moved, in most instances the seller may either tender to the buyer a document of title or
obtain an acknowledgment by the bailee of the buyer’s right to possess the goods.
a. True
b. False
Deception may occur either through false representation or material omission.
a. True
b. False
Under the Statutory Close Corporation Supplement, a closely held corporation may use
a shareholder agreement in place of bylaws.
a. True
b. False
Title to land may be transferred by which of the following?
a. Deed.
b. Will or by the law of descent upon the death of the owner.
c. Open, continuous, and adverse possession by a nonowner for a statutorily prescribed
period of years.
d. All of these.
ABC Company sells nursery products. It only hires women as sales representatives
because it thinks that its customers relate better to women. Which of the following is
true?
a. This is a violation of Title VII of the 1964 Civil Rights Act.
b. This is an example of a bona fide occupational qualification.
c. This is a violation of the Equal Pay Act.
d. None of these.
Rule utilitarianism supports rules that, on balance, produce the greatest good.
a. True
b. False
Most forms of speech are protected by the strict or exacting scrutiny standard.
a. True
b. False
The main provision of the Restatement (Third) of Torts, Section 2, recognizes three
types of product defects: manufacturing defects, design defects, and failure to warn, but
it imposes strict liability only for manufacturing defects.
a. True
b. False
The characters and the names of a television show may be registered as collective
marks.
a. True
b. False
A “Vertical Restraint Index” is a measure of relative market share.
a. True
b. False
A qualified indorsement destroys negotiability.
a. True
b. False
Deontological theories assess good and evil in terms of the consequences of actions.
a. True
b. False
Larry leases his farm to Tom for a period of twenty years. What interest does Larry
have in the land?
a. A vested remainder.
b. A reversion.
c. A private easement.
d. A possibility of reverter.
Delay will have no effect on the power of avoidance.
a. True
b. False
Ratification can occur in which of the following ways?
a. Through express language.
b. As implied from conduct.
c. Through failure to make a timely disaffirmance.
d. All of these.
NAFTA’s objectives include to:
a. create trade barriers between the U.S., Mexico, and Canada.
b. increase investment opportunities.
c. enforce real property rights.
d. All of these are objectives.
In liquidation cases the creditors look to the debtor’s property at the commencement of
the bankruptcy proceeding.
a. True
b. False
Insiders would violate the short-swing profits rule (16b) of the 1934 Act by buying
stock on January 1 and selling on May 1.
a. True
b. False
Which of the following is NOT a basis for involuntary dissolution?
a. A proceeding initiated by the secretary of state, if it is established that the corporation
failed to pay its franchise tax.
b. The directors are deadlocked and the shareholders cannot break the deadlock.
c. The shareholders dissent to a merger and are asserting their appraisal rights.
d. None of these.
Sam wants to sell his golden retriever to Al. Sam tells Al that the dog is three years old
and that he will point, back, and retrieve. Al relies on these statements and purchases
the bird dog. Although the dog is three years old and will point at birds, he will not back
(honor another dog’s point). The buyer has most probably been a victim of:
a. duress.
b. undue influence.
c. fraud in the inducement.
d. fraud in the execution.
One difference between large, publicly held corporations and closely held corporations
is that more of the shares of closely held corporations are held by institutional investors.
a. True
b. False
Paul promises Marty $1,500 if he will completely landscape Paul’s yard. Which of the
following would discharge Paul’s obligations to pay under this contract?
a. Marty leaves a one-foot strip of land barren.
b. Marty doesn’t begin work on the landscaping until after he finishes two other jobs.
c. Marty doesn’t plant any flowers or grass.
d. Paul isn’t satisfied with Marty’s design.
An arm’s length transaction is one in which:
a. the parties owe each other a special duty of confidentiality.
b. the parties owe each other a fiduciary duty.
c. the parties are acting in their own self-interest.
d. None of these.
In an article about a prominent judge, a newspaper indicates that the judge had
organized crime connections. The judge sues. The judge will have a cause of action:
a. if the suit is for defamation and the newspaper responsibly checked its sources.
b. if the suit is a suit for intrusion.
c. whether or not the newspaper checked its sources as long as the information printed
is ultimately found to be untrue.
d. if the statement, which was untrue, was made with malice.
To be effective, title to land may transferred only by deed.
a. True
b. False
Governments can use nontariff barriers to give local industries a competitive advantage.
a. True
b. False
“Restricted securities” are exempted from registration.
a. True
b. False
a. Distinguish between an assignment, a delegation, and a third-party beneficiary
contract as to the time rights of the third party arise.
b. Identify and define the following terms: assignor and assignee; delegator and
delegatee; intended beneficiary, incidental beneficiary, creditor beneficiary.
Which of the following activities is identified as an unfair employer practice under the
NLRA?
a. To interfere with employees’ rights to unionize and bargain collectively.
b. To refuse to bargain in good faith with duly established employee representatives.
c. To discriminate against union members.
d. All of these.
Bailments for the bailee’s sole benefit are usually limited to the gratuitous loan of
personal property for use by the bailee.
a. True
b. False