The Federal Trade Commission Act allows the FTC to:
a. determine what constitutes deceptive advertising practices.
b. prohibit all advertising in certain professions.
c. require advertisers to contribute to a fund to reimburse injured consumers.
d. require the independent testing of consumer goods.
George has been declared incompetent by the court and is under the care of his sister.
Unknown to his sister, George rents the 10,000-seat civic center for his birthday party.
George’s contract to rent the civic center is best described as:
a. a void contract.
b. a quasi contract.
c. a voidable contract.
d. an enforceable contract.
If Marie, a minor, disaffirms the purchase of her new car that she has recently wrecked,
in most jurisdictions she need only return the damaged vehicle to validly disaffirm the
contract.
a. True
b. False
Critics of business offer all but which of the following arguments to support their
contention that business must help resolve societal problems?
a. Social contract.
b. The more responsibly companies act, the less government must regulate them.
c. Involvement in social causes makes good business sense.
d. Expertise.
Jan promises Eli $4,000 for one of his original paintings on the condition that she
receives $1 million from her mother’s will. Jans promise:
a. is illusory.
b. is legally sufficient unless Jan knows she cannot inherit the $1 million.
c. is a conditional promise, which is not sufficient to form consideration.
d. is legally inadequate, and the courts will therefore not enforce it.
Usually in cases where there is a known principal, the agent has liability for, and rights
under, contracts made on behalf of a principal.
a. True
b. False
In the case of Rea v. Paulson, the court found no undue influence because the party in
the dominant position had insisted that the weaker party seek independent advice about
deeding her house.
a. True
b. False
Zelda signs a promissory note for $2,500 to First Bank. At the request of both Zelda and
the bank, Ann also signs the note as an accommodation maker. In this situation:
a. Zelda is primarily liable on the note.
b. Ann is primarily liable on the note.
c. Ann has secondary liability on the note
d. Zelda and Ann are both primarily liable on the note.
e. Zelda is primarily liable andAnn has secondary liability on the note
When the agency terminates, the agent’s duty of confidentiality continues.
a. True
b. False
Under the UCC, a(n) __________ is a practice or method of dealing regularly observed
and followed in a place or vocation or trade.
a. course of dealing
b. usage of trade
c. course of performance
d. integrated document
Before granting an injunction enjoining a former employee from competing in a
described territory, the courts insist that the employer demonstrate that the restriction is
__________ to protect the employer’s legitimate interest.
a. exculpatory
b. unconscionable
c. necessary
d. usurious
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.
a. True
b. False
The word “parol” literally means release.
a. True
b. False
Employers are subject to civil, but not criminal, penalties for violations of the
Occupational Safety and Health Act.
a. True
b. False
Jack has been in the business of selling carpeting for 20 years. He calls Bob, who is
opening another branch of his furniture stores, and offers to sell him 100 square yards
of carpet at $20 per square yard. Bob agrees and sends back the following letter
confirming the deal:
Dear Jack:
As we discussed on the phone January 3, we accept your offer of 100 square yards of
Saxony “heather blue” carpeting at the rate of $20 per square yard. We also reserve the
right to purchase any additional yardage we need to carpet our other showroom
facilities at the same rate for one year from that date.
Very truly yours,
Bob
Which of the following is true?
a. There is a contract for only 100 square yards of carpeting.
b. There is a contract for 100 square yards PLUS the additional yardage.
c. There is no contract since Bob made a counteroffer.
d. There is no contract because the additional term is too uncertain to become a contract
term.
The regulation of insurance has been left to the states.
a. True
b. False
A secondary-line injury to competition occurs when the recipient of a favored price
passes the benefits of the lower price on to the next level of distribution.
a. True
b. False
Marilyn brought her $400 silk dress to University Dry Cleaners to be cleaned. On the
back of the ticket she received in exchange for the dress was written, “Liability limited
to five times the cost of cleaning.” Marilyn’s dress was lost and University now claims
it owes her no more than $53.25, five times the cost of cleaning. Is that true?
a. No, because Marilyn is not a bailor.
b. No, because University is a common carrier.
c. No, because the limitation was not communicated to her.
d. No, because the limitation is unconscionable.
a. In general, what is considered a fundamental change in a corporation? Give three
examples of what would be considered a fundamental change.
b. Who proposes such fundamental changes? Who must approve them? Explain.
c. Brian is a minority shareholder in Gryath, Inc. He opposes a fundamental change that
is approved and implemented. What rights does he have?
Bylaws are rules governing a corporation’s internal management.
a. True
b. False
If Eilene, a shareholder, sues in a derivative suit, the judgment will be paid to:
a. the shareholders as a dividend.
b. Eilene directly.
c. the corporate treasury.
d. the board of directors.
Which of the following are the two basic elements to consideration?
a. Bargained-for exchange and legal sufficiency.
b. Legal detriment and legal benefit.
c. Legal sufficiency and legal adequacy.
d. Promise and forbearance.
Anita included Bob’s name and photograph in a list of the FBI’s top ten criminals. Bob
has never been convicted of any crime and is horrified by the thought of being
considered a criminal. This:
a. is defamation.
b. is false light.
c. is nuisance.
d. could be either defamation or false light.
The European Community was the predecessor to the:
a. ICJ.
b. GAAT.
c. CISG.
d. EU.
a. What is a fiduciary?
b. What are the implications of an agent’s fiduciary obligation? What is an agent
prohibited from doing as a result of this obligation? Explain.
Andrew, an attorney, has a case that was recently heard by the United States Court of
Appeals. He would like to have the United States Supreme Court hear the case. One
way by which the U.S. Supreme Court may review the case is by:
a. forum non conveniens.
b. writ of certiorari.
c. en banc appeal.
d. motion for supreme judgment.
A multinational enterprise wishing to exploit a patent may choose to sell a foreign
company the right to use the property rather than entering the foreign market itself. The
sale of such rights is licensing.
a. True
b. False
It is possible for legal acts to be immoral.
a. True
b. False
The delivery necessary for a gift may be accomplished constructively.
a. True
b. False
Kant’s approach, like that of ethical fundamentalists, asserts that universal laws stem
from the direct pronouncements of God.
a. True
b. False