If a court finds that a contract or contract clause is unconscionable, it may refuse to
enforce the entire contract.
The Fourteenth Amendment contains Equal Protection, Due Process, and Privileges and
Immunities Clauses.
In a bailment, the owner of the property is the bailee.
Detachment means that the creditor has an enforceable security interest against the
debtor, and can satisfy the debt out o the designated collateral.
If a court finds that a contract clause is unconscionable, it may refuse to enforce the
unconscionable clause but enforce the remainder of the contract.
A cashier’s check is a cancellable, non-negotiable instrument upon its issue.
Utilitarianism requires taking the course of action that provides at least some good to
the greatest number of people.
Emancipation occurs when a minor involuntarily leaves home and lives apart from his
or her parents.
Fraudulent misrepresentation requires that the intent to deceive be proven.
With an assignment of rights, an obligee generally becomes an assignor when the right
is assigned.
Secondary boycott picketing is lawful only if it is product picketing.
Title VII of the Civil Rights Act of 1964 applies to labor unions with ten (10.) or more
members.
Under the UCC, electronic agents allow for sale and lease contracting of goods over the
Internet.
Notice of a shareholder’s meeting must be given not less than ten days or more than
fifty days before the date of the meeting, and may be given in person or by mail.
Duress could be a personal or a real defense depending on the type or level of duress.
Professional football has been found to be exempt from antitrust laws.
A franchisor and franchisee who use the same trade name and trademarks and make no
effort to inform the public of their separate legal status may find themselves in an
“apparent agency” situation.
Equity courts, whether separate or merged into law courts, can decide contract disputes.
Under the Uniform Commercial Code, value has been given if the holder takes the
instrument in payment of or as security for an antecedent claim.
In order for an agreement to be valid, there must be mutual assent by the parties.
The birth of and care for a child is a situation covered by the Family and Medical Leave
Act.
Private parties who have been injured by certain securities violations may bring a civil
action against the violator under Section 12 of the Securities Act of 1933.
Personal property can be divided into the three categories of tangible, intangible, and
real property.
The decision of a jury is known as a judgment.
A holder qualifies as a holder in due course even if at the time the instrument was
issued or negotiated to the holder, the instrument bore apparent evidence of forgery or
alteration or was otherwise so irregular or incomplete as to call into question its
authenticity.
An adverse opinion determines that the company’s financial statements do not fairly
represent the company’s financial position, results of operations, or change in cash
flows in conformity with GAAPs.
Warrantless arrests may only be made based on a “beyond a reasonable doubt of guilt”
standard.
A certification of title is a chronological history of the chain of title and encumbrances
affecting the property.
You cannot be considered an insider unless you own at least fifty-one percent of a
company’s outstanding securities.
The franchisor typically deals with the franchisee as an independent contractor.
An exclusive license means that for the specified duration of the license, the licensor
will not grant to any other person rights in the same information.
The drawer is the bank on which a check is drawn.
According to the Restatement (Second) of Contracts, nondisclosure is a
misrepresentation if it would constitute a failure to act in “good faith.”
A(n) ________ adoption occurs when there is a private arrangement between biological
and adoptive parents of a child.
A) independent
B) dependent
C) principal
D) agency
E) welfare
Which of the following statements is true?
A) The Fifth Amendment guarantee against self-incrimination does not prohibit the
taking of fingerprints against a suspect’s will.
B) The Fifth Amendment guarantee against self-incrimination has been extended to
include all business records and documents.
C) Even if immunity from prosecution has been granted, the defendant may still refuse
to testify.
D) The attorney-client privilege is the only privilege that has been recognized under the
Fifth Amendment.
E) The Fifth Amendment guarantee against self-incrimination prohibits the taking of
fingerprints against a suspect’s will.
Which is true about jury verdicts in criminal cases?
A) If a defendant is found guilty, the defendant may appeal.
B) If the defendant is found not guilty by the jury after a fair trial, the government may
appeal.
C) If the jury cannot agree on guilt or innocence, this is a hung jury and the defendant
goes free just as if found not guilty.
D) In the case of a tie jury vote, the judge casts a vote to break the tie.
E) If the jury cannot reach a verdict within seventy-two (72) hours from the beginning
of jury deliberations, the judge must, according to the rules of criminal procedure,
declare a mistrial in the case.
In conformity with state law, five accountants formed a limited liability partnership.
The partnership is dissolved at a time when partnership debts exceed assets. Which of
the following is true?
A) The limited liability partnership must continue as a legal entity until the debts are
repaid.
B) The limited partners are personally liable for the debts of the partnership, since there
was no general partner.
C) The limited partners are not personally liable for the debts of the partnership beyond
their capital contributions.
D) The limited partners are not personally liable for the debts of the partnership, but
only if the creditors specifically agreed not to hold them personally liable.
E) The limited partners are personally liable for the debts of the partnership, regardless
of whether there was a general partner.
An offeree can form a contract by simply making a promise if the offer to form a
contract is:
A) bilateral.
B) unilateral.
C) trilateral.
D) quadrilateral.
E) multilateral.
Under the laws of most states today, when a minor enters into a contract with an adult,
what effect is there on the situation if the minor has falsely misrepresented that the
minor is an adult?
A) The minor loses all right to disaffirm the contract.
B) The minor’s right to disaffirm will end immediately upon the minor reaching the age
of majority.
C) The minor will be obligated to pay the fair market value for items purchased.
D) The minor must place the adult in status quo.
E) The minor owes nothing and is not required to return the goods because a minor is
not held responsible for misrepresentations.
Jordan is a student at State College. She has been paying her tuition and fees under a
payment plan and made her final payment on May 8th. She has taken and passed her last
final examination required for graduation on May 14th. On May 21st she walked across
the platform during graduation ceremonies. Her diploma was mailed to her on May 23rd
and she received it on May 25th. When is Jordan’s contract with State College
considered executory?
A) May 8th
B) May 14th
C) May 21st
D) May 23rd
E) May 8th, May 14th, May 21st and May 23rd
Under the ________, it is a federal crime for any person to convert a trade secret to his
or her benefit or for the benefit of others, knowing or intending that the act would cause
injury to the owner of the trade secret.
A) Trade Secret Act
B) Economic Espionage Act
C) Intellectual Property Act
D) Trade Secret Espionage Act
E) Intellectual Property Espionage Act
An agent owes a ________ duty not to act adversely to the interests of the principal.
A) qualified
B) conditional
C) fiduciary
D) emissary
E) eleemosynary
Which of the following is an appropriate abbreviation for a professional corporation?
A) P.C.
B) P.A.
C) S.C.
D) D.A.
E) P.C., P.A. or S.C.
Under Article 2 of the UCC, where the offeror is a merchant and the offeree is a
non-merchant, what is the effect of minor differences in terms contained in an
acceptance?
A) A contract will be formed incorporating the different terms of the acceptance.
B) No contract is formed, and the purported acceptance is treated as a counteroffer.
C) A contract is formed, but only if the parties resolve the differences in the offer and
the acceptance.
D) A contract is formed according to the terms of the offer, and the additional terms are
treated as proposed additions to the contract.
E) The purported acceptance is treated as a rejection, except that the original offer
remains open under the firm offer rule.
How does the law determine what amounts to a necessary of life in a contract involving
a minor?
A) State statutes designate which items are necessaries of life.
B) It will depend on whether the contract terms identify them as necessaries of life.
C) The courts will rely on public policy.
D) It will depend on the particular minor’s lifestyle, station in life, and other
circumstances.
E) It depends on whether the minor has sufficient funds with which to pay for the
goods.
Alan decides that the best way to get a promotion would be to have his supervisor
killed. He hires a “hit man” to have the supervisor killed. This contract would be
described as:
A) valid.
B) void.
C) voidable.
D) unenforceable.
E) a quasi-contract.
A creditor who has repossessed collateral may choose to retain it:
A) in all circumstances.
B) in all circumstances, unless the secured party receives an appropriate notice within
twenty-one days.
C) in all circumstances where the debtor willfully did not pay the debt.
D) in all circumstances, unless the secured party receives a written objection to the
proposal from a person entitled to receive notice within twenty days after the notice was
sent, or the debt involves consumer goods and the debtor has paid sixty percent of the
cash price or loan.
E) in all circumstances, unless the secured party receives an appropriate notice within
thirty days.
How can the concept of unforeseen difficulties affect whether a contract meets the
consideration requirements?
A) Unforeseen difficulties can allow a promise of illegal consideration to meet the
consideration requirements.
B) Unforeseen difficulties can convert an illusory promise to a valid binding promise.
C) Unforeseen difficulties can result in past consideration meeting the consideration
requirements.
D) Unforeseen difficulties can result in a contractor’s promise to complete an existing
contract being supported by new consideration rather than being considered a
preexisting duty.
E) Unforeseen difficulties cannot affect whether a contract meets consideration
requirements.
A lease stating that rent is to be paid on the first of each month beginning on August 1,
2011, but not indicating when the lease ends, would be a:
A) tenancy for years.
B) periodic tenancy.
C) tenancy at will.
D) tenancy at sufferance.
E) temporary lease.
In a finance lease, when does the risk of loss pass from the supplier to lessee, if the
supplier is a merchant?
A) when the parties sign the lease contract
B) when the lessee make the first lease payment
C) when the lessor receives the first lease payment
D) when the supplier ships the goods
E) when the lessee receives the goods
A party who employs another person to act on his or her behalf is called a(n):
A) agent.
B) independent contractor.
C) employee.
D) surety.
E) principal.
Which of the following may prevent genuine assent to a contract?
A) mistake
B) fraudulent misrepresentation
C) duress
D) undue influence
E) mistake, fraudulent misrepresentation, duress, or undue influence
A procedure which can be used to assess the moral health of a corporation is the:
A) social audit.
B) Minnesota Multiphasic Corporate Inventory (MMCI).
C) corrupt practices inventory.
D) moral minimum assessment.
E) Sarbanes-Oxley inspection.
Under Article 2 of the UCC, what is an accommodation shipment?
A) any accidental or intentional shipment of nonconforming goods
B) any shipment of nonconforming goods that the seller intends the buyer to accept as a
substitute
C) any shipment of nonconforming goods that the seller notifies the buyer is being
offered as a substitute for the goods ordered
D) any shipment of goods sent pursuant to a court order resulting from a breach
E) any accidental shipment of nonconforming goods
The federal Food, Drug and Cosmetic Act was enacted in:
A)
B)
C)
D)
E)
John is hired at minimum wage in a fast-food restaurant. John works at the counter
taking customer orders, accepting payment, and giving the orders to the customers.
John must work in accordance with a detailed procedures manual. John is:
A) an independent contractor, but not an agent.
B) an employee, but not an agent.
C) an independent contractor, as well as an agent.
D) an employee, as well as an agent.
E) an independent contractor and an agent.
MAK Corp. is incorporated in the state of Delaware, and does business only in Kansas
and Illinois. MAK Corp. would be considered:
A) a domestic corporation in all fifty states.
B) a domestic corporation in Delaware, Kansas and Illinois, and a foreign
corporation in the other forty-seven states.
C) a domestic corporation in Delaware, a foreign corporation in Kansas and Illinois,
and an alien corporation in the other forty-seven states.
D) a domestic corporation in Delaware, and a foreign corporation in Kansas and
Illinois.
E) a foreign corporation in Delaware, because they do no business there, and a domestic
corporation in Kansas and Illinois, where they do conduct business.
________ means that the creditor has an enforceable security interest against the debtor
and can satisfy the debt out of the designated collateral.
A) Detachment
B) Parchment
C) Attachment
D) Origination
E) Generation
Pat places an order with a Seller for 500 red blankets. Seller immediately ships 500 blue
blankets. Pat refuses to pay for the blankets. Has a contract been made?
A) Yes there is a contract because Pat’s order was considered an offer and the offer was
accepted by the Seller’s shipment of blankets.
B) Yes there is a contract because the Seller’s shipment was an accommodation
shipment, which is acceptance of Pat’s offer.
C) Yes there is a contract because the Seller’s shipment was an assortment shipment,
which is acceptance of Pat’s offer.
D) No there was not a contract because the Seller’s shipment was an assortment
shipment, which is not proper acceptance of Pat’s offer.
E) No there was not a contract because the Seller’s shipment was an accommodation
shipment, which is not proper acceptance of Pat’s offer.
A ________ restraint of trade occurs when two (2) or more competitors at the same
level of distribution enter into a contract, combination, or conspiracy to restrain trade.
A) parallel
B) fundamental
C) vertical
D) horizontal
E) contiguous
Which best describes assumption of the risk in a negligence case?
A) The plaintiff knowingly and willingly subjected herself to a risk, and by doing so, is
not able to collect from a defendant even if all of the elements of negligence are
present.
B) The defendant gave advance warning to the plaintiff that an injury would occur.
C) The plaintiff is more at fault than the defendant in causing the accident.
D) The plaintiff was involved in an abnormally dangerous activity.
E) The defendant knew that the conduct was risky, but nonetheless chose to engage in
it.
Fred has received a deed that says,” to Fred for life, and upon Fred’s death, to the
original grantor.” What type of interest does the grantor have?
A) a life estate pour autre vie
B) a right of survivorship
C) a reversion
D) a remainder
E) a tenancy at sufferance
Bill, Bob, and Susie form a limited liability corporation, and each contributes $50,000
in capital. The limited liability company is in operation for two years, but then files
bankruptcy, with $500,000 in debt. How much do Bill, Bob, and Susie stand to lose?
A) Bill, Bob, and Susie stand to lose their capital contribution, but that is all.
B) Bill, Bob, and Susie are each personally liable for one-third of the debt of the
company.
C) Bill, Bob, and Susie are each personally liable for the entire debt of the company.
D) Bill, Bob, and Susie are each personally liable for the entire debt of the company,
unless each can demonstrate a lack of negligence on his or her part.
E) Bill, Bob, and Susie are each personally liable for one-third of the debt of the
company, unless he or she can establish a voting record against poor managerial
decisions involving the company in the previous twelve months.
The Electronic Communications Privacy Act applies in each of the following situations,
making, the action illegal, except:
A) Mike, Kathy’s boyfriend, has placed a program on Kathy’s computer which
automatically sends a copy of every e-mail she sends to the recipient and a copy to
Mike’s computer without Kathy’s knowledge.
B) Mike, Kathy’s boyfriend, is sitting in his car outside of Kathy’s home with a device
that allows him to see copies of any e-mail that Kathy sends, even though he hasn’t
installed any programs on her computer.
C) Mike, Kathy’s boyfriend, hacks into the server at Kathy’s office and reads the e-mail
that Kathy has sent for the past 48 hours.
D) Mike, Kathy’s employer, places a program on her work computer to monitor e-mail
transmissions sent.
E) Mike, an FBI agent, places a program on Kathy’s computer without obtaining a
search warrant to monitor her e-mail because she is a prime suspect in an ongoing
criminal investigation.
What are the two general kinds of implied warranties for which warranty liability can
be imposed in connection with a negotiable instrument?
A) transfer and contract
B) signature and contract
C) transfer and secondary
D) with recourse and without recourse
E) transfer and presentment