The “takings clause” prevents the government from taking private property for any
reason.
a. True
b. False
Henry David Thoreau felt that war was unjust and therefore refused to pay his taxes
when the United States declared war on Mexico. If Henry David Thoreau’s neighbor
agreed that war was unjust but paid his taxes because the law required him to pay the
tax, the neighbor would be applying the jurisprudence theory of:
a. Legal Positivism.
b. Natural Law.
c. Legal Realism.
d. Common Law.
If Casey assigns her rights to receive income from rental property to Errol, then Errol
will legally acquire any rights to the income previously held by Casey.
a. True
b. False
There are four types of illegal activity under Title VII of the Civil Rights Act of 1964.
Which of the following is NOT one of them?
a. Disparate treatment
b. Retaliation
c. Unattactiveness discrimination
d. Hostile environment
The Federal Trade Commission promulgated Telemarketing Sales Rules regulating the
activities of telemarketers. One of the rules prohibits telemarketers from calling a
person’s residence at any time other than between 8:00 a.m. and 9:00 p.m. This
legislative rule has the effect of a statute.
a. True
b. False
Spicy & Hot, Inc. is interested in expanding its Mexican food restaurant into a Mexican
food catering business. Spicy & Hot, Inc. buys a new delivery van from Van World.
Spicy & Hot, Inc. is a buyer in the ordinary course of business when purchasing the
van.
a. True
b. False
Bidding on one’s own goods at an online auction may subject the bidder to liability
under anti-fraud statutes as well as liability under state statutes explicitly prohibiting
shilling.
a. True
b. False
Mulligan Domestics Co. breached a contract by refusing to accept its order for 60 bolts
of fabric from Wellington Mills, although the fabric met the contract specifications.
Wellington:
a. has at least four remedies under the UCC.
b. may resell the goods to someone else and, if it sues Mulligan, Wellington will be
assured of being awarded the difference between the original contract price with
Mulligan and the price received from the resale.
c. may choose not to resell the fabric and settle for the difference between the contract
price and the market value.
d. would be awarded consequential damages by most courts.
To be valid, a noncompete clause must be:
a. ancillary to a legitimate bargain.
b. reasonable in time, geographical area, and scope of activity when ancillary to the sale
of a business.
c. necessary to protect trade secrets, confidential information, or customer lists
developed over an extended time when ancillary to an employment contract.
d. All of the above.
A third party beneficiary’s status occurs:
a. after an assignment and delegation.
b. when the third party is informed of the contract.
c. when the third party beneficiary agrees to the contract terms.
d. when the contract is created.
A company’s collective bargaining agreement has expired and negotiations are
underway for a new one. After one exhausting session, union leaders have decided
management will not bargain in good faith. The union declares it will be going out on
strike the following midnight if an agreement is not reached. The union:
a. is allowed to go out on strike the following midnight.
b. must give the employer at least seven days’ notice before going out on strike.
c. must give the employer at least 30 days’ notice before going out on strike.
d. must give the employer at least 60 days’ notice before going out on strike.
John is a holder in due course of a check. John goes to the drawee bank, Last Chance
Bank, to cash the check. What is the liability of Last Chance?
a. Last Chance Bank is primarily liable on the check.
b. Last Chance Bank is not primarily liable on the check until it accepts the check.
c. Last Chance Bank is secondarily liable on the check.
d. Last Chance Bank is not secondarily liable on the check until it accepts the check.
The crime of money laundering involves using low-value currency to produce
counterfeit high-value currency bills.
a. True
b. False
Under the doctrine of commercial impracticability, which situation would not excuse
the seller’s performance?
a. The seller forgot to include the cost of freight in a C&F contract.
b. The seller’s source of supply is no longer available because of a governmental
embargo prohibiting an export from another country.
c. The seller cannot deliver because severe flooding wiped out three-fourths of the
state’s produce.
d. The seller’s workforce is out on an unexpected strike.
Under the UCC, a merchant is frequently held to a higher standard of conduct than a
non-merchant.
a. True
b. False
In January 2008, Professor Noe entered into a contract with State University. She
agreed to teach full time during the 2008-2009 academic year. Professor Noe died on
May 31, 2008. Her estate:
a. is obligated to find another person who will agree to teach during the academic year.
b. is discharged from any further obligations under the contract.
c. will be discharged from any obligations under the contract only if it can be shown
that her death was unexpected.
d. will not be discharged. If the University has to pay more in order to hire a
comparable substitute professor at the last minute, then the estate will be responsible for
the difference in pay.
Karen is a strong swimmer. One afternoon she is having a picnic at a lake and sees a
man she does not know drowning. Generally, Karen:
a. has a legal duty to rescue the man.
b. has a legal duty to rescue the man, but only if her efforts will not pose a serious threat
to her own safety.
c. has a legal duty to rescue the man since, as a strong swimmer, she is treated as a
‘special class” of persons who must get involved in such situations.
d. has no legal duty to rescue the man.
A copyright is valid for 28 years after it is obtained and can be renewed for another 28
years.
a. True
b. False
Reformation is:
a. a type of restitution
b. a form of quantum meruit.
c. a form of quasi-contract.
d. uncommon.
Great State Bank and First Federal Bank have a security interest in TriColor’s
equipment. If neither secured party is perfected, the first to sue or repossess has priority
over the collateral.
a. True
b. False
Since 1900, the number of workplace injuries and deaths has decreased, partly due to
the OSHA, even though the size of the workforce has increased fivefold.
a. True
b. False
Actual hearings are required in formal administrative agency rulemaking.
a. True
b. False
Compensatory damages are typically assessed against the breaching party:
a. as a penalty for breaching the contract.
b. only under the UCC when the sale of goods is the subject of the contract.
c. to put the non-breaching party in the position it would have been in had the contract
never been formed.
d. to put the non-breaching party in the position it would have been in if the contract
hadn’t been breached.
Individual debtors are allowed to keep some assets in a Chapter 7 bankruptcy.
a. True
b. False
Ramona, age 42, orally agreed to work for Brahma, Inc. for the rest of her life for
$50,000 per year. This agreement would not be enforceable since it violates the
one-year rule of the statute of frauds.
a. True
b. False
Lance indorses a promissory note to Connie in exchange for consideration. Unknown to
Lance, the note is not good because the maker’s signature was forged. Connie later
attempts to present the instrument for payment to the original alleged maker, Lilly, who
is able to deny liability for payment due to the forged signature. Connie may later sue
Lance for breach of a transfer warranty.
a. True
b. False
The UCC requires sellers to give written warranties.
a. True
b. False
Acme Co. offers to buy 1000 widgets from Widget World Co. The written offer
provides for 1000 at $10 per widget, to be delivered May 1. The offer has no other
provisions. Widget World sends a written acceptance. However, the acceptance also
states that if any claim arises under this contract, Widget World must be notified within
10 days. Acme does not object to this provision. Both parties are merchants. Which of
the following best describes this situation?
a. No contract exists. The purported acceptance contains additional terms, so it is a
counteroffer, which has not been accepted.
b. No contract exists if the additional terms are construed to be material terms.
c. A contract exists. If the additional terms are construed to be material, they are not part
of the contract. If the additional terms are not material, they are part of the contract.
d. A contract exists, but the additional terms are not part of the contract no matter what.
Gary, Louise, and Brian, who own competing gas stations in town, happen to see each
other at a restaurant one morning and have breakfast together. While talking, they
decide to set their gas prices at the same amount. They have committed an illegal act
only if the agreed price is unfair to consumers.
a. True
b. False
Mark was refused employment at a Christian bookstore because he was not a
“born-again Christian.” If Mark brings a Title VII action against the bookstore, the
bookstore’s best defense would be
a. it did not discriminate against a protected category.
b. Title VII doesn’t apply to private businesses.
c. being a “born-again Christian” is a bona fide occupational qualification.
d. it could not reasonably accommodate Mark.
Erica’s supervisor told her to arrange for a conference room at the Kelly Inn. Erica has
express authority to contract for the room.
a. True
b. False