A major advantage of an Asset Protection Trust is:
a. It is shielded from creditors that arise after the trust is established
b. Its proceeds are tax-free.
c. Its value cannot decline due to stock market fluctuations.
d. It has a guaranteed rate of return.
Discrimination under Title VII does NOT include:
a. firing a women after she becomes pregnant
b. refusing to hire a person based on the color of their skin
c. refusing to promote a woman to a position in authority over men
d. refusing to hire a 15 year old boy
Noncompetition agreements are:
a. more common today than they were in the past, although policy issues they raised in
the 1700s have never gone away.
b. now illegal, as they violate antitrust laws.
c. infrequently litigated.
d. relatively recent developments, first used following the Great Depression in the
United States.
When a testator wants to change or amend a limited portion of a will, he may use:
a. the process of probate
b. a codicil
c. power of attorney
d. nuncupative will
On January 8, Quastrar, Inc. sent Hylavian Company a letter offering to sell $10,000 in
restaurant supplies. On January 18, Hylavian mailed a letter to Quastrar accepting the
offer. Quastrar received the acceptance letter on January 20. On January 17, Quastrar
sent a letter revoking the offer. Hylavian received this letter on January A contract
between Quastrar and Hylavian:
a. was not formed because the revocation was effective before the acceptance was sent.
b. was not formed because the revocation was effective before the acceptance was
received.
c. was formed on January 18.
d. was formed on January 20.
Jose and Juanita are first cousins. Jose lives in San Francisco, California; Juanita lives
in Toronto, Canada. The two have met only once in life, and may never meet again.
Nonetheless, because they are blood relatives, Juanita has an insurable interest in Jose’s
life.
When a married person dies intestate, the surviving spouse is entitled to:
a. nothing
b. the entire estate
c. a forced share of the estate, which is calculated differently in different states
d. the same portion as each of the couples children
Which of following must be included in a federal Environmental Impact Statement?
a. Available alternatives to the proposed action.
b. Means to mitigate adverse environmental impacts.
c. Direct and indirect effects of the proposed action.
d. All of the above.
Which statement most accurately describes third party beneficiary rights?
a. A beneficiary may enforce a contract if the parties intended to benefit him and if
enforcing the promise will satisfy a duty of the promisee to the beneficiary.
b. If a promisee intended to make a gift to the beneficiary, the beneficiary may not
enforce the contract.
c. An intended third party beneficiary has no enforceable rights in a contract.
d. Incidental beneficiaries have enforceable rights against both contracting parties.
Fact Pattern 40-1
John purchased $600 worth of clothes from Clothing Mart. He paid for the clothes with
a credit card. When he received his statement, he sent the credit card company a check
for $600. The credit card company mistakenly recorded his payment as $60. When John
received his next statement, he noticed the $540 error and contacted the credit card
company.
A few days later when he attempted to use his card to buy gasoline, he was told by the
cashier that the card had been canceled and she was instructed to take his card. John
was shocked, embarrassed, and angry. When he contacted the credit card company, it
pointed out a provision in his initial contract for the card that stated the company could
revoke his card privileges at any time with or without cause.
What federal law applies to this particular situation?
a. Truth in Lending Act.
b. Fair Credit Billing Act.
c. Fair Credit Reporting Act.
d. Equal Credit Opportunity Act.
Leases can contain what type of tenancy?
a. Partial Tenancy
b. Tenancy at will
c. Tenancy in common
d. Tenancy at severance
Wrongful discharge claims are generally based upon all EXCEPT:
a. public policy.
b. criminal law.
c. contract.
d. tort law.
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.
The Consumer Leasing Act requires a lessor to disclose in writing all EXCEPT:
a. number of payments.
b. penalties for late payments.
c. lease rates of the competition.
d. penalties for early termination.
International copyright protection:
a. is automatic for works created in member countries of the Berne Convention.
b. is granted for the life of the author plus 70 years under the Berne Convention.
c. is not yet available for computer programs.
d. lacks any enforcement capability for overseas infringement of works authored in the
United States.
Which of the following promises ordinarily must be in writing to be enforceable?
a. Promises made as a part of a prenuptial agreement.
b. The agreement to sell a car for $1500.
c. The promise by an executor of an estate to pay a debt of the decedent.
d. All of the above.
The issue in Kuehn v Pub Zone was
a. Legal Positivism.Can a bar serve drunk patrons?
b. Did the bar have a duty to protect its patrons?
c. Is a bar allowed to exclude motorcycle riders from the premises?
d. Can the government prosecute patrons who get into fights on private property?
MegaCorp is incorporated in the state of Delaware and is registered only in Delaware.
Jolene purchased a MegaCorp product from a company’s sales representative following
a presentation in Michigan. Jolene was seriously injured by the product in Michigan.
Under the Model Act, if Jolene sues in Michigan, can MegaCorp defend the suit there?
a. MegaCorp may only defend against a lawsuit in Michigan if it first registers by
paying back fees, taxes, and penalties.
b. Yes, MegaCorp can bring or defend against a lawsuit in any state regardless of
whether the corporation is registered to business in that state.
c. Yes, MegaCorp can defend against a lawsuit in Michigan regardless of whether
MegaCorp is registered to do business in that state.
d. No. Jolene must sue and MegaCorp may defend a lawsuit only in Delaware.
Which of the following actions would prevent a discharge of debts under Chapter 7?
a. Discharge under Chapters 7 or 11 within the past eight years.
b. Falsified records presented to bankruptcy court by debtor.
c. Failure to disclose assets.
d. All of the above would prevent a discharge of debts.
When considering both imports and exports, the country trading the most goods with
the United States is:
a. Canada.
b. China.
c. Japan.
d. Mexico.
Joseph got caught at State U with some marijuana. It is not legal in his state. What
insures he gets a fair hearing.
a. Takings Clause
b. Due Process Clause
c. Equal Protection Clause
d. Supremacy Clause
Wally owns 200 acres of land. Wally offers to sell the land to Robert for $1,500 per
acre. Robert replies that he does not need 200 acres of land but would like to buy 40
acres at $1,500 per acre. Wally agrees to sell but does not identify which 40 acres.
Later, Wally refuses to sell any land to Robert. What is the result?
a. Robert wins; this is an enforceable contract with complete and definite terms.
b. Robert wins; the UCC will decide which 40 acres are to be sold.
c. Wally wins; the original offer was not intended to be an offer but merely an invitation
to negotiate.
d. Wally wins; this agreement is too indefinite since it does not identify which 40 acres
are to be sold.
Adam decided to play a practical joke on Linda, a co-worker. As Linda was leaving the
office one night, Adam, wearing a mask, stepped out from behind some bushes. He
pointed a handgun made out of licorice at her and demanded her purse. He then pushed
the candy gun to her head and told her if she told anybody he’d kill her. Linda was very
scared during the whole incident. She did not think it was funny when Adam pulled the
mask off and took a bite out of the gun as he gave her the purse back. Which statement
is correct?
a. Adam committed an assault but not a battery.
b. Adam committed a battery but not an assault.
c. Adam committed an assault and a battery.
d. Adam committed neither an assault nor a battery since he used a candy gun and was
only playing a joke on Linda.
Don works at the local gas station and garage. Dons boss, Betsy, encourages Don to
find brake problems with out of state cars that come to the station. Usually Don tells the
driver that their brakes are leaking fluid, and offers to replace the brakes at a good price.
The cost is low because Don does nothing more than remove the tires and look at the
old brake pads. One day a woman with five kids comes to the station and Betsy tells
Don to “do a brake job. Don does not want to have five kids running around the station
and tells the lady that they are out of gas and to go down the street to the next station.
Can Betsy fire Don?
a. Yes, unless the station really was out of gas..
b. Yes, because Betsy ordered him to perform a service and Don refused..
c. No, but Don is liable for any economic loss Betsy suffered.
d. No, because Betsy ordered him to perform an illegal act.
The basic distinction between a bilateral contract and a unilateral contract is that:
a. only one promise is involved in a bilateral contract.
b. only one promise is involved in a unilateral contract.
c. the Statute of Frauds applies to one and not the other.
d. one is enforceable, the other is not.
One reason you may not need a written contract is:
a. you are dealing with a party you do not know well, so you need to remain flexible.
b. you are buying land from a member of your family.
c. the terms of the agreement are simple and the value of the transaction is small.
d. you have negotiated enough that you both know what the other person intends.
On April 10, Amy agreed to buy a riding lawn mower from Mowers Plus, signing a
promissory note and security agreement giving Mowers Plus a security interest in the
mower. On April 15, Amy took delivery of the mower. On May 1, Mowers Plus filed a
financing statement. Which of the following is correct?
a. Despite the agreement, Mowers Plus could not create a security interest in the mower
since it is a consumer good.
b. Mowers Plus has attachment of a security interest in Amy’s mower.
c. Mowers Plus completed the attachment of a security interest in the mower when it
filed the financing statement on May 1.
d. The security interest has not attached, but attachment is unimportant to enforceability
of a security interest.
In a “mixed contract,” one involving a sale of both goods and services, the court will:
a. apply the UCC to the provisions of the contract involving the sale of goods and the
common law to the provisions involving the sale of services.
b. apply the lex mercatoria to the contract.
c. first determine the dominant purpose of the contract. If the sale of goods dominates
the contract, then the court will apply the law of the UCC, Article 2. If the sale of
services dominates the contract, the court will apply the common law.
d. apply UCC Article 2A.
Esmeralda is a debtor in a Chapter 7 bankruptcy proceeding. Which of the following is
not a duty of Esmeralda under Chapter 7?
a. To undergo credit counseling with an approved agency before filing.
b. To provide a repayment schedule for the debt owed to each creditor listed on the
creditor list.
c. To provide a list of all her assets and debts.
d. To provide a schedule of all her income and expenditures.
Assume that in December 2006, the Environmental Protection Agency (EPA) filed an
administrative complaint against Marlin Firearms Co. alleging that the company
exceeded chromium emissions limits. The EPA proposed a $257,162 fine. Which
statement is correct concerning the administrative agency adjudication?
a. A jury decides the matter.
b. The Federal Rules of Criminal Procedure govern the admissibility of evidence.
c. The losing party has a right to appeal.
d. The parties are not represented by attorneys.
Secondary boycotts:
a. are generally legal provided the boycott is peaceful.
b. are generally legal provided the boycott does not involve public employees such as
nurses or school teachers.
c. are not expressly permitted nor prohibited under federal law.
d. are generally illegal.
Patty is a poor college student struggling to work and keep up with her studies. Fred,
her uncle, promises to pay Patty support of $200 per month for the next six months.
Although Fred didn’t ask her to, she quits her current job in order to devote full time to
her studies for the next six months. Fred makes one payment and then stops with no
explanation. If Patty sues, what is the likely result?
a. Fred would win, as he did not ask Patty to quit her job.
b. Patty would win, as a contract was formed when Fred promised to pay her the
support.
c. Fred would win, as family members cannot sue each other for breach of an oral
promise.
d. Patty may win under the doctrine of promissory estoppel.
Tort law is not concerned with how to respond to injury caused by criminals, as this
would be addressed by criminal law.
In a breach of contract the injured seller may resell goods not accepted by the buyer. If
the resale is commercially reasonable, the seller may recover the difference between the
resale price and contract price, but cannot recover incidental damages.
Firing an employee for her refusal to violate the law would raise a claim of wrongful
discharge.
Emily runs a childrens clothing boutique which takes in local homemade items on a
consignment basis. Her standard form contract indicates that Emily has the right to put
items on sale without prior approval, but does not specify what effect the sale has on the
consignors payment percentage. Her intent is to keep the same profit she would have
had without the sale. She is using ambiguity in her contract to increase her sales and
profit.
James purchased an abandoned lot. When he started to develop the land, he discovered
several underground storage tanks containing hazardous waste buried on the site. He
claims the seller, Richards, is liable to him for the cost of removing the tanks. Richards
claims he owned the lot for 20 years and never knew of the underground tanks.
Richards argues he purchased the land from Thomas and that Thomas or his heirs are
liable for the cost of removing the underground tanks. Explain whether Richards is
liable to James. Does Thomas or do his heirs have any liability to James or Richards?
When a noncompete agreement is ancillary to the sale of a business, it is enforceable
if reasonable in time, geographic area, and scope of activity.
Silas asks his friend Shelby to come to his property to go fishing at his pond. If he fails
to warn her that the dock has a rotten spot and she falls through and is injured, Silas
would be held liable in most states.
The SEC has enforcement powers, including the power to issue cease and desist orders,
to levy fines, and to confiscate profits from illegal transactions.
The dock workers on Main Harbor were union members. They have been negotiating a
contract with management, so far unsuccessfully. Discuss what tactics they might use in
unison to gain a bargaining advantage, identify the statute that guarantees their rights,
and discuss the possible response by management.
Select the correct answer:
a. Rosie rents a locker at the airport, and she puts a bag in the locker. Rosie keeps the
locker key. In this case, the bag has been delivered to and accepted by the airport. The
airport is a bailee.
b. Hill rents a boat to Dan. The boat is located at a lake 30 miles away. Hill gives Dan
keys to the boat. Dan drives to the lake and takes possession of the boat. In this case,
the boat has been delivered to and accepted by Dan, and Dan is a bailee.
c. Unknown to Lon, Jeff left a bike at Lon’s house. Lon has not found the bike and he is
not likely to find it because Jeff left the bike under the front porch. In this case, Lon is a
bailee of the bike.
d. Ken parked a car in a self-service lot and Ken kept the keys. The parking lot is a
bailee.
A party may make either an assignment or a delegation, but cannot make both an
assignment and a delegation simultaneously.
Society is hurt when business managers behave ethically.
Anyone who has ever owned or operated a site on which hazardous wastes are found, or
who has transported wastes to the site, or who has arranged for the disposal of wastes
that were released at the site, is liable for cleanup.
While shopping at the mall, Everett’s wallet fell out of his pocket. Jon found the wallet.
The wallet is abandoned property and Jon may keep it.
Peggy Lou filed a lawsuit against “We Fix ‘Em Rite,” an auto body shop, for the sloppy
paint job it did on her 1998 car. Once the lawsuit was filed with the appropriate clerk of
court, Peggy Lou personally dropped a copy of the lawsuit in the mail. “We Fix ‘Em”
says it never received notice of the lawsuit. Local court rules require that a lawsuit be
served by an independent process server or by the sheriff’s department. Is this an
example of substantive law or procedural law? Explain the difference.
Courts have ruled that negligently retaining a violent employee is a tort.