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The UCC statute of limitations provides that an action for breach of any written or oral
sales or lease contract must commence within three (3.) years after the cause of action
accrues.
A contract is unilateral if the offeror's promise is answered with the offeree's promise of
acceptance.
According to Kantian ethics, keeping a promise to abide by a contract is a moral duty,
unless the contract turns out to be detrimental to the obligated party.
A motion for judgment on the pleadings alleges that if all the facts presented in the
pleadings are true, the party making the motion would win the lawsuit when the proper
law is applied to these facts.
Under the UCC, a sale or lease contract can be valid, even if material terms are not
agreed upon.
Actual damages or treble damages are recoverable for violations of the Federal Trade
Commission Act.
The executive branch can enter into treaties with foreign governments without the
"advice and consent" of the United States Senate.
A note that requires the performance of services is negotiable so long as there is also a
requirement for payment of a fixed amount of money.
Article III of the United States Constitution establishes the judicial branch of
government.
The members of the Equal Employment Opportunity Commission are appointed by the
United States Senate.
In order for a liquidated damages clause in a contract to be upheld, the actual damages
must be difficult or impracticable to determine.
Every state has adopted the Uniform Partnership Act.
A bargaining unit must consist entirely of employees from a single company.
Consumers who have to pay higher prices because of an antitrust violation have
recourse under Section 4 of the Clayton Act.
Where a valid delegation of duties contains the term assumption or other similar
language, there is a declaration of duties.
The bankruptcy estates includes all the debtor's legal and equitable interests in real,
personal, tangible, and intangible property, wherever located, that exist when the
petition is filed, and all interests of the debtor and debtor's spouse in community
property.
Under the Lilly Ledbetter Fair Pay Act of 2009, the EEOC has the opportunity to sue
the employer on the complainant's behalf.
If, after a public administrative hearing, the FTC finds a violation of Section 5 of the
FTC Act, it may issue a cease-and-desist order.
Limited liability companies can issue notes and bonds.
In a sale on approval, the risk of loss passes to the buyer when the goods are delivered.
There are no defenses available to the accused if a "per se" restraint of trade occurs.
The Sarbanes-Oxley Act prohibits public companies from making personal loans to
their directors or executive officers.
"Regulation A" permits issuers to sell up to $5 million of securities during a
twelve-month period, pursuant to a simplified registration process.
Generally, the UCC does not apply to transactions when both parties are
non-merchants.
Federal bankruptcy exemptions include an interest of up to $25,000 in equity in
property used as a residence.
Regions that do not meet air quality standards are designated nonattainment areas.
Passersby are generally not expected to rescue others gratuitously to save them from
harm.
An agency can be designed to terminate upon the occurrence of an event that is outside
the control of the agent or principal.
If the express terms of a written contract are unclear, the court can consider the previous
conduct of the parties, in interpreting the contract.
Under the Fair Credit Reporting Act, a consumer may request the following information
from a credit bureau at any time: (1.) the nature and substance of all the information in
his or her credit file; (2.) the sources of this information; and (3.) the names of
recipients of his or her credit report.
Through agency by ratification, the principal is bound to perform, and the agent is
relieved of any liability for misrepresentation.
When proper negotiation occurs, it is possible for the new holder to get better rights
than the person that transferred the instrument to them.
A short-form merger is a simplified form of merger that can be used so long as the
number of voting shares outstanding of the surviving corporation increases by less than
twenty percent.
Jimmy is annoyed because his neighbor's dog is constantly barking. He intentionally
walks up to the dog and kicks it. Jimmy is guilty of:
A) civil battery.
B) civil assault.
C) negligent infliction of emotional distress.
D) conversion of personal property.
E) no tort.
Your university's police/security force requires that all officers be six feet tall or taller,
and one hundred and ninety pounds or heavier. This requirement creates:
A) a disparate effect regarding men.
B) a disparate impact regarding men.
C) a disparate effect regarding women.
D) a disparate impact regarding women.
E) nothing illegal or improper, because being large is a bona fide occupational
qualification for law enforcement officers.
If there is no room for indorsement on an instrument, the indorsement may be written
on a separate piece of paper called ________.
A) parol evidence
B) an addendum
C) an exhibit
D) an allonge
E) a codicil
The owner of a gym tells Ruppert that if he joins the gym for a year and hires a personal
trainer, his body will be more attractive to women and his life will change forever.
Ruppert joins and hires a personal trainer, but otherwise his life remains the same. The
statements of the gym owner could be described as:
A) statements of fact.
B) statements of opinions.
C) predictions about the future.
D) statements of opinions and predictions about the future.
E) statements of fact, statements of opinions, and predictions about the future.
Which of the following can the holder of a life estate not do with her life estate?
A) sell it
B) give it away
C) leave it to someone in her will
D) mortgage it
E) lease it to another
Martha decided to start a business organizing school events for fund raising. She
operated under the fictitious name "Money for Fun." She took no other steps in starting
the business. Her very first booking was a high school dance. Unfortunately, one of her
employees spilled punch on the floor, resulting in the school principal falling and
injuring his back. He sued Martha. Discuss Martha's business form, and whether the
principal could reach Martha's personal assets, or whether he is instead limited to
reaching "Money for Fun's" assets.
Which of the following must be met in every instance in order to revoke an acceptance
of goods?
A) The seller must have fully paid for the goods prior to revocation.
B) The seller's promise to cure the nonconformity has not been met.
C) The goods were accepted before discovery of the nonconformity and the
nonconformity was one that was difficult to discover.
D) The goods were accepted before discovery of the nonconformity and the seller had
assured the buyer that the goods were conforming.
E) The nonconformity is one that substantially impairs the value of the goods.
On January 10th, JON, Inc. enters into a contract in which Jon, Inc. is to deliver 1000
special order widgets to the JPK Construction Company for use in a unique project.
Delivery is scheduled for November 23rd. On February 14th, JON, Inc. hears through
the grapevine that JPK has entered into a contract with another company to buy the
widgets at a lower price. JON, Inc. calls JPK on March 15th and is reassured that the
contract will be honored. On August 8th, JPK takes delivery of the widgets from the
other company and begins using them in the unique project they are working on. On
November 23rd, JON, Inc's truck arrives at JPK's loading dock with the 1000 widgets
and JPK refuses to take delivery.
If JON, Inc. wanted damages for the breach of contract but wishes to pursue recovery
through ADR rather than litigation but wanted to keep litigation options open, which
form of ADR should JON, Inc. avoid?
A) negotiation
B) mediation
C) arbitration
D) mini-trial
E) fact-finding
The term "mitigation" refers to the ________ of damages resulting from breach of
contract.
A) calculation
B) prediction
C) assertion
D) reduction
E) estimation
On January 10, 2011, Jonathan writes a check, payable to Josh in the amount of
$500.00, drawn on Jonathan's account with MBNA bank. Josh, on the back of the
check, writes, "Pay to the order of Brandi" and leaves the check on his night stand.
Brandi comes to visit while Josh isn't home (she has a key) sees the check and takes it
believing that it was indorsed to her a repayment of a debt. Brandi, then signs her name
to the back of the check and hands it to Lori as a birthday present. If Lori sells the
check to Faye, who knows nothing about what has previously occurred,:
A) Brandi would have a personal/limited defense against Faye.
B) Faye would be a holder in due course.
C) Brandi could buy it from Faye and become a holder in due course based on the
re-acquirer rule.
D) Josh would have a fraud in the factum defense against Faye.
E) Faye would have no rights to the instrument because it was stolen.
The filing of a voluntary or an involuntary petition suspends certain legal actions by
creditors against the debtor or the debtor's property. This is called an automatic
________.
A) injunction
B) stay
C) suspension
D) judgment
E) denouement
Which of the following is false regarding the International Monetary Fund?
A) The day-to-day operations of the International Monetary Fund are run by an
executive committee.
B) The International Monetary Fund is funded by monetary contributions of member
nations assessed based on the size of each nation's economy.
C) The International Monetary Fund is headquartered in Washington, D.C.
D) The International Monetary Fund may make grants to needy countries, but it does
not make loans.
E) A country does not have to agree to any conditions in order to receive assistance
from the International Monetary Fund.
Which of the following is true regarding the Free Trade Area of the Americas?
A) It was formed in 1958.
B) It is an agreement between the Caribbean nations and the United States governing
free trade.
C) It was an agreement, formed in the early 1900s between the United States and
Mexico, that was deemed unconstitutional.
D) It is a proposed extension of the North American Free Trade Agreement.
E) It is not supported by the United States, or by most large United States corporations.
The franchise ________ often includes detailed information about the prospective
franchisee's previous employment, financial and educational history, and credit status.
A) disclosure statement
B) memorandum of understanding
C) application
D) agreement
E) articles of organization
The United States Congress created the 13th court of appeals in 1982. It is called the
Court of Appeals for ________.
A) Internal Affairs
B) the District of Columbia
C) Death Penalty Due Process
D) the Federal Circuit
E) Congressional Review
Which of the following is a consequence of defective formation of a limited
partnership?
A) Contracts entered into by the partnership will be void.
B) Contracts entered into by the partnership will be voidable by the other party.
C) The rights between the partners will be different as a result of the defective
formation.
D) A partner who would have otherwise enjoyed limited partner status might have
unlimited liability to a third party who conducted business with the partner, while
holding a "good faith" belief that the partner was a general partner.
E) A partner who would have otherwise enjoyed limited partner status will have
unlimited liability to all third parties who conduct business with the partnership during
the time period affected by the defective formation.
When does the "post-effective" period begin and end?
A) It begins when the registration statement becomes effective, and runs until the issuer
either sells all of the offered securities or withdraws them from sale.
B) It begins when the registration statement becomes effective, and runs until the issuer
sells all of the offered securities.
C) It begins when the registration statement becomes effective, and runs until the issuer
withdraws the offered securities from sale.
D) It begins forty-five days after the registration statement is filed, and runs until the
issuer either sells all of the offered securities or withdraws them from sale.
E) It begins sixty days after the registration statement is filed, and runs until the issuer
sells all of the offered securities.
To be negotiable, a draft or check must contain the drawer's unconditional ________.
A) order to pay
B) assurance of performance
C) promise to pay
D) covenant
E) demand for assurance of performance
A business that undertakes activities that benefit persons who are in no way connected
with the business is applying which theory of the social responsibility of business?
A) moral minimum
B) maximizing profits
C) stakeholder interest
D) corporate citizenship
E) moral maximum
Molly has purchased widgets from Adrian on several occasions. The widgets are
identified by serial numbers. In this particular instance, Molly and Adrian decide to
only use electronic communication. On March 1, Molly sends an Adrian an e-mail to
purchase 500 widgets. On March 10, Adrian replies to Molly and includes 500 serial
numbers of the widgets that will be shipped to Molly. Adrian ships the widgets on
March 12 and Molly receives them on March 15. Under the UCC when are the widgets
considered identified and why?
A) on March 10 because it was an electronic contract
B) on March 12 because it was an electronic contract
C) on March 15 because it was an electronic contract
D) on March 10 regardless of whether it was an electronic contract
E) on March 12 regardless of whether it was an electronic contract
Under which types of delegation of duties does the delegatee become liable to the
obligee for the performance of the duty?
A) assumption of duties
B) declaration of duties
C) both an assumption of duties and a declaration of duties
D) neither an assumption nor a declaration of duties
E) both an assumption of duties and a declaration of duties, if it can be shown that the
obligee approved of the delegation.
Which of the following is true about the distinction between secured and unsecured
credit?
A) Secured debt is debt that has already been paid, while unsecured debt has not yet
been paid.
B) Unsecured debt is expected to be collected, whereas collection of secured debt is
doubtful.
C) Secured debt will be collected over a time period of more than one year, while
unsecured debt is expected to be collected within one year.
D) Secured debt has collateral associated with it, while unsecured debt has no
associated collateral.
E) Secured debt results from a court judgment, whereas unsecured debt results from an
agreement between the parties.
Which of the following is false about the recovery of punitive damages in connection
with contracts?
A) They are awarded to punish the defendant.
B) They are awarded to deter the defendant from similar conduct in the future.
C) They are awarded as a substitution for compensatory damages.
D) They are awarded to set an example for others.
E) They are awarded as a substitute for compensatory damages.
Which of the following is not a basis on which a court could order a remedy in
connection with an illegal contract?
A) a party was justifiably ignorant of the law
B) a party entered into the illegal contract because of fraud
C) after the contract was formed one of the parties attempted to prevent the
performance of the illegal act
D) one party would lose more than the other if the court took no action
E) one party is less at fault than the other party for entering into the illegal contract
A grocery store mails to a produce importer an offer to purchase for prompt shipment
50,000 pounds of bananas. The importer immediately ships the 50,000 pounds of
bananas by truck to the buyer but does not send notification to the buyer that it is
making the shipment. Which of the following is true?
A) There has been an effective acceptance merely by shipping the bananas.
B) There would be an acceptance only if the seller sends a written acceptance by mail
since the offer was received by mail.
C) The seller must send an acceptance to the buyer by any commercially reasonable
method.
D) When the bananas arrive at the grocery store, their arrival will be treated as an offer.
E) There has been no acceptance because perishable items are involved, and notice
must be given prior to shipment.
A consent order is:
A) an agreement whereby a defendant agrees not to violate securities laws in the future,
but does not admit to having violated securities laws in the past.
B) an agreement that results in the federal district court granting an injunction.
C) a request of the court for ancillary relief.
D) an agreement to sell securities at a future date at the current price on the day the
agreement was reached.
E) a plea bargain agreement with the United States Department of Justice to provide
information in exchange for a reduced sentence.
"Your Buzz On-the-Go" is a franchisor of a drive-through fast food chain of stores
where all drinks and food contain caffeine. For example, even their breakfast burritos
contain chocolate. The franchisor requires its franchisees to purchase all of the food
items and paper supplies (paper bags, napkins, packaging, etc.) from a supplier that is
owned by the franchisor. Mike, a franchisee, would prefer purchasing these items from
less expensive sources. Most likely, what is legality of the requirement to purchase
these items from the franchisor?
A) The arrangement is illegal for both the food products and the paper items.
B) The arrangement is legal for the food products, but illegal for the paper items.
C) The arrangement is illegal for the food products, but legal for the paper items.
D) The arrangement is legal for both the food products and the paper items.
E) The arrangement is legal for the food products if it can be shown that they are not
unique, but illegal for the paper items.
Which of the following types of speech is protected by the United States Constitution?
A) dangerous speech
B) defamatory language
C) obscene speech
D) offensive speech
E) child pornography
An appellate court will ________ a decision if it finds an ________ of law in the
record.
A) reverse; error
B) affirm; error
C) reverse; interpretation
D) affirm; interpretation
E) reverse; ambiguity
When an employee breaches a fixed-term employment contract by quitting before the
end of the term, what can the employer recover as damages?
A) nothing, because courts do not order anyone to perform a job against his or her will
B) all amounts already paid to the employee under the contract
C) only amounts paid to the employee for which the employee has not yet done the
work
D) the costs of hiring a replacement employee, plus any increase in salary paid to the
replacement employee
E) only specific performance
When a wire transfer is involved, what happens if a receiving bank mistakenly pays a
greater amount to the beneficiary than ordered?
A) The originator is liable for the entire amount paid, and has no right of recovery.
B) The originator is liable for the entire amount paid, but may recover only from the
person or company who ordered the wire transfer.
C) The originator is liable for the entire amount, but may recover only from the
improper beneficiary.
D) The originator is liable for only the amount he or she instructed to be paid.
E) The originator is not liable for any amount, and the transaction is void.
What is the modern view when a legal document refers to the assignment of a contract?
A) Only the rights of one party are assigned, and no duties of either party are assigned.
B) The rights of both parties are assigned, but no duties are assigned.
C) The rights of one party are assigned and that same party's duties are simultaneously
delegated.
D) The rights of both parties are assigned, and the duties of both parties are delegated.
E) The rights are assigned only if the obligor consents, and duties are never assigned.
________ personal property includes equipment, vehicles, furniture, computers,
clothing and jewelry, while ________ personal property includes securities, patents,
trademarks and copyrights.
A) Fixed; variable
B) Transparent; non-transparent
C) Tangible; intangible
D) Real; conjectural
E) Identifiable; conjectural
Rob and Gabby have decided to marry, and they want to define some of their
responsibilities during the marriage. Which of the following would be an illegal
agreement regarding their marriage?
A) Rob agrees to provide medical coverage for Gabby's children from a previous
marriage.
B) Gabby agrees to cook three hot dinners per week for Rob.
C) The couple agrees to take a one-week vacation apart from each other annually.
D) Rob agrees to buy Gabby a new car every three years, as long as Rob has the
financial means to afford it.
E) Gabby agrees to have sexual relations with Rob a specific number of times per week.
