Landview Appliances sells a stove to Evan for his home. The contract of sale excludes
liability for consequential damages. When Evan turns on the stove, it catches fire,
burning Evan severely. Evan cannot recover for his injuries because of the exclusion of
damages clause.
a. True
b. False
The “discovery” stage of a trial includes which one of the following?
a. Production of documents.
b. Written interrogatories.
c. Depositions.
d. All of these.
In which of the following cases will an oral contract for the sale of goods of $750 be
enforceable without a writing?
a. The goods are to be specially manufactured for the buyer and the seller has made a
substantial beginning of their manufacture.
b. A party admits in an answer to a complaint in a lawsuit that the contract was made.
c. Delivery and acceptance of the goods has been made.
d. All of the above.
The Sarbanes-Oxley Act has all but which of the following provisions?
a. Creating a five-person Accounting Oversight Board with authority to review and
discipline auditors.
b. Creating severe civil and criminal penalties for enterprises that engage in the
commission of two or more predicate acts within a period of ten years.
c. Increasing the penalties for existing federal crimes and creating new criminal
offenses.
d. Adding new financial disclosure requirements.
Some states allow the formation of partnerships in which all partners have limited
liability.
a. True
b. False
The Clean Air Act requires that the standard of performance for new stationary sources
that are constructed or modified after the publication of regulations reflect emissions
achievable through application of the best available technological system of continuous
emission reduction.
a. True
b. False
The degrees of mental fault in criminal law include which of the following?
a. Subjective fault, which includes a purposeful, knowing, or reckless mental state.
b. Objective fault, which would be a negligent or careless mental state.
c. Liability without fault, where no requisite mental state or even knowledge of the act
is required in some instances.
d. All of the above.
e. None of the above
The type of authority that arises from acts of the corporation that lead third parties to
believe reasonably and in good faith that an officer has the requisite authority is:
a. actual express authority.
b. actual implied authority.
c. apparent authority.
d. ratification.
Which of the following is a true statement concerning a life estate?
a. A life estate is an ownership right for the life of the grantor.
b. A life estate is an ownership right in property for the life of any individual designated
by the grantor.
c. A life estate requires special wording, prescribed by statute, to create it.
d. None of these.
The courts will never presume a negotiation of order paper was intended; the parties
must clearly indicate a negotiation or else the courts will presume an assignment was
intended.
a. True
b. False
Mary financed her 72 high-definition TV with a bank, but is now delinquent on her
payments. The bank holds a security interest in the TV. In most states, when Mary is not
at home and without her knowledge, bank personnel may enter Mary’s home to
repossess the TV.
a. True
b. False
An example of successful land purchases made by agents for an undisclosed principal
took place in Florida for Walt Disney Productions.
a. True
b. False
Leslie purchased 100 flower pots from a local merchant. Warranties which are not
included in her sales contract, but exist by “operation of law,” are the:
a. express warranties.
b. exclusive warranties.
c. quasi warranties.
d. implied warranties.
Which of the following is a basic objective of the 1933 Securities Act?
a. To provide investors with material information concerning securities offered for sale
to the public.
b. To prohibit misrepresentation, deceit, and other fraudulent acts and unfair practices in
the sale of securities generally, whether or not they are required to be registered.
c. Both of these.
d. Neither of these.
The court in National Business Services, Inc. v. Wright found a noncompete agreement
drafted for an employee of an Internet company was:
a. no different in enforceability than noncompete agreements for other types of
companies.
b. subject to smaller geographic restrictions than for other types of companies.
c. unreasonable in duration with a one-year time restriction.
d. subject to larger geographic restrictions than for other types of companies.
Dissociation refers to those situations in which the RUPA requires a partnership to wind
up and terminate.
a. True
b. False
A person with a life estate cannot do which of the following?
a. Strip-mine the land.
b. Build a bridge over the creek.
c. Cut a single tree.
d. Put a new roof on the house.
An instrument representing an interest in real property created to secure repayment of
the debt is called a:
a. warranty deed.
b. foreclosure.
c. mortgage.
d. default judgment.
Audit working papers would include which of the following?
a. Records of accounting and auditing procedures and tests performed.
b. Engagement letters.
c. A collection of IRS rulings related to auditing in general.
d. Accountant fees accrued for the year from all accounts.
The “but for test is useful when two or more forces, each of which is sufficient to bring
about the harm in question, are actively operating.
a. True
b. False
A shareholder of one-third of all the stock in a corporation would be entitled to
one-third of all corporate assets of an ongoing company.
a. True
b. False
The requirement that a classification have a substantial relationship to an important
governmental objective is known as the:
a. rational relationship test.
b. strict scrutiny test.
c. intermediate test.
d. Contract Clause.
The Rogers family has always wanted to buy the beautiful house at the top of the hill.
The owners of the house, the Thompsons, decided to sell and called Mr. Rogers. Before
he could get back in touch with Mr. Thompson, Mr. Rogers suffered a heart attack and
died. Mr. Rogers adult daughter, to whom the Thompsons had not spoken, still wants
the house. She may:
a. not accept, since the offer is terminated.
b. not accept, because she does not have the capacity.
c. accept, since the contract offer is assignable.
d. accept, since the offer cannot be revoked without notice.
A signed writing by a shareholder authorizing a named person to vote his stock at a
specified meeting of shareholders is a(n):
a. control.
b. affiliate.
c. proxy.
d. registration statement.
Which of the following is correct with respect to an accountant’s working papers?
a. The client is held to be the owner of an accountant’s working papers.
b. An accountant must surrender his working papers to his client if the client so
requests.
c. An accountant may not surrender her working papers unless the client consents or a
court orders the disclosure.
d. All of these are correct.
“Insider trading” rules pertain to:
a. tippees.
b. officers and directors.
c. underwriters.
d. All of these.
The Uniform Commercial Code is a federal law that applies to commercial transactions
among the states.
a. True
b. False
__________ jurisdiction refers to the authority of a particular court to judge a
controversy of a particular kind.
a. Exclusive federal
b. Subject matter
c. Concurrent federal
d. None of these
In which of the following situations has conversion NOT occurred?
a. When an instrument is paid on a forged indorsement.
b. When a drawee to whom a draft is delivered for acceptance properly returns it upon
request.
c. When any person to whom an instrument is delivered for payment refuses on demand
to pay or to return it.
d. When a bank pays an instrument containing only one of two required indorsements.
A lease for office space is considered to be personal property.
a. True
b. False
__________, promulgated by the SEC, provides a nonexclusive safe harbor for securing
the intrastate exemption.
a. Rule
b. Rule
c. Rule
d. Rule
Which of the following is correct with respect to the act of state doctrine?
a. It allows foreign countries to be liable for their torts.
b. It allows state governments in the United States to ignore treaties entered into by the
United States.
c. It provides that the judicial branch of a nation should not question the validity of
actions taken by a foreign government within that foreign sovereign’s own borders.
d. It is a very recent addition to U.S. law.
A majority of states have enacted the Uniform Residential Landlord and Tenant Act
which provides a comprehensive system for regulating the landlord-tenant relationship.
a. True
b. False
Under the Code, what rights do the parties have to affect the possible remedies
available in the case of breach?
Discuss the use of and types of stock options.
Compare and contrast a summary judgment and a directed verdict.
Identify two situations in which silence or nondisclosure constitutes a
misrepresentation.
Identify the defenses that can be used against a holder in due course and those defenses
that cannot be used against a holder in due course.
Name four types of contract rights that are non-assignable.
Explain what is meant by an implied warranty of habitability and how this doctrine has
changed the common law approach with respect to residential leases.
Discuss the role of the state attorneys general in consumer protection.
Explain consequential damages. Give an example.
Who usually enters into employment contracts and what provision is commonly
included regarding possible restraint of trade? Explain the purpose of such provisions.
What are the principal attributes of a corporation?
What is a Subchapter S Corporation, and what are its requirements?
Barton granted his neighbor, Mullins, the right to graze her cattle on Bartons land.
Identify the type of property interest Mullins has in Bartons land and explain how such
interests are created.
First Bank loaned $100,000 to Central Office Supply Store to purchase computers for
its inventory. Central signed a financing agreement, which First Bank duly filed in the
appropriate public office. Lynn came into Central’s store and purchased a computer that
was subject to the security interest held by First Bank. Assuming that Lynn is a buyer in
the ordinary course of business, whose interest in the computer has priority?
The U.S. and the government of San Sebastian broke off diplomatic relations in a
dispute over fishing rights. The U.S. blocked exports to San Sebastian. San Sebastian in
turn seized and expropriated the assets of several U.S. companies located within the
country. One of the companies, Continental Coffee, sued the U.S. government and the
government of San Sebastian charging violation of the U.S. Constitution on the grounds
of deprivation of property without due process of law. How will the company fare in its
case against the U.S.? against San Sebastian? Explain your answer, providing reasons
for your decision.
What are the major functions of the Federal Trade Commission (FTC) and what power
does the FTC have?