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Where there is an anticipatory repudiation, the non-breaching party's obligations under
the contract are discharged immediately.
Since the World Trade Organization's international trade rules are capitalist in nature,
socialist countries are not eligible to join the organization.
All states have enacted statutes creating an accountant-client privilege.
The prospectus provides expert analysis, from a duly-appointed representative of the
Securities and Exchange Commission, of a particular security's potential for future
value and growth.
Under the doctrine of contributory negligence, where a plaintiff has been partially
responsible for causing his or her own injuries, liability is assessed proportionally to the
degree of fault of each party.
According to the Restatement (Second) of Contracts: "A contract is a promise or a set of
promises for the breach of which the law gives a remedy or the performance of which
the law in some way recognizes a duty."
An offer expires at the lapse of time of an offer.
Under Rawls's social justice theory, each individual has the same responsibility to use
his or her own efforts to realize his or her own potential without consideration for the
least advantaged in society.
For the doctrine of promissory estoppels to apply, there must be a contract with
adequate consideration.
In a tenancy in common, the interests of a surviving tenant in common pass to the
deceased tenant's estate and not to the co-tenants.
The U.S. Court of Appeals for the Federal Circuit in Washington, D.C. is a special
federal appeals court that hears patent appeals from the Board of Patent Appeals and
Interferences of the U.S, Patent and Trademark Office and federal courts concerning
patent issues.
The court must approve any adoption before it is declared legal.
The National Association of Securities Dealers Automated Quotation System is an
electronic stock market.
If a person owns real property in fee simple, his or her ownership has no limitation on
inheritability.
Under Chapter 11 bankruptcy, discharge of debts not included to be paid in the
reorganization occurs only after the reorganization plan has been executed.
If a mortgage is not recorded, the rights and obligations regarding the mortgage are not
enforceable against the parties to the mortgage.
When there is an anticipatory repudiation, the aggrieved party will not have a cause of
action until the time that performance was due.
The SEC requires companies, foreign and domestic, to file registration statements,
periodic reports, and other forms on its electronic filing and forms system called
"EDGAR."
All states have adopted all, or a major part of Article 2 of the UCC.
An agreement among shareholders to restrict the ability to sell their shares is considered
to be an unreasonable restriction on the ownership of stock, and therefore against public
policy.
The Jackson Act is a federal statute, enacted in 1890, that makes certain restraints of
trade and monopolistic acts illegal.
Section 12 of the Securities Act of 1933 imposes civil liability on any person who
violates the provisions of Section 5 of the Act.
Most jurisdictions hold both the principal and the agent liable if the agent injures
someone while on a "dual-purpose mission."
The UN Security Council is primarily responsible for maintaining international peace
and security; the Security Council does not, however, have authority to use armed
forces.
Recording statutes give potential lenders or purchasers of real property the ability to
determine whether there are any existing liens on the property.
The Fair Credit Billing Act requires that creditors promptly acknowledge in writing
consumer billing complaints and investigate billing errors.
Many state Statutes of Frauds require that agents' contracts to sell real property covered
by the Statute of Frauds be in writing to be enforceable. This requirement is often
referred to as the equanimity rule.
It is possible to commit a fraud by remaining silent and not saying anything.
Many state antitakeover statutes cover corporations that have their principal office in
the state, have a certain percentage of its shareholders who are residents of the state, or
have residents of the state who own a certain percentage of the corporation's stock.
In determining whether an accommodation is "reasonable" under the Americans with
Disabilities Act, an employer's size and financial resources are irrelevant.
The courts of one jurisdiction are not bound by the precedent established by the courts
of another jurisdiction, although they may look to each other for guidance.
The board of directors of a corporation is appointed by the executives of the
corporation.
Determining the line of commerce that will be affected by the merger involves defining
the relevant product or service market.
Zach owns property that contains wetlands and decides that he would like to dredge
them. Which of the following is true?
A) He may dredge the wetlands without getting permission from anyone.
B) He must obtain a permit from the Environmental Protection Agency.
C) He must obtain a permit from the Clean Water Authority.
D) He must obtain a permit from the United States Army Corps of Engineers.
E) He must obtain a permit from the United States Secretary of the Interior.
Many states have adopted the ________ Arbitration Act, which promotes the arbitration
of disputes at the state level.
A) Amalgamated
B) Multi-state
C) Consolidated
D) Collaborative
E) Uniform
John has invented a device to monitor the tire pressure on bicycle tires. This device
consists of a tire pressure sensor on the tire with a radio transmitter and a receiver
mounted on the handlebars to give a read-out of the pressure. The radio transmitter is
similar to existing designs, but one has never been used in this way. The product cannot
be produced for less than $120, but John's preliminary marketing studies indicate that
the product could not be sold for more than $25. Which of the following is true?
A) John cannot get a patent, because the transmitter part is not a new invention.
B) John cannot get a patent, because the inability to produce the product at a cost low
enough to sell it means it does not meet the usefulness requirement.
C) John can get a provisional patent, which would provide limited protection until he
can redesign it so it can be made for under $25.
D) John can obtain protection for his invention even if someone else files a patent
application for the same invention, so long as John actually invented his first.
E) John can obtain protection for his invention even if someone else files a patent
application for the same invention, so long as John actually invented his first and pays a
fee of $1,000.
Kim robbed a bank. Kim used a gun and attempted to murder the teller because the
teller screamed upon seeing Kim's gun. The teller was injured. Bank robbery is a
federal offense, and attempted murder is a state law offense. A trial is held on the state
law charge of attempted murder and results in a hung jury. This is the only lawsuit Kim
has faced up to this point arising from this incident. What is the complete list of legal
actions that could be brought against Kim at this point arising from the bank robbery?
A) a state criminal case and a federal criminal case.
B) a state criminal case, a federal criminal case, and a civil case by the teller for
damages.
C) a federal criminal case, and a civil case by the teller for damages.
D) either a state or a federal criminal case (but not both), and a civil case by the teller.
E) a federal criminal case
When a court orders specific performance, it:
A) orders monetary damages to be paid by the breaching party to the non-breaching
party.
B) modifies the contract terms in order to maximize the fairness to both parties.
C) orders a party to a contract to do exactly what was called for in the contract.
D) orders a party to return any and all consideration received.
E) orders restitution.
For ________ to be negotiated, there must be indorsement and delivery.
A) bearer paper
B) order paper
C) a promissory note
D) a check
E) a draft
Which of the following is true about rescission and restitution?
A) Rescission and restitution are designed to give the non-breaching party the benefit of
the bargain.
B) Rescission and restitution occur when a party seeks compensatory damages.
C) Rescission and restitution usually occur together.
D) Rescission and restitution are available only when the subject matter of the contract
is unique.
E) Rescission and restitution are available only if the breaching party has committed
fraud.
A grantor transfers real property to the city for "as long as the property is used as a
park." What kind of interest does the city have?
A) fee simple absolute
B) fee simple defeasible
C) life estate
D) reversion
E) remainder
Which of the following is not true regarding the Uniform Limited Liability Company
Act?
A) The Act codifies limited liability company law.
B) The Act was issued by the National Conference of Commissioners of Uniform State
Laws.
C) The Act is binding on any state that allows limited liability companies.
D) The Act covers most problems that arise in the formation, operation, and termination
of limited liability companies.
E) The Act was issued in 1995.
The law has developed two (2) standards concerning contracts of mentally incompetent
persons:
A) legal insanity and equitable insanity.
B) express insanity and implied insanity.
C) adjudged insane and insane but not adjudged insane.
D) formal insanity and informal insanity.
E) adult insanity and minor insanity.
The general requirements for a liquidated damages clause to be enforceable are that:
A) actual damages are difficult to determine and the liquidated damages amount is
reasonable.
B) actual damages exceed the amount foreseen by the parties.
C) the liquidated damages clause applies only to unforeseeable damages.
D) the breaching party used its best efforts to avoid a breach of the contract.
E) the parties have rescinded the contract.
Robin owns an amusement park with an "extreme" roller coaster, the Rocking Dragon,
which risk-seekers love. She contracts with Exotic Shirt Company, allowing the
company to manufacture and distribute a line of shirts with the name "Rocking Dragon"
on them, along with a picture of the roller coaster. Which of the following is true
regarding Robin's agreement with Exotic Shirt Company?
A) Robin and Exotic Shirt Company have a joint venture.
B) Robin and Exotic Shirt Company have a strategic alliance.
C) This is a licensing agreement involving Robin as the licensor, and Exotic Shirt
Company as the licensee.
D) This is a licensing agreement involving Robin as the licensee, and Exotic Shirt
Company as the licensor.
E) The agreement between Robin and the Exotic Shirt Company is a franchise, with
Robin the franchisor, and Exotic Shirt Company he franchisee.
Under which of the following situations can a party rescind a contract?
A) a unilateral mistake of fact
B) a unilateral mistake of law
C) fraud in the inducement
D) a mutual mistake of value
E) a mutual mistake of a non-material fact
Chapter 13 is a ________ form of bankruptcy for individuals.
A) restitution
B) rehabilitation
C) remuneration
D) eminent domain
E) injunctive
Which of the following is true regarding enforcement of the Clean Water Act?
A) The federal government is solely responsible for enforcing the Act.
B) State governments are solely responsible for enforcing the Act.
C) The federal government is primarily responsible for enforcing the Act, but state
governments may enforce the Act if the federal government fails to do so.
D) State governments may enforce the Act, but only if the federal government gives
special permission to do so.
E) States are primarily responsible for enforcing the Act, but if a state fails to do so, the
federal government may enforce the Act.
The duty of ________ requires corporate directors and officers to use diligence when
acting on behalf of the corporation.
A) care
B) loyalty
C) good faith
D) obedience
E) a fiduciary
________ agency occurs when an agent acts for two (2.) or more different principals in
the same transaction.
A) Bilateral
B) Mutual
C) Dual
D) Bifurcated
E) Common
Which of the following is true?
A) Trademark protection can be lost if a trademark becomes used generically.
B) Under the "fair use" doctrine, trademarks can be used in certain limited ways
without the trademark holder's permission.
C) Selling a trademarked item to many buyers can result in loss of the trademark.
D) Terms such as "Mustang" cannot be trademarked, because they consist of only
generic words.
E) Trademark protection is not recognized in about one-half of the states.
Peter, Paul and Mary have agreed to be general partners to purchase and rehabilitate a
dilapidated home, which they plan to renovate and then resell. Peter and Paul each put
in 30%, and Mary contributes 40%, of the financial capital. Which of the following is a
true statement?
A) Each partner is personally liable for partnership debts, up to the extent of his or her
capital contribution.
B) Peter, Paul and Mary may name the partnership, "PPM, Inc."
C) According to the majority rule, Peter, Paul and Mary are not required to file a written
certificate of partnership.
D) Mary, because of her larger capital contribution, has a larger vote in partnership
decisions.
E) According to the majority rule, Peter, Paul and Mary will be required to file a written
certificate of partnership.
Sally owns a very expensive fur coat which Mary would like to buy. During the course
of conversation, Mary asks how much Sally would take for the coat. Sally replies, "I am
not sure I want to sell the coat, but I think it is worth about $3,000." Mary says, "That is
a little more than I wanted to spend." Several days later, Mary calls Sally on the
telephone and says, "I'll bring over the $3,000 today." Sally refuses to sell the coat, and
Mary sues. What is the likely outcome?
A) Mary wins because a valid contract was created.
B) Sally wins because there was never any offer for Mary to accept.
C) Sally wins because when Mary said $3,000 was too much to pay, Mary rejected the
offer.
D) Sally wins because Mary did not accept the offer in a reasonable manner.
E) Mary wins only if she can show she subjectively thought Mary was serious.
________ damages are usually awarded in a small amount.
A) Consequential
B) Special
C) Compensatory
D) Nominal
E) Punitive
Under the Uniform Commercial Code's indorsers' liability rules, drawers of checks and
drafts and unqualified indorsers of negotiable instruments have ________ liability on
the instruments.
A) conditional
B) stipulated
C) primary
D) secondary
E) tertiary
Spokes Folks is one of four bicycle shops in a college town. Spokes Folks is the only
retailer in town that carries the line of bicycles made by Silver Streak. Spokes Folks
carries several other bicycle lines, some of which are also sold by at least one of the
other retailers. Spokes Folks has been having difficulties lately dealing with Silver
Streak. Following a recent disagreement, Spoke Folks sent a letter to Silver Streak
stating that Spoke Folks "refuses to purchase any further products from Silver Streak,
and will terminate all business dealings as soon as its current unpaid invoices are paid."
Is this an illegal boycott under the Sherman Act?
A) yes, because any refusal to deal with Silver Streak is a violation
B) yes, because Spoke Folks is Silver Streak's only access to the retail market in this
town
C) no, because Spoke Folks carries other lines of bicycles
D) The action is legal if the dispute with Silver Streak is bona fide; otherwise, it is
illegal.
E) no, because there was no agreement by Spoke Folks with a competitor
The General Agreement on Tariffs and Trade, the predecessor of the World Trade
Organization, was ineffective regarding the resolution of trade disputes because:
A) there were no enforcement rules to penalize violators.
B) member nations that lost disputes had the power to veto the sanctions imposed
regarding decisions made against them.
C) there were not enough member nations to make resolution of disputes fair.
D) without a body of international precedent, there was little to base a nation's actions
on, so decision-makers were hesitant to enforce sanctions against violators, due to
concerns about the assurance of fairness and justice.
E) the United States withdrew from GATT, primarily due to its controversial dispute
resolution provisions.
Which of the following did the Food and Drug Administration not have the authority to
regulate until 1976?
A) organic foods
B) medicinal devices
C) food additives
D) artificial sweeteners
E) non-prescription drugs
A principal has a duty of compensation:
A) in all agency arrangements.
B) only in agency arrangements that expressly provide for compensation.
C) in all agency arrangements, except for "gratuitous" agency arrangements.
D) to pay the agent before he or she performs agency duties.
E) to pay the agent, even where the agent failed to produce the required result under a
contingency fee agreement.
Authority that a third party may reasonably assume the agent possesses is called:
A) express authority.
B) implied authority.
C) apparent authority.
D) incidental authority.
E) equitable authority.
Which of the following is true?
A) Contracts can be classified as either voluntary or involuntary.
B) All contracts are legally enforceable.
C) The terms of a valid contract become private law between the parties.
D) Contract promises are generally not enforced by the courts.
E) The terms of a valid contract become public law between the parties.
What is the general purpose of the Statute of Frauds?
A) to provide a civil remedy for those who have suffered a loss from fraudulent conduct
B) to provide criminal punishment for those who engage in fraud
C) to clearly specify what a plaintiff must prove in the different kinds of fraud cases
D) to ensure that the terms of certain contracts are not forgotten
E) to ensure that a written contract contains all material terms related to the contract
subject matter
The guilt of a defendant who has been charged with a crime must be proven at trial:
A) with a fair preponderance of the evidence.
B) beyond a fair preponderance of the evidence.
C) beyond a reasonable doubt.
D) with a fair probability of doubt.
E) beyond any doubt.
Which of the following is not necessary in order for the implied warranty of fitness for
a particular purpose to apply to a sale of goods?
A) The seller knows or has reason to know of the buyer's intended use of the good.
B) The seller is a merchant.
C) The seller states that the goods will serve the purpose of the buyer's intended use.
D) The buyer relies on the seller's skill and judgment.
E) The goods are purchased.
