The Uniform Electronic Transactions Act, in effect in all of the states, covers contracts
not governed by Articles 2 and 2A.
A limited partner’s financial obligation to the partnership may be increased if the:
a. limited partner acts as agent for a competing partnership.
b. limited partner takes active part in the management of the partnership.
c. certificate of limited partnership is incorrect or incomplete.
d. Both (b) and (c) are correct.
A patent would be appropriate in all but which one of the following cases?
a. The discovery of a medical use for moon rocks
b. The invention of a miniature portable generator
c. The discovery of a method of making soap from sand
d. The invention of a fingernail-sized radio
The voluntary transfer of a contractual right to a third party is known as a(n):
a. implied warranty.
b. assignment.
c. delegation.
d. novation.
Mary, age 17, sold Mark, age 22, the briefcase she got for graduation. Mark’s father
liked it and bought it from him. If Mary decides to disaffirm the contract, will Mark’s
father have to return the briefcase to her?
a. Yes, the briefcase is not a necessary.
b. Yes, if Mark’s father still has it.
c. No, her contract was with Mark and he cannot return goods he does not have.
d. No, if Mark’s father bought it without knowing that Mary was a minor.
Wanda has a new idea for a novel, which she won’t have time to write until next year.
She may protect it by means of:
a. patent.
b. copyright.
c. registration of the idea.
d. nothing. An idea that has not yet been developed into a tangible form cannot be
protected.
Able gets a judgment against Baker in state court for $50,000 on July 1. On July 15,
Baker files a bankruptcy petition under Chapter 7. Which of the following is true?
a. Able is a lien creditor.
b. A creditor with a security interest that was not perfected when the bankruptcy petition
was filed has priority over Able.
c. The judgment is a preferential transfer that will be invalidated by the trustee.
d. Both (a) and (b) are true.
If B grants A a life estate in his property and then B dies, what happens to the land
when A dies?
a. It goes to A’s heirs.
b. It goes to the state.
c. It reverts to B’s heirs.
d. It passes under A’s will.
Answer the following:
A will is generally revoked by all but which of the following?
a. The testator’s murder by a devisee
b. Tearing it in half with the intent to revoke it
c. Executing another will that is inconsistent with the first
d. Inadvertent burning which destroys the document
By law, all apartment buildings in Mary’s state must have smoke alarms in the ceilings.
If Mary suffers smoke inhalation because the smoke alarm in her apartment building
was not yet installed and Mary sues the owner for negligence, Mary would have to
prove:
a. a duty existed toward her.
b. a breach of that duty.
c. injury and causation.
d. All of the above.
Answer the following:
Which of the following is an informal contract?
a. A letter of credit.
b. A written contract for the sale of a 5-acre tract of land.
c. A check.
d. A recognizance.
Which of the following generally is not grounds for discharge of a contract by operation
of law?
a. Objective impossibility
b. Subsequent illegality
c. Running of the statute of limitations
d. Bankruptcy
a. When may the attorney general of a state seek to dissolve a corporation?
b. When may the shareholders of a corporation seek to dissolve it?
c. When may the creditors of a corporation seek to dissolve it?
Dayton Hardware Store and Leighton Bank enter a loan agreement in which Leighton
agrees to lend $10,000 on the security of Dayton’s existing store equipment. A security
agreement is executed and a financing statement is filed, but no funds are advanced. A
week later, Dayton enters a loan agreement with Ramos Bank in which Ramos agrees to
lend $10,000 on the security of the same store equipment. The funds are advanced, a
security agreement is executed, and a financing statement is filed. A week later,
Leighton Bank advances the agreed $10,000. Dayton defaults on both loans. In this
case:
a. between Leighton Bank and Ramos Bank, Ramos has priority because it advanced
the funds before Leighton Bank did.
b. between Leighton Bank and Ramos Bank, Leighton Bank has priority because it was
the first to deal with Dayton in the matter.
c. between Leighton Bank and Ramos Bank, Leighton Bank has priority because
priority among security interests perfected by filing is determined by the order in which
the financing statements were filed.
d. neither bank needed to check filings of financing statements because the filings had
no impact on which bank had priority.
Under Section 1 of the Sherman Act, which of the following is illegal per se?
a. Vertical market allocations
b. Horizontal market allocations
c. Vertical territorial and customer restrictions
d. (b) and (c)
Actual authority terminates upon:
a. illness of one of the partners.
b. dissolution of the partnership.
c. physical destruction of partnership papers.
d. All of the above.
Which of the following statements is most accurate concerning charitable subscription
promises?
a. They are generally not enforceable.
b. The courts equate them with gifts.
c. They are generally enforceable if there is reliance by the charity.
d. The Restatement uses a strict reliance requirement in relation to charitable
subscriptions.
A restraint involving collaboration among competitors at the same level in the chain of
distribution is:
a. a vertical restraint.
b. a horizontal restraint.
c. price fixing.
d. a trust.
The Convention on Contracts for the International Sales of Goods (CISG) includes
which of the following provisions?
a. Interpretation and trade usage
b. Intellectual property rights
c. Obligations and remedies of sellers, but not buyers
d. Profitability
Arthur, Betty, and Clara each inherit an undivided one-third of an apartment complex.
Instead of selling it, they decide to continue to operate it for the next few years as a
sideline to their other occupations just to see if they can earn some extra money. What
are they?
a. A partnership
b. Co-owners only
c. A corporation
d. Tenants in common
A principal has no duty to compensate his or her agent if:
a. the agent breached the duty of obedience.
b. the agent breached the duty of loyalty.
c. it is a gratuitous agency.
d. All the above are correct.
In which of the following situations would a landowner have liability to a trespasser?
a. Where the landowner has rigged up a trap to injure anyone coming onto the property
without permission.
b. Where a landowner next to a nursery school has an unfenced swimming pool and a
trespassing child drowns.
c. Where a trespasser trips over some lawn furniture in an unlighted backyard.
d. Both (a) and (b).
e. All of the above.
Damages for interference with contractual relations include:
a. payment for emotional distress.
b. nominal damages.
c. conversion fees.
d. criminal fines.
Amanda goes to American Bank where she uses $2,000 of her savings to purchase a
six-month certificate of deposit. In this case:
a. Amanda is the maker.
b. American Bank is the maker.
c. American Bank is the payee.
d. Amanda is the promisor.
All indorsements disclose the:
a. method to be employed in making subsequent negotiations.
b. kind of interest that is being transferred.
c. liability of the indorser.
d. All of the above.
e. None of the above.
Which one of the following is not a personal defense?
a. Infancy, to the extent that it is a defense to a simple contract
b. Breach of contract
c. Non-delivery of an instrument
d. Failure of consideration
In order to be the subject of a suit for copyright infringement, the copyright:
a. must be registered with the copyright office.
b. must be registered with the copyright office unless the work is a Berne Convention
work whose country of origin is not the United States.
c. must be registered with the copyright office before the infringement.
d. need not be registered under any circumstances.
Carolyn agrees to sell Marianne an antique handmade lace tablecloth for $1,500. When
Carolyn discovers that her cousin wants it too, she breaks the contract with Marianne.
Marianne can ask the court to order:
a. nominal damages.
b. specific performance.
c. restitution.
d. equitable rescission.
Which of the following would be admissible under the parol evidence rule? Assume the
written contract was made on June 1, 2010, and that it is an integrated document.
a. A letter dated July 9, 2010, reciting agreement to new delivery terms
b. A chart showing the dates for delivery written on August 16, 2009
c. A copy of two letters while the parties were in the negotiation stage of their contract
which showed agreement to a term not included in the June 1, 2010 contract
d. A copy of common carrier rules on the duty of delivery persons for uncrating
merchandise, which is dated December 1, 2006
Sarah has a checking account at First Bank. Orrin steals one of her blank checks, writes
a check for $250 to himself, and then forges Sarah’s signature. Orrin then indorses the
instrument to Paul in payment of a debt. Paul presents the instrument to First Bank for
payment. At First Bank’s request, Paul indorses the instrument, and the bank then pays
him $250. Which of the following is correct?
a. Paul has breached the warranties on presentment if he knew of Orrin’s forgery.
b. Orrin has breached the warranties on presentment.
c. Sarah has breached the warranties on presentment.
d. All of the above are correct.
e. Both (a) and (b) are correct.
Although Trina has paid her annual insurance premium, her insurance company sends
her a written notification that it is canceling her policy, which should have had four
more months of coverage. The insurer need do nothing more to effect the cancellation.
All price discrimination is illegal under the Robinson-Patman Act.
Carelessness or negligence is a form of subjective fault.
A debtor may not receive a discharge under Chapter 7 if he or she received a Chapter 13
discharge within the past six years in most cases.
In some states and under the RMBCA, cumulative voting is permissive, not mandatory.
The Fair Debt Collection Practices Act applies directly to creditors.
The most uncommon type of duress involves the use of physical compulsion.
Explain consequential damages. Give an example.
The scope of the Clean Water Act is very broad.
A drawee bank’s refusal to certify a check constitutes a dishonor of the instrument.
Banking and the collection process of checks is governed solely by state law, primarily
the UCC.
The adequacy of consideration, while not important to the existence of consideration,
may be relevant to the availability of certain defenses or remedies.
An auctioneer is the offeror and each bid is a counteroffer until a final bid is accepted.
Under the Superfund Recycling Act of 1999, recyclers may be liable to third parties, but
not to the federal or state governments.
A director who is a member of the board that declares an illegal dividend is not
personally liable to the company for the amount that is illegal.
The 2001 revision of the RULPA has been widely adopted.
Maria gives Joe $250 cash in return for Joe’s indorsed check for $300. If Maria
subsequently finds out that the check she took was given to Joe in return for a stolen
car, Maria is no longer a holder in due course.
The courts will enforce an agreement declared illegal by statute.
The test under the one-year provision of the statute of frauds is based on the likelihood
that the contract will be completed within one year.
Adrianne may form a limited liability company by filing articles of organization in a
designated state office, even if she is the only member of the company.