The term “probable cause” refers to the substantial likelihood that a person either
committed or is about to commit a crime.
Strict liability requires the injured person to prove that the defendant breached a duty of
care.
A statute of limitations begins to run at the time the plaintiff first produces a complaint.
A bank’s refusal to certify a check does not amount to the dishonor of the check.
The Financial Accounting Standards Board (FASB) issues new GAAP rules and amends
existing GAAP rules.
An isolated incident or offhand remark that is not very serious and that does not create a
hostile work environment or adverse employment decision does not violate Title VII.
The performance of an accord is called a counteroffer.
The imposter rule eliminates HDC status with regard to negotiable instruments that
arise out of certain consumer credit transactions.
A principal is held liable for the intentional torts of agents and employees even if they
are committed outside the principal’s scope of business.
Transfer and presentment warranties shift the risk of loss to the party who was in the
best position to prevent the loss.
The Securities Act of 1933 requires that before a corporation or another business sells
securities to the public, the issuer must file a registration statement with the Securities
and Exchange Commission (SEC).
The President of the United States is elected solely on the basis of popularity among the
citizens of the country.
The ACPA gives owners of trademarks the right to prevent the kidnapping of Internet
domain names by cybersquatters.
The Civil Rights Act of 1866 applies only to rentals of public property.
A market extension merger is a merger between two companies in similar fields whose
sales overlap.
Jumbo CDs are CDs of under $100,000.
Unless otherwise agreed upon, the principal owes a duty to cooperate with and assist
the agent in the performance of the agent’s duties and the accomplishment of the
agency.
In a tort of appropriation case, the plaintiff can recover the unauthorized profits made
by the offending party.
Two persons who are eligible to marry, living together, and holding themselves out as
husband and wife require a court decree of divorce to end the marriage in spite of not
having a valid marriage license.
Agricultural cooperatives enjoy an implied exemption from antitrust laws.
If a franchisor violates FTC disclosure rules, the wrongdoer is subject to an injunction
against further franchise sales, to civil fines, and an FTC civil action on behalf of
injured franchisees.
The Statute of Frauds provides that all contracts irrespective of their costs must be in
writing to be enforceable.
A contract that is entered into by means of fraudulent misrepresentation can be
rescinded by the innocent party.
A system in which each shareholder votes the number of shares he or she owns on
candidates for each of the positions open is the cumulative voting system.
A warranty that arises when a seller or lessor warrants that the goods will meet the
buyer’s or lessee’s expressed needs is called implied warranty of fitness for a particular
purpose.
The defense of assumption of the risk can be used by a defendant against a plaintiff who
voluntarily participates in a risky activity that results in injury.
Checks are the most common form of negotiable instrument used in the United States.
Under the strict scrutiny test, the government must have an important reason for
treating persons differently because of their sex in order for such unequal treatment to
be lawful.
Under the Uniform Commercial Code, businesses are subject to the laws of each state
in which they operate.
When there is a mutual mistake of value, the contract remains enforceable by either
party because the identity of the subject matter of the contract is not at issue.
An apparent agency is created when a franchisor leads a third person into believing that
the franchisee is its agent.
The Articles of Confederation granted the federal government the right to levy and
collect taxes.
Which of the following is true of a buyer’s right of inspection?
A) Cost of inspection is shared by the seller and buyer if goods are conforming.
B) The buyer pays for the inspection if the goods conform to the contact.
C) Inspected goods, even if found to be nonconforming, should be paid for by the
buyer.
D) Inspection has to be performed after the goods in the contract have been paid for.
The term ________ refers to a written document signed by a contractor, subcontractor,
laborer, or material person, waiving his or her statutory lien against real property.
A) mortgage
B) supplier’s lien
C) lien release
D) notice of lien
Which of the following is true of a shipment contract?
A) It requires the seller to deliver goods to the buyer’s place of business or another
specified destination.
B) Its delivery is said to have occurred when the goods reach a specific destination.
C) It requires the seller to contract for proper transportation of goods and promptly
notify the buyer.
D) It is applicable to noncarrier cases of transactions between buyers and sellers.
A common form of ownership in a multiple-dwelling building in which the purchaser
has title to the individual unit and owns the common areas as a tenant in common with
the other owners is called a ________.
A) ranch
B) barndominium
C) condominium
D) cooperative
According to the Treaty Clause of the U.S. Constitution, the president can make
treaties, provided that ________ of the senators present concur.
A) all
B) two-thirds
C) half
D) one-third
Which of the following criteria must be met for a company to be treated as an S
corporation?
A) Shareholders must be other corporations or partnerships.
B) Nonresident aliens cannot be shareholders.
C) The corporation must have more than 100 shareholders.
D) The corporation must have more than one class of stock.
Which of the following statements is true of an employer-employee relationship?
A) An employee has implied power of attorney towards the principal.
B) An employee has authority to act on behalf of the principal.
C) An employee can enter into contracts on behalf of the employer.
D) An employee is hired to perform a task or service.
The plaintiff must prove privity of contract to recover monetary damages under Section
11(a) of the Securities Act of 1933.
Which of the following is true of a member-managed LLC?
A) Each member has equal rights in the management of the business of the LLC.
B) The member with the highest capital contribution becomes the de facto manager of
the LLC.
C) Any matter relating to the business of the LLC is decided by the member managing
the LLC.
D) Any matter relating to the business of the LLC is decided by the member with the
highest capital contribution.
Jonas enters into an oral contract with Chelsea to lease his house to her for $100,000.
Chelsea pays him $100,000 and moves in. A month later, Jonas learns that his state
requires contracts for the lease of goods with payments of $1,000 or more to be in
writing. Which of the following options does either party have?
A) Jonas can evict Chelsea as the contract does not comply with the Statute of Frauds
and is hence void.
B) Neither Jonas nor Chelsea can rescind the contract as it has already been executed.
C) Chelsea can rescind the contract on the grounds of noncompliance with the Statute
of Frauds.
D) Jonas can rescind the contract on the grounds of noncompliance with the Statute of
Frauds.
Which of the following is true of the Public Company Accounting Oversight Board
(PCAOB)?
A) All members of the Public Company Accounting Oversight Board have to be CPAs.
B) The Public Company Accounting Oversight Board was created by the Tax Reform
Act of 1976.
C) The SEC has oversight and enforcement authority over the board and its functioning.
D) The Public Company Accounting Oversight Board lacks the power to adopt rules
concerning the ethics of public accountants.
________ refers to an equitable doctrine that permits the court to rewrite a contract to
express the parties’ true intentions.
A) Reformation
B) Injunction
C) Conjunction
D) Garnishment
Which of the following horizontal restraints of trade contains the element of monopoly?
A) conscious parallelism
B) market sharing
C) group boycott
D) exchange of nonprice information
The Inkilwas Corporation has 30,000 shares outstanding. A shareholders’ meeting is
duly called to amend the articles of incorporation. According to the RMBCA, what is
the minimum outstanding shares that must be represented in this case to have a
quorum?
A) 12,001
B) 18,501
C) 15,001
D) 17,501
________ is a crime that involves the willful or malicious burning of a building.
A) Larceny
B) Arson
C) Battery
D) Embezzlement
Federal courts have ________ jurisdiction to hear cases involving a federal question or
diversity of citizenship.
A) exclusive
B) limited
C) in rem
D) quasi in rem
A(n) ________ is a contractual provision that relieves one or both of the parties to a
contract from tort liability.
A) contract of adhesion
B) exculpatory clause
C) duty of restitution
D) fundamental breach
________ says that a principal is generally not liable for injuries caused by its agents
and employees while they are on their way to or from work.
A) Vicarious rule
B) Coming and going rule
C) Frolic and detour
D) Dual-purpose rule
An LLC differs from a sole proprietorship in that it ________.
A) gives nonmanager members rights to manage a manager-managed LLC’s business
affairs
B) is less complex and costly to form than a sole proprietorship
C) can be owned by one owner in most states and can thus obtain limited liability
D) requires at least one member who is personally liable for the obligations of the
partnership
If a lawyer fails to file a document with the court on time, causing his client’s case to be
dismissed, he would be liable for ________.
A) professional malpractice
B) intentional misrepresentation
C) tort of appropriation
D) defamation
A(n) ________ contract is inferred from the conduct of the parties.
A) express
B) action-oriented
C) implied-in-fact
D) implied-in-law
A(n) ________ is a contract by which the owner of software or a digital application
grants limited rights to the owner of a computer or digital device to use the software or
digital application for a limited period and under specified conditions.
A) e-license
B) ISPS
C) domain
D) digital signature
Paulo Dessario is the owner of Paulo’s Pizzeria, which has not been doing well in the
last year. He files for bankruptcy under Chapter Which of the following is true in
accordance with the constitution of the Chapter 13 estate?
A) Paulo must terminate all his business operations in the United States.
B) If the pizzeria is not exempt from Chapter 13 estate, Paulo must surrender it.
C) Paulo is allowed to continue operating the pizzeria, irrespective of it being exempt.
D) Paulo can only operate the pizzeria but cannot remain in possession of it.
Equity was resorted to when ________ would not be the proper remedy.
A) the application of natural law
B) an award that is morally just
C) an award of money damages
D) maxims based on fairness
An accountant can defeat the imposition of liability under Section 18(a) if the
accountant ________.
A) can show that the misleading statement was made to protect the company from
bankruptcy
B) can show that he acted negligently
C) was an employee of the plaintiff
D) can show that the plaintiff had knowledge of the false statement
A sole proprietorship does not pay taxes at the business level because ________.
A) it does not have a separate legal personality.
B) it is a small business that is exempted from taxation.
C) it is a not-for-profit organization.
D) it is generally an institution with no business dealings.
A(n) ________ is the chronological history of the chain of title and encumbrances
affecting the property.
A) abstract of title
B) certificate of title
C) title insurance
D) quiet title action
Howard is injured by Penny in a car accident, caused due to Penny’s negligence. Which
of the following statements holds true for Howard’s right to assign?
A) Howard cannot assign the recovery of punitive damages from Penny.
B) Howard can only assign the recovery of his medical expenses from Penny.
C) Howard’s right to sue Penny cannot be assigned.
D) Howard can only assign his right to take the case to the appellate court.
A panel of persons who are elected by the shareholders that make policy decisions
concerning the operation of a corporation is known as ________.
A) legal aides
B) cartel
C) consortium
D) board of directors
Which of the following statements is true about an answer?
A) The plaintiff cannot claim damages once a default judgment is entered against the
defendant.
B) A default judgment establishes the plaintiff’s liability.
C) A defendant’s answer can assert affirmative defenses.
D) The defendant’s answer is never revealed to the plaintiff.
Which of the following U.S. Supreme Court decisions creates precedent for future
cases?
A) plurality decisions
B) majority decisions
C) tie decisions
D) concurring decisions
Ali is a member of a member-managed LLC. While Ali is driving to a client’s office to
handle the LLC’s business, he hits an old man and severely injures him. The man sues
the LLC and recovers $3 million in damages. The court however determines that Ali
was ordinarily negligent and that the accident was caused by the uneven terrain of the
road. Which of the following is true of the given scenario?
A) Ali is liable to the LLC for the $3 million it was ordered to pay the man.
B) Ali will not be liable to the LLC for any losses caused to the LLC.
C) The $3 million should be paid by all the members of the LLC.
D) The $3 million should be paid by the member-managers of the LLC.
When Sheila is 16 years old (a minor), she enters into a contract to purchase an
automobile costing $20,000 from Brian, a competent adult. Brian, who believes that
Sheila is an adult, does not ask for verification of her age, and delivers ownership of the
automobile to Sheila after he receives her payment of $20,000. Subsequently, before
Sheila reaches the age of 18 (the age of majority), she is involved in an automobile
accident caused by her own negligence. The automobile sustains $7,000 worth of
damage in the accident (the automobile is now only worth $13,00. If Sheila disaffirms
the contract and returns the damaged vehicle to Brian, he has to pay her ________.
A) $20,000
B) $10,000
C) $7,000
D) $13,000
A(n) ________ is a clause in an insurance policy that provides that insurance proceeds
are payable only after the insured has paid a specified amount toward the damage or
loss.
A) incontestability clause
B) coinsurance clause
C) exclusions from coverage clause
D) deductible clause
Differentiate between design patents and utility patents with an example.
Explain the duties of insured and insurer in an insurance contract.
Explain the circumstances under which states recognize a marriage in spite of the
parties not having a valid marriage license.
Discuss the features of Helping Families Save Their Home Act of 2009.
Discuss how the UCC’s regulation of additional terms differs from the common law of
contracts.
Explain how preferred stockholders can collect dividends from corporations in spite of
corporations having no earnings to pay them.
Define emancipation and list a few possible reasons for its occurrence.
Explain how the assignment of rights facilitates an obligor to assert any defense against
the assignor or the assignee.
What are the guidelines for dealing with attempts to revoke unilateral offers?
Distinguish between the act of state doctrine and the doctrine of sovereign immunity.
Helen contracts with a local builder to construct a church in her neighborhood. The
locals will benefit by having a church that may raise the housing value in the locality.
The builder breaches the contract and the locals intend to hold him legally liable for
nonperformance. Discuss an argument for or against the intentions of the locals.
Examine the need for antitakeover statutes.
Compare and contrast motion for judgment on the pleadings and motion for summary
judgment.
Discuss the nuances behind actual causes and proximate causes of negligence.
How do email harassments differ from other forms of harassment? Discuss how
employers can protect employees from such harassments.
What is the Fair Housing Act of 1968? Evaluate the weaknesses of this law.
Laurie owes $10,000 to Kim. Kim sells her right to collect the money to Josh for $7,500
and after a few weeks to Sam for $7,500. Sam provides Laurie with a notice of
assignment, but Josh doesn’t. Which assignee would have the legal rights to the
assigned right? Provide arguments supporting each assignee.