Kathy and Tom are filing for divorce. Their marital home, which they still live in, is
worth $7.5 million and their furniture and other assets are worth more than $25 million.
Kathy wants half of everything, but Tom doesn’t think she deserves more than 25
percent. They may file in federal court to have their dispute adjudicated.
One benefit of the Subchapter S corporation is that there is no double taxation.
Federal legislation or regulation must be authorized by a specific enumerated power in
the Constitution.
A principal has a duty to reimburse or indemnify the agent for payments made or
expenses incurred event if incurred outside the agent’s actual authority.
If a student goes to the library and plagiarizes text from a book or other publication, he
or she is guilty of indirect infringement.
When the judge issues the jury instructions, the judge is said to be charging the jury.
If business records can be proved to be private papers, the records may be protected
from seizure under the Fifth Amendment right against self-incrimination by sole
proprietors.
While normal arbitration produces an arbiter’s decision and the parties are bound by the
award, online arbitration produces a decision but the award is not binding on the
parties.
The Revised Uniform Partnership Act was enacted by Congress to make partnership
law more consistent and standardized throughout the United States.
A party to a contract may be discharged from performance due to operation of law if the
other party unilaterally alters the contract.
Fred has returned from a nursery where he has purchased 21 rose bushes to decorate the
exterior of his home. Each bush has its roots wrapped in burlap, and Fred carried the
bushes home in the back of his pickup truck. Fred has now planted each of the rose
bushes. The bushes are real property.
Sylvia is a student who parked her car in a university parking lot. To enter the lot, she
had to swipe her ID card to gain access. During class, a thief broke into her car and
stole her computer. The school is liable to her under a bailment relationship if it did not
exercise proper care in the protection of her car.
Secured creditors do not need to perfect their interests to be protected under the UCC.
Kevin’s transfer of $10,000 to his brother to pay off a loan two months before filing
bankruptcy can be undone by the trustee.
The purpose of secondary sources of law is to increase uniformity and fairness across
courts in the 50 states.
Amanda, a recent university graduate, needed a car to get to her new job. To help
Amanda secure a loan for the car, Ted, a friend, agreed to pay the loan should Amanda
default. Ted’s promise is enforceable as long as he goes to the bank, declares his
promise to guarantee Amanda’s loan in front of witnesses, and shakes hands on the deal,
giving his word.
Faye is driving when she sees an accident occur a half mile in front of her. Sarah has
negligently swerved her car, forcing Lindsay’s car off the road and into a tree. Lindsay
is thrown from the car and appears injured. Faye stops to render aid, and while helping
Lindsay, she slips and breaks her leg. Sarah is not liable in negligence for Faye’s injury
because the injury was not foreseeable and Sarah’s act was not the proximate cause of
Faye’s injury.
Bankruptcy laws come solely from state statutes and case law.
LLCs are not permitted to capitalize by selling equity ownership in the LLC itself.
Wrongfully revoking an acceptance will constitute a breach of contract by the buyer.
Preferred stock is the most frequently used form of equity instrument.
In an agency relationship the principal’s control must be total and continuous over the
agent.
The Clayton Act was amended by the Robinson-Patman Act.
Patios R Us contracts with Karl’s Concrete to have 35 yards of concrete delivered to a
job site it is working on. Payment is to be made 30 days after delivery. Five days after
the concrete is delivered, Patios R Us files for bankruptcy and the filing is accepted by
the court. Karl’s cannot sue to enforce the contract and receive payment.
A state probate court, which hears only will and estate matters, is generally described as
having limited authority or jurisdiction.
A valid contract is one that has all the necessary elements and, thus, can be enforced.
Only property owners are liable for cleanup costs of contaminated sites under the
Superfund laws.
Ike has orally agreed to paint Tina’s portrait. The oral agreement is for the portrait to be
completed in nine months. Even if the portrait actually takes 13 months to complete, the
agreement will be enforceable.
According to the Zippo standard, websites that provide information but do not provide
the opportunity to conduct online transactions are deemed to be passive and do not
create personal jurisdiction over the defendant company that operates the site.
Genericization occurs when a trademark has lost its distinctiveness and becomes a
general term describing a type of product rather than a specific company’s product.
Arbitration can at times be legally mandated, but mediation is entered into only on a
voluntary basis.
Agencies can monitor compliance with their regulations through inspection of business
facilities under their jurisdiction.
Impossibility of performance is subjective, meaning that one of the parties may
unilaterally decide that performance is impossible, thus discharging the contract.
In the typical business context, ADR is invoked either via contract or by mutual
agreement.
Pierre and Fritz have an oral agreement to ship goods from Switzerland to Quebec,
Canada. If the CISG applies:
A. there is no contract to ship the goods because it is not in writing.
B. there is no contract to ship the goods because both Pierre and Fritz are not
European.
C. the oral agreement is binding only if the goods are shipped and received without
protest from either party.
D. there may be a contract, depending on the totality of the circumstances.
Clyde contracts with Seaside Resorts to rent an oceanfront room for a romantic
weekend with his girlfriend Anne. In fact, Clyde intends to propose to Anne on the
beach under the full moon during their stay. He made this decision after booking the
room. The contract with Seaside Resorts requires a $250 deposit with the remaining
$250 due upon check-in. The deposit is nonrefundable unless the reservation is
canceled at least 48 hours prior to check-in. The day before they are to leave for the
resort, Clyde and Anne have a huge fight and break up. Clyde calls Seaside and cancels
the reservation and demands a refund of his deposit.
A. Clyde will get the refund because of impossibility; he can’t propose if they are no
longer speaking.
B. Clyde will get the refund because of impracticability; he can’t stay at a romantic
seaside room if he has no one to share it with.
C. Clyde will get the refund because of frustration of purpose; his intention was to
propose and that is no longer possible.
D. Seaside is not required to provide a refund.
Security transactions involving the original issuance and reissuance of securities by a
business to raise capital are called the:
A. primary market.
B. secondary market.
C. preferred market.
D. common market.
What is the name of the legislation that helps homeowners avoid foreclosure by
offering certain guarantees when refinancing a mortgage?
A. Mortgage Forgiveness Debt Relief Act
B. Truth in Lending Act
C. House Refinancing and Protection Act
D. Foreclosure and Debt Prevention Act
Mega Corporation has developed a strategic plan that calls for an emphasis on
appealing to a younger demographic. If it decided that such an appeal to a younger
market would necessitate a change in the corporate logo and trademark, such changes
would require an understanding of:
A. securities law.
B. intellectual property law.
C. contract law.
D. antitrust law.
Under the American legal system, subject to some exceptions, costs of litigation
regarding both the plaintiff and the defendant:
A. are all paid by the loser.
B. are all paid by the winner.
C. are paid for by each side, with the plaintiff and defendant paying for their own legal
costs.
D. are totaled by the court and then, for fairness, are split in half, with each side paying
an equal amount.
Protections under the Bill of Rights were extended to include restrictions and actions by
state governments under the:
A. Twelfth Amendment.
B. Thirteenth Amendment.
C. Fourteenth Amendment.
D. Fifteenth Amendment.
ABC Land Co. is negotiating the sale of an office building to Mega Co. Which laws
will govern the contract for the sale of the building?
A. hybrid laws
B. the Uniform Commercial Code
C. state statutory law based on the Uniform Commercial Code
D. state common law
Aimee goes online and orders a pair of jeans, three T-shirts, and a pair of boots. This is
an example of:
A. a divisible contract.
B. an entire contract.
C. a quasi-contract.
D. a formal contract.
Chelsea’s house is for sale, and she is selling it through a real estate agent. The house is
listed, and any licensed agent may show the house by using the special accessible key
in a lockbox on the front porch. Stan is a licensed agent and brings Paula into the home
to show it for a possible sale while Chelsea is not home. Stan and Paula would be
considered:
A. invitees.
B. licensees.
C. trespassers.
D. guests.
Punishment damages are called:
A. nominal damages.
B. consequential damages.
C. punitive damages.
D. compensatory damages.
Who, among the following, is not present during a pretrial conference?
A. the judge
B. the parties
C. the court reporter
D. the party’s attorneys
Which of the following is not an administrative agency function?
A. policymaking
B. creating statutes
C. licensing and permitting
D. investigation and enforcement
The Securities Act of 1933 focuses on the:
A. primary market.
B. secondary market.
C. preferred market.
D. common market.
Which of the following must be approved by the FDA before it can be sold to the
general public?
A. eggs
B. food ingredients
C. produce
D. all products made from animals
The nickname for the Comprehensive Environmental Response Compensation and
Liability Act (CERCLA) is _____.
In Automobile Supply Co. v. Scene-in-Action, Scene rented a commercial space from
Automobile. Soon after Scene took possession of the premises, the heat started
malfunctioning for hours at a time, with the temperature dropping to below 50 degrees.
After numerous employees stopped coming to work due to cold and illness, Scene
moved out, claiming:
A. breach of the right to possession.
B. breach of the right to quiet enjoyment.
C. adverse possession.
D. constructive eviction.
In Lieberman v. Wyoming.com, LLC, Lieberman dissociated from the LLC and
demanded cash for his share of the company. The remaining members voted to continue
the company, and the operating agreement discussed distribution in the case of
dissolution but not simple dissociation. The court decided that:
A. fundamental common law rules of fairness should apply and Lieberman was due a
fair share to be decided by independent business analysts.
B. Lieberman had rightfully dissociated from the company but since the operating
agreement was silent as to distribution should the company continue, he forfeited all
rights upon dissociation and should receive nothing.
C. because the operating agreement was silent on the issue, the Uniform Limited
Liability Company Act controlled and Lieberman should get his initial investment back
but nothing above that.
D. Lieberman had rightfully dissociated from the company but since the operating
agreement was silent as to distribution and state LLC law was also silent regarding the
issue, Lieberman should get no distribution for dissociation but would retain his interest
in the company until dissolution occurs.
With regard to consideration in a sales contract, the UCC differs from the common law
in that:
A. consideration in a sales contract may be modified without additional consideration.
B. consideration exchanged must be equal or very closely equal in sales contracts.
C. consideration is not required in sales contracts.
D. consideration in a sales contract may be modified as long as additional
consideration is provided.
Something of value that is exchanged as part of an agreement is called:
A. mutual assent.
B. consideration.
C. capacity.
D. legal purpose.
In Merchants Acceptance Inc., v. Jamison, Jamison ordered encyclopedias and the
contract specified that delivery was to be made to Jamison’s home. Instead, the
encyclopedias were delivered to her post office box and she never received them. She
refuses to pay for them and is sued.
A. Jamison must pay because it was her post office box, delivery was close enough to
be substantial performance, and risk of loss passed to her.
B. Jamison must pay because she easily could have mitigated damages by going to her
post office box to pick up the encyclopedias.
C. Jamison does not have to pay because the goods were never tendered to her
properly, so risk of loss never passed.
D. Jamison does not have to pay because the UCC permits a nonmerchant to cancel
contracts with merchants at any time as a consumer protection.
Finley is a U.S. senator. While at a friend’s wedding, he comments that another senator,
Glen, is corrupt and is an alcoholic and drug addict. A reporter overhears this statement
and includes the conversation in a written report that is published in the state’s largest
newspaper. Glen is called before a Senate investigatory committee, and his reputation is
permanently scarred. Is Finley guilty of defamation?
A. Yes, he has committed slander.
B. Yes, he has committed libel.
C. No, he didn’t disseminate the information to a third party; the reporter did.
D. No, he has an absolute privilege as a government official.
Penalties for violations of the 33 Act may include each of the following except:
A. civil penalties and fines.
B. revocation of the corporate charter for egregious cases.
C. criminal prosecution and incarceration.
D. revocation of the investment by the investor.
Employers must provide continuous coverage to any employee, even if terminated,
under the:
A. Health Insurance Portability and Accountability Act.
B. Consolidated Omnibus Budget Reconciliation Act.
C. Social Security Act.
D. Health Care and Education Reconciliation Act.
When did the U.S. withdraw from compulsory jurisdiction of the International Court of
Justice?
A. It withdrew in 1959.
B. It was never under compulsory jurisdiction of the court.
C. It withdrew in 1986.
D. It never withdrew.
Murder is the killing of a human being with malice aforethought. Malice aforethought
is the premeditation and planning of the crime. Malice aforethought shows that one
considered the consequences of the action and knowingly committed the crime. The
killing would be the:
A. actus reus.
B. mens rea.
C. voir dire.
D. indictment.
Fred is a student in your class and is frequently disruptive. Your professor has asked
him to stop talking four times and to stop texting three times just in today’s class.
Finally your professor asks him to leave, and when Fred says, “Make me,” your
professor loses it and knocks him out with a right cross to the jaw. Fred is now suing
your professor for civil battery. Both sides believe that you can provide valuable
information for their sides. Which discovery method should they use to get your
information?
A. a deposition
B. an interrogatory
C. a request that you write down your recollection so that they can file for a request for
production to obtain your statement
D. a request that you make an admission
In Fontainebleau Hotel v. Eden Roc, the Eden Roc Hotel sued the Fontainebleau Hotel
when Fontainebleau began erecting a 14-story addition to its premises that Eden Roc
claimed blocked air and sunlight from its pool and sunbathing areas. The court
determined that:
A. blocking the air and sunlight constituted a nuisance, so the building could be
stopped.
B. the English law doctrine of “ancient lights” applied only if the building caused a
dangerous circumstance to occur but not if the building caused only a nuisance.
C. the building could be erected only if it could be shown to be useful and beneficial as
long as it is not being erected out of spite to knowingly harm the plaintiff.
D. the building could be erected if it could be shown to be useful and beneficial even if
it may have been erected partly for spite to knowingly harm the plaintiff.
Franz asks Josef if he will paint his office building for $1,000. Josef says he will do the
job for $2,000. Josef’s response is:
A. a counteroffer.
B. an acceptance.
C. a rejection.
D. a mirror image offer.
Which part of the Truth in Lending Act requires that certain disclosures be made before
a credit transaction is consummated?
A. Regulation Y
B. Regulation Z
C. Creditors’ Disclosure Regulation
D. Disclosure of Key Terms Regulation
Mike is walking down the street minding his own business when he is stopped by a
police officer. Although no crimes have been reported in the area and Mike has done
nothing suspicious, the police officer doesn’t like the looks of Mike so he conducts a
pat-down search and finds a tiny bag of marijuana. Under these circumstances, this is:
A. an illegal search under Fourth Amendment protections.
B. an illegal search under Fifth Amendment protections.
C. a legal search because illegal drugs were found, justifying the police officer’s
actions.
D. a legal search because police are given broad discretion to use their experience to
fight crime and obviously the police officer was right in this case.
Which of the following is not true regarding venture capital firms?
A. They are generally long-term investors.
B. They generally concentrate on one particular industry.
C. They usually insist on substantial control of the corporation being funded through
membership on its board or through appointments to certain officer positions.
D. They are generally a source of expertise in operations and expansion of the
corporation being funded.
When a Mississippi defendant does business or extensively advertises in Louisiana, the
defendant subjects himself or herself to personal jurisdiction in Louisiana based on the
concept of _______.
If an agent possesses important facts directly related to his agency relationship but
withholds those facts from the principal, the agent has breached her duty of _____.
Lost revenue or profits, whether actual or potential, are called ________ harm.
A _______ is a concerted refusal to deal with a third party.
Amos owns a piece of land along a country dirt road. Very few cars use the road, and
the land is pretty secluded. One day Amos hears that the county is planning to build a
major highway that will go right along the border of his property. He checks the
newspaper and sees that, indeed, plans are being made to build the road and funds are
being arranged. Amos then drains his modest bank account and borrows money from
his family and friends to erect a diner on his property to attract the highway drivers. Just
as he finishes construction of the diner, the county changes its plans and decides to
build the highway along another route, miles from Amos’s property. Amos now has a
shiny new diner, miles from any traffic and essentially in the middle of nowhere. What
legal options does Amos have, if any?
A ________ is a document filed by one party that requests court action in a matter
pertaining to the litigation.
Vertical restraints are restrictions in which one company colludes with a ________
company.
________ is typically defined as intentionally committing a wrongful act with intent to
harm.
Suds Corp. has just suffered a huge loss of revenue for three quarters, and the
shareholders are furious. Much of the loss can be attributed to a board decision to
change the focus of the company from traditional lager beer to a lighter and smoother
brew. Unfortunately, the new recipe alienated current customers and failed to bring in
new customers. Although Suds has announced that it will return to its original product,
the shareholders are claiming a violation of the board’s fiduciary duty of care, and they
are suing the directors personally for their significant losses. What must the
shareholders prove to be successful? What defense is available to the directors, and
what must they prove to prevail?
All monopolies are illegal.
For a binding contract to exist, not only must there be agreement but the agreement
must be supported by ___________.
People and companies that are directly and indirectly affected by another company’s
decisions are called _______.
X-mart has just purchased 100 acres of land in Happyville. The town, fearful of a huge
chain store ruining the economy and putting local businesses out of business, quickly
passes an ordinance restricting the size of any new buildings to no more than 5,000
square feet. The typical X-mart store averages approximately 100,000 square feet. Does
the town of Happyville have the right to enact a zoning restriction of this nature?
You are an accounting major at your school. Your goal is to go to graduate school to
obtain further education and the appropriate credits necessary to become a certified
public accountant. Your goals are well known to your faculty and administration, and it
is also well known that your parents and grandparents are CPAs, as well as your older
brothers and sisters. As you enter your junior year, after paying your tuition and room
and board fees in full, your school loses its regional accreditation, making any degree
issued by the school essentially worthless. A worthless degree will not be recognized by
graduate schools and will not be recognized by state accounting boards. When you
demand a refund, the school refuses, claiming that it will still provide classes and
knowledge. Do you have grounds to have the contract terminated and receive a refund?
John owns a company that makes televisions. The company makes high-quality TVs
and has a large share of the market. Recently John’s company decided to expand its
business into surround-sound systems. If the company requires its distributors to buy
the surround-sound system as a condition of sale for the TVs, would there be an illegal
restraint? Why or why not?
Lon’s GPS Inc., orders 500 Class A widgets to be installed in GPS units it is
manufacturing. When delivery is made on Monday, the widgets delivered are Class B.
Lon’s signs a receipt accepting the nonconforming shipment. The next day, Lon’s
installs some of the Class B widgets and finds that they perform with half the accuracy
of the Class A widgets. What, if any, options does Lon’s have?
Under what conditions may an employer be held responsible to an aggrieved employee
for sexual harassment committed by a co-worker even if the employer is completely
unaware of and had no actual knowledge of the illegal conduct.
Maria has just sat down and is ready to take her last final exam before graduating. Just
before the tests are distributed, she discovers that all three pens that she brought are out
of ink. She turns to Mike, a classmate, and asks to borrow a pen. Recognizing her
predicament, he says, “No, I won’t lend you a pen, but I’ll sell you this Bic ballpoint pen
for $100.” Recognizing that she has no alternative, she gives him the money. A Bic pen
is worth about 10 cents. Afterward she demands a return of her cash and offers to return
the pen. Mike laughs and says, “No, a deal’s a deal.” How would the courts look at this
“deal”?
A business existing in or by right of law is considered a ________ entity.