An automatic stay halts all creditors’ collection actions except for ones brought by
government agencies.
An agent is generally prohibited from using his or her own judgment as a substitute for
the principal’s judgment unless specifically authorized by the principal.
Debtors may keep certain assets after they have filed for liquidation.
Craig is a licensed plumber and has a contract to install a replacement toilet for Mary.
When Craig realizes that he has booked two appointments simultaneously, he calls
Brian, another licensed plumber, and asks him to install Mary’s toilet. Craig has
assigned his duties to Brian.
Fifth Amendment protections against self-incrimination apply to corporate entities.
Even if the parties have no intent to form or operate as a partnership, their conduct may
result in the law recognizing them as partners.
The out-of-existence option is not risky if the debtor has no assets.
Jessica was caught shoplifting at a department store both by employees who witnessed
the act and by cameras in the store. The store’s management may hold her as long as it
takes to get her to confess.
An agent may work for two principals at the same time if the agent deals fairly with
both.
When a party successfully sues for an equitable remedy for a breach of contract, that
party does not receive a monetary award.
Stephen is 40 years old and has applied for a job at a large computer game development
company. He is told that he is “over the hill” and not eligible for employment at that
company. Stephen does not have a valid age discrimination suit under the Age
Discrimination in Employment Act because the act applies only to those already
employed, not to applicants in the hiring process.
Kate owns 1,000 shares of stock in a corporation. As an owner of the corporation by
virtue of her stock ownership, if she enters into a contract on behalf of the corporation,
the company will be bound by her actions.
Administrative agencies at the state level do not issue licenses.
State and local affirmative action plans in regard to race- or gender-based preferences in
the hiring of government contractors are subject to strict scrutiny.
Administrative agencies are not empowered to hear cases of alleged violations of their
regulations and must depend on the courts for adjudication.
Leah is a first-year elementary school teacher at a private religious school. The parents
and kids love her, and she gets along with everyone. One month after starting, she’s
called into the headmaster’s office and handed an envelope containing spring-break
college photos of her topless, guzzling beer and alcohol, while sitting in various men’s
laps. The headmaster informs her that she is terminated immediately and that she must
clean out her desk and remove all personal belongings by the end of the day. She
demands to know where the headmaster got these photos, and he tells her that the
school monitors social networking sites. These pictures had been posted to a site she no
longer uses and had forgotten about. She will be successful if she sues for wrongful
termination based on invasion of privacy.
A business that is subject to an agency’s jurisdiction is required to turn over documents
relevant to determining compliance with a particular rule.
Jones Corp. is set to deliver goods ordered by Smith Inc., and calls to confirm that the
goods will be delivered the next day. Smith Inc., on the phone, notifies Jones Corp. that
it has found the same goods available cheaper from another seller and will not accept
delivery. In order for Smith Inc., to officially be in breach of contract, Jones Corp. must
deliver and tender conforming goods and have Smith Inc., wrongfully reject them.
Corporations may be created by written agreement between the principals, and no strict
or formal filing is required as long as the agreement is written.
Online negotiation is available for minor disputes, but disputes arising from complex
transactions may be resolved only with traditional face-to-face meetings.
The shift from an agricultural society toward industrial production began almost
immediately after the end of the U.S. Revolution.
Peter and Paul are business associates. The police enter the business with a search
warrant because Peter is under investigation for a crime. When the police ask Paul to
answer some questions, he agrees, but one of the questions, if answered, might make
him culpable also. Paul must answer the question because he is not under investigation
and does not therefore currently have the right against self-incrimination.
Growing marijuana for purely personal medical use while possessing a valid
prescription in a state that has approved medical use of marijuana has been found to be
interstate commerce.
Antitrust legislation was enacted in response to the robber barons of the late 18th
century.
A successful Age Discrimination in Employment Act suit requires that the plaintiff
affirmatively prove that age was the direct reason for the adverse employment action
suffered.
If a defendant is found guilty in a criminal trial, he or she may not appeal due to double
jeopardy.
Mike believes that his neighbor Stephanie has been dumping sewage on her property.
After the Environmental Protection Agency conducts its investigation, Mike is
permitted, under the Sunshine Act, to attend the meeting called to discuss the results of
the investigation.
Under the Age Discrimination in Employment Act, substantially younger is not defined,
but many courts follow the general rule that the age difference must be 10 years in order
to qualify as substantially younger.
An agency’s prosecutorial discretion is seen as practically unreviewable by the
judiciary.
General partnerships are not created by filing a form with a government agency.
Agencies tend to employ large numbers of attorneys to make sure that the rulemaking
process is legally compliant.
Common law governs a contract that involves installation of computer equipment when
materials are valued at $75,000 and labor is $10,000.
Eve is a promoter and has approached Adam with an investment opportunity. Eve
anticipates a generous profit and informs Adam that he too can realize a generous profit.
This opportunity is not being offered to others. Assuming all other requirements to
classify this as a security are in evidence, the commonality of this transaction would be
described as a:
A. horizontal commonality.
B. parallel commonality.
C. vertical commonality.
D. common commonality.
An offer of a reward, if it is fulfilled, forms:
A. a bilateral contract.
B. a unilateral contract.
C. an express contract.
D. a quasi-contract.
The common law system is based on the legal concepts and organization of:
A. the United States.
B. ancient Rome.
C. England.
D. France.
If the offer specifies no time limit in which to accept:
A. the offeree has 10 days to accept.
B. the offeree has 30 days to accept.
C. the offeree has an unlimited time to accept as long as a revocation has not been
made.
D. the offeree has a reasonable time to accept.
What legislation amended the Comprehensive Environmental Response Compensation
and Liability Act (CERCLA)?
A. Revised Environmental Response Compensation and Liability Act (RERCLA)
B. National Environmental Policy Act (NEPA)
C. Superfund Amendments and Reauthorization Act (SARA)
D. Resource Conservation and Recovery Act (RCRA)
Which of the following would not generally be formed as an LLP?
A. three frat brothers opening a bar
B. two attorneys operating a law firm
C. four licensed physical therapists running a clinic
D. twenty CPAs running an accounting firm
Whose only legal remedy is to bring a lawsuit against a borrower to try to recover the
money loaned?
A. secured creditors
B. unsecured creditors
C. a mortgager
D. a government agency
Mike is driving when he has an accident. Robin, who is driving behind him, sees the
accident and stops to help. She pulls Mike from the burning car and administers CPR,
saving his life. Mike is a wealthy landowner and wants to reward Robin, so he gives her
a home with the understanding that when she dies, the home will go back to Mike or, if
Mike is deceased, to Mike’s heirs. Mike has granted Robin a:
A. fee simple.
B. fee tail.
C. life estate.
D. fee simple defeasible.
Horizontal restraints are agreements between:
A. business and government.
B. noncompetitors.
C. competitors.
D. consumers and government.
The nonagent employee relationship is sometimes referred to as the:
A. superior-inferior relationship.
B. supervisor-worker relationship.
C. director-directee relationship.
D. master-servant relationship.
A utility or business method patent will last for:
A. 14 years from the date of the filing of the application with the U.S. Patent and
Trademark Office.
B. 14 years from the date of the approval of the application granted by the U.S. Patent
and Trademark Office.
C. 20 years from the date of the filing of the application with the U.S. Patent and
Trademark Office.
D. 20 years from the date of the approval of the application granted by the U.S. Patent
and Trademark Office.
What type of legal system would a government that based its laws on the tenets of
Buddhism have?
A. a karma law system
B. a blended legal system
C. a religious-based legal system
D. a mixed legal system
The ability to distribute earnings without incurring double-level taxation is an
advantage of a:
A. pass-through entity.
B. corporate tax structure.
C. member-managed LLC.
D. manager-managed LLC.
Which of the following is not a major change to bankruptcy law in the Bankruptcy
Abuse Prevention and Consumer Protection Act?
A. credit counseling
B. means test
C. proof of income
D. lowering the priority of alimony payments
Which of the following is not a potential right a tenant has should a serious dispute
arise with the landlord?
A. claim a constructive eviction
B. withhold rent and remain on the premises until the dispute is resolved
C. pay rent into escrow and remain on the premises until the dispute is resolved
D. terminate the lease and sue the landlord for damages
The law firm of Smith, Brown, and Jones has just held a meeting in which the three
partners decided that all fees charged by each of them will be $500 per hour with no
exceptions. They also set nonnegotiable fees for such things as preparation of wills, real
estate settlements, and other types of standard cases. Smith, Brown, and Jones:
A. are guilty of horizontal price-fixing under the Sherman Act.
B. are guilty of vertical price-fixing under the Sherman Act.
C. are guilty of price discrimination under the Robinson-Patman Act.
D. have broken no laws.
The number of civil cases filed annually in state and federal courts combined exceeds:
A. 10 thousand.
B. 10 million.
C. 20 thousand.
D. 20 million.
At this moment, your contract with your university or college is:
A. implied, unilateral, and voidable.
B. express, bilateral, and valid.
C. implied, bilateral, and valid.
D. quasi, unilateral, and voidable.
Which of the following is not true of strict liability?
A. Intent to injure does not have to be proved.
B. It primarily applies in defective product and abnormally dangerous situations.
C. Injury need not occur or be proved.
D. It is based on state law.
Which of the following involves a third-party substitution?
A. novation
B. accord and satisfaction
C. substitute agreement/modification
D. rescission
The UCC permits disclaimers of warranties:
A. under no circumstances.
B. when the seller disclaims properly.
C. if the buyer was unaware of the warranties.
D. when allowed by common law.
In Federal Communications Commission v. Fox Television Stations Inc., the FCC had
followed a restrained enforcement policy for profanity used on television. It used a
two-prong test to judge indecency violations. The FCC also offered a three-part test to
determine whether or not material was patently offensive. In 2003 Bono’s acceptance
speech at an awards show included the use of the word f-k, and the FCC ruled that the
word did not violate the indecency policy. After that, the FCC instituted a
zero-tolerance rule for certain words no matter what the circumstance. In 2006 Fox was
fined when presenters at an award show used expletives similar to Bono’s usage in
2003. Fox brought an action to have the new standard invalidated. The Supreme Court
held that:
A. the FCC’s new standard was not valid because its standards require congressional
approval.
B. the FCC’s actions were not arbitrary and capricious and its reasoning for expanding
the scope of its enforcement activity was rational and consistent with reasoned decision
making.
C. the FCC had not supplied any reasoned analysis for the radical departure from its
previous policies.
D. the new standard was invalid because the FCC lacked empirical evidence in its
decision making.
The Takings Clause is found in the Constitution’s:
A. First Amendment.
B. Fifth Amendment.
C. Eighth Amendment.
D. Fourteenth Amendment.
Toy Tech (TT) has ordered 50,000 aluminum widgets from the Acme Widget
Corporation (AWC) with delivery to be made on November 1. These widgets will be
used in TT products to create toys for the holiday season. Under which circumstance
may TT claim an anticipatory repudiation?
A. The cost of aluminum has risen, lowering AWC’s profit margin, yet AWC insists that
it will honor the contract.
B. The demand for widgets has suddenly decreased, and TT isn’t sure it can sell the
50,000 widgets it ordered.
C. AWC’s sole manufacturing plant burned down on October 1, yet AWC insists that it
will rebuild and honor the contract.
D. TT has found another manufacturer that can provide less expensive widgets of the
same quality as AWC’s widgets.
Victims of odometer tampering may receive:
A. actual damages.
B. double damages.
C. triple damages.
D. liquidated damages.
Michelle is driving at night when a policeman pulls her over for a blown tail light.
When he approaches the car, he shines his flashlight into the car and sees a bag of white
powder on the back seat. The officer orders Michelle out of the car and then reaches in
to seize the bag. A quick examination leads him to believe that the bag contains cocaine.
He arrests Michelle and takes her to the station.
A. The officer conducted an illegal search because he didn’t obtain a warrant.
B. The officer conducted an illegal search because he may look into the car but may
not use mechanical devices to aid his search without a warrant, so the use of the
flashlight made the search illegal.
C. The officer conducted a legal search because he may look into the car and may use
simple mechanical devices, such as a flashlight, to aid his search without a warrant.
D. The officer conducted a legal search because he found drugs and the ends justify the
means.
In Grimshaw v. Ford Motor Company, if Ford had made the repairs to the cars,
diminishing profit but enhancing customer safety, which theory of corporate social
responsibility would Ford have been exhibiting?
A. the narrow view, or invisible hand theory
B. the moderate view, or government’s hand theory
C. the hybrid view, or citizen’s hand theory
D. the broad view, or management’s hand theory
Bob has inherited a small home in Wyoming from his deceased uncle George. Bob has
no desire to live in Wyoming, but he enjoys going up to his Wyoming property to fish
for two weeks every fall and spring. George’s lawyer has agreed to have the home
secured when Bob leaves and to have it opened when he’s planning to visit. George’s
lawyer, without asking or informing Bob, has suggested to his freeloading brother Alan
and Alan’s wife, Judith, that they stay at Bob’s Wyoming place and simply vacate just
before Bob shows up, which they do. They live there acting like the owners for 48
weeks every year. The statutory period for adverse possession in Wyoming is 10 years.
After 12 years Alan and Judith file for ownership under Wyoming’s adverse possession
statute.
A. Alan and Judith will be successful because they have lived there for longer than the
required 10 years.
B. Alan and Judith will be successful because they have lived there for longer than the
required 10 years and they were open, notorious, and visible.
C. Alan and Judith will not be successful because one cannot become the owners by
adverse possession if one is there without the owner’s permission.
D. Alan and Judith will not be successful because their control of the property was not
exclusive or continuous.
Which of the following creditors has first priority?
A. an ex-spouse who is due alimony
B. unpaid employees
C. general creditors
D. the court, for its costs
The source of warranty law is:
A. the UCC.
B. FTC regulations.
C. the Consumer Protection Act.
D. the TILA.
Which of the following is not available in a court of equity?
A. an order for the payment of money damages for a breach of contract
B. an order prohibiting the building of a 16-foot fence in a residential neighborhood
C. an order requiring teachers to stop picketing in a particular area
D. an order requiring a party to turn over goods after being found guilty of breach of
contract
In a shipping contract, the risk of loss passes to the buyer when:
A. the contract is signed or finalized.
B. the goods are delivered to the carrier.
C. the goods are delivered to the buyer.
D. the goods are en route and at least halfway to the buyer.
Bill is a technician at a university chemistry lab and is in charge of safety inspections
and prevention of injury due to faulty equipment, and Bill’s job includes the repair of
faulty equipment. One morning, as a result of his inspection, Bill discovers a gas burner
with a broken valve and does a very poor job of repairing it, using techniques not
considered proper or acceptable. When the morning class arrives, Halle uses the faulty
burner and is burned when it catches fire. Bill’s negligence is based on:
A. nonfeasance.
B. misfeasance.
C. negligence per se.
D. res ipsa loquitur.
When a trademark has become representative of a broad type of products as opposed to
being descriptive of a particular brand, the trademark has become ________ and the
holder has lost the right to enforce the mark against competitors.
Treasury Secretary Geitner had knowledge of the AIG bonuses but failed to stop them
because they were ________ obligations between a private company and its
employees.
In 2010, the state of Arizona passed an immigration law that allowed law enforcement
officers to check the immigration status of individuals charged with a crime. Which
legal philosophy best fits the theory of jurisprudence, which the Arizona lawmakers
may use to justify such a law?
The ________ Act is the main federal statute that is a source of administrative law.
Floyd has lived in his residence for three years when new neighbors move in. Soon
afterward he starts to smell foul odors emanating from the new neighbors’ home. It
turns out that they have started a large compost heap that they plan to use as fertilizer
for their spring and fall planting. Even with his windows closed and the air conditioning
on, he can’t stop the smell from permeating his home. If he files in court claiming a
nuisance, what standard will the court use and how is it applied?
The mental element, or “guilty mind,” required for criminal liability to occur is called
_____.
Fast Feet, a manufacturer of running shoes, gave merchandise on credit to Rick’s
Running for its store. Rick’s is required to sign an agreement that describes the
merchandise as collateral and specifies that Rick’s will pay Fast Feet weekly based on
the sales of the shoes. Fast Feet files a statement of notice with the appropriate
government agency. Based on these facts, what kind of creditor is Fast Feet, and why?
The Sportsman’s Club is planning its annual banquet and fund-raiser and has decided to
feature a speaker who will attract a huge crowd. The club contracts with Hall of Fame
football announcer John Madden to be the keynote speaker. A week before the event,
John calls and says that he would like to give his brother Fred the opportunity to
speakJohn would sit in the audience rather than speak. What options does the
Sportsman’s Club have?
An agreement between the government and a party that details conditions and
compliance measures that the party will follow in exchange for the government not
filing suit is called a _____.
Discuss the early motivations for enacting antitrust laws.
Damages agreed to when the contract is written and prior to any actual breach are called
________ damages.
Expressly firing someone for whistle-blowing constitutes the act of _____.
Officers, directors, and controlling shareholders are often called _______.
The collateral used for a mortgage is ____.
Explain the structure of the U.S. government and how the checks and balances system
operates to maintain equalization of power between the different parts of the
government.
Valarie is employed as a sales representative at a major corporation. On occasion she
feels that the men at her office stare at her, and they occasionally make suggestive
comments that upset her and make her uncomfortable. When she complains to her
human resource department, the department informs her that it will send out a memo
asking the male employees to start acting more professionally but it doesn’t feel that the
conduct has broken any laws. When she says the company and the male employees are
not acting ethically, that implies that this is a legal but not an ethical matter. Do you
agree or disagree, and why?
Mixed motives discrimination is analyzed using the ________ standard.