Which piece of legislation prohibits denying an applicant credit on the basis of
discrimination?
A. Equal Credit Opportunity Act
B. U.S. Constitution
C. Fair Credit Act
D. Truth in Lending Act
Two merchant companies have entered into a contract for the sale of goods but have
had no prior dealings that would establish a course of conduct between them. The UCC
will allow gap fillers to apply to their contract regarding missing terms in each of the
following situations except:
A. they have failed to specify when payment for the goods is to be made.
B. they have failed to specify where delivery of the goods is to be made.
C. they have failed to specify the quality or grade of the goods to be delivered.
D. they have failed to specify the price of the goods to be delivered.
With regard to negligent hiring, the courts would require the least amount of scrutiny
regarding:
A. an office worker.
B. a teacher.
C. a tour guide.
D. a pizza delivery person.
Which of the following would generally not be patentable?
A. a mathematical formula that allows one to calculate the gross national product
B. a new business method that streamlines and improves production
C. a business process that changes water into wine
D. an engine that runs on water
Several people have decided to go into business as an LLC. To cover all contingencies,
they want to specify what constitutes an act of dissociation and outline the procedures
upon dissolution. This information would be included in:
A. the certificate of organization.
B. the operating agreement.
C. the Uniform Limited Liability Company Act.
D. common lawthe members may not negotiate these rights.
Regarding limited partners:
A. they may withdraw from the partnership at any time but they forfeit their investment
if they withdraw early.
B. they may not withdraw before the time that the partners have agreed the partnership
will terminate.
C. if the partnership agreement is silent as to notice required prior to termination, 90
days’ written notice is required before the limited partner may withdraw.
D. they must obtain a court order to withdraw because of their limited liability and its
effect on the remaining partners and third parties dealing with the business.
The three stripes on Adidas clothing represent:
A. a trademark.
B. trade dress.
C. a trade secret.
D. a patent.
In In re Jones, Jones graduated from college and then went to law school. He graduated
from law school but was unable to pass the bar exam. Over the next decade he worked
various jobs before going back to school again for a master’s. Jones took out student
loans to pay for his education, resulting in $140,000 of debt. He filed for bankruptcy
and sought to have the student loans discharged for “undue hardship.” The court held
that the undue-hardship standard:
A. had been met because the amount of money owed was too much for a person in his
fifties to be able to pay.
B. had been met because Jones demonstrated that he had made diligent efforts to find
employment.
C. had not been met because for a healthy, educated, employable man, paying back the
loans would not amount to undue hardship.
D. was not applicable to student loans and therefore Jones could not discharge the debt.
The Environmental Defense Fund, an environmental watchdog group, files a lawsuit to
prevent future open-pit coal mining in West Virginia. This type of lawsuit is known as
a:
A. wrongful-damage suit.
B. citizen suit.
C. nuisance suit.
D. negligence suit.
Under the Clean Air Act (CAA), who determines the best way to achieve National
Ambient Air Quality Standards (NAAQS)?
A. Congress
B. the Environmental Protection Agency (EPA)
C. the states
D. the National Air Quality Control Agency (NAQCA)
Agency law generally exists on the state statutory level and is based on:
A. common law.
B. the Restatement (Second) of Agency.
C. tort law.
D. the federal regulation of agency.
Fundamentally, an agency transaction involves creation of agency, performance of
obligations and duties, and:
A. express agreement.
B. entering of a contract.
C. termination of agency.
D. transaction of business.
Martin is an intern working for Tennessee Fried Chicken, an international company
with over 1,000 franchised restaurants throughout the United States and in 21 other
countries. TFC heavily advertises on television and in various print media that its
chicken is superior due to its blend of “42 secret herbs and spices.” Many have tried to
duplicate the recipe unsuccessfully, and burglars have even been caught trying to steal
it. One day Martin is called into the president’s office for an assignment, and during the
talk the president leaves the room, leaving Martin alone. Martin notices that the wall
safe is open and looks inside, where he sees an envelope labeled “THE RECIPE.” He
opens it and finds that it’s the list of the 42 secret herbs and spices, along with quantities
and order of use. He quickly makes a copy of the recipe and returns the envelope to the
safe. That afternoon he calls Bluto’s Fried Chicken, a TFC competitor, and informs
Bluto’s of the information he possesses, and they arrange a meeting.
A. If Martin sells the recipe to Bluto’s, Martin is guilty of misappropriation but Bluto’s
is not guilty of misappropriation.
B. If Martin sells the recipe to Bluto’s, Martin is not guilty of misappropriation but
Bluto’s is guilty of misappropriation.
C. If Martin sells the recipe to Bluto’s, both Martin and Bluto’s are guilty of
misappropriation.
D. Neither Martin nor Bluto’s is guilty of misappropriation because leaving the safe
open shows that the secret was not guarded and guarding is necessary to qualify for
trade secret protections.
LLPs are often currently used to protect family businesses as they provide a way to
resolve:
A. management disputes.
B. capitalization disputes.
C. issues regarding transition from one generation to another.
D. issues of family fiduciary duties and rights to represent and bind the business.
The bankruptcy chapter filing option that liquidates the debtor’s property to repay
creditors and discharge the debts is:
A. Chapter 7.
B. Chapter 11.
C. Chapter 12.
D. Chapter 13.
Which treaty is a standard that courts use for interpreting treaty law?
A. Convention on the Recognition and Enforcement of Foreign Laws
B. U.N. Treaty on Foreign Jurisprudence
C. Berne Convention
D. Vienna Convention on the Law of Treaties
If a civil trial results in a hung jury:
A. the plaintiff wins.
B. the defendant wins.
C. the litigants must start the process over and conduct a trial with a new jury.
D. this will be grounds for an automatic appeal and the appellate court will render a
final decision.
Assume that Iowa has just passed a statute requiring all noncitizens to sit in the back of
public buses. That statute would be reviewed using:
A. rational basis scrutiny.
B. intermediate scrutiny.
C. strict scrutiny.
D. no particular form of scrutiny (none is required in this situation).
Nobel Prize-winning economist Milton Friedman believed that:
A. managers who pursue social initiatives with corporate funds are morally correct and
are pursuing a path that is required regarding their fiduciary duties owed to
stakeholders.
B. Adam Smith’s belief – that the common good is best served when economic
institutions don’t pursue a common good but instead pursue an economic advantage – is
wrong and misguided.
C. the only responsibility a business has is to maximize shareholder wealth.
D. a deliberate amorality in corporate decision making is discouraged.
A contract that meets one or more specific requirements of construction is considered:
A. a formal contract.
B. an informal contract.
C. a hybrid contract.
D. a unilateral contract.
Which of the following is not required in order to show standing to assert a claim?
A. The party must have suffered an injury in fact.
B. The party must be a citizen or taxpayer eligible to use the U.S. court system.
C. The party must suffer harm that is direct, concrete, and individualized.
D. The party must articulate what legal redress exists to compensate for the injury.
An agency relationship is terminated by expiration in all of the following situations
except:
A. the time period ends.
B. an event occurs.
C. the purpose has been accomplished.
D. the principal dies.
The SEC is an independent agency that:
A. is not under the direct control of the president.
B. is under the direct control of the president.
C. is under the direct control of the Department of Justice.
D. is under the direct control of the U.S. Treasury Department.
There are two ice cream stands at the same intersection. In order to protect their
businesses, the two owners agree that they will charge their customers the same prices
for an ice cream cone. What type of horizontal restraint is this?
A. none (It is not a horizontal restraint.)
B. price-fixing
C. market allocation
D. boycott
In Brower v. Gateway, the issue involved the enforcement of a mandatory and binding
arbitration agreement pertaining to disputes between Gateway and its customers. With
regard to the agreements enforcement, the court determined that:
A. because the Standard Terms and Conditions Agreement made the arbitration
agreement enforceable after the customer retained the computer for 30 days and over 30
days had elapsed, the agreement was considered accepted and enforceable.
B. because Congress had indicated in the Federal Arbitration Act that arbitration
agreements were the preferred method of dispute resolution, the courts were bound and
preempted by Congress’s stated policy, so the agreement had to be enforced.
C. because the parties could not agree on a suitable arbitrator, the clause was useless
and only litigation before a court could adequately and fairly resolve the dispute.
D. because the mandatory fee required by the arbitration forum exceeded the cost of
most of Gateway’s products, the prohibitive cost of arbitration made the arbitration
unfair and biased toward Gateway and therefore nullified the arbitration clause.
Which of the following is a valid bailment?
A. babysitting your sister’s child for the weekend
B. house sitting your friend’s house for the weekend
C. feeding your neighbor’s dog (who lives in the yard in a dog house) by tossing food
over the fence
D. putting your neighbor’s car in your garage to shield it from a hail storm
In Butters v. Vance International Inc., Vance International was hired to provide security
for the Saudi royal family while they were in California. Butters was employed by
Vance International as a security officer. She was assigned to the Saudi detail and
worked occasionally as an acting supervisor in a security command post. Vance
International recommended to the Saudis that Butters be promoted to a full rotation in
the command post. The Saudis rejected this recommendation on their belief that it was
against Islamic law to have a woman in the command post. Butters sued over gender
discrimination for the loss of promotion. Vance International argued that it was immune
under the Federal Sovereign Immunities Act because it was carrying out the orders of a
foreign government. The court found that Vance International:
A. was not immune because the discrimination took place on American soil.
B. was not immune because the Saudis waived immunity by hiring an American
security company.
C. was immune because the Saudis were performing an act peculiar to a sovereign and
not a commercial activity.
D. was immune because U.S. courts recognize the jurisdiction of Saudi Arabia’s laws
for Saudi nationals in the United States.
The Revised Uniform Partnership Act mandates that with regard to partnership debts
and liabilities, general partners are:
A. not personally liable for non debt liabilities, which may be charged only to the
partnership, but personally liable for debts.
B. personally jointly liable for unpaid debts and liabilities.
C. personally jointly and severally liable for unpaid debts and liabilities.
D. not personally liable for debts or liabilities, which may be charged only to the
partnership.
From least to most serious, crimes are classified as follows:
A. misdemeanors/infractions/felonies
B. felonies/misdemeanors/infractions
C. infractions/misdemeanors/felonies
D. infractions/felonies/misdemeanors
Which of the following is not regulated through the Transport and Air Quality
Program?
A. tailpipe emissions
B. the distance that semitrucks may travel in one day
C. performance standards
D. the composition of fuel
Thirteen sorority sisters decide to start a dog-walking business. They incorporate under
the name Pro Canine Walkers Inc., and advertise their services throughout the city in
newspapers and on flyers they post. All stock is owned by the 13 principals, and none is
offered to anyone outside the 13. This corporation would be classified as a:
A. privately held corporation.
B. privately held public corporation.
C. privately held professional corporation.
D. privately held public professional corporation.
________ refers to having a conscious system in use for deciding moral dilemmas.
In order to _______ a warranty, the seller must do so in a conspicuous writing such as
capital letters or bold print.
Conversion occurs when a party interferes with the ________ of another’s property.
LLCs are frequently governed by an agreement of the parties called an LLC agreement
or _______.
Power Play Inc., has decided to raise capital to grow and strengthen the company in
order to make it attractive to competitors that might wish to purchase the business. A
board member has suggested that Power Play seek funding through a venture capital
firm. How does a venture capital firm operate, and is there a disadvantage to using
venture capital?
When a seller makes a representation of fact about a product, this is known as an
________ warranty.
What is the difference between the assignment of a lease and the subletting of a lease?
How does each pertain to the rights and duties of the original tenant?
The nation of Tobago is looking for new boats for its coast guard. Tobago enters into a
contract to purchase boats from an American manufacturer while visiting its facility in
Miami. Tobago revokes the contract after the acceptance period under the UCC. The
boat manufacturer sues for contract enforcement in a U.S. federal court. Does the court
have jurisdiction over the nation of Tobago?
Sam is hired by a pest company to go into people’s homes, and six months after he
starts working, it is discovered that Sam had previously been arrested and found guilty
of criminal assault. Failure to fire Sam or reassign him to a nonpublic-related position
may give rise to a suit based on ________ should Sam attack a customer in the
customer’s home while in the course of employment.
Delaware’s court, which exclusively hears commercial matters, is called the Delaware
________ Court.
Employers are not bound by the FLSA regarding employees classified as ________
employees.
What ethical lapses was Arthur Andersen guilty of in its involvement in the Enron
scandal? Explain.
How may LLCs be ended?
An investigation period during which a party can examine the suitability of a
transaction is called _____________.
The document served on the defendant along with the complaint that provides actual
notice of the lawsuit is called a _______.