Jorgeson Co., on its website, promised the company would not give a customer’s
personal information to third parties without the customers consent, but then gave out
such information anyway. This practice violates Section 5 of the FTC Act.
a. True
b. False
Bill is injured when his new motorcycle speeds out of control because of a defective
part. In most jurisdictions, Bill
a. can sue the motorcycle manufacturer even though he does not have privity.
b. cannot sue the motorcycle manufacturer because his injuries are personal injuries as
opposed to economic loss.
c. cannot sue the motorcycle manufacturer because the law requires arbitration.
d. cannot sue the motorcycle manufacturer because there is no privity of contract.
With regard to mortgages, the Consumer Finance Protection Bureau (CFPB) requires
mortgage servicers
a. to contact borrowers who are 36 days late in making a payment.
b. to wait 180 days after nonpayment before beginning foreclosure.
c. to credit payments within 3 days after they are received.
d. to extend delinquent borrowers additional time to repay the loan.
Under which of the following does the insurer promise to pay the insured a fixed yearly
amount, as guaranteed income, after the insured attains a specified age?
a. straight life policy
b. whole life policy
c. universal life policy
d. deferred annuity contract
In a civil case, the plaintiff must prove the case
a. by a preponderance of the evidence.
b. by clear and convincing evidence.
c. beyond a reasonable doubt.
d. None of the above; the burden of proof is on the defendant.
Randy, Joan, and Arnie are partners. Their agreement did not address dissociation nor
how long the partnership would last. Randy decided to leave the partnership. What
happens when Randy serves notice he intends to withdraw?
a. The partnership can either buy him out and continue in business or wind up the
business and terminate the partnership
b. The partnership automatically terminates
c. The partnership winds down
d. The partnership estoppes
The Framers of our Constitution, a true cross section of the population at the time,
created the Constitution by amending the Articles of Confederation, which had been the
governing document of the colonists.
a. True
b. False
Jill owns a retail business by herself and was sued by a customer who fell in the store.
The customer claimed the business was negligent in caring for its floors. Which
statement best describes Jill’s potential liability?
a. Jill has no potential liability to the customer.
b. Jill can be held personally liable to the customer since she is the owner.
c. Jill can only be liable to the amount she initially invested in the business.
d. Jill cannot be held personally responsible; the woman’s insurance must pay for the
claim.
Lily is involved in the winding-up of her partnership. Lily is NOT entitled to
compensation for her work since she is a partner.
a. True
b. False
Crytrin Manufacturing, Inc. contracted with Molfrey, Inc. to manufacture three large
pieces of equipment. The contract contained a clause stating that Crytrin agreed to
repair or replace any defective equipment, but that was the only remedy Molfry would
have. This clause
a. is an effective disclaimer.
b. will not keep Molfry from obtaining consequential damages since, under the UCC,
consequential damages cannot be excluded.
c. is a limitation of remedy clause, which limits or excludes normal remedies permitted
under the UCC.
d. limits any express warranties made by Crytrin.
A person who violates the Clean Water Act can face possible imprisonment in addition
to other penalties.
a. True
b. False
If Lorenzo is seeking an injunction against Brenda to prevent her from selling materials
that infringe his copyright, he is entitled to a jury trial if the value of the materials is
over $100.
a. True
b. False
The UCC deals with unconscionability in a contract by providing that a court may:
a. refuse to enforce the contract.
b. enforce the remainder of the contract without the unconscionable clause.
c. limit the application of any unconscionable clause as to avoid any unconscionable
result.
d. All of the above.
Which of the following regulates deceptive practices regarding a company’s privacy
policy?
a. Section 5 of the FTC Act
b. the federal COPPA
c. the federal ECPA
d. the FCC’s privacy directive
Which of the following statements regarding alcohol and drug use is accurate?
a. Government employers may not test their employees for drug and alcohol use.
b. The EEOC prohibits testing for prescription drugs unless a worker seems impaired.
c. While a private employer may test its employees for drug and alcohol use, it may not
sanction a worker who fails the test.
d. The EEOC has implemented standards so that now all fifty states adhere to the same
laws on drug testing.
Lian contracted for financial services from E-wise. This contract is governed by Article
2 of the UCC.
a. True
b. False
Horizontal cooperative strategies would include all EXCEPT
a. market division.
b. price fixing.
c. reciprocal dealing.
d. bid-rigging.
Uncle Brandon promises to give his motorcycle to you for free at the end of the month.
This transaction is governed by UCC, Article 2, because a motorcycle is within the
definition of “goods.
a. True
b. False
The President of the United States
a. creates federal common law.
b. can veto Congressional legislation.
c. determines the constitutionality of statutes.
d. passes statutes.
Which principle of Islamic law prohibits any contract gain that is not clearly outlined at
the time of contract, especially when it involves risk and deception?
a. gharar
b. ijtihad
c. shari’a
d. jus cogens
Kenneth was exposed to radiation on his job in an environmental cleanup. In a lawsuit
against his employer, the court must decide the full extent of both present and future
damages rather than allowing Kenneth to return to court years later if medical problems
develop at that time.
a. True
b. False
In Chapter 11 bankruptcy only the debtor may propose plans of reorganization.
a. True
b. False
Jason and Stacey posted a copy of their favorite movie, Frozen, on YouTube. When
YouTube realized it was posted, it removed it to avoid breaking copyright laws and was
not liable for the posting. This is known as
a. a legal reaction.
b. a safe harbor.
c. the digital solution.
d. copyright liability.
All but which of the following may be used as collateral in a secured transaction under
UCC Article 9?
a. Stocks and bonds
b. Personal injury tort claims of individuals
c. Intellectual property rights
d. A computer program if, by purchasing a computer, the buyer of the computer
acquires the right to use that embedded program
Ollie leased a building in Old Town. Ollie installed a washer and dryer unit and a new
furnace in the basement of the building with new duct work throughout the building.
Upon expiration of the lease, Ollie intends to remove the washer and dryer, but not the
furnace. The washer and dryer can easily be removed without harming anything.
Removal of the furnace, however, will damage the building. Are the washer, dryer, and
furnace fixtures?
a. The washer, dryer, and furnace are all fixtures.
b. The furnace is a fixture, but the washer and dryer are not.
c. The washer and dryer are fixtures, but the furnace is not.
d. The furnace and the washer are fixtures, but the dryer is not.
Which school of jurisprudence is based on the philosophy that what matters is not what
is written as law, but who enforces the law and by what process?
a. Legal positivism
b. Natural law
c. Legal realism
d. Sovereign selection
Exclusive dealing contracts, if they have an anticompetitive effect, are illegal under the
a. Sherman Act only.
b. Clayton Act only,
c. Sherman Act and Clayton Act.
d. Sherman Act, Clayton Act, and Robinson-Patman Act.
A fundamental problem of the modern corporation is the conflict of interests between
managers, shareholders, and stakeholders.
a. True
b. False
Contracts for the sale of fabric, automobiles, computers, furniture, and paper clips
would all be governed by Article 2 of the Uniform Commercial Code.
a. True
b. False
Regarding beneficiaries, if the promisee is making a gift, the third party is called a
_______ beneficiary.
a. donee
b. creditor
c. intentional
d. obligor
The UCC includes sections that limit the perfect tender rule’s effect and courts have a
tendency to apply these limitations more enthusiastically than the rule itself.
a. True
b. False
Tom rented an apartment from Margaret on a month-to-month basis, with rent due on
the first of the month. This type of tenancy is known as a “tenancy at will.”
a. True
b. False
Garden World orders 120 hand cultivators from Green Thumb, Inc. When the
cultivators arrive, they seem fine, so Garden World accepts them. As the stock person is
putting the cultivators on display, she notices that the tines are loose on all the
cultivators. Garden World returns the cultivators to Green Thumb, but they are lost
when the delivery truck slips on an oily spot in the road and drives into a nearby lake.
Discuss who bears the risk of loss for the shipment.
Explain what a trademark is and list the four different types of “marks” that can be
protected under trademark law. Explain how each mark is used.
The chain of Mega Hardware stores agreed with Lock Tight Manufacturing not to carry
any brand of locks and door handles other than those manufactured by Lock Tight.
Mighty Lock threatened to sue for antitrust violations. On what basis and under what
statute(s) would Mighty Lock sue?
Outline the parts of a typical contract.
Explain horizontal price-fixing and vertical minimum and maximum price-fixing.
Discuss their status under antitrust laws.
Assume that the state of Ohio passed a hazardous waste statute, seeking to protect the
general public and workers. The state statute did not violate the Commerce Clause
because it imposed no restriction on interstate commerce. Both the state statute and the
federal Occupational Safety and Health Act established job safety standards and
specified worker training and employer licensing, but the requirements differed.
Discuss which statute(s) Ohio corporations had to obey, and identify the source of the
answer.
Explain the concepts of legal positivism, natural law, and legal realism as they relate to
the field of jurisprudence.
Big Corporation is served with a subpoena to turn over business records to an
administrative agency. What are three possible legal grounds the company can raise to
avoid producing the requested records?
Jones contracts to buy a computer from Martin for $1500. The contract calls for Martin
to service the computer quarterly for the first year and to tutor Jones on how to use the
software. Is this contract covered by the UCC or common law?
The Rameys are selling their home. They did not set forth in the sales agreement
whether the washer and dryer, the draperies, and a cherry corner cabinet that was in the
dining room were to be included in the sale or whether they were planning to take these
items with them. The buyers are claiming these items are fixtures and should stay with
the house. The Rameys are claiming they are movable goods and they should not be
part of the real estate which was sold. Define “fixtures, identify the tests used to
determine whether an item is a fixture, and explain whether you think each of the
contested items is a fixture and why or why not.
Discuss the concept of insurable interest. Indicate the difference between a buyer’s and
a seller’s insurable interest.
Tony signed a contract agreeing to purchase a used, high-powered boat for $10,000.
Prior to signing the contract, the sales representative explained that the boat motor was
guaranteed for six months for all labor and parts. The written contract contained nothing
about the warranty; however, it did have an integration clause in it. Tony had problems
with the boat motor, causing expensive repairs. Tony returned the boat to the sales
representative for the repairs, only to learn the salesman denied knowing anything about
a six-month warranty. If Tony sues, discuss the likely outcome.
Define and compare the terms “vagueness and “ambiguity.
Lance sued Mega Corp. for negligence, and a jury awarded him $1.2 million. Mega
Corp. filed a motion for judgment NOV, and that motion was denied by the trial court.
Mega Corp. then appealed the case. Discuss a judgment NOV and when it is
appropriate for a judge to grant such a judgment.
Identify and explain at least four situations where a written contract is either necessary
or recommended.
Discuss the pros and cons of gambling and state what the California Court of Appeals
ruled regarding the treatment of gambling on credit.
Patsy is shopping for a used car. She finds a car she likes at Morley Motors. Discuss
how the UCC views each party and the standard of conduct it imposes on the parties in
performing the sales transaction.
MegaCorp has five directors. The company has 1,050 shares of voting stock. Jessica
would like to purchase enough stock to elect herself to the board of directors. The
company allows for cumulative voting. Explain the concept of cumulative voting and
also state how many shares of MegaCorp stock Jessica will need to own to assure
herself a place on the board of directors.