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A transferor who transfers his or her distributional interest in a limited liability
company is not released from liability for the debts, obligations, and liabilities of the
LLC.
The Food, Drug, and Cosmetic Act gives the Federal Trade Commission the authority to
regulate the testing, manufacture, distribution, and sale of drugs.
In the landmark case Exxon Mobil Corporation of Texas v. United States, the United
States adopted the "rule of reason" standard for analyzing Section 1 of the Sherman Act
cases.
A maker's discharge in bankruptcy is considered to be a real defense.
Section 16 of the Clayton Act permits the government or a private plaintiff to obtain an
injunction against anticompetitive behavior that violates antitrust laws.
Undue influence can occur when both parties are equal in mental, emotional and
physical strength.
A group boycott is also known as a refusal to deal.
A joint venture is an arrangement in which two or more business entities combine their
resources to pursue a single project or transaction.
An unqualified opinion represents an auditor's finding that the company's financial
statements unfairly represent the company's financial position.
A limited partner does not have any liability in connection with the partnership.
"Bait and switch" is a type of deceptive advertising found in the fishing industry.
To obtain a writ of attachment, a creditor must follow the procedures of state law, give
the debtor notice, and post a bond with the court.
An initial license fee is a periodic payment for the privilege of being granted a
franchise.
The "means test" may be used to deny relief under Chapter
The majority of Chapter 11 proceedings are filed by corporations that want to
reorganize their capital structure by receiving discharge of a portion of their debts.
Misdemeanors are the least serious of crimes.
In a sale on approval, the title remains with the seller until the buyer accepts the goods.
When a cashier's check is presented for payment, the issuing bank debits its own
account.
The law has developed two (2.) standards concerning contracts of mentally incompetent
persons: 1.) legal insanity; and 2.) quasi-insanity.
The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 requires that
before an individual debtor receives a discharge in a Chapter 7 or Chapter 13
bankruptcy, the debtor must attend a personal financial management course approved
by the United States Trustee.
Japan belongs to the Association of Southeast Asian Nations, but China does not.
Because of their tangible nature, intellectual property rights are more subject to
misappropriation than is intangible property.
Section 1 of the Sherman Act outlaws contracts, combinations, and conspiracies in
restraint of trade.
A purchaser cannot be a holder in due course if an instrument is acquired either after
demand or at an unreasonable length of time after its issue.
The buyer's or lessee's general obligation is to accept and pay for the goods.
"No-fault" automobile insurance covers all expenses of a driver involved in a collision,
as long as he or she was not at fault.
A bond is a long-term, unsecured debt.
Monetary damages are recoverable only when a material breach of contract has
occurred.
Most patents are fidelity patents that protect the functionality of an invention.
In a negligence action, if the defendant is a man, the court applies a reasonable man
standard to establish the duty of care owed. If the defendant is a woman, the court
applies a reasonable woman standard.
The Defense of Marriage Act bars same-sex couples from enjoying federal benefits (for
example, Social Security benefits due the spouse of a married couple).
In an express agency, the agent has the authority to contract or otherwise act on the
principal's behalf, as stated in the agency agreement.
A buyer agrees to purchase "two cars" from an elevator company. All material terms are
contained in a written contract, but "two cars" is not further defined. Which of the
following evidence can be admitted if there is a dispute over the meaning of "two cars?"
A) Oral evidence that before the signing of the contract the parties intended the contract
to be for the purchase of three cars.
B) Oral evidence that before the signing of the written agreement the elevator company
said it would extend its normal one-year warranty (which is stated in the written
contract) to two years.
C) Oral evidence that the word "car" refers to an elevator, because that is how the word
"car" is used in the elevator industry, and that it does not refer to any of the company's
automobiles.
D) Written evidence from prior to the signing of the written contract that the parties
intended the contract to be for the purchase of three cars.
E) The parole evidence rule prevents any additional evidence from being considered,
even if terms are not clear on their face.
Charlie is a contractor contacted by Hilda to discuss repairing termite damage to Hilda's
home. The damage is so extensive that Charlie doubts the home can be saved. Hilda
begs Charlie to try to repair the home. Charlie tells Hilda that he will do the best he can
but cannot promise that the he will be successful. He will charge Hilda $60 per hour
whether or not he succeeds. Hilda agrees to these terms. Which of the following is true
in this situation?
A) This is a best efforts contract properly supported by consideration on both sides.
B) This is an illusory promise because Charlie is not obligated to repair the damage.
C) The doctrine of promissory estoppel will allow Hilda to recover from Charlie if he
fails to repair the damage.
D) If Charlie encounters unforeseen difficulties Hilda will not be obligated to pay him.
E) This is a requirements contract because it states what each party is required to do.
After the defendant's attorney has finished calling witnesses, the plaintiff's attorney can
call witnesses and put forth evidence to rebut the defendant's case. This is called the
________.
A) rejoinder
B) rebuttal
C) conjoinder
D) parler
E) absolution
If one party to a contract has reasonable grounds to believe that the other party either
will not or cannot perform his or her contractual obligations, a(n) ________ may be
demanded.
A) adequate assurance of performance
B) absolute assurance of performance
C) insurance bond
D) rescission
E) summary judgment
Cindy, a student, and her professor Lance have an argument during class and Lance is
upset at her lack of respect. That afternoon he sees her alone, and unknown to her,
walks up to her quietly from behind and slams her over the head with his briefcase.
What tort(s) has he committed, if any?
A) assault
B) battery
C) assault and battery
D) false imprisonment
E) Lance has committed a crime, but not a tort
What is the significance of requiring that a plaintiff's reliance in a fraud in the
inducement case be justifiable?
A) The reliance must have caused damage to the plaintiff.
B) The plaintiff must be able to prove the reliance in a court of law.
C) The misstatement relied upon by the plaintiff must have been the only factor in the
plaintiff's decision to enter into the contract.
D) The plaintiff must be able to prove why the defendant made the false statement.
E) The plaintiff can recover only if the belief of the false statement was reasonable.
Josh is an authorized agent for the Dark Beer Corporation. He orders ingredients on
behalf of the corporation and signs the check in payment for the ingredients solely by
signing his name. In terms of liability for the amount owed on the check:
A) Dark Beer is liable, but Josh has no liability because he is only an agent.
B) Josh is liable, but Dark Beer is not liable.
C) both Dark Beer and Josh are liable on the entire instrument.
D) neither Dark Beer nor Josh is liable.
E) both Dark Beer and Josh are liable, but each is liable for only 50% of the check.
The "unfair advantage" theory is most often applied when analyzing:
A) horizontal mergers.
B) vertical mergers.
C) market extension mergers.
D) product market extension mergers.
E) conglomerate mergers.
The categorical imperative is an integral part of:
A) Rawl's social justice theory.
B) Locke and Rousseau's theory of social contract.
C) Kant's duty ethics.
D) the "maximizing profit" theory.
E) the "moral minimum" theory.
Under an automobile insurance policy, what does "comprehensive" coverage protect
against?
A) all types of loss in connection with the ownership and operation of a vehicle
B) all types of losses caused by the insured to other parties
C) all types of damage to the insured's covered vehicle
D) all types of damage to the insured's covered vehicle, except for damage caused by
collision
E) coverage for all losses in connection with the insured's vehicle that are caused by
other parties
The Consumer Product Safety Commission (CPSC) is empowered to adopt rules and
regulations to interpret and enforce the Consumer Product Safety Act (CPSA).
In the case in which Wal-Mart was sued by Samara Brothers under the Lanham Act for
selling knockoff clothes designed by Samara Brothers, what did the Supreme Court
rule?
A) that a producer such as Samara must show that the allegedly infringing feature is
likely to cause confusion with the product for which protection is sought
B) that in an action for infringement of unregistered trade dress, a product's design is
protectable only upon a showing of secondary meaning
C) that in an action for infringement of unregistered trade dress, a product's design is
protectable without a showing of secondary meaning
D) that a producer such as Samara is not required to show that the allegedly infringing
feature is likely to cause confusion with the product for which protection is sought
E) that a producer such as Samara must show that the allegedly infringing feature is
likely to cause confusion with the product for which protection is sought, and that in an
action for infringement of unregistered trade dress, a product's design is protectable
only upon a showing of secondary meaning
Grandpa calls his grandson, Billy, and says, "I want you to have my toy train set. I'll
bring it by next week." Billy says that he would love to have it. Grandpa dies
unexpectedly that afternoon; in his will, he leaves everything to Alicia, Billy's cousin.
Which is true?
A) Billy gets the train, because of his agreement with Grandpa.
B) Billy gets the train, because there was donative intent on Grandpa's part, and Billy
accepted the gift.
C) Alicia gets the train, because Grandpa had not yet delivered the train to Billy.
D) Billy gets at least a partial interest in the train, because Grandpa cannot treat Billy's
cousin more favorably than Billy in his will.
E) This is a gift "causa mortis," because Grandpa died before he could complete the
gift.
A contract that has been fully performed by all parties is said to be:
A) executed.
B) tendered.
C) mitigated.
D) liquidated.
E) substantiated.
Which of the following statements is true concerning the notice that must be given to
third parties upon partnership dissolution?
A) All third parties must receive actual notice.
B) All third parties need receive only constructive notice.
C) Third parties who have dealt with the partnership must receive constructive notice.
D) Third parties who have not dealt with the partnership, but who know of its existence,
must receive constructive notice.
E) Notice must be published such that third parties who have not dealt with the
partnership, and do not know of its existence, are protected from possible future
dealings.
Which of the following is true about venue?
A) It is an alternative to meeting jurisdiction requirements.
B) Its requirements must be met in addition to meeting jurisdiction requirements.
C) In most cases, venue selection is up to the defendant.
D) It allows a party to select the court most likely to decide a case in its favor.
E) the defendant is from a different state than the plaintiff.
________ is an unconditional and absolute offer by a contracting party to perform his
or her obligations under a contract.
A) Proffer
B) Tinder
C) Tender
D) Proclamation
E) Subornation
In order to obtain a patent for an invention, it is not necessary that the item be:
A) novel.
B) marketable.
C) non-obvious.
D) useful.
E) In order to obtain a patent for an invention, it is necessary that the item be novel,
marketable, non-obvious and useful.
Which of the following is the false statement?
A) Purely mechanical duties are not delegable.
B) In order for a novation agreement to be valid, all three (3) parties involved must
agree to the substitution.
C) A legal right arising from a breach of contract may be assigned.
D) There is a guarantor in a delegation.
E) The same right can be assigned more than once.
Which of the following would be considered an example of general intent to commit a
crime?
A) putting sugar in someone's food.
B) shooting someone you are aiming at with a water gun.
C) throwing a Nerf ball at someone.
D) playing catch with your dog in a crowded park.
E) driving drunk after a night at a bar and killing someone while on the way home
Which of the following is a true statement about the rights of an assignee of contract
rights?
A) The assignee must have received all of the assignor's rights, because partial
assignments are not permissible.
B) The assignee often gets greater ability to enforce a right than the assignor had.
C) The assignee obtains the assignor's rights only if the obligor consents.
D) The assignee's rights are no greater than those of the assignor.
E) The assignee has rights, but must have the assignor institute any lawsuit needed to
compel performance.
The goal of Chapter ________ bankruptcy is to reorganize the debtor with a new capital
structure so that the debtor emerges from bankruptcy as a viable concern.
A) 7
B) 11
C) 13
D) 15
E) 17
In an ordinary lease, when does the risk of loss pass from the lessor to lessee, if the
lessor is a merchant?
A) when the parties sign the lease contract
B) when the lessee makes the first lease payment
C) when the lessor receives the first lease payment
D) when the lessee receives the goods
E) when the lessor ships the goods
The E-SIGN Act provides that a digital signature can be verified in which of the
following ways?
A) by a notary public
B) by two (2) attesting witnesses
C) by biometrics
D) by legal counsel
E) by genetic screening
Is the following instrument negotiable?
"On January 3, 2012, I promise to pay to the order of Mary Atkins the sum of $500 plus
interest at the rate of Citibank's prime rate as of January 3, 2012. The interest rate shall
be 15% per year after January 3, 2012. Further, I will pay the costs of collection if legal
action is necessary to collect this amount. Dated this January 3, (Signed) Colleen
Smith."
A) Yes, this is a negotiable instrument.
B) No, there is not an unconditional promise or order to pay.
C) No, interest at the legal rates does not constitute a fixed amount.
D) No, the different interest rate after default destroys negotiability.
E) No, the additional promise to pay collection costs destroys negotiability.
What is a title?
A) the name of the goods being sold
B) legal, tangible evidence of ownership of the goods
C) the contract in which goods pass from seller to buyer
D) a record of the sale of goods
E) a receipt kept by the buyer, to document the terms of a purchase of goods
When a party wants to make a proxy solicitation of shareholders in a publicly-held
corporation, what must occur following the filing of the proxy materials with the
Securities and Exchange Commission?
A) Before sending out the proxy solicitation, that party must wait until receiving the
appropriate Securities and Exchange Commission approval of the solicitation materials.
B) The Securities and Exchange Commission will prepare a statement of its position on
the matter connected with the proxy solicitation, and this must be sent out along with
the proxy solicitation materials.
C) The Securities and Exchange Commission will make the solicitation public, and
allow a public comment period.
D) A period of ten days must pass, during which time the Securities and Exchange
Commission can notify the party soliciting proxies that additional disclosures are
needed.
E) After a period of ten days has passed, the party must seek permission from the
Securities and Exchange Commission to send out the solicitation materials.
Josh is thirty years old and lives with his parents. They tell him that they want him to
move out on June 1. June 1 comes, but Josh refuses to leave. The parents are upset, but
they nevertheless allow him to stay. Which of the following is the most accurate
statement concerning Josh's living arrangements with his parents?
A) Josh's periodic tenancy has become a tenancy at will.
B) Josh's tenancy at sufferance has become a tenancy at will.
C) Josh's tenancy at will has become a tenancy at sufferance.
D) Josh's tenancy at will remains a tenancy at will.
E) Josh's tenancy at sufferance remains a tenancy at sufferance.
Brooke has fallen asleep on the beach. Eight guys, who are all friends of hers, get into a
circle around her and one gets really close and screams, "Snake!" into her ear. When
she jumps up screaming, they all start laughing at her. What tort, if any, have they
committed?
A) battery
B) assault
C) intentional infliction of emotional distress
D) false imprisonment
E) disparagement
In addition to the Bill of Rights, ________ other amendments have been added to the
United States Constitution.
A) ten (10)
B) fourteen (14)
C) seventeen (17)
D) twenty-seven (27)
E) thirty-three (33)
What is the significance of a contract clause stating that "time is of the essence?"
A) It creates a legal goal for the parties.
B) It puts a duty on the parties to a contract to perform as soon as possible.
C) It means that the contract is ineffective if the time for performance is not expressly
stated.
D) It means that performance by the stated time is an express condition.
E) It means that if performance of the contract is completed within a short time of the
stated time, it will be considered performed at essentially the proper time.
Which of the following is true about the assignment and the negotiation of a negotiable
instrument?
A) An assignment does not require a signature, while a negotiation does.
B) A negotiation results in a transfer of rights, but an assignment does not.
C) An assignment applies to bearer paper, and a negotiation applies to order paper.
D) An assignment can transfer no greater rights than those held by the transferor, while
the transferee in a negotiation can receive greater rights than those held by the
transferor.
E) The rights acquired by subsequent transferees may not vary according to the method
of transfer.
The Age Discrimination in Employment Act makes it illegal for employers to:
A) hire only employees who are forty years old or older.
B) have a seniority system.
C) never promote a younger employee over an older one.
D) have a mandatory retirement age for most jobs.
E) not have a seniority system.
A holder in due course takes an instrument free of which defenses?
A) personal only
B) real only
C) free of all defenses
D) free of no defenses
E) legal defenses
