Which of the following would be an example of a civil lawsuit?
a. George is being prosecuted for bank fraud.
b. The government has initiated an action against Jeff for operating a motor vehicle
under the influence of alcohol.
c. Gretta hit Rita in a bar during happy hour. Rita is now suing for her injuries.
d. The district attorney is bringing Ali to court for violating the city’s keg ordinance.
Olga draws a check payable to Sven. Sven indorses the back of the check “without
recourse” and negotiates the check to Hansel who in turn negotiates the check by a
blank indorsement and delivers the check to Gretta. Gretta deposits the check in her
checking account. If the bank dishonors the check because Olga has filed for
bankruptcy, and returns the check to Gretta, who has liability on the check?
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.
An employer is in the process of negotiating a new contract with its union. During
negotiations, the employer changed the workweek from a five-day, eight-hour-per-day
week to a four-day, ten-hour-per-day week. Which statement is correct?
a. This is a violation of the National Labor Relations Act.
b. This is not a violation of the NLRA because the employer is bargaining with the
union.
c. This is not violation of the NLRA because the total number of work hours per week
has not changed.
d. Whether or not this is a violation of the NLRA will depend on the relevant state
statutory law.
If a foreign company “dumps” goods on the United States market:
a. the goods will be considered illegal goods and not be allowed to be sold in the United
States.
b. the United States will issue trade sanctions against the country that allowed the
dumping.
c. a “dumping duty” will be imposed on the dumped goods if the Commerce
Department determines the goods are being sold at less than fair value and that this
harms an American industry.
d. All the above are correct.
Angelina owned a lot near a lake. Although she never had permission from the owner of
the adjoining land, each weekend when she camped on her lot she crossed his land to
take her boat to the boat ramp at the lake. If Angelina continued this use of her
neighbors land for the number of years required by local statute, she would have:
a. created a “profit.
b. an easement by prescription.
c. a grant easement.
d. a license to use her neighbors land.
When a contract falls within the statute of frauds but is not reduced to a writing, the
contract is:
a. illegal.
b. unenforceable.
c. void.
d. voidable.
David and George have a contract wherein George agrees to buy sporting goods and
equipment. Since the goods are not to be delivered for several months, they left the
price open. Under the UCC, which of the following will be true?
a. The price will be the reasonable price based on fair market value of the goods at the
time of delivery.
b. David has the freedom to set any price he wants considering George was foolish
enough to enter into a contract without a price established.
c. George has the right to establish a price because he is the buyer. David should have
taken steps to protect his sales interest.
d. None of the above. The contract is not valid because the terms are not definite and
certain.
Jessie is the maker of a $1000 promissory note in favor of Tyler. Tyler subsequently
indorses the note to Ryan by signing just his name. Ryan in turn indorses it to Breanna
by indorsing the back of the note, “Without recourse, Ryan.” Breanna then indorses it to
Liz, the present holder, with a special indorsement.
If Liz collects payment from Tyler, then Tyler can demand payment from:
a. Ryan and Breanna.
b. Ryan only.
c. Jessie only.
d. Breanna only.
Axle Corporation imports goods into the United States. Who is required to pay the duty
on the imported goods?
a. The importer, Axle Corporation.
b. The World Trade Organization.
c. Each party pays one-half the duty.
d. The exporter of the goods.
Lucky loses in a high-stakes poker game to Fat Chance. To pay his debt, Lucky writes a
check to Fat Chance, who negotiates the check to Convenient, who then tries to cash the
check at Lucky’s bank. Lucky has already stopped payment on the check, so the check
is not honored by her bank. Convenient then tries to collect the check by suing Lucky.
High-stakes poker games are illegal in this state. Which statement is correct?
a. If Convenient can demonstrate that he is a holder in due course, he will prevail.
b. If Convenient can demonstrate that he was a buyer in the ordinary course of business,
he will prevail.
c. If Convenient can demonstrate that he gave value without notice, he will prevail.
d. Convenient will not prevail.
Ted and Janet were married and owned a piece of jungle property in a tenancy by the
entirety. When Janet died, her will left of all her real property to T.J., their adult son.
T.J. claims he is the sole owner of the jungle property. Ted objects and files a lawsuit
for sole ownership of the jungle property.
a. Ted will win because property owned in a tenancy by the entirety includes rights of
survivorship for the surviving spouse. Ted will get the title to the entire property.
b. Ted will win only a one-half interest in the jungle property. T.J. will own the other
one-half interest because Janet had the right to will her half of the property to anyone
she chose.
c. Ted will lose and forfeit his entire interest in the whole property because a tenancy by
the entirety means that one party owns the entire property.
d. None of the above.
When Myrtle comes home from work one evening, she finds that her yard has been
mowed and trimmed. Later, a man comes to collect for the yard work done. Myrtle
refuses to pay for the work since she has never seen the man before and did not hire
him to do her yard work. Which of the following answers is most accurate?
a. This is an implied, unilateral contract and she must pay the price requested by the
man.
b. This is an express, voidable contract that either party may avoid.
c. The court would order Myrtle to pay the reasonable value of the yard work because
of the benefit conferred on her.
d. Myrtle would not have to pay for the yard work.
For the business judgment rule to apply:
a. there must be a conflict of interest.
b. the director must exercise extraordinary care.
c. the director must act in the best interests of the corporation.
d. All of the above.
Martin, Human Resources Director for Spring Co., sent Lynn the following signed
letter: “This letter confirms our offer to you. We will pay for your moving expenses, up
to $1,500. Your starting date will be February 1, and you will become eligible for health
care benefits as of May 1. You will receive a starting salary of $36,500 annually, with
reviews and eligibility for increases at six months, 12 months, and annually thereafter.
Vacation will be for two weeks a year after one year. Spring fired Lynn eight months
after she started to work, and Lynn sued arguing the letter constituted a memorandum of
an oral contract for employment for five years. Is the letter sufficient to satisfy the
statute of frauds?
a. Yes, to satisfy the statute of frauds, a memorandum is sufficient if it evidences an oral
contract between the parties and is signed by the defendant.
b. Yes, the memorandum is signed by the defendant and states with reasonable certainty
the subject matter and essential terms of the agreement.
c. No, to satisfy the statute of frauds, the memorandum must contain all essential terms
of the contract.
d. No, the letter was not formal enough to satisfy the statute of frauds.
When Mohammed was hired by Pomico, Inc., he signed the following agreement,
“Upon termination of my employment with Pomico, I agree not to work for a
competing company within 30 miles of Pomico’s headquarters for one year.” This
agreement, important to protecting secret information developed in the employer’s
business, is:
a. an unenforceable exculpatory agreement.
b. an unenforceable usurious agreement.
c. an enforceable bailment agreement.
d. an enforceable agreement not to compete.
Ed, a vice-president of Palmette Products, Inc., buys 1,000 shares of his companys
stock on June 15. His son has medical problems in September, and Ed sells the stock at
a profit. Ed:
a. must turn over to Palmette any profits he made on the sale.
b. may keep any profits on the sale since he had a good reason to sell and was not
selling in order to manipulate the market.
c. may keep the profits from the sale as long as he reported his sale to the SEC within
two business days.
d. may keep any profits from the sale if he did not act on secret information when he
sold the shares.
The idea that courts should not be heavily involved in lawmaking, but rather should
only rule in cases where the Constitutionality is clear is known as:
a. judicial review.
b. judicial activism.
c. judicial reform.
d. judicial restraint.
If there is a conflict between a state and federal law, generally the federal law will
prevail because of the:
a. federalism doctrine.
b. Supremacy Clause.
c. paramount doctrine.
d. Interstate Commerce Clause.
The UCC requires that anyone wishing to cash a check must provide:
a. a picture I.D.
b. a major credit card.
c. thumbprint proof of identity.
d. reasonable identification.
Janet was employed as a sales representative for Esday, Inc. An appreciative customer
gave her a diamond bracelet for all her hard work on a complicated contract. Can Janet
keep the bracelet?
a. Yes. The bracelet was given to Janet personally and intended for her.
b. Yes, but only if she discloses the gift to Esday and Esday consents to her keeping the
bracelet.
c. No. An agent is not allowed under any circumstances to personally profit as a result
of the agency relationship.
d. No. The bracelet is regarded as an unfair trade practice and violates antitrust law.
A buyer who properly rejects goods:
a. can do so by sending the goods back in any manner.
b. must notify the seller of the rejection within a reasonable time.
c. must pay the costs of returning the rejected goods.
d. None of the above.
Louie has the right to drive across Bernie’s land, which is adjacent to Louie’s property,
to reach the ocean front. Louie’s right to drive across Bernie’s land is called:
a. an easement appurtenant.
b. a profit appurtenant.
c. an easement in gross.
d. a profit in gross.
George gave his great-grandfather’s pocket watch to Nurse Nadene because he expected
to die soon. This is:
a. a testamentary gift.
b. an inter vivos gift.
c. an executed gift.
d. a gift causa mortis.
Sherry, a 12-year-old, visited a website that wanted to know her family size, her parents’
educational level, and her weekly allowance. The site also asked Sherry’s name, mailing
and e-mail addresses, and age.
a. Under COPPA, the website must disclose how it will use the information it acquires
from Sherry.
b. COPPA prohibits the Internet operator from collecting such information without her
parents permission.
c. COPPA does not apply to Sherry’s situation since she is over the age limit for those
protected by the statute.
d. Both a and b.
The stated purpose(s) of Article 2 of the UCC is/are:
a. to simplify the law governing sales.
b. to permit the continued development of business practices through custom and usage.
c. to make the laws governing sales uniform among the various states.
d. All of the above are correct.
Nortron Corporation wants to create an ethical environment in its company. Which of
the following has been found to help foster a sense of ethics within an organization?
a. The company may develop a formal, written ethics code.
b. The company may institute a formal ethics training program for the employees.
c. The top executives may provide good examples by behaving ethically themselves.
d. All of the above alternatives have been used by U.S. companies to create an ethical
environment in their organizations.
Adam decided to play a practical joke on Linda, a co-worker. As Linda was leaving the
office one night, Adam, wearing a mask, stepped out from behind some bushes. He
pointed a handgun made out of licorice at her and demanded her purse. He then pushed
the candy gun to her head and told her if she told anybody he’d kill her. Linda was very
scared during the whole incident. She did not think it was funny when Adam pulled the
mask off and took a bite out of the gun as he gave her the purse back. Which statement
is correct?
a. Adam committed an assault but not a battery.
b. Adam committed a battery but not an assault.
c. Adam committed an assault and a battery.
d. Adam committed neither an assault nor a battery since he used a candy gun and was
only playing a joke on Linda.
Which of the following statements is incorrect concerning arbitration?
a. The losing party in an arbitration can file an appeal in a District Appellate Court.
b. Arbitration is almost always cheaper and faster than litigation.
c. Arbitrators may be biased toward the “larger party who may be a repeat client.
d. Parties to a contract cannot be forced to arbitrate unless the contract specifies it.
Under which of the following exemptions is there no dollar limitation?
a. Rule 504.
b. Rule 505.
c. Rule 506.
d. Regulation A.
Laurie is incorporating her business. Lauries home state is Wisconsin. Business will be
conducted in California, Michigan, Pennsylvania, and Virginia. Laurie:
a. must incorporate the business in Wisconsin, the home state.
b. must incorporate the business in Wisconsin, California, Michigan, Pennsylvania and
Virginia.
c. must incorporate in Delaware.
d. can incorporate the business in any state.
Wayne agrees over the phone to sell L.J. Cartwright 1,000 yards of 1-inch diameter
rope. Wayne honestly believes that L.J. Cartwright offered to pay $1.00 per yard
whereas L.J.Cartwright actually offered to pay 75 cents per yard. If the parties
subsequently take their dispute to court, the fact that L.J.Cartwright admits on the stand
that he offered to pay Wayne 75 cents per yard will:
a. prevent L.J.Cartwright from using the statute of frauds to nullify the contract.
b. create an unconscionable contract.
c. make it possible for Wayne to enforce the contract to sell 1,000 yards of rope at a
price of 75 cents per yard.
d. Both a and c are correct.
Money laundering consists of
a. proceeds from a criminal act
b. attempting to conceal the source
c. using the money to commit crimes
d. all of these answers are correct
Securities issued by banks are exempt from SEC registration.
Define discovery, and identify and explain five of the most important forms of
discovery.
Define and compare the terms “vagueness and “ambiguity.
If Casey assigns her rights to receive income from rental property to Errol, then Errol
will legally acquire any rights to the income previously held by Casey.
Brock and Heidi agree to jointly run a fundraiser for the nonprofit childrens hospital.
Even if they dont have a formal, written agreement, they have formed a partnership.
Billy owes a liquidated debt of $3000 to Rayna, his personal weight trainer. Billy sends
Rayna a check for $300 on which he has marked, “Payment in Full.” If Rayna cashes
the check she will not be able to successfully sue Billy for the remainder of the debt.
Typically, exemptions under the 1933 Act are based on either the type of security or the
type of transaction.
Disputants Martin and Daulton have hired Thurman to mediate their disagreement.
Although Martin and Daulton must accept whatever decision Thurman makes, the
mediation has the advantage of keeping Martin and Daulton out of court.
A manager who has engaged in self-dealing has violated the duty of loyalty to the
corporation, unless the self-dealing also benefited the corporation.
The First Amendment to the U.S. Constitution explicitly protects citizens from
abridgment of the right of free speech by any level of government.
For the first 70 years after the Sherman Act was enacted, judges were reluctant to
enforce it since scholars and economic experts believed the law was a violation of the
Constitution’s Commerce Clause.
Explain horizontal price-fixing and vertical minimum and maximum price-fixing.
Discuss their status under antitrust laws.
A patent is available for an idea as well as a tangible application.
Under Utilitarian ethics if a decision maximizes happiness in the most people it is
ethical
Identify and describe the four principal contract interests a court may seek to protect.
A valid contract can legally be voided by either party.
Inez contracted with Filippo Furnaces Co. for the installation of a new furnace. Inez
selected the furnace she wanted, accepting no suggestions from Filippo Furnaces’
heating engineer. The furnace operated fine, but it did not heat the entire house. The
size of the blower on the furnace was too small to accommodate the third floor of the
house. Inez sued Filippo Furnaces Co. for the breach of the implied warranties of
merchantability and fitness. What result?
If you have an established relationship with a buyer, you can sell small tracts of land
without a written contract.