Monic, a college professor, makes 30 photocopies of a magazine article and passes the
article out to her students. The students are assigned to read the article and write an
opinion paper about it. Has Monic violated copyright law?
a. Yes. Though the author will probably not enforce his or her rights under this
situation, Monic has technically violated federal copyright law.
b. Yes. Though educators have a right under the “fair use doctrine” to make limited use
of copyrighted materials, Monic violated the law when she made photocopies of an
entire article and distributed them to her students.
c. No. Monic has acted within the fair use doctrine.
d. No, as up to 50 photocopies of articles are always permissible.
To pay for a minor repair, May writes a check for $50 to David, who indorses the check
in blank and gives it to his sister, Glenda, for her birthday. She indorses the check in
blank and gives it to her trash collector to pay her quarterly bill. Which of the following
is correct?
a. David made transfer warranties to Glenda and to her trash collector.
b. David did not make transfer warranties to Glenda because Glenda gave no
consideration for the transfer of the check to her.
c. Neither David nor Glenda made any transfer warranties because they indorsed the
check with blank indorsements, making the check bearer paper.
d. The trash collector must wait until the check is dishonored before making a transfer
warranty claim against Glenda.
The business form that is taxed as a partnership and gives all owners limited liability, is:
a. a close corporation.
b. a limited partnership.
c. a limited liability company.
d. a general partnership.
Susan took out a life insurance policy on herself, paying all of the premium payments.
She named her daughter, Jessica, as the beneficiary under the policy. Jessica has not
given anything in consideration for the policy. Jessica is:
a. a donee beneficiary who has rights to enforce the policy once Susan dies.
b. a creditor beneficiary who has rights to enforce the policy once Susan dies.
c. an incidental beneficiary because Jessica did not give any consideration for the policy
and therefore cannot enforce the policy even when Susan dies.
d. None of the above.
James was a partner in a large firm. He died unexpectedly. His son, Frank, wanted to
take over for his father in the partnership and was well qualified to do the work his
father had done. Which statement best describes Frank’s rights in the partnership if he
inherits the interest?
a. Frank has a right to take over for his father in the partnership.
b. Frank is entitled to the value in the partnership, but not to become a full partner.
c. Frank has no rights to his father’s partnership interest.
d. None of the above.
Ev-R-Green Co., a private corporation, decides to sell substantially all of the companys
assets. Under the Model Act and many state statutes:
a. the sole remedy for dissenting shareholders is to sell their stock on the stock
exchange.
b. the board must first get unanimous shareholder approval for this fundamental change.
c. Ev-R-Green must buy back, at fair value, the stock of any shareholders who object to
the decision.
d. the company may buy back, at fair value, the stock of any shareholders who object to
the decision or the shareholders who object may receive the right of first refusal to
purchase corporate assets.
Mark was refused employment at a Christian Bookstore because he was not a
“born-again Christian.” If Mark brings a Title VII action against the bookstore, its best
defense would be:
a. they did not discriminate against a protected category.
b. Title VII doesn’t apply to private businesses.
c. being a “born-again Christian” is a bona fide occupational qualification.
d. they could not reasonably accommodate Mark.
In a contract modification, the phrase, “charged with such amendment means:
a. the party who suggested the change.
b. the party who will benefit from the change.
c. the party who will be adversely affected by the change.
d. the party who did NOT suggest the change.
Fashions, Inc. has 12 shareholders. There is no shareholder agreement concerning the
board of directors. The company is subject to the Model Act. How many directors is
Fashions, Inc. required to have?
a. None.
b. One.
c. Two.
d. Five.
In order to travel extensively and not worry about handling her affairs, Lee transfers
most of her assets into a trust, with her bank serving as trustee. She has created:
a. a travel trust.
b. a testamentary trust.
c. a constructive trust.
d. an inter vivos trust.
David has worked as a CPA for Accountants R Us for about eight months. When his
wife had a baby, he requested to take some time off. He believes he is allowed to do so
pursuant to the Family and Medical Leave Act.
Does the Family and Medical Leave Act apply to professionals like CPAs?
a. Yes, if they work for a company with at least 50 workers.
b. Yes, but only if they are paid on an hourly basis.
c. No, but the professional firm must provide adequate vacation and sick days.
d. No, unless the employer specifically provides coverage.
Which of the following occurs when a person uses labor and/or materials to add value
to personal property belonging to another?
a. Accession.
b. Bailment.
c. An inter vivos gift.
d. A mutual-benefit bailment.
Psychologist Holtz is working with a patient, Rebecca, who has expressed the intention
to seriously harm two of her acquaintances. If you apply the principle set forth by the
Supreme Court of California in the Tarasoff v. Regents of the University of California
case, Psychologist Holtz:
a. has, because of the bystander rule, no duty to warn the foreseeable victims about
Rebeccas expressed intention to harm them.
b. has a duty to exercise reasonable care to protect foreseeable victims of Rebeccas
violence.
c. is in a special relationship with patients, and this relationship creates a privilege of
confidentiality between the communicants.
d. will be held to a strict duty of care and will be held liable for any victims injuries if
Holtz failed to warn a them of Rebeccas potential violence toward them.
Rich and Archie sign an agreement in which Archie agrees to deliver ten cases of
champagne in 5 days. The parties negotiated and meant to say in the written agreement,
delivery in 50 days. If the evidence is clear that the two parties intended to agree to 50
days, the courts will probably apply the remedy of:
a. reformation.
b. rescission.
c. restitution.
d. reliance.
Employees of Truan went on strike because Truan refused to bargain in good faith.
After the strike, the striking workers are:
a. entitled to get their jobs back.
b. not entitled to get their jobs back.
c. entitled to get their jobs back but only as they become available.
d. fired.
Seth told the salesperson at Outdoor Times that he wanted the sleeping bag that was
advertised in the Sunday paper; one that would keep him comfortable if the temperature
drops to 10 degrees Fahrenheit. The salesperson told Seth they were sold out of that
bag, but there were two other styles that would meet his needs and were the same price.
Seth insisted he wanted the advertised bag and threatened to sue for breach of contract.
Which is true?
a. Outdoor Times is guilty of “bait and swap.
b. Seth will prevail in his case, as Outdoor Times is responsible for having sufficient
stock of advertised items.
c. Seth will not prevail, as the advertisement was simply an invitation to negotiate.
d. Outdoor Times must provide Seth with a raincheck, ensuring he can buy the same
bag at the sales price at a later date.
Alice’s Aspirin Inc., produces and packages aspirin for sale to retail stores. Bob buys a
bottle of Alice’s aspirin at Dahl’s Food Stores. Two days later Bob’s friend, Hank, takes
two aspirin while at Bob’s house. Within minutes, Hank is very ill and is rushed to the
hospital, where it is found that a defect in the aspirin caused the reaction. Which of the
following is correct?
a. Hank can sue both Alice’s Aspirin Inc. and Dahl’s under tort theories because he is an
injured party due to the defective product.
b. Hank cannot sue anyone because he assumed the risk of taking the aspirin.
c. Hank cannot sue anyone because he is not in privity with Dahl’s or Alice’s.
d. Hank can sue but will not be able to recover consequential damages for his medical
expenses.
What is not required to establish promissory estoppel?
a. A promise made by the defendant.
b. A promise made by the plaintiff in response to the defendant’s promise.
c. Reliance on the defendant’s promise.
d. Enforcing the promise is the only way to avoid injustice.
Maude was denied employment with Trucks R Us as a warehouse worker because she
didn’t meet the weight requirement of 160 pounds. Trucks argued the weight
requirement was reasonable because warehouse workers often have to lift things
weighing up to 100 pounds. If she sues Trucks, she will probably:
a. lose, as the weight requirement seems like a reasonable occupational requirement.
b. lose, as the 160-pound requirement doesn’t discriminate.
c. win, as the weight requirement is discriminatory and doesn’t appear necessary for the
requirement of lifting 100 pounds.
d. win, as the employer specifically cannot have a weight requirement.
Which of the following statements is correct?
a. Violent street crime results in a greater monetary loss to society than white-collar
crime.
b. White-collar crime results in a greater monetary loss to society than violent street
crime.
c. Studies are not able to calculate the estimated value of white-collar crime since most
white-collar crime is never publicly disclosed.
d. Studies are not able to accurately calculate the estimated value of either violent street
crime or white-collar crime.
Rob works for a federal governmental agency. No policy statements have been reported
to the employees regarding their privacy rights or regarding their use of workplace
computers for personal business. Rob’s supervisor has reason to suspect that Rob has
used his workplace computer to order an illegal substance. Which of the following is
true?
a. Rob’s employer may search Rob’s computer at any time since it was provided by the
employer.
b. Even if Rob’s employer tries to search Rob’s computer, if Rob has deleted any
incriminating information, the employer will be able to find nothing on his computer to
prove Rob was engaged in illegal activity.
c. The Fourth Amendment prohibits unreasonable searches and seizures by the
government, but this amendment does not apply to computers.
d. Because there was no policy statement by the employer, if Rob has a legitimate
expectation of privacy in the information on his computer, his employer would have to
obtain a search warrant in order to conduct a search of the computer.
Under the Clean Air Act:
a. states and the EPA were to act as partners wherein the individual states would
formulate State Implementation Plans to meet primary and secondary standards created
by the EPA.
b. the EPA formulated primary and secondary standards for air pollution; however, the
individual states were not required to comply with these standards if they already had
reasonable state statutes or regulations in place.
c. the states were required to follow the guidelines established by the EPA and did not
have the authority to create their own state plans for implementing the federal
standards.
d. state laws or regulations preempt or take precedence over the guidelines promulgated
by the EPA.
A CPA’s duty of care to a client most likely will be breached when the CPA:
a. gives a client an oral report instead of a written report.
b. gives a client incorrect advice based on an honest error in judgment.
c. fails to give tax advice that would save the client money.
d. fails to follow generally accepted auditing standards (GAAS).
Sharon fell while making an inspection of a machine at work and in the fall, she broke
her arm. Can she collect workers’ compensation for the time she had to be away from
work as she recovered?
a. Yes, since the injury occurred while she was engaged in her job at work.
b. Yes, if she can prove that the injury was caused by a fellow employee.
c. No, she can only receive compensation for her medical expenses.
d. No, since she should have been using a safety harness.
Vicki entered into a written contract to buy a car from Valley Motors. The written
contract included a provision that stated, “This writing is the full and final expression of
the parties’ agreement; anything said before signing or while signing is irrelevant.” This
is:
a. an integration clause.
b. a statute of frauds clause.
c. parol evidence.
d. an exculpatory clause.
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.
Laurel Speckle received a check from State University. She indorsed the check as
follows: “For Deposit only, /s/ Laurel Speckle.” Laurel’s indorsement is a:
a. blank indorsement.
b. special indorsement.
c. restrictive indorsement.
d. None of the above is correct.
An estray statute:
a. governs the ownership of livestock that have strayed from the rest of the herd.
b. is a federal statute that governs the rights of ownership of found property.
c. is both of the above.
d. is neither of the above.
Big Hog Farms of America, Inc., purchased 6,000 acres of farmland in South Dakota.
The company intends to build several hog confinement buildings that will house nearly
40,000 hogs in each one. When completed, the facility will have over 200,000 hogs.
The “hog factory” will cause terrible odors which will be extremely unpleasant for
neighbors within five miles. A town of 2,500 people is only three miles north of the
planned facility. The most serious concern is the disposal of all the hog manure, which
will be very substantial. The hog factory will dump the hog sewage into large lagoons
and then empty the watered-down sewage onto farm fields. It plans to sell some of this
manure as fertilizer, though most of it will be spread on grounds the facility owns.
Despite all the uproar from people in the area, many people are in favor of the facility.
It will employ nearly 200 people, purchase a lot of products (feed, supplies, etc.) from
local businesses, and generate a lot of money into the economy.
Is this business required to submit an Environmental Impact Statement to the federal
government and/or obtain a permit to operate from the EPA? Does the operation need
any permits from the federal government to operate? Does it need authorization from
state or local authorities? Explain.
In a negligence case, the plaintiff must establish:
a. duty, strict liability, causation, and injury.
b. mens rea, breach, foreseeable harm, and injury.
c. duty, actus reus, foreseeable harm, and causation.
d. duty of due care, breach, causation, foreseeable harm, and injury.
John hired Tim to sell his house. Which statement is correct?
a. John is Tim’s principal.
b. Tim, but not John, can terminate the agency.
c. This illustrates a power coupled with an interest.
d. All the above are correct.
Actual hearings are required in formal administrative agency rulemaking.
The Federal sentencing guidelines are just guidelines. Judges do not have to follow
them.
A contract involving the sale of goods from a Texas seller to a French wholesaler must
always use the United Nations Convention on Contracts for the International Sale of
Goods (CISG).
Alan, a dentist, and his wife Martha, an attorney, can protect their personal assets with
limited liability from their business dealings by creating and operating a professional
corporation together.
Revised Article 9 of the UCC only applies to goods and does not include intangibles
such as accounts or chattel paper.
Jerry enters a restaurant and hangs his coat in an unattended cloakroom near the
entrance of the restaurant. Even though no employee of the restaurant is present, the
provision of the cloakroom makes Jerry think it will be safe. In this situation, the
restaurant is a bailee of Jerrys coat.
Identify the considerations the United States Supreme Court outlined for calculating
punitive damages.
Under the “fair use doctrine,” instructors cannot be liable for copyright violations.
Most types of duties may be delegated.
Consumer credit reporting agencies are unregulated governmental agencies.
Under the natural law theory of jurisprudence, an unjust law is no law at all.
The five members of the National Labor Relations Board are appointed by the
President.
In January, Erwin told David, his nephew, that he would give him a car when he
graduates from college. David graduated in May. If Erwin refuses to give David a car,
David can sue him for breach of an inter vivos gift.
Identify seven possible remedies for a buyer when the seller breaches a contract.
A proxy is a vote that is mailed in, like an absentee ballot.
Valley Mart told its employees that they would be fired if they actively supported a
unionizing effort. Valley Mart has committed an unfair labor practice.
Jorgeson Co., on its website, promised the company would not give PII to third parties
without the customers consent, but then gave out such information. This practice
violates Section 5 of the FTC Act.