Able borrowed $10,000 from Baker, promising to return it with $1,000 interest on
January 1, 2006. There is no dispute that Able owes Baker $11,000 due on January 1,
2006. On that day, Able gave Baker a valid check in the amount of $10,500 marked
“payment in full for loan due January 1, 2006.” Baker accepted that check and
deposited it into his account. If Baker then sues Able for the unpaid $500, what would
the result be?
A. Able wins, because Baker accepted the lesser payment.
B. Able wins, because Baker made an implied promise to accept $10,500 as full
payment, thereby forgiving $500 of the loan.
C. Baker wins, because Able gave no consideration in exchange for Baker’s promise to
forgive $500 of the loan.
D. Baker wins, because marking “payment in full” can never relieve a party of its
original obligations under a contract.
On May 1, 1985, Mint, a 16-year-old, purchased a sailboat from Sly Boats. Mint used
the boat for six months, at which time he advertised it for sale. Which of the following
statements is correct?
A. The sale of the boat to Mint was void, thereby requiring Mint to return the boat and
Sly to return the money received.
B. Sly Boats has the power to recover the boat from Mint because he has advertised it
for sale.
C. Mint’s use of the boat for six months after the sale on May 1 constituted a ratification
of that contract.
D. Mint may disaffirm the May 1 contract at any time prior to reaching majority.
In case a check is altered so skillfully that a bank is unable to detect the alteration,
which of the following stands true?
A. The bank should honor only those checks for which it receives a notice from the
drawer.
B. The bank is allowed to charge to the account the amount for which the check
originally was written.
C. The bank will be liable to recredit the drawer’s account for negligence.
D. The bank will hold the drawer responsible for contributing to the alteration of the
check.
Lisa lives next to a vacant plot that belongs to Carol. Carol has never visited the plot in
the last 20 years during which period, Lisa has taken care of it by fencing the plot and
mowing the grass. If this continues, Lisa will be able to claim ownership of land based
on:
A. easement.
B. a quitclaim deed.
C. adverse possession.
D. fee simple absolute.
The power of executive order normally derives from a(n):
A. legislative delegation.
B. federal court.
C. injunction.
D. restatement.
Which of the following is true of the emission trading scheme provided by the 1990
amendments to the Clean Air Act?
A. Allowances can be traded between companies, but cannot be sold.
B. It requires companies to file an environmental impact statement.
C. It applies only to those companies engaged in interstate commerce.
D. Allowances can be sold to government, but not among private firms.
Linda was visiting Jose at his apartment. While she was there, Linda slipped on a
banana peel that Jose had negligently left on the kitchen floor. Linda was injured and
sued both Jose and his landlord. Who is liable to Linda?
A. Both Jose and the landlord are liable.
B. Jose is liable because he was negligent.
C. The landlord is liable for all accidents that happen in his apartment.
D. No one is liable.
The Uniform Commercial Code changed the traditional statute of frauds rule by making
it:
A. easier to satisfy that rule.
B. mandatory to have contracts in writing.
C. apply to service contracts only.
D. apply to real estate contracts only.
The _____ is the preferred form of business for professionals and is especially good for
consultants and auditors, allowing them management flexibility while insulating them
mostly from personal liability.
A. S Corporation
B. LLLP
C. LLC
D. LLP
A shareholder’s preemptive right allows him to:
A. increase his proportionate voting power.
B. maintain his dissenters’ right.
C. increase the value of his shares.
D. maintain his proportionate share of dividends.
Jack is Martha’s boss. They are lifeguards working for the City of Miami. Jack is very
interested in developing a romantic relationship with Martha. However, Martha is not
attracted to Jack. His attention is unwelcome to her. Jack tells Martha that if she will
engage in sexual relations with him, he will give her the highest employee evaluation
possible, and she will get a raise. This is an example of:
A. quid pro quo sexual harassment.
B. sociological harassment.
C. hostile environment harassment.
D. tangible sexual harassment.
Which of the following statements about vehicle emission standards under the Clean
Air Act is accurate?
A. Individual owners need to get their vehicles certified by the EPA for emission
standards.
B. Manufacturers are required to warrant that certified vehicles will always meet
emission standards.
C. EPA can order manufacturers to recall and repair vehicles that do not meet emission
standards.
D. EPA performs emission tests on all the vehicles it certifies for emission standards.
When the surrounding facts and circumstances indicate that an agreement has in fact
been reached, a(n) _____ has been created.
A. implied contract
B. quasi-contract
C. void contract
D. unenforceable contract
Under the TILA, a creditor can unilaterally terminate a credit plan for a home equity
loan and require immediate repayment of the outstanding balance when a consumer
has:
A. paid the installment without the added interest.
B. lost his only source of income.
C. defaulted on one repayment installment.
D. made material misrepresentations.
A person who is appointed under a will to look after the property of the deceased person
is known as a(n):
A. obligee.
B. estate agent.
C. legal heir.
D. executor.
Which of the following is guaranteed by the Sixth Amendment?
A. The right to remain silent
B. The right to a speedy trial by an impartial jury
C. The right to refuse custodial interrogation
D. The right to refuse unreasonable searches
Mr. Blue is in a contract with Mr. Brown for the repair of Mr. Blue’s roof for $9,000.
Mr. Brown has already performed the work, but contacts Mr. Blue that he should pay
his cousin Joe Jr. the amount owed. Joe Jr.’s status under the contract is called what?
A. Delegation
B. Assignment
C. Incorporation
D. Organizing
Section 8 of the Clayton Act requires a _____ analysis of behavior for determining
liability.
A. quick-look
B. per se
C. secondary
D. rule of reason
Mr. Blue has invested in SuperMart Inc. Mr. Blue purchased $5000 worth of shares or
3% equity in the company. Shortly after investing SuperMart Inc. is found guilty of
various civil wrongs and a judgment is entered in against the company for 3.1 million
dollars. How much liability will Mr. Blue have?
A. $5000 will be the limit of his liability
B. $93,000 or 3% of the value of the judgment
C. $0 Since Mr. Blue was not a managing officer
D. $100,000 which is statutory minimum for investor liability
Which of the following is an accurate statement about the Privacy Act of 1974?
A. It bars administrative agencies from gathering information about private citizens
unless the agencies have obtained a court order justifying the information gathering.
B. It is frequently used by public interest groups to obtain information useful to the
advancement of their public causes.
C. It ensures that every portion of every meeting of an agency shall be open to public
observation.
D. It allows persons to inspect files kept on them by administrative agencies and to
request corrections of erroneous or incomplete information.
Which of the following statements about the Equal Pay Act (EPA) is accurate?
A. An employee may recover liquidated damages under the EPA.
B. The EPA requires that private plaintiffs submit their complaints to the EEOC.
C. Employee suits under the EPA are for unpaid wages or overtime.
D. The EPA is enforced by the Labor Department.
What remedy is provided by the states that allow disaffirmance to adults who suffer
losses due to a minor’s misrepresentation of age?
A. There is no remedy
B. Tort of necessaries
C. Tort of deceit
D. Emancipation
When a court identifies a meaningful difference between a present and past case, it
_____ the earlier decision.
A. interprets
B. implements
C. prioritizes
D. distinguishes
What term references threats or coercion that is used by one party to a contract to force
another to agree to a contract?
A. Duress
B. Undue influence
C. Breach
D. Power of Attorney
In order to “run with the land,” a restrictive covenant must essentially:
A. be related to any disputed property.
B. have a number of claimants to an estate.
C. be binding on the original parties and their successors.
D. be a joint tenancy.
What year was the Toxic Substances Control Act passed?
A. 2001
B. 1970
C. 1981
D. 1976
When taxes assessed on real property are not paid when due, they become a(n) _____
on the land.
A. easement
B. lease
C. loan
D. lien
_____ categorizes using or manipulating others as an unethical action.
A. Utilitarianism
B. Teleological ethics
C. Consequentialism
D. Kantianism
Which of the following is NOT a basic element of a contract?
A. Offer
B. Consideration
C. Capacity
D. Goods
What is the test frequently used to determine “hybrid” contracts?
A. Determining the value of the contract.
B. Determining the party to benefit.
C. Determine which element predominates.
D. Determining the validity of the contract.
_____ theory emphasizes that one should use the categorical imperative and judge an
action by applying it universally.
A. Utilitarian
B. Teleological
C. Justice
D. Kantian
In a due diligence meeting, officers and experts confer with each other for the purpose
of:
A. increasing corporate transparency and responsibility.
B. ascertaining that the registration statement contains no misstatements or omissions of
material fact.
C. creating strategies for maximizing capital raised from public issue of securities.
D. issuing a proxy solicitation document for issuance of securities.
Tracy is attending the annual general meeting of shareholders of Acor Corporation.
Seven directors are going to be elected from twenty nominees during the meeting
through cumulative voting. One thousand shares will be voted. What is the minimum
number of shares that Tracy needs to have to be able to elect three directors?
A. 374
B. 375
C. 376
D. 377
Which of the following is also called the slippery slope fallacy?
A. Gambler’s fallacy
B. Reductio ad absurdum
C. Sunk cost fallacy
D. Argumentum ad hominem
Anyone who discharges wastewater, other than just domestic sewage, to a publicly
owned treatment works (POTW) must obtain what is known as a(n) _____ permit from
the local sewage treatment plant where the discharge is being sent or from the state.
A. industrial discharge
B. Water Pollution Control System
C. National Pollution Discharge Elimination System
D. national industrial discharge