The 2010 amendments to the Federal Organizational Corporate Sentencing Guidelines
restricted the availability of reduced sentencing for corporations having effective
compliance and ethics programs and meeting additional requirements.
a. True
b. False
In 1990, Congress enacted the Administrative Dispute Resolution Act to require
agencies to use alternative dispute resolution.
a. True
b. False
Will wants to buy a new car. He goes to the bank to get a loan for the purchase, and
signs an agreement to pay $10 per month in premiums on a term life insurance policy
which names the bank as the recipient of the policy proceeds in the event of his death
before the loan is repaid. The bank is a(n):
a. incidental beneficiary.
b. creditor beneficiary.
c. donee beneficiary.
d. assignee.
A buyers commercially reasonable charges for the care and custody of goods that a
buyer has rightfully rejected are known as:
a. incidental damages.
b. liquidated damages.
c. consequential damages.
d. cover charges.
A person for purposes of membership in a partnership includes a natural person, a
partnership, a limited partnership, a trust, an estate, an association, or a corporation.
a. True
b. False
Marge wishes to raise some money to begin mass producing her prize-winning jellies
and jams. She offers her neighbors a portion of her profits if they will put up $2,000
each towards her endeavor. Is their investment a ‘security”?
a. Yes, since Marge will do all the work.
b. Yes, because her neighbors will have a security interest in the jelly.
c. No, since the neighbors are putting no effort into it.
d. No, because Marge is not issuing stock certificates.
The Federal Trade Commission has overall enforcement authority for the Equal Credit
Opportunity Act.
a. True
b. False
The concept of consideration in contract law includes:
a. that each party to a contract must unintentionally exchange a legal benefit.
b. an inducement to each party to make a return exchange.
c. that each party takes out an insurance bond if the possibility of damages is above
$500.
d. All of these.
American courts generally will enforce a gambling agreement.
a. True
b. False
Which of the following involves an invalid assignment that a court would not enforce?
a. An assignment of a savings account accompanied by the delivery of the passbook.
b. An assignment lacking consideration.
c. An assignment of an automobile liability insurance policy accompanied by the
delivery of the policy.
d. An assignment in writing signed by the assignor and delivered to the assignee.
Stark enters into a contract with a contractor to build a large shopping mall in River
City. Donner will greatly benefit from this contract since his convenience store is
adjacent to the mall. Donner in this instance is:
a. an implied beneficiary.
b. a partial beneficiary.
c. a donee beneficiary.
d. an incidental beneficiary.
Contracts containing unconscionable clauses are void and unenforceable.
a. True
b. False
An agreement of a seller to supply a buyer with all of the buyer’s requirements for
certain goods is known as:
a. an output contract.
b. a requirements contract.
c. a firm offer.
d. promissory estoppel.
Why do governments impose tariffs?
a. To protect domestic industries from foreign competition.
b. To raise revenues.
c. To attempt to improve their balance of trade.
d. Governments impose tariffs for all of the above reasons.
With tying arrangements, the courts may establish a seller’s economic power by
showing that:
a. the seller occupied a dominant position in the tying market.
b. the seller’s product enjoys an advantage not shared by its competitors in the tying
market.
c. a substantial number of customers have accepted the tying arrangement and the only
explanation for their willingness to comply is the seller’s economic power in the tying
market.
d. All of these.
Which of the following is characteristic of an executive administrative agency?
a. It has complete independence from the president.
b. It deals only with executives of major corporations.
c. It is housed within the executive branch of the government.
d. It has complete independence from Congress.
Psychologist Lawrence Kohlberg observed that people progress through sequential
stages of moral development according to the two major variables of age and reasoning.
a. True
b. False
Federal legislation that requires agencies to maintain in their records only that
information about an individual that is relevant and necessary to accomplish an agency
function and to collect information to the greatest extent practicable directly from the
individual is the:
a. FOIA.
b. Privacy Act.
c. Government in the Sunshine Act.
d. APA.
The states may enact legislation concerning a subject in which there is a federal statute
if:
a. Congress has not clearly indicated that it intends to control that subject matter.
b. the states petition the Supreme Court for permission.
c. the state legislation falls within the Necessary and Proper Clause.
d. the states reserve the right at the time the federal statute is enacted.
An investor has the right to transfer his investment securities by sale, but not by gift or
pledge.
a. True
b. False
The UCC and the common law are essentially the same in regard to their treatment of
risk of loss or damage to identified goods.
a. True
b. False
D owes C a past-due undisputed debt of $500. D sees C in a bar and pays him $400. C
then says to D, “Forget about the other $100 you owe me. I’m glad to get the $400.” C’s
promise to discharge the remainder of the debt is binding.
a. True
b. False
Anita owes Brad $75,000. Brad signs a written statement granting Carl a gratuitous
assignment of his rights from Anita. If Brad delivers the signed statement to Carl before
he dies:
a. the delivery of the statement makes the assignment irrevocable.
b. the assignment is terminated upon Brad’s death.
c. the signing of the statement makes the assignment irrevocable.
d. the assignment is invalid, because it is revocable.
A tiger gets loose from the tent of a circus and mauls a passerby. The circus claims it
has always treated the animal well and that it was not at all negligent in its handling of
the animal. The circus has no liability for the injury caused by the animal.
a. True
b. False
Jennifer purchased a used refrigerator from her next-door neighbor. When she took it
home and plugged it in, the refrigerator burst into flames. The seller in this case is in
breach of the implied warranty of merchantability.
a. True
b. False
Pat bought a cotton sweater at Ivey’s Fashion Store. Sue, the salesperson, told her the
sweater was guaranteed not to shrink if washed in cold water by hand. Pat washes the
sweater as directed, and it shrinks. Which of the following is correct?
a. Pat has no recourse against the store, because it was only the salesclerk who
misrepresented the sweater.
b. Sue has apparent authority to make warranties such as the one that she made.
Therefore, the store is bound.
c. If Sue is only a part-time employee, Ivey has no responsibility for misrepresentations
she makes.
d. Salesclerks are usually independent contractors. Thus, there is no liability on the part
of Ivey.
Social Security benefits are funded by:
a. legally required assessments on employers.
b. taxes paid by both employers and employees or by self-employed persons.
c. the federal tax on corporations.
d. a combination of federal and state taxes.
Ricardo is the holder of a check that contains the indorsement “Without Recourse,
(signed) Mary Roberts.” This indorsement:
a. makes further indorsement impossible.
b. requires a special indorsement by the transferee.
c. limits the liability of Mary Roberts.
d. limits the liability of all subsequent holders, including Ricardo.
The federal courts have jurisdiction over all matters that have not been exclusively
given to the state courts.
a. True
b. False
NEPA is a federal act that focuses on particular environmental hazards without stating
national environmental policy.
a. True
b. False
A person may ratify a prior unauthorized act and may later revoke the ratification.
a. True
b. False
Under the UPA, which of the following liabilities of a partnership has the highest
priority for payment out of partnership assets? Amounts owing to:
a. partners for profits.
b. partners for loans or advances.
c. creditors other than partners.
d. partners for capital.
The American Law Institute’s Model Penal Code provides that a corporation cannot be
convicted of a criminal offense for the conduct of its employees or board of directors.
a. True
b. False
No minimum amount of capitalization is necessary before a partnership may commence
business.
a. True
b. False
Civil law systems, as found in the state of Louisiana and countries such as Scotland,
depend on comprehensive legislative enactments.
a. True
b. False
Explain three limitations on monetary damages.
Cheryl is a 17-year-old high school student who was elected homecoming queen and
does part-time modeling to earn money for college. She has an important interview with
a modeling agency and wants to make a good impression, so she withdraws $5,000
from her savings and buys a designer outfit and a fur coat for the interview. A week
later, she returns the coat to the department store and says she would like her money
back. The store is reluctant to take the items. What are Cheryl’s rights? Explain.
b. What is an undisclosed principal?
b. What is a partially disclosed principal?
c. What liability does an agent have to a third party when the principal is either
undisclosed or partially disclosed?
d. Dale is asked to be an agent for Phil, but Phil does not wish third parties to know that
Dale represents him. In light of your answer to part (c), why would Dale want to be an
agent for Phil? Why would Phil wish that third parties not know his identity? Explain.
Carlos wrote a check with the numbers $4500 and the written amount as forty-five
dollars. Explain how the ambiguity will be resolved.
Assume that you and your best friend have decided to form a partnership after
graduation. You have both studied business law, so you both know the importance of
having a written partnership agreement. Summarize the clauses that you would include
in your partnership agreement.
Identify at least six situations in which the parol evidence rule does not apply.
Discuss how an owner of intellectual property protects those rights in other countries.
Lily drew a check on First Bank payable to Shelley. Lily signed the check in the normal
place at the bottom, right side of the check. Glenn signed the check at the bottom left of
the front of the check. In what capacity will the Code interpret Glenn to have signed?
Will Glenn be able to introduce parol evidence to establish his intent?
Compare the adjudication process in an administrative hearing to the judicial process.
What takes place at an administrative hearing in contrast to what takes place at a trial in
court?
When will a court enforce a liquidated damage clause? When will a court refuse to
enforce one?
What is the basic purpose of the World Trade Organization (WTO)?
Define consideration.
Briefly discuss enforcement of a judgment.
What is law? Discuss the various definitions of law by legal scholars. What is the
relationship between law and morality and between law and justice?
Compare and contrast civil and criminal law. Include in your discussion definitions,
how the cases are commenced, the purposes of civil and criminal law, the burdens of
proof, and principal sanctions.
Hugo wishes to raise money for his restaurant. He offers to sell stock to his brothers,
sisters, aunts, uncles, and cousins. The offering is made by telephone to each of the
investors and amounts to a stock offering in the total dollar amount of $1.5 million. The
offering is made to a total of 38 family members and no notice is given to the SEC. Is
this a permissible exempt offering under the federal securities laws? Explain.