Securities that are exempt from the registration requirement can generally be sold and
resold without being registered.
An accord and satisfaction requires that the amount of a debt be certain.
Each partner is an agent of the partnership in carrying out the usual business of the firm.
A corporation whose shares are held by relatively few persons is a partnership.
Under no circumstances can a non-partner be regarded as an agent whose acts are
binding on the partnership.
Insurance is classified according to the amount of the payment on a claim.
The owner of real property has relatively exclusive rights to the airspace above the land.
Some promises are not legally binding contracts.
Compensatory damages are only available for victims of intentional employment
discrimination.
Generally, an accountant must exercise the degree of care that an ordinarily prudent
accountant would exercise.
Under the UCC, an oral contract for a sale of goods is enforceable unless payment has
been made and accepted.
Unlike an ordinary bailee, a warehouse company cannot limit its liability.
A payee whose name is misspelled on an instrument cannot indorse the instrument.
An offer may invite an acceptance to be worded in such specific terms that the contract
is made definite.
If collateral consists of consumer goods subject to a purchase-money security interest,
the secured party must “purchase” the goods on default.
In general, a buyer’s duty to pay for tendered goods becomes absolute before the buyer
has had an opportunity to inspect the goods.
Law includes enforceable rules governing relationships between individuals and their
society.
There are no exceptions to the employment-at-will doctrine.
A person can insure anything in which he or she has an insurable interest.
An otherwise valid contract may be unenforceable if it is not in writing.
An express contract must be in writing.
A small difference in job content can justify higher pay for one gender.
Corporate shareholders are the ultimate authority in every corporation.
The role played by women may present some difficult ethical problems for firms doing
business internationally.
The measure of damages on a breach of contract is the amount that will impress on the
breaching party the harm that has been done.
Identity theft occurs when a wrongdoer steals another’s form of identification.
Parties can form a contract without putting the terms in writing.
A borrower has a right to rescind a mortgage within three business days.
The establishment clause of the U.S. Constitution prohibits the federal government
from establishing an official religion.
A customer must examine a bank statement and report any discovered forged signature
to recover from the bank for the forgery.
Under a destination contract, a seller must deliver the goods via a carrier.
Harm must be foreseeable to be considered the proximate cause of an injury in
negligence.
A homestead exemption allows a debtor to subtract the value of the family home from
the amount of a debt.
Willful violations of the Securities Act of 1933 may be subject to criminal prosecution.
Dag is the secured party in a secured transaction with Elmo. In this transaction, Dag
A.has a security interest.
B.owes payment.
C.owes performance.
D.owns collateral.
Philomena dies without a will. A court appoints Quigley to handle the probate of
Philomena’s estate. The administrator of the estate is
A.Philomena’s closest blood relative.
B.Philomena.
C.Quigley.
D.the court.
Fact Pattern 18-1
Excel Vehicles, Inc., makes and sells automobiles to auto dealers, including Fine Auto
Sales. Fine sells the cars to consumers and businesses.
Refer to Fact Pattern 18-1. Holly, a professional driver, buys an Excel from Fine to
drive in a Grand Prix race. Holly’s Excel is
A.a consumer good.
B.an accession.
C.equipment.
D.inventory.
Petra signs a check payable to Quincy, who indorses the back, gives it to Regional
Credit Union, and receives cash. The transfer of the check from Quincy to the credit
union is
A.an assignment.
B.a negotiation.
C.a payment.
D.a sale.
Nikita operates a sole proprietorship, a corporation, and a partnership. Nikita wants to
obtain relief for her individual debts and the debts of her corporation and partnership.
For each of these, Nikita may file a petition in bankruptcy for relief through
A.a liquidation.
B.a reorganization.
C.a repayment plan.
D.a family-farmer bankruptcy plan.
Genetic Seed Company hires Howie to work on Genetic’s shipping dock, accepting
deliveries and dealing with other companies’ drivers. With respect to Genetic, Howie is
most likely
A.an agent.
B.an independent contractor.
C.a principal.
D.a work for hire.
One night, Izzy discovers Joe, an intruder, in Izzy’s Kwik Spot convenience store after
the store is closed. Izzy shoots and kills Joe. With respect to criminal prosecution for
this use of deadly force, in a state that has a stand-your-ground law, Izzy
A.is presumed innocent or may be exempt from prosecution.
B.must prove that he first told Joe to “Stop!” or “Stand your ground!”
C.must prove that he first tried to retreat or that his life was in danger.
D.must prove that Joe did not try to retreat or acted without regard for his own life.
During the trial phase of Fuel Corporation’s suit against Gas Stations, Inc., their
attorneys engage in voir dire. This is
A.the assessment of the arguments on the issues.
B.the determination of the issues to be argued.
C.the litigation of the issues and arguments.
D.the selection of jurors.
Edna and Flavia buy a boat that they dock in a marina near Gulfport, Mississippi. On
the death of either owner, that owner’s interest in the boat passes to her heirs. This is
A.a joint tenancy.
B.a tenancy by the entirety.
C.a tenancy in common.
D.ownership in fee simple absolute.
Dyan executes her will to give “to my nephew Esau my stock in Fargo, Inc.” Later,
Dyan writes separately, with the same formalities required for a will, to leave the stock
to her niece Ginny and cash to Esau. This writing
A.does not affect the will’s gift of the stock to Esau.
B.requires a gift of the stock in equal shares to Esau and Ginny.
C.revokes the whole will, which must be redrafted.
D.revokes the will’s gift of the stock to Esau.
Estes, an accountant, contracts to perform services for Frasier. In performing those
services, Estes uncovers a suspicious financial transaction. Estes is most likely not
liable if he
A.acted negligently in failing to discover the transaction sooner.
B.conceals the discovery and otherwise finishes the work.
C.investigates and reports the discovery to Frasier.
D.obtains restitution from the perpetrator without Frasier’s knowledge.
Mac files a petition for a discharge in bankruptcy. Mac’s failure to appear at a meeting
of the creditors listed in Mac’s schedules may result in Mac being
A.denied a discharge of bankruptcy.
B.fined.
C.held in contempt.
D.imprisoned.
According to the dissent in MedImmune, Inc., v. Genentech, Inc. case, a patent licensee
can challenge the validity of a licensed patent
A.only after breaching the license agreement.
B.only before breaching the license agreement.
C.without breaching the license agreement.
D.under no circumstances.
Fact Pattern 16-1
Ewa signs an instrument unconditionally promising to pay to “First State Bank” $5,000
with interest in installments with the final payment due June 1, 2012.
Refer to Fact Pattern 16-1. The instrument that Ewa signed is most likely
A.a certificate of deposit.
B.a draft.
C.an order to pay.
D.a promissory note.
Detail Designs Company, an architectural firm, wants to hire Eduardo, a noncitizen. A
temporary work visa is most likely to be set aside for a noncitizen who is
A.a “person of ethnic similarity to the employer’s workforce.”
B.a “person of extraordinary ability.”
C.a “person of ordinary ability and ambition.”
D.a “person with an extraordinary work ethic.”
Sol is chairman of the board of Tasty Foods Corporation. Uma, a consumer, falls sick
after eating a Tasty product. Uma sues Tasty, and Sol individually. Tasty may pay Sal’s
legal fees
A.only if Sol wins the suit.
B.only if Tasty wins the suit.
C.only if Uma wins the suit.
D.regardless of the outcome.
Gina induces Hugh to enter into a contract for the purchase of a condominium about
which Gina knowingly misrepresents a number of material features. When Hugh
discovers the truth, he can
A.not rescind the contract.
B.rescind the contract on the basis of fraud.
C.rescind the contract on the basis of mistake.
D.rescind the contract on the basis of undue influence.
Wally’s Warehouse offers to sell a certain used forklift to Value Lumber Outlet, but it is
stolen before Value accepts. Most likely, Wally’s must obtain
A.a forklift for Value if Wally’s insurance covers the loss.
B.a forklift for Value if it still wants one.
C.nothing for Value because that would extend the time of the offer.
D.nothing for Value because the theft terminated the offer.
Parker, a salesperson for Quality Textiles, Inc., shows Rosa, a fabric buyer for Style
Clothing Company, samples of cloth, stating that any shipment will match the samples.
This statement is
A.an express warranty.
B.an implied warranty.
C.a warranty of title.
D.puffing.
Tyro has the right to drive across Ula’s land, which is next to Tyro’s property, to reach
an access road. Tyro’s right is
A.an easement appurtenant.
B.an easement in gross.
C.a profit appurtenant.
D.a profit in gross.
Todd indorses a check, “Pay to Interstate Trucking if they deliver the lumber by May 1,
2013.” This is
A.a blank indorsement.
B.a qualified indorsement.
C.a restrictive indorsement.
D.a special indorsement.
A record does not require a signature to have legal effect under the UETA.
Delilah files a petition in bankruptcy. The proceeding is governed by the Bankruptcy
Code, which is part of
A.state law.
B.federal law.
C.the U.S. Constitution.
D.international law.
Vicky contracts with Warren for the delivery of hospice services to benefit Xavier. This
is
A.a delegation.
B.an assignment.
C.a third party beneficiary contract.
D.a novation.
General Packaging Corporation, a U.S. employer, may hire Hilo, a noncitizen, if Hilo is
A.a lawful permanent resident of the United States.
B.an unlawful but hopefully permanent resident in the United States.
C.an unlawful but only temporary resident in the United States.
D.any of the choices.
Fact Pattern 10-4
Kelly and Lucas sign a written contract for the sale of Kelly’s Koffee Kiosk to Lucas.
The parties intend their written contract to be a final statement of the terms of their
agreement.
Refer to Fact Pattern 10-4. The writing that Kelly and Lucas signed is
A.a completely integrated contract.
B.a conditionally integrated contract.
C.an agreeably integrated contract.
D.an obviously integrated contract.
Eighty-year-old Clark exhibits confusion, forgetfulness, and disorientation. Dave,
Clark’s doctor, believes that the symptoms indicate dementia. Elsa, who has significant
contact with Clark, believes that he is in a state of mental decline. These facts indicate
A.an urgency that Clark distribute his assets.
B.Clark’s lack of capacity.
C.Dave’s misdiagnosis.
D.Elsa’s intent to take advantage of Clark.
Commercial Development Corporation (CDC) hires Delta Construction Company to
work at a site as an independent contractor. Whether CDC will be liable for torts
committed at the site by Delta depends on
A.what Delta bid for the job.
B.whether exceptionally hazardous activities are involved.
C.which party obtained insurance to cover tort liability.
D.who is paying Delta.
Fact Pattern 9-2
Brad defends against a breach-of-contract suit by College Credit Corporation by
claiming that their deal-a student loan accruing interest at a certain rate and payable
beginning on a certain date-was unfair because the consideration for their contract was
inadequate.
Refer to Fact Pattern 9-2. If, as Brad claims, the consideration in this problem is
inadequate, it may indicate a lack of
A.accord in Brad’s satisfaction with the value of the deal.
B.bargained-for exchange or mutual assent.
C.flexibility on the part of College Credit to accommodate Brad’s needs.
D.”heft,” “substance,” or “weight” in the terms of the contract.
Glen and Hadley sign a written contract. Glen claims that the parties later orally agreed
to modify the contract. Any oral modification is likely not enforceable if it falls under
A.the doctrine of promissory estoppel.
B.the “main purpose” exception.
C.the “partial performance” exception.
D.the Statute of Frauds.
Energy Green, LLC, is a limited liability company. Instead of distributing its profits to
its members, Energy wants to reinvest the profits in its business. For this reason, Energy
may prefer to be taxed as
A.a corporation.
B.a partnership.
C.a sole proprietorship.
D.a natural person.
Sweet Candy, Inc., and Tasty Treats Stores enter into a contract for a sale of candy.
Sweet, a merchant who deals in goods of the kind sold, makes express warranties in
connection with the sale. Under the UCC, at the time a contract is formed, an express
warranty can be disclaimed or modified
A.by clear, conspicuous language called to the buyer’s attention.
B.by implied affirmations of fact relating to the goods.
C.in any way that the seller sees fit for the ordinary purpose.
D.in no way.
Patty’s parents give her a car as a graduation present. While Patty spends the summer in
Europe, her friend Rita agrees to keep the car in her garage. On Patty’s part, this is
acquisition of property by
A.bailment.
B.capture.
C.find.
D.gift.
BroadView Company arranges to have Carrier Corporation, a common carrier, transport
500 DVD players from New York to California. Dan is Carrier’s driver. BroadView will
have no cause of action against Carrier if Carrier fails to deliver the players on time
because
A.authorities are stopping and searching all trucks entering California.
B.Carrier’s dispatcher mistakenly delays Dan’s departure.
C.Carrier’s truck is broken into and the players are stolen.
D.Dan has to wait two days in Denver for the truck to be repaired.
Lyle, vice-president of sales for Mi-T Electric, Inc., adheres to Judeo-Christian religious
ethical standards. With respect to their application, these standards are
A.absolute.
B.analytical.
C.discretionary.
D.utilitarian.