Bess, Ray, and Irwin inherited 48 acres of land, which they own as tenants in common.
If Bess decides she wants to live on a portion of the land, in order to get clear title to
that portion:
a. Bess may request that the land be partitioned, which would change her, Rays, and
Irwins undivided interests in the whole parcel into smaller, individually owned parcels.
b. Bess need only move onto the land, as she has the right to possession of the whole 48
acres.
c. Bess would need to convince Ray and Irwin to join her in selling the entire 48 acres,
and she would then need to buy the portion she wishes to own separately.
d. Ray and Irwin must agree to relinquish their right of survivorship and thus destroy
the present tenancy.
Authority that a third person, in view of the circumstances, the conduct of the parties,
and a lack of notice or knowledge to the contrary, may reasonably consider to exist is
known as:
a. actual implied.
b. apparent.
c. actual express.
d. None of these.
A fundamental difference exists between the breach or nonperformance of a contractual
promise and the failure or nonhappening of a condition.
a. True
b. False
In general, procedural rules are exempt from the notice and comment requirements of
the APA.
a. True
b. False
The Code and the Restatement have no provisions for discharge of contractual duties in
cases involving commercial impracticability.
a. True
b. False
Under the stakeholder model, a derivative of the social contract theory, a corporation
has fiduciary responsibilities to more than just its stockholders.
a. True
b. False
The Rehabilitation Act:
a. requires all employers with 20 or more workers to take affirmative steps to employ
the handicapped.
b. has been recently amended to categorically remove those with AIDS from its
protection.
c. states that a person addicted to cigarette smoking is handicapped under the Act.
d. does not consider drug and alcohol abuse handicapping conditions for the purposes
of the statute.
Smarth, King, and Finkel have been partners for years, but a court of equity is now
segregating and considering separately the assets and liabilities of the partnership and
the respective assets and liabilities of the individual partners. This process is called:
a. marshaling of assets.
b. liquidation.
c. dissolution of the partnership.
d. winding up.
Liability for the negligent conduct of a defendant requires not only that the conduct in
fact caused injury to the plaintiff but also that it was the proximate cause of the injury.
a. True
b. False
A periodic leasehold tenancy may be terminated:
a. upon expiration of the period.
b. upon 6 months’ notice in a tenancy from month to month.
c. upon the date set in the lease agreement.
d. upon notice at the expiration of any one period but only on adequate notice to the
other party.
A gratuitous agent:
a. is a paid agent.
b. is subject to the same duty of loyalty as other agents.
c. has no duty of diligence.
d. need not be reimbursed for her expenses.
The Consumer Product Safety Commission:
a. only has the authority to educate the public concerning product safety problems.
b. uses data it gathers to set uniform product safety standards for goods such as toys and
lawn mowers.
c. can only make manufacturers voluntarily submit their products for testing if the
product falls below its regulatory standards.
d. have no enforcement powers since compliance with its regulations is left up to the
manufacturer.
Misuse or abuse of the product is a defense to an action brought under 402A of the
Restatement (Second) of Torts.
a. True
b. False
The definition of “discharge by breach” is:
a. performance that is incomplete but that does not defeat the purpose of the contract
but entitles the injured party to damages.
b. wrongful failure to perform the terms of a contract that gives rise to a right to
damages by the injured party.
c. a breach that prevents performance by either party.
d. None of these.
An “anti-dumping” statute:
a. is applied to both foreign companies and domestic companies which charge a higher
price for products sold in the U.S. than the price charged abroad.
b. has been declared invalid because of the inherent discrimination against foreign
corporations.
c. is administered by the FTC.
d. makes illegal the sale of exported goods from one country to another country at less
than normal value.
Theodore, as treasurer of Komand Corporation, had the duty to invest corporate
earnings as he deemed best for the company. When Komand Corporation went public,
the new board decided that a committee of the officers would make such investment
decisions. If Theodore thereafter unilaterally contracted to purchase investment
securities with corporate earnings as he had done many times before, such contract
would be valid:
a. since Theodore would have express authority.
b. since Theodore had implied authority.
c. under apparent authority if the seller knew of Theodore’s past transactions.
d. because of ratification if the board did not know of his actions.
Knowing and intentional use of a counterfeit mark can be a criminal offense.
a. True
b. False
Chuck, Betty, and Bert form CB&B Partnership to run a specialty grocery store. Bert is
the day-to-day manager of the store, Betty buys the groceries, and Chuck does all the
administrative work. Betty decides she would like a new car to use when calling on
prospective wholesalers. She makes a contract with Big Ben Motors in the name of
CB&B without consulting Chuck and Bert. CB&B and the individual partners are:
a. bound by Betty’s actual implied authority to buy a car.
b. bound by Betty’s apparent authority to buy a car.
c. bound by estoppel.
d. not bound because buying a car is outside the scope of the partnership business.
Assuming a note made by Barbara payable to Carol, which indorsement will limit
negotiability?
a. “Pay Al. Carol.”
b. “For deposit only, Acct. #602-043. Carol.”
c. “Pay Connie for Al. Carol.”
d. “Pay Claudia as attorney for John Jones. Carol.”
The Code imposes certain affirmative duties on bank customers and fixes time limits
within which they must assert their rights.
a. True
b. False
The seller contracts directly with the buyer in the other country under a:
a. multilateral trade agreement.
b. direct export sale.
c. flow of trade.
d. None of these.
If the contract does not state otherwise, standard goods under a contract for sale to meet
the satisfaction of the buyer must:
a. meet the buyers actual satisfaction, if honest and in good faith, even if unreasonable.
b. meet the buyers actual satisfaction, only if reasonable.
c. meet a subjective standard.
d. satisfy a reasonable person.
Carl loans Dan $1,500 for Dan’s honeymoon. Dan gives Carl his ruby ring as security
for the loan and after a year, tells Carl he may as well sell it to recoup the $1,500. When
Dan’s wife hears of this, she persuades Dan to call Carl and get back the ring. Can Carl
sell it anyway?
a. Yes, because Carl has apparent authority.
b. Yes, because Carl has an express agency.
c. No, Carls authority has been revoked.
d. Yes, because Dan cannot terminate this agency except by discharging the obligation.
__________ is available to a third person to whom a representation is made and who
justifiably relies on the representation.
a. Delectus personae
b. Respondeat superior
c. Culpable negligence
d. Partnership by estoppel
A contract to sell five acres of land is governed by Article 2 of the UCC.
a. True
b. False
IBN has two manufacturing facilities, one in New York and one in Oklahoma. Marjorie
has worked in the Oklahoma plant for 15 years assembling resistors. Her sister, Ellen,
has worked at the same plant for 15 years also. Their brother, Hank, has worked there
for 10 years in the same job as his sisters. Ellen transfers to the New York facility. Their
salaries are now as follows: Marjorie-$12 per hour; Ellen-$19.50 per hour; Hank-$14
per hour. Is there a violation of the Equal Pay Act?
a. Yes, because Ellen’s pay is higher than Marjorie’s.
b. Yes, because Ellen and Hank receive more per hour than Marjorie.
c. Yes, because Hank’s pay is higher than Marjorie’s.
d. No, since they are different people with different personalities.
Article 8 of the UCC covers rules applicable to transfers of investment securities.
a. True
b. False
The UCC Article 2 statute of frauds provision applies to the sale of goods for the price
of __________ or more.
a. $50
b. $100
c. $500
d. $1,000
Northstar Sporting Goods sells consumer goods to Lena for $85 and provides a written
warranty regarding the quality of the goods. Northstar:
a. must designate the warranty as full or limited.
b. may disclaim any and all implied warranties as long as the disclaimer is conspicuous.
c. may modify the implied warranties.
d. All of these are correct.
David, Ed, and Fred are partners in the DEF partnership. The partnership is being
dissolved, having $200,000 in assets and owing $410,000 to creditors. David
contributed $100,000 in capital; Ed contributed $50,000 in capital; and Fred contributed
$25,000 in capital. Profits are shared equally. Which of the following is correct with
regard to the responsibility of each partner?
a. The partners will bear losses equally.
b. The partners will bear losses in the proportion of their relative capital contributions.
c. If Ed refuses to contribute to covering the loss and he is out of the jurisdiction, David
and Fred must contribute the additional amount necessary to pay DEFs liabilities in the
relative proportion of their capital contributions.
d. Any of these could be true, depending on the partnership agreement.