Pat’s Pen Co. manufacturers and sells an inexpensive ball-point pen. Salley’s Stationery
purchases the pens for $.25 each in quantities of 1,000. Salley’s discovered that a
national chain, a competitor of Salley’s, buys the pen at $.20 for 1,000. If Salley’s
Stationery sues Pat’s Pen Co. for price discrimination:
a. Pat’s Pen Co. will win if it can prove that it has been selling to the national chain
continuously at the cheaper rate.
b. Pat’s Pen Co. will win if it can prove that it did not intend to economically harm
Salley’s Stationery.
c. Salley’s Stationery will win unless Pat’s Pen Co. can justify the price differential.
d. Salley’s Stationery will win since price discrimination is a per se violation with no
real defenses.
Cameron, editor of the local newspaper, assigned to Jim the writing of a story about
pollution of a nearby stream. Although Jim used reasonable care in gathering and
checking his information, unknown to Jim, the story contained a defamatory statement
about Maureen. Maureen reads the story and sues Jim for libel. Cameron, who read and
published the story:
a. must indemnify Jim for Maureens claim.
b. need not indemnify Jim for Maureens claim because Jim should have checked his
facts more carefully.
c. need not indemnify Jim for Maureens claim because Jim breached his duty to obey
instructions.
d. can recover damages from Jim for any injury to the newspaper resulting from Jims
story.
What is true about insider trading?
a. Fiduciaries have to be full time permanent executive employees
b. Prior plans to sell stock do not protect and insider.
c. Someone who trades on inside information is liable only if he breaches a fiduciary
duty.
d. It is acceptable to tip off someone off as long as the insider does not profit from any
transaction involving the information.
What does the Fourth Amendment provided a criminal defendant?
a. protection from unreasonable search and seizures
b. protection from being forced to incrimination themselves
c. protection from being tried for a crime more than once
d. guarantee of a jury trial
When one party to a contract fails to perform as promised, it is called:
a. litigation.
b. breach.
c. liquidated damages.
d. bad faith.
What does RICO prohibit
a. using criminal money to purchase a legitimate business
b. acquiring a business through criminal activity
c. operating a business through criminal activity
d. all of these answers are correct
In 2012 The National Conference of Commissioners on Uniform Satte Laws created a
set of amendments to Article 9 of the UCC. What is true about these amendments.
a. The amendments are binding on all 50 states.
b. require that a partys name be that contained on his or her birth certificate.
c. .six states have voted to adopt the amendments to Article 9 of the UCC.
d. none of the above
The major disadvantage of a trust is:
a. expense.
b. lack of privacy.
c. it may have to go through an often lengthy probate process.
d. lack of control.
The Electronic Communications Privacy Act covers:
a. e-mail communications.
b. transmissions from cellular phones.
c. transmissions from pagers.
d. All of the above.
If a plaintiff is successful in proving that an auditor has violated Section 10(b) of the
1934 Act, the auditor has:
a. primary liability.
b. secondary liability.
c. contingent liability.
d. rebuttable liability.
What are the elements of Slander
a. oral statement that may be true but and is communicated to a third person to injure a
partys reputation.
b. oral statement that is false and is communicated to a third person to injure a partys
reputation.
c. written statement that is false and is communicated to a third person to injure a partys
reputation.
d. a written statement that is false and is communicated to a party that injures that
partys reputation.
What is meant by the term “piercing the corporate veil”?
a. Corporate directors and/or officers may be held personally liable to a person damaged
by an act of the corporation.
b. Corporate shareholders may be held personally liable to a person damaged by an act
of the corporation.
c. Both of the above.
d. None of the above.
The Occupational Safety and Health Administration promulgated a rule requiring
warehouse employees to wear hardhats when in the vicinity of an operating forklift. The
purpose of the hardhats is to protect employees from danger of falling objects. This rule
is:
a. an executive order.
b. a statute.
c. common law.
d. administrative law.
Under the Fair Debt Collection Practices Act, a collection company is legally permitted
to:
a. call the debtor between 8 a.m. and 9 p.m.
b. call acquaintances of the debtor to locate the debtor.
c. contact the debtor at work if not prohibited by the employer.
d. All of the above are permissible.
A civil case generally proceeds as follows:
a. answer, complaint, discovery, trial, verdict.
b. complaint, answer, trial, discovery, verdict.
c. complaint, answer, discovery, trial, verdict.
d. discovery, complaint, answer, trial, verdict.
Environmental protection issues are regulated by:
a. federal statutory law.
b. state statutory law.
c. administrative regulations.
d. All the above.
The most important warranty in the Code
a. Is an expressed warranty
b. Is a warranty for fitness for a particular purpose
c. Is a warranty that goods will meet a certain standard
d. Is an implied warranty of merchantability.
For manufactured goods, the United States and European Union impose an average
tariff of ________ percent, and major trading partners around the world impose tariffs
of ________ percent for identical items.
a. 10; 5
b. less than 4; 10 to 30
c. 25; 39 to 70
d. 10 to 30; less than 4
Which of the following is NOT true under the Electronic Communications Privacy Act?
a. An intended recipient of an e-mail has the right to disclose it to third persons.
b. ISPs are prohibited from disclosing the content of electronic messages to anyone
other than the addressee, even if the disclosure is necessary for the performance of the
ISP’s service.
c. An employer has the right to monitor workers’ e-mail if the monitoring occurs in the
ordinary course of business or the employer provides the e-mail system.
d. To access e-mail messages that have been stored for 180 days or less, the government
must first obtain a search warrant.
Great State Bank loans money to Seth, securing the loan with property owned by Seth.
Great State Bank is advised by its attorney to file a financing statement. Great State
Bank doesn’t understand why it should spend the extra money for this filing, since Seth
has told them that he has no other creditors. Why should Great State Bank file a
financing statement?
a. There are criminal penalties for failing to file.
b. The financing statement allows Great State Bank to repossess the collateral on
default without a court order.
c. The financing statement will protect Great State’s priority rights with other creditors
by giving notice to other creditors that it claims a security interest in the collateral.
d. Filing the financing statement is necessary to complete the attachment requirement in
order to create a security interest.
What is necessary for an employee to win a defamation suit against a former employer?
a. The employer makes an unfavorable reference OR the employer makes an untrue
statement about the employee.
b. The employer makes an unfavorable reference AND the employer makes an untrue
statement about the employee.
c. The employer makes an untrue statement about the employee OR the employer
reveals the former employees salary.
d. The employer makes an untrue statement about the employee AND the employer
reveals the former employees salary.
How are ambiguities interpreted in a check:
a. Parole evidence is necessary to clear up any ambiguities
b. Numbers over words; handwritten over typed, typed over printed.
c. Words over numbers; handwritten over typed; typed over printed.
d. Words over numbers; handwritten over typed; printed over typed
Andy’s business is not able to pay its debts, and the prospects for its finances to improve
are slim. Andy decides not to continue the business. In this case, Andy should file a
voluntary petition for which type of bankruptcy?
a. Chapter
b. Chapter
c. Chapter
d. Chapter
The Family and Medical Leave Act applies to:
a. companies with 15 or more full-time workers.
b. companies with 50 or more employees.
c. companies with 100 or more employees.
d. any company engaged in interstate commerce.
Walter enters a dentist office and points to a damaged tooth. The dentist, Matt, treats the
tooth. If Walter refused to pay and Matt sued:
a. Walter would win as there was no contract.
b. Walter would win because of the UCC.
c. Matt would win; this is an implied contract.
d. Matt would win in quantum meruit.
Pamela applies for a life insurance policy with Forever Young Insurance Company.
When completing the application form about past surgeries, Pamela forgot about a past
outpatient surgery when she had an infected hang-nail removed and her toe treated. One
year after issuing the policy, Pamela died suddenly from a brain aneurysm. Forever
Young denies payment under the policy based on misrepresentation. If Pamela’s sister,
Paula, sues Forever Young, she will:
a. win, because once an application has been accepted, an insurer may not use a
misrepresentation on the application to avoid liability.
b. win, because Pamela’s misrepresentation was not a material fact and did not increase
Forever Young’s risk in insuring Pamela’s life.
c. lose, because Pamela’s application contained a misrepresentation of material fact.
d. lose, because an insurer can always use any misrepresentation on an application to
avoid paying.
Which of the following insurance policies continue for a stated period of time with the
premiums increasing with the age of the insured?
a. Double indemnity.
b. Term insurance.
c. Annuity contract.
d. Whole Life
The percentage of people dying without a will is approximately:
a. 5%.
b. 25%.
c. 60%.
d. 90%.
Barden Corporation was convicted of violating federal RICO laws. Accordingly:
a. the government may file criminal charges against both the company and the
individuals associated with the criminal acts.
b. the government may file a civil lawsuit against the company to obtain injunctions and
other relief.
c. individuals may file civil lawsuits against the company for violating the RICO statute
to recover losses sustained by the criminal act.
d. All the above are correct.
Darcy buys a life insurance policy on her own life, under which she pays the annual
premiums. The insurance is issued for a specific period, but is renewable for similar
periods. Darcy is covered only as long as she makes the payments. There is no cash
value portion to the policy. Darcy probably owns:
a. whole life insurance.
b. key-person life insurance.
c. term life insurance.
d. an annuity.
Identify the main provisions of the Digital Millennium Copyright Act and two
arguments opponents of the Act raise.
The Constitution is the supreme law of the land and any law that conflicts with it is
void.
Since 1900, the number of workplace injuries and deaths has decreased, partly due to
the OSHA, even though the size of the workforce has increased fivefold.
Per capita means each heir gets an equal share of an estate.
Ed wants to give Howard his old car, but Howard says he doesnt want it. Howard later
reconsiders and tells Ed he does want the car. His previous repudiation means there is
no gift, and Howard has no rights in the car.
Disputants Martin and Daulton have hired Thurman to mediate their disagreement.
Although Martin and Daulton must accept whatever decision Thurman makes, the
mediation has the advantage of keeping Martin and Daulton out of court.
Spicy & Hot, Inc. is interested in expanding its Mexican food restaurant into a Mexican
food catering business. Spicy & Hot, Inc. buys a new delivery van from Van World.
Spicy & Hot, Inc. is a buyer in the ordinary course of business when purchasing the
van.
Strawly Corp. runs an “adult bookstore in Metro City, leasing the building from
MegaCorp. Then, Metro City passes an ordinance prohibiting the sales of the types of
merchandise found in “adult bookstores. Strawly is still bound to the contract.
The Magnuson-Moss Warranty Act covers all consumer products regardless of their
cost.
On Monday, Travis took his four-wheeler to Repparts Equipment & Service for repair
because the steering was not working properly. On Friday he called Repparts to see if
his four-wheeler was ready because he wanted it for a weekend trip. Repparts said they
had done the major repairs but that the steering system still needed some work and they
needed another few days to finish the repairs. Travis told them he would pick the
four-wheeler up and use it for the weekend and then bring it back to have them finish
their work. While riding with friends on the weekend, Travis ran into someone because
the steering stuck and he couldnt swerve to avoid them. Discuss how a court would
determine causation in a negligence suit against Travis.
Under the UCC, a merchant is frequently held to a higher standard of conduct than a
non-merchant.
Compare and contrast money laundering and embezzlement. Give an example of each.
The power to create laws regulating international commerce is given to Congress and
the states concurrently under the U.S Constitution.
Filings are required to form and operate a limited liability partnership.
If Ray agrees to rake leaves for Michelle in exchange for Michelle’s promise to pay off
the debt Ray owes to Dean, then Dean is a donee beneficiary of the agreement between
Ray and Michelle.
If a court finds as a matter of law that a clause of a contract was unconscionable at the
time the contract was made, the court must refuse to enforce the contract.
In determining if an accommodation is reasonable, the courts will look at absolute cost.
Chapters 11 and 13 are liquidation chapters.