In Jones v. Clinton, the court held that
a. Paula Jones did not demonstrate the essential elements for her claim.
b. Paula Jones was entitled to a summary judgment.
c. the case be dismissed because of the Presidents governmental position.
d. President Clinton failed to comply with a discovery order.
Auditors cannot protect themselves from liability to third parties by issuing a qualified
or an adverse opinion.
a. True
b. False
Employees of Mega Corp. have gone out on strike seeking better pay. Mega Corp.
announces that if the union does not end the strike it will begin hiring replacement
workers. Which statement is correct?
a. Hiring replacement workers during a strike is an unfair labor practice.
b. Mega Corp can only hire replacement workers if the collective bargaining agreement
expressly gives the company the right to do so.
c. Mega Corp can only hire replacement workers if it gives the union 14 days’ notice
prior to actually bringing in the replacement employees.
d. Mega Corp can hire replacement workers at any time during a strike.
Willis and Leslie orally agree to the sale of a parcel of land for $50,000: one-half
payable now as a down payment; one-half payable in 30 days at the time of closing
when the title will be transferred. The buyer, Willis, is to have possession immediately.
Willis pays Leslie $25,000, takes possession of the land, and starts building a house. At
the time of closing, Willis has made a substantial beginning on the house. However,
Leslie refuses to transfer the title, claiming the oral contract is not enforceable. This
contract is
a. enforceable, because the statute of frauds does not apply to this interest in land.
b. unenforceable, because there is no writing signed by Leslie.
c. enforceable, because Willis has partially performed the oral contract and made
improvements on the land.
d. unenforceable, because the parol evidence rule applies.
First Federal loaned Madeline $20,000 to purchase a new van. The van was for
Madeline’s personal and family use. First Federal’s security interest is a purchase money
security interest which perfects only upon filing a financing statement.
a. True
b. False
Sit-down strikes, in which members stop working but remain at their job
posts,physically blocking replacement workers from taking their places are legal.
a. True
b. False
Don received in the mail merchandise he never ordered. The package was addressed to
him, and when he opened it he saw a brochure stating he could keep the products for
only $19.95. If he chose not to keep the products he was instructed to mail them back
within five days. Which of the following is correct?
a. Don can keep and use the merchandise without having to pay for it.
b. Don can keep the merchandise only if he pays the $19.95 charge.
c. Don must send the merchandise back within five days if he does not want it.
d. Don must return the merchandise within 30 days if he does not want it.
Ramona has received a discharge in bankruptcy, but wants to reaffirm a debt to her
sister. To be valid, the reaffirmation
a. will be scrutinized by the court to make sure her sister has not unfairly pressured
Ramona.
b. will be automatically disallowed because allowing Ramona to promise to pay a
discharged debt would be contrary to the goals of the bankruptcy proceedings.
c. will be automatically allowed if Ramona voluntarily chooses to make it.
d. must clearly disclose that Ramona has the right to rescind at any time since the debt
was already discharged.
There is no way to attach a security interest in electronic chattel paper.
a. True
b. False
Professor Jones accuses Rachel, a senior at a large state university, of cheating on an
exam. The Professor claims that Rachel must prove to him that she did not cheat. If she
fails to convince him, she will be expelled from college. Rachel is being denied her due
process rights.
a. True
b. False
Local regulation is more effective than state or federal regulation in controlling air
pollution.
a. True
b. False
Lori works for Big Corporation. The existing contract between Lori and Big
Corporation can be terminated at will by either party. Richard, the owner of a small
store, offers to pay Lori much more money if she will leave Big Corporation and work
for his store. When Lori starts to work for Richard, Big Corporation correctly claims
Richard is liable for tortious interference with a contract.
a. True
b. False
A union declares its workers are going on strike. The employer states the collective
bargaining agreement is still in force for another eight months and that it contains a
no-strike clause. The union claims the CBA’s no-strike provision is not binding since
new union leadership is in place. Which of the following statements is correct?
a. The union can strike since new leadership is now in control.
b. The union can strike since no-strike provisions have been ruled by the courts to be
unenforceable.
c. The union cannot strike, as strikes to exert economic pressure on management are
prohibited by the NLRA.
d. The union cannot strike because of the no-strike clause in the contract.
The most accurate statement about the Robinson-Patman Act is
a. It has rarely been enforced in recent years.
b. The U.S. government has stepped up its enforcement during the last decade.
c. It has been declared unconstitutional.
d. It was repealed by Congress in 1998.
The Foreign Corrupt Practices Act prohibits bribery abroad.
a. True
b. False
Meister Bros. shipped 250 radiator belts to fill Braybons order. Quality control
measures had been in place in Meisters factory when the belts were manufactured.
When Braybon received the order one day before it was due, it notified Meister that it
rejected the belts because of a variation from the contract specifications. Meister,
although it believed the original belts met the contract specifications, notified Braybon
that it would supply conforming goods within one week. When the conforming goods
arrive in one week
a. Braybon must accept them, but does not have to pay the full price because the
contract deadline has passed.
b. Braybon does not have to accept them because Meister Bros. only has one chance to
fill the order correctly.
c. Braybon should accept them because Meister Bros. has a right to cure even after the
contract deadline under these circumstances.
d. Braybon does not have to accept them because Meister Bros. failed to meet its UCC
requirement to deal in good faith.
When one party to a contract fails to perform as promised, it is called
a. litigation.
b. breach.
c. liquidated damages.
d. bad faith.
Which person held the belief that the circumstances into which we are born play an
important role in our personal outcome?
a. Immanuel Kant
b. John Stuart Mill
c. Milton Friedman
d. John Rawls
A refusal to deal
a. is a right to decide with whom to do or not to do business and cannot be legally
limited.
b. is a rule of reason violation of the Sherman Act and is illegal if it harms competition.
c. is an agreement in which a buyer refuses to purchase goods from a supplier unless the
supplier also purchases items from the buyer.
d. occurs when a manager refuses to recognize that price-fixing is a problem.
Mrs. O’Leary hired Jenna to sell her house in Michigan. She executed a power of
attorney in favor of Jenna authorizing her to do “anything and everything associated
with the sale of real estate, acting as a prudent person.” On May 30, Jenna finalized a
deal with Brandon for the purchase of the house. Brandon and Jenna signed the real
estate contract that day. Jenna learned the next day that Mrs. O’Leary had died May 29.
a. The contract is void since the agency terminated May 29.
b. The contract is valid since the agencys purpose was achieved before Jenna was
notified of Mrs. O’Leary’s death.
c. The contract is voidable at the option of Mrs. O’Leary’s estate.
d. The contract is voidable at the option of Brandon.
The SEC has enforcement powers, including the power to issue cease and desist orders,
to levy fines, and to confiscate profits from illegal transactions.
a. True
b. False
Under the UCC, the buyer is entitled to consequential damages if the seller could have
reasonably foreseen them.
a. True
b. False
What administrative agency regulates pesticides, insecticides, fungicides and
rodenticides?
a. The Food and Drug Administration
b. The Occupational Safety and Health Administration
c. The Environmental Protection Agency
d. The Nuclear Regulatory Commission
Coastal City Power Plant received its annual sulfur dioxide emission allowance.
Because it is using a low-sulfur fuel which burns cleaner than some fuels, it does not
need its entire allowance this year. In this instance, Coastal City Power
a. loses whatever unused allowance it has for the year.
b. may sell its leftover allowance to another company.
c. will not be regulated by an allowance next year since it was within its allowance for
this year.
d. will only avoid future regulation if it signs an agreement to continue using either
low-sulfur coal or natural gas in the future.
To be negotiable, a check must be in writing. Under the UCC, a check
a. must be written on standard size paper of 6″ × 5.”
b. must be written on an official bank form.
c. need not be on any official form or even on paper.
d. must be written on a pre-printed bank issued check.
Under the Uniform Commercial Code, an agreement modifying a contract
a. always requires consideration.
b. requires consideration only when the sale of goods is involved.
c. may not require consideration.
d. requires consideration only when one of the parties is incompetent.
Emily, an 11-year-old girl, wants to sign-up for a fashion newsletter and sweepstakes. In
order to do so, the website wants to know Emily’s name, address, phone number, and
e-mail address. Which of the following is correct?
a. Emily must have permission from her parents in order to furnish the information to
the website.
b. Under the Children’s Online Privacy Protection Act, the website cannot collect any of
this information from Emily, even if her parents give her permission.
c. Under Section 5 of the FTC Act, the website is protected from disciplinary action if
Emily provides the requested information.
d. The Electronic Communications Privacy Act will allow the website to collect Emily’s
information, but restricts the website from sharing the information with other firms.
To prevail under Section 11 of the 1933 Securities Act, a plaintiff must prove
a. the registration statement contained a material misstatement or omission; and the
plaintiff lost money.
b. the registration statement contained a material misstatement or omission; the auditor
acted knowingly or recklessly; and the plaintiff lost money.
c. the registration statement contained a material misstatement or omission; the auditor
intended to deceive; and the plaintiff lost money.
d. only that the registration statement contained a material misstatement or omission.
Which of the following types of property would be classified as “goods” under Article 2
of the UCC?
a. Cash in hand
b. A stock certificate
c. A computer
d. A membership to a health club
The first step a court takes in choosing a remedy is to determine
a. what interest it is trying to protect.
b. if the damages can be quantified with reasonable certainty.
c. if punitive damages should be awarded.
d. whether the injured party mitigated its damages.
When two creditors have a security interest in the same collateral, which party takes
priority?
a. The first unperfected party to attach
b. A party with an unperfected interest
c. A party with a perfected interest
d. The first perfected party to sue
Tyron purchased a vacant lot and entered into a contract with BZ Inc. to construct a
shopping center on the site. Douglas heard about this contract and built a restaurant on
an adjoining piece of property because of the planned shopping center. Tyron was
unable to raise the necessary capital and was unable to perform the contract with BZ,
Inc. Douglas sued Tyron for breach of contract as a third party beneficiary. Douglas will
probably
a. win as a third party creditor beneficiary.
b. win as a third party donee beneficiary.
c. lose as a third party incidental beneficiary.
d. lose as a third party creditor beneficiary.
Alberta is not employed by E-prise, Inc. but she is a member of E-prise’s board of
directors. Alberta is an outside director.
a. True
b. False
After her 18th birthday Lora may, by words or action, ratify a contract she made during
the previous year.
a. True
b. False
Barbara, a skilled welder, was hired at Mainco Enterprises for a welding position. She
was asked to sign a noncompete clause limiting future employment if she left Mainco.
A court would be very likely to enforce the noncompete clause unless the time or
geographic restriction is unreasonable.
a. True
b. False
Mary was suspicious of her neighbor, whom she thought was involved in selling illegal
drugs. One day Mary arrived at her apartment and saw a large paper sack tied up with
string in front of her neighbor’s door. She took the bundle into her apartment, opened it,
and discovered it was full of cocaine. She called the police and the neighbor was
arrested. The neighbor’s lawyer claimed the evidence had been illegally obtained since
no probable cause existed to justify opening up the paper bundle.
Identify and briefly discuss the management rights and duties of a partner.
Compare and contrast money laundering and embezzlement. Give an example of each.
Briefly discuss the meaning of bilateral, unilateral, executory, and executed contracts.
Describe legal capacity and discuss how it applies to minors entering into and
cancelling contracts.
Discuss how a corporation is terminated.
What are the advantages and disadvantages of using arbitration rather than litigation?
Mountain Ridge Bank has been named trustee for a $100,000 trust Fred and Martha
Betts established for “the living children of the grantors. List the requirements for
establishing a trust. Identify the primary obligation of the trustee and discuss the
fiduciary duty of the trustee.
Explain the role that power, importance and fascination play in contemporary American
law.
Southern Fuels Co. and Langham-Hill Petroleum, Inc. are both in the business of
buying and selling large quantities of petroleum products. In October, the parties
entered into a fixed price contract wherein Southern agreed to purchase 4.2 million
gallons of No.2 fuel oil at a specified price per gallon to be delivered in four monthly
installments. The contract included a force majeure clause. The first three monthly
shipments of oil were purchased by Southern as agreed. In January of the next year, the
price of oil in the world market collapsed as a result of Saudi Arabian attempts to regain
its share of the world oil market. Southern refused to purchase the last shipment under
the contract. Southern informed Langham-Hill that because the drop in world oil prices
was caused by Saudi Arabians who were “outside Southern’s control” that it was
invoking the force majeure clause. Langham-Hill sued for damages in the amount of
$306,075. What is a force majeure clause? Southern’s basic argument is that it can now
buy oil at a substantially lower price. Will Southern succeed on this basis?
What are some of the advantages for a business to incorporate in Delaware?
Rick and Allan want to start a union in the small factory where they work. Outline the
basic procedures they will need to follow to get a union recognized as the exclusive
bargaining unit for the company employees.
What is the difference between an unilateral mistake and a mutual mistake? Under what
circumstances will a court refuse to rescind a contract based on the defense of a
“mistake”?
What are the three main purposes of the federal Bankruptcy Code? How are these
purposes supported and fostered in the Code?
Define the common law. Discuss its conflicting goals and the doctrine created to serve
one of these goals.
Mark and Cynthia work for Bryson Supply Co. If the company files for Chapter 7
bankruptcy before paying their last month of wages and benefits, will they be able to
recover anything from the company?
Frank’s Furniture Company promised in a written agreement to purchase as much
walnut wood “as it desires” from Forestry Products, Inc. If Frank’s purchased walnut
wood from another source and Forestry Products sued, what is the likely result?
Andrew has been hired to do some work for Rossi Enterprises. What factors would a
court consider in determining if Andrew is an employee or an independent contractor?
Why does the designation matter?
Discuss the tenant’s and the landlord’s basic duties under a landlord-tenant relationship.