The Statute of Limitation provision of the UCC holds that for contracts for the sale of
goods (in the absence of contractual agreement to the contrary) the period of time
within which a lawsuit must be commenced is:
A. one year.
B. two years.
C. three years.
D. four years.
According to the MBCA, who amongst the following is liable for a defective
corporation’s contracts and torts?
A. A shareholder manager who knows that the corporation does not exist.
B. A passive shareholder who knows that the corporation does not exist.
C. A nonshareholder manager who believes that the corporation exists.
D. A member of the board of directors who believes that the corporation exists.
Which of the following ends the right to rescind a voidable contract?
A. Acquiescence
B. Ratification
C. Concealment
D. Assertion
A contract that involves obligations on the part of manufacturers and distributors is
called a(n):
A. requirements contract.
B. composition agreement.
C. output contract.
D. exclusive dealing contract.
Debbie gives Barry a Cartier watch as a gift for their engagement. A week later, Debbie
suddenly leaves the country, leaving Barry a note that she cannot marry him. Assume
that Debbie had no good reason to break off the engagement. Under the traditional rule:
A. Debbie will be able to recover the watch because she does not intend Barry to keep
the gift.
B. Debbie will be able to recover the watch because the gift was made on the implied
condition of marriage.
C. Debbie cannot recover the watch, because she is in a foreign country.
D. Debbie cannot recover the watch because it is a valid gift delivered to Barry.
The doctrine of respondeat superior means:
A. “let the buyer be aware.”
B. “you may have the body.”
C. “of private right.”
D. “let the master answer.”
Bart agreed to deliver fruits worth $1,000 to a retail store. Bart and the store owner
agree that if delivery is not made on time, Bart will pay the store some amount as
liquidated damages, for the lost sales. Which of the following amounts would most
likely be considered penal if they settle for it?
A. $200
B. $25,000
C. $10
D. $650
In the form of alternative dispute resolution (ADR) called court-annexed arbitration:
A. a neutral third party is called in to mediate.
B. courts decide on certain types of criminal lawsuits.
C. the losing party has the right to a regular trial.
D. civil lawsuits are sent to the Supreme Court for a hearing.
Which of the following is most likely to involve liability for violating the so-called
“right of publicity”? In each case, assume that the plaintiff’s name, likeness, work, etc.
was appropriated without the plaintiff’s permission.
A. Using the work of an unknown artist to illustrate the T-shirts one makes and sells.
B. Using the picture of the owner to sell beer at a pub.
C. Using a picture of a race car to sell chewing tobacco.
D. Using Madonna’s name to sell women’s apparel.
Bob, an attorney, purchased licensed software from Bill Able Inc. to prepare his clients’
invoices online. The shrinkwrap packaging for the program disks and the software
manuals contained a limitations of remedies clause which limited the buyer’s remedies
to the $50.00 purchase price of the software. Bob later discovered that his invoices for
the past year were too low due to a malfunction in the software, costing him over
$10,000 in lost revenue. Bob sues Bill Able Inc. for breach of warranty. What is the
likely result?
A. Bob wins because he has equal bargaining power with Bill Able, Inc.
B. Bob wins because such shrinkwrap limitations of remedies clauses are generally
unenforceable.
C. Bob loses because the court will likely view the limitations of remedies clause as
conscionable and enforceable.
D. Bob loses because the disclaimer is effective.
Statements made in an advertisement are what kind of warranty?
A. Express
B. Implied
C. Corporate
D. Fiduciary
Tom is the sole director and largest shareholder of Newage Corporation, a close
corporation. Jim and Janice, the two other shareholders of Newage Corporation, allege
that though Tom is paying himself a large salary, no dividend has been paid in the last
three years. Tom also refuses to hire them as employees of the corporation. Jim and
Janice are complaining of:
A. oppression.
B. novation.
C. right of appraisal.
D. maltreatment.
What Chapter of the bankruptcy code is liquidation for businesses?
A. Chapter 12
B. Chapter 11
C. Chapter 15
D. Chapter 7
A _____ serves as constructive notice to the world that the creditor claims an interest in
collateral that belongs to a certain named debtor.
A. model audit
B. financial report
C. financing statement
D. continuation statement
The 1970 Clean Air Act required the EPA to regulate the emission of toxic air
pollutants. Which of the following toxic air pollutants did the EPA set standards for
under this authority?
A. Toluene
B. Phenol
C. Asbestos
D. Selenium
Which of the following characterizes natural law?
A. It accepts the need for both good and bad laws.
B. It reads constitutional law narrowly.
C. It rejects the separation of law and morality.
D. It opposes the view that law should be guided by a “higher reason.”
Which of the following is true about indirect purchasers?
A. Indirect purchasers’ recovery from defendants precludes recovery by direct
purchasers.
B. The Supreme Court has held that indirect purchasers lack standing to sue for antitrust
violations.
C. The Supreme Court has held that indirect purchasers can recover only their actual
losses.
D. Indirect purchasers do not have the standing to sue under any of the state antitrust
statutes.
Jill takes a loan from a bank. She signs a standard-form note prepared by the bank. The
note obligates Jill to pay to the bank the amount of the loan, plus interest. Jill is the:
A. maker of the note.
B. bearer of the note.
C. drawee of the note.
D. payee of the note.
Which of the following ethical theories illustrates that acting in one’s selfish interests
can ultimately result in ethical behavior and benefits to society?
A. Rights theory
B. Profit maximization theory
C. Kantian theory
D. Justice theory
John owned a parcel of land on which he wanted to build an apartment building.
However, his land is a swamp and he could not get a permit from the Army Corps of
Engineers to drain the swamp. He had to buy a neighboring piece of land and build the
apartment on that. Since he has been effectively deprived of being able to make any
economically viable use of his property, his attorney suggests that he may be able to
pursue a claim for regulatory taking and receive compensation from the government for
the fair market value of the interest of his land. What is the basis for such a claim?
A. The Marine Protection, Research, and Sanctuaries Act
B. The Fourth Amendment
C. The Clean Water Act
D. The Fifth Amendment
Which of the following attacks the speaker for his argument, not his reasoning?
A. Argumentum ad hominem
B. Argumentum from authority
C. Argumentum as populism
D. Argumentum ad vacuum
The Code empowers courts to deal fairly with a contract that is grossly unfair or
one-sided by recognizing the concept of:
A. good faith.
B. unconscionable contract.
C. quasi-contract.
D. implied contract.
Jada owned an insurance policy in her life, on which she paid all the premiums. Shaun
was named the beneficiary. Jada died and the insurance company refused to pay the
insurance proceeds to Shaun. An action by Shaun against the insurance company for the
insurance proceeds will be:
A. successful because Shaun is a third-party donee beneficiary.
B. successful because Shaun is a proper assignee of Jada’s rights.
C. unsuccessful because Shaun is not the owner of the policy.
D. unsuccessful because Shaun did not pay any of the premiums.
Which of the following is true of an agent who has the authority to appoint a subagent?
A. An agent becomes a principal with respect to the subagent.
B. An agent is able to appoint a subagent without the principal’s knowledge.
C. An agent has the authority to appoint a subagent when the situation involves a
nondelegable duty.
D. An agent has the authority to appoint a subagent when the co-agent demands such an
appointment.
The person who receives the insurance proceeds in a life insurance is the:
A. insurer.
B. insured.
C. trustee.
D. beneficiary.
In which of the following is the implied warranty of habitability applicable?
A. Both residential and commercial property leases
B. Only residential property leases
C. Only commercial property leases
D. Only agricultural property leases
The formula for determining the minimum number of shares required to elect a desired
number of directors under cumulative voting is _____ where X = number of shares
needed to elect the desired number of directors, S = total number of shares voting at the
shareholders’ meeting, R = number of director representatives desired, and D = total
number of directors to be elected at the meeting.
A. X – 1 = (S × R)/(D + 1)
B. X = (S × R)/(D – 1)
C. X – 1 = (S × R)/(D – 1)
D. X = (S × R)/(D + 1)
Generally, a buyer in the ordinary course of business can take a property free from any
security interest. Which of the following buyer is an exception?
A. A person who is a consumer of durable goods.
B. A person buying inventories from a wholesaler.
C. A person buying farm products from a farmer.
D. A person who is a consumer of perishable goods.
Which of the following is true of the National Environmental Policy Act (NEPA)?
A. It does not apply to businesses in states that have their own state laws in place.
B. Citizens can force federal agencies to comply with the NEPA.
C. It requires that state governments ensure that all entities within state borders submit
environmental impact statements.
D. The NEPA requires that all businesses file an environmental impact statement before
a project is undertaken.
What Uniform Commercial Code (UCC) section indicates that it is presumed that an
assignment includes a delegation under contract law?
A. 2-210
B. 1-104
C. 7-344
D. 2-114
Menzes is the Treasurer of ABC Corp. As such, he is authorized to sign checks for the
corporation. A supplier bills ABC for a legitimate obligation. Menzes makes out a check
to the supplier and signs it “ABC Corp., by Menzes, Treasurer.” Who is liable on this
check?
A. ABC only.
B. Menzes only.
C. ABC and Menzes.
D. Neither ABC nor Menzes.
Roe promises to build a house for Crown for which, Crown agrees to pay him $10,000
when the house is complete. This example is related to the concept of:
A. express condition.
B. constructive condition.
C. subsequent condition.
D. implied condition.
