Jim was a mechanic. One day when he attempted to weld a car’s gasoline tank, it
exploded and he was hurt. He filed to collect workers’ compensation. His employer
resisted on grounds that Jim had been negligent and had also violated the express
regulations of the company when he attempted to weld a gasoline tank. Which
statement is correct?
a. Jim cannot recover if it is shown that his negligent conduct caused the explosion.
b. Jim cannot recover if it is shown that he violated the express regulations of his
employer.
c. Workers’ compensation doesn’t apply in situations like this.
d. Jim can recover even if he was negligent and violated the employer’s rules.
A minor can undo a contract that has already been completed by having a court
_______ the contract to formally cancel it.
a. affirm
b. rescind
c. disaffirm
d. ratify
Franchise fees can be costly, but they are usually payable over a number of years, after
profits are generated from the business.
a. True
b. False
Wally owns 200 acres of land. Wally offers to sell the land to Robert for $1,500 per
acre. Robert replies that he does not need 200 acres of land but would like to buy 40
acres at $1,500 per acre. Wally agrees to sell but does not identify which 40 acres.
Later, Wally refuses to sell any land to Robert. What is the result?
a. Robert wins; this is an enforceable contract with complete and definite terms.
b. Robert wins; the UCC will decide which 40 acres are to be sold.
c. Wally wins; the original offer was not intended to be an offer but merely an invitation
to negotiate.
d. Wally wins; this agreement is too indefinite since it does not identify which 40 acres
are to be sold.
In Anglo-Saxon society, men were put into groups of ten, known as a “tithing and were
individually held responsible for any injury caused by any member of the group. This is
the forerunner of the idea of business partnerships.
a. True
b. False
If a seller includes an express warranty in the written sales contract, any disclaimer is
invalid.
a. True
b. False
Tort issues are firmly ingrained in law and do not change.
a. True
b. False
An engagement letter is a written contract
a. between an accountant and client.
b. in anticipation of marriage.
c. between a corporation and the AICPA.
d. intended to create a fiduciary duty of an accountant to his client.
Law governing relations among governments and international organizations is referred
to as _______, while law that applies to private parties in international commercial and
legal transactions is referred to as _______.
a. private international law; public international law
b. public international law; private international law
c. sovereign international law; statutory international law
d. statutory international law; sovereign international law
If Crosby and Dash are in disagreement as to the exact amount of money that Crosby
owes Dash, then they may choose to form a new agreement at a set amount. If they both
perform the new agreement, their conduct would be an example of
a. a rescission.
b. a contract modification.
c. a preexisting duty.
d. an accord and satisfaction.
You go to a theater to see a play one Saturday evening. You have
a. purchased an interest called a “profit.
b. an easement by reservation.
c. a license to enter the theater.
d. no property right in the theater just by purchasing the ticket for the play.
Limited liability is a major advantage of a partnership as compared to a corporation.
a. True
b. False
At issue inVerizon v. Federal Communications Commissionwas the Open Internet Order
and the treatment of ISPs as common carriers.
a. True
b. False
Islamic law, the legal system influenced by the religion of Islam, is referred to as
shari’a.
a. True
b. False
An appeals court can rule that a trial court’s ultimate ruling was correct even if the trial
court made a harmless error during the trial.
a. True
b. False
In incorporating E-prise, the promoter gave an incorrect ZIP Code for the registered
agent. All of the other requirements for incorporation were met. E-prise is a(n)
a. de jure corporation.
b. de facto corporation.
c. corporation by estoppel.
d. indemnified corporation.
With non-negotiable commercial paper, a transferees rights are conditional.
a. True
b. False
Nelson writes Leah a check for mowing his lawn. Leah deposits the check in her bank,
but it is not paid by Nelsons bank. Leah calls Nelson to notify him that her bank
returned his check to her unpaid. Leahs notice of the dishonor is insufficient; she must
provide written notice.
a. True
b. False
Utilitarian ethics holds that decisions should be made on the basis of practicality, and
whatever action is most convenient should be favored.
a. True
b. False
Which of the following statements concerning a Chapter 11 reorganization plan is true?
a. A reorganization plan will be confirmed by the court only if a majority of each class
of creditors votes in favor of the plan.
b. A reorganization plan can be confirmed by the court over objections of some
creditors if the court determines that the plan is feasible and fair.
c. Only the bankruptcy court has the authority to confirm or reject the reorganization
plan. Creditors do not have a right to vote on the plan.
d. A reorganization plan binds only the debtor and not the creditors.
Melody is a recent graduate of State Law School. She lands an impressive employment
contract with the firm of Dewey, Cheathem, and Howe, Attorneys at Law, on the stated
provision that she pass the upcoming bar exam. This provision in the employment
agreement is a(n)
a. condition precedent.
b. condition subsequent.
c. implied condition.
d. concurrent condition.
Entrapment can be a valid defense to a criminal act.
a. True
b. False
When does a criminal defendant have the right to a trial by jury?
a. in all cases regardless of the circumstances
b. only for cases requiring the defendant to pay restitution
c. only when a bench trial is not available
d. when faced with a charge that could result in a sentence of six months or longer
What is the Justice Department’s current position relative to reciprocal dealing
agreements?
a. The Justice Department actively enforces this illegal activity.
b. The Justice Department is only concerned about these agreements if a large, national
company is involved.
c. The Justice Department only gets involved if such an agreement will foreclose a
significant share of the market and if the participants agreed not to buy from other
competitors.
d. The Justice Department only gets involved if such an agreement is “decidedly
uneven” meaning that one company benefits significantly more than the other.
Two parties are debating whether or not to put their contract into writing. In making
their determination, which of the following factors would normally NOT be
considered?
a. whether or not the agreement falls within the Statute of Frauds
b. the complexity of the agreement
c. the length of time covered by the agreement
d. the relationship between the two parties
The primary source of federal power to regulate business is the
a. Supremacy Clause.
b. Commerce Clause.
c. Contract Clause.
d. Privilege and Immunities Clause.
NikeShoes.com produces a running shoe that it sells in the United States. The shoe has
a check mark on the side, uses inferior materials and is made using child labor. Nike,
Inc. sues NikeShoes for trademark infringement under the Federal Trademark Dilution
Act of 1995 What is likely to be the grounds for this suit?
a. NikeShoes is diluting the value of Nike, Inc.’s product and tarnishing its image.
b. NikeShoes is not paying Nike, Inc. a percentage of its sales.
c. Nike, Inc. does not want its products compared to competitors.
d. NikeShoes should have not been awarded a trademark for the check mark on its
shoes.
An agency will be terminated in all but which one of the following situations?
a. The principal and agent agree on an agency relationship to sell a boat, and the boat is
sold.
b. A travel agent files for individual bankruptcy under Chapter 13.
c. The agent violates his duty of loyalty.
d. An electrician, an agent of a contractor, has her license revoked.
Char-Glo Industries contracted with Evergreen Lawn Service to mow and trim the
companys lawn. In the contract, Char-Glo included a clause prohibiting Evergreen from
delegating its duties. Courts will ordinarily not enforce such a clause.
a. True
b. False
You cannot be held liable for the actions of your agents if the agents are violating your
instructions.
a. True
b. False
Congress can create a statute on any topic at all.
a. True
b. False
In order for a copyright holder to collect money damages from a person who used
copyrighted material, it must be proven that
a. the infringement was intentional.
b. the copyright holder sustained more than $500 in actual damages.
c. the copyrighted material contained the copyright symbol, name of the copyright
holder, and the year of copyright.
d. the infringer actually copied the work.
After being served with a summons and a copy of the complaint, a defendant usually
files a pleading known as an answer, briefly replying to each allegation in the
complaint.
a. True
b. False
In negotiating the purchase of a vehicle, the sales representative told Karla, “I guarantee
that you will be personally satisfied with this car.” The guarantee was written on the
contract when Karla purchased the car. If a controversy arises over Karla’s satisfaction,
the court will apply a subjective standard, which means Karla’s judgment must be
reasonable.
a. True
b. False
Explain the overall purposes of the Sherman Antitrust Act, the Clayton Act, and the
Robinson-Patman Act. How do each of these Acts relate to each other?
What is the difference between incidental damages and consequential damages?
Briefly discuss how an offer can be accepted. Include in your answer the application of
the mirror image rule.
Explain the difference between attachment and perfection.
Identify the possible remedies for a seller when the buyer breaches a contract.
James Packard, a lawyer representing Robert Marino, received a check for $16,000 in
settlement of Roberts case. Instead of turning over the money to Robert or putting it
into a trust fund for him, James forged Roberts indorsement and deposited the money
into his own account without notifying Robert. Discuss the claims the parties have.
Discuss the importance of the UCC to the law of sales. Include who created the UCC,
how it became law, and the stated purposes of the statute.
Loraine is a shareholder of Taley Corp. She would like to inspect and copy the
company’s minute book, accounting records, and shareholder lists. Under what
circumstances is Loraine allowed to inspect or copy corporate records?
Derrick buys a CD, but after listening to it, decides he doesnt like the music. May he
legally sell the CD to someone else? If he thinks his cousin would enjoy the music, may
he legally copy the CD for her?
Discuss the advantages and disadvantages of using IFRS.
Select the correct answer:
a. Rosie rents a locker at the airport, and she puts a bag in the locker. Rosie keeps the
locker key. In this case, the bag has been delivered to and accepted by the airport. The
airport is a bailee.
b. Hill rents a boat to Dan. The boat is located at a lake 30 miles away. Hill gives Dan
keys to the boat. Dan drives to the lake and takes possession of the boat. In this case,
the boat has been delivered to and accepted by Dan, and Dan is a bailee.
c. Unknown to Lon, Jeff left a bike at Lon’s house. Lon has not found the bike and he is
not likely to find it because Jeff left the bike under the front porch. In this case, Lon is a
bailee of the bike.
d. Ken parked a car in a self-service lot and Ken kept the keys. The parking lot is a
bailee.
Identify four factors courts consider in deciding the validity of commercial
impracticability and frustration of purpose claims.
Discuss the major provisions of the Credit CARD Act.
Explain the difference between civil law and criminal law.
Shelby hired Evan to drill a well on her property for $3,000. They both thought the soil
and subsoil were normal for the area, but after he started drilling, Evan found a layer of
rock that required him to purchase a special drill and required an extra ten hours of
work. Evan demanded an extra $1,000 to complete the job. Discuss whether Shelby is
liable for the additional $1,000.
Ramiro is dissociated from the partnership he helped form ten years ago. If his partners
want to continue the business, what must they do? Does it make any difference if the
dissociation was wrongful?
Outline the focused, multi-step process recommended for reading a contract before you
agree to it.
Define these terms: usage of trade, course of dealing, and course of performance and
identify how they are used according to the UCC.