After the plaintiff’s attorney has completed his or her questions, the defendant’s attorney
can question the witness. This is called direct examination.
Providing government subsidies to farmers, but not to those in other occupations, is a
violation of the ‘strict scrutiny” test of equal protection.
According to the theory of ethical relativism, if a person meets his or her own moral
standards in making a decision, no one can criticize him or her for it.
A state may legally impose a large tax on foreign goods sold within the state, if the tax
is designed to protect a state industry.
The function of an audit committee is for public company employees, such as executive
officers, to conduct an audit of the company.
If a person dies without a will and without relatives, the property is donated to a special
charitable organization set up for that purpose.
The exclusionary rule specifies those people and companies that are exempt from
certain procedural due process rights.
Under the ULLCA, the articles of organization of a limited liability company need not
set forth the address of the limited liability company’s initial office.
Shaping moral standards is not a function of the law.
Debt securities are also called variable income securities.
A destination contract requires the seller to ship the goods to the buyer via a common
carrier.
Most personal and business contracts are implied-in-fact contracts.
When there has been a valid assignment of rights, the assignee ‘stands in the shoes of”
the assignor.
Directors’ and officers’ liability insurance protects directors and officers from liability
for the actions they take on behalf of the corporation.
A promissory note is an unconditional written order by one party (the drawer) that
orders a second party (the drawee) to pay money to a third party (the payee).
If the jury cannot come to a unanimous decision about the defendant’s guilt one way or
the other, the jury s considered a ‘suspended jury.”
An example of an implied bailment is the finding and safeguarding of lost property.
Shareholders elect the corporate board of directors and vote on fundamental changes in
the corporation.
Federal patent law is exclusive; there are no state patent laws.
Title VII of the Civil Rights Act of 1964 applies to state and local governments and
their agencies.
An “area” franchise grants the franchisee the authority to sell franchises on behalf of the
franchisor.
Over-extensive covenants not to compete are nevertheless enforceable if they are
included in franchise agreements.
To prove a disparate impact discrimination case, the complainant must prove that (1.)
he or she belongs to a Title VII protected class, (2.) he or she applied for and was
qualified for the employment position, (3.) he or she was rejected despite this, and (4.)
the employer kept the position open and sought applications from persons with the
complainant’s qualifications.
With regard to defamation, “publication” requires that the defamatory statement be
published in a newspaper, magazine or book.
The executive branch of government is empowered to issue executive orders. This
power is derived from express delegation from the judicial branch and is implied from
English common law.
If a light-skinned member of a race refuses to hire a dark-skinned member of the same
race, this constitutes discrimination in violation of Title VII of the Civil Rights Act of
1964.
Social audits have recently become mandatory for publicly-traded corporations.
The Statute of Frauds does not allow the integration of documents.
A party can avoid a contract on the basis of insanity if that party has significantly lower
intelligence than the other party.
The seller’s recovery for necessaries of life sold to a minor is based on the equitable
doctrine of quasi-contract.
Frankie and Johnny were lovers. Frankie knows that Johnny is out of work and out of
money. She is surprised when Johnny presents her with an expensive gold watch and
when she asks how he could afford it, he winks and says that he “found it.” Earlier in
the day she had heard a radio report about a jewelry store robbery. She is not guilty of
receiving stolen goods because she has no actual knowledge that this particular watch
was stolen and perhaps Johnny had indeed “found it.”
Section 11 of the 1933 Act provides for criminal liability for damages when a
registration statement on its effective date misstates or omits a material fact.
Under the stakeholder interest theory of the social responsibility of business, a business
has obligations to both shareholders and employees, but not to others.
Unless otherwise agreed in noncarrier cases, the place of delivery is the seller’s or
lessor’s place of business.
The tort of misappropriation of the right to publicity does not apply in the case of public
figures, because public figures are presumed to have consented to public use of their
likeness.
The United States Department of Labor permits employers to pay less than the
minimum wage to students and apprentices.
Which of the following is true about misappropriation of trade secrets?
A) Any form of a valid patent is required in order to recover.
B) Any form of a valid trademark is required in order to recover.
C) Any form of both a valid trademark and valid patent are required in order to recover.
D) A valid trademark and patent registered with the Trade Secret Office in Washington,
D.C. are required in order to recover.
E) Neither a valid trademark nor a valid patent, regardless of form, is required in order
to recover.
The best statement of the test applied in determining if a defendant was the proximate
cause of the plaintiff’s injuries is:
A) Was it foreseeable to the plaintiff that the defendant would engage in this conduct?
B) Given this particular injury to the plaintiff, was it foreseeable that the defendant was
the cause?
C) Should it have been foreseeable to the defendant that defendant’s conduct could lead
to this kind of injury?
D) Was the injury foreseeable to the plaintiff prior to the injury’s occurrence?
E) Was it foreseeable to the plaintiff that this kind of injury could occur under the
particular conditions that the injury did occur?
If a federal statute does not expressly provide for exclusive jurisdiction, state and local
governments have ________ jurisdiction to regulate an area or activity.
A) long-arm
B) exclusive
C) concurrent
D) concordant
E) discordant
Which theory of social responsibility contends that a business owes only one
responsibility, and that is to produce the highest return for its shareholders?
A) moral minimum
B) maximize profits
C) stakeholder interest
D) corporate citizenship
E) corporate interest
Which of the following is a restrictive indorsement?
A) “(Signed) Michael R. Harmon”
B) “Pay to John Smith (signed) Michael R. Harmon”
C) “(Signed) Michael R. Harmon, Without Recourse”
D) “For Deposit Only, (signed) Michael R. Harmon”
E) “Payable in cash, (signed) Michael R. Harmon”
The most recent revision to UCC 2-201 requires that contracts for the sale of goods
costing ________ must be in writing to be enforceable. A state must adopt this
amendment for it to become effective; most states, however, have not enacted this
change.
A) $500 or more
B) $500 or less
C) $5,000 or more
D) $5,000 or less
E) $5,000, more or less
The individual protections in the Bill of Rights apply to the actions of:
A) the federal government only.
B) the state governments only.
C) the federal, state, and local governments.
D) the legislative and executive branches of the federal government, but not to state and
local governments.
E) the federal government and businesses that operate across state lines.
Which of the following best describes an “umbrella” insurance policy?
A) a policy that covers more than one type of risk
B) a policy that provides coverage beyond the dollar limits of the insured’s other
policies
C) a policy that covers damage caused exclusively by rain
D) a policy that covers risks to a business
E) a policy that combines life insurance and fire insurance protection
Antideficiency statutes usually apply only to ________ purchase money mortgages.
A) collateral
B) credit
C) first
D) second
E) conditional
Ray and Rayetta were on a camping vacation in Maine. They had reservations for
themselves and their car on a ferry from Bar Harbor, Maine to Nova Scotia. Because
they had their two mountain bikes mounted upright on a roof rack on their car, they had
to use a special line including motor homes, vans and other high vehicles. Upon loading
onto the ferry, all of these high profile vehicles used the rightmost of the six parallel
lanes on the auto deck of the ferry. When the drivers returned to their cars upon
reaching Nova Scotia, they were directed off the ferry by ferry employees. The driver of
the motor home immediately in front of their car had not returned by the time all of the
cars from other lanes had exited. After waiting for another 10 minutes, one of the ferry
employees motioned Ray and Rayetta to turn to the left into the next lane rather than
wait for the motor home to move. Ray and Rayetta followed the employee’s hand
signals, but unfortunately their bikes struck a low clearance pipe and the frames of both
bikes were destroyed. Discuss the issues and outcome of their lawsuit against the ferry
company.
Imprisonment is generally imposed to serve the following functions except:
A) protect society from the person imprisoned.
B) provide a means to rehabilitate the criminal.
C) allow victims to have a formalized process to meet and confront the criminal.
D) deter others from engaging in the same conduct.
E) inhibit personal retribution by the victim.
Nondisclosure is a misrepresentation if it would constitute a failure to act in ________.
A) abeyance
B) a reasonable period of time
C) good faith
D) mitigation
E) equity
The golden rule, “Do unto others as you would have them do unto you,” is most directly
reflected in which moral theory?
A) ethical relativism
B) utilitarianism
C) ethical fundamentalism
D) Kantian ethics
E) Rawls’s distributive justice theory
Which of the following does not need to be proven by a plaintiff who is claiming that
an implied-in-fact contract exists?
A) The plaintiff provided property or services to the defendant.
B) The plaintiff and defendant communicated with each other about the property or
services.
C) The plaintiff expected to be paid by the defendant for the property or services and
did not intend to provide the property or services gratuitously.
D) The defendant was given an opportunity to reject the property or services provided
by the plaintiff but failed to do so.
E) The plaintiff did not intend to provide the property or services gratuitously.
Co-ownership of a multiple-dwelling building where a corporation owns the building
and the residents own shares in the corporation is called:
A) a condominium.
B) a cooperatives.
C) a tenancy by corporation.
D) either a condominium or a cooperative.
E) a multiple tenancy
What is the legal significance of whether a delegation of duties is an assumption of
duties or a declaration of duties?
A) It determines whether the delegator remains liable for the performance of the duty.
B) It determines whether the duty is one that can be delegated.
C) It determines whether the delegator must pay the delegatee to perform the duty.
D) It determines whether the delegatee is liable to the obligee for failure to perform.
E) It determines whether notice of the delegation must be given to the obligee.
The United Nations was created by multilateral:
A) contract.
B) convention.
C) settlement.
D) union.
E) treaty.
In general, state anti-takeover statutes are:
A) constitutional.
B) constitutional, so long as it is possible to comply with both the state and federal
laws.
C) unconstitutional, because they violate the Commerce Clause.
D) unconstitutional, because they violate the Supremacy Clause.
E) unconstitutional, because they violate the First Amendment.
Donna is on vacation in 2010 in San Francisco. She is a professional photographer and
would like to take and sell some photographs of the Golden Gate Bridge. She wants her
photographs to be copyrighted, but knows that there are already copyrighted photos of
the Golden Gate Bridge taken from almost every angle. What must Donna do to obtain
copyright protection for the photo?
A) take the photo, apply for copyright protection, and there will be a search to be sure
her photo is not too similar to previously-copyrighted photos
B) take the photo, apply for copyright protection, and wait for the statutory period for
anyone to file an objection
C) take the photo and mark it as copyrighted with her name and the date
D) take the photo
E) Donna cannot get copyright protection, because her idea to take a photo of the
Golden Gate Bridge is not original.
No more than ________ non-accredited investors may purchase securities pursuant to a
“private placement” exemption.
A) fifteen
B) twenty-five
C) thirty-five
D) forty-five
E) There is no prescribed limit, as long as each investor qualifies.
For the written confirmation rule to apply, who must be a merchant?
A) the offeror
B) the offeree
C) both the offeror and the offeree
D) neither the offeror nor the offeree
E) the offeror, the offeree, and the assignee
Which of the following best describes horizontal division of markets?
A) an agreement by competitors to each only serve part of the market for their products
B) any action in which a company distributes some products in one geographic area,
and other products in another geographic area
C) any action in which a company charges different prices for a product, depending on
the geographic market
D) an agreement under which two companies agree to jointly market related products,
such as sport utility vehicles and outdoor camping equipment
E) the granting of exclusive geographic territory to salespersons
Big Green Company is considering introducing a new product to replace an existing
product. The new product would result in increased revenues, but slightly lower overall
profits because the product will cause injury to a few users and Big Green will
compensate persons who are injured. The introduction of this product would be the
proper decision under:
A) both the moral minimum theory and the profit maximization theory.
B) neither the moral minimum theory nor the profit maximization theory.
C) the moral minimum theory, but not under the profit maximization theory.
D) the profit maximization theory, but not under the moral minimum theory.
E) the moral maximum theory, but not under the moral minimum theory.
Which of the following types of damages could generally be simultaneously recovered
in the same breach of contract action?
A) nominal and liquidated
B) compensatory and liquidated
C) compensatory and consequential
D) consequential and liquidated
E) hypothetical and conjectural
Which of the following is/are a post-judgment collection remedy?
A) attachment
B) execution
C) garnishment
D) attachment and execution
E) execution and garnishment
A bailment without a fixed term is called a(n) ________.
A) constructive bailment
B) quasi-bailment
C) bailment in perpetuity
D) implied bailment
E) bailment at will
The form of business combination seldom used today because of the advantages of
other forms is the:
A) merger.
B) consolidation.
C) purchase of assets.
D) share exchange.
E) hostile takeover.
Which of the following is true regarding any duty of care owed by members of
“member- managed” and “manager-managed” limited liability companies?
A) Members of both “member-managed” limited liability companies and
“manager-managed” limited liability companies owe a duty of care not to engage in
grossly negligent conduct that would injure their companies.
B) Members of “member-managed” limited liability companies owe a duty of care not
to engage in grossly negligent conduct that would injure their companies, but members
of manager-managed limited liability companies owe no such duty, so long as the
members do not act as managers.
C) Members of “manager-managed” companies owe a duty of care not to engage in
grossly negligent conduct that would injure their companies, but members of
“member-managed” companies owe no such duty.
D) Neither members of “member-managed” nor “manager-managed” limited liability
companies owe a duty of care to their respective companies.
E) Any duty of care owed by members of “member-managed” and “manager-managed”
limited liability companies relates to a corresponding duty of loyalty.
The ________ primarily regulates the issue of securities by companies and other
businesses.
A) Securities Act of 1933
B) Securities Act of 1934
C) Securities Exchange Act of 1933
D) Securities Exchange Act of 1934
E) Securities Exchange Act of 1935
Under ERISA rules, no more than ________ percent of the pension fund’s assets can be
invested in the securities of the sponsoring employer.
A) five (5)
B) eight (8)
C) ten (10)
D) twelve (12)
E) fifteen (15)
Decisions of a state inferior trial court are generally appealed to:
A) the state general trial court.
B) the state intermediate appellate court.
C) either the state general trial court or the state intermediate appellate court.
D) the federal District Court.
E) the federal Court of Appeals.
Classy Antique Motels is a chain of older motels most of which were originally built in
the 1950s and 1960s. The idea is to distinguish these older motels from the many older
motels that have become “run-down” or ‘seedy.” Each motel retains it original name and
sign, but has an additional sign that says, “Member of Classy Antique Motels.” One of
the chain’s slogans is, “Stay at original motels, often with the original owners.” The
franchisor provides group marketing and management assistance in exchange for an
initial fee to become part of the chain, and a continuing fee based on gross revenues.
One of the franchisee motel owners allowed the conditions at his motel to deteriorate to
the point that it is now a popular location for illicit drug transactions. A guest was
injured from gunfire arising out of a drug deal at the motel. Can the guest recover from
the franchisor?
A) yes, because franchisors are generally liable for the torts of franchisees
B) yes, because each motel is an actual agent of the franchisor
C) yes, because the motel is the apparent agent of the franchisor
D) no, because the conduct in this situation does not create an agency arrangement
E) no, because franchisors cannot be held liable for a franchisee’s tort, unless the
franchisor actively participated in the tort
What is the difference between proposed additions and the “Battle of the Forms”
doctrine?
A) Proposed additions arise between merchants and non-merchants, but Battle of the
Forms” arises between merchants.
B) Proposed additions arise between only merchants and “Battle of the Forms” only
arises between non-merchants.
C) Proposed additions and “Battle of the Forms” arise between both merchants and
non-merchants.
D) A contract is made when proposed additions are made, but not when there is a
“Battle of the Forms.”
E) There is no difference between proposed additions and the “Battle of the Forms”
doctrine.
Another term for consequential damages is:
A) special damages.
B) remedial damages.
C) liquidated damages.
D) nominal damages.
E) distinguishable damages.