Which of the following doctrines often proves helpful to plaintiffs who bring a product
liability lawsuit alleging negligence?
A. Res judicata
B. Res ipsa loquitur
C. Caveat venditor
D. Caveat emptor
In the absence of a specific provision in a general partnership agreement, partnership
losses will be allocated:
A. equally among the partners irrespective of the allocation of partnership profits.
B. in the same proportion that profits are shared.
C. in proportion to the partners’ capital contributions.
D. in proportion to the partners’ capital contributions and outstanding loan balances.
A limited partner in a limited partnership:
A. provides capital and shares profits.
B. is a fiduciary of the business.
C. has management powers.
D. possesses complete liability for its obligations.
What section of the UCC covers how to deal with conflicting and ambiguous terms in a
check?
A. 3-114
B. 3-102
C. 2-104
D. 9-331
Mr. White is a doctor and purchases insurance on him professionally making a mistake.
This form of insurance is called?
A. Real property insurance
B. Professional insurance (malpractice)
C. Personal property insurance
D. Insurance rider
Predatory Co., a large company entering a new geographic market, decided to eliminate
its smaller rivals in the new market by selling below cost in that market (but not
elsewhere) until the rivals were forced out of business. This type of price discrimination
is classified as:
A. super-tertiary level discrimination.
B. tertiary level discrimination.
C. primary level discrimination.
D. secondary level discrimination.
Which of the following is a characteristic of legal realists?
A. They define law as that which is codified in the books.
B. They believe in the use of discretionary standards.
C. They believe that the rules in the books—really affect people’s lives.
D. They believe that “law is law, just or not.”
Noncompete clauses in contracts:
A. are never enforced because they violate anti-trust laws.
B. are never enforced because they are unethical.
C. are always enforced under the doctrine of “freedom of contract.”
D. are enforced if found to be reasonable.
Congress enacted the _____ after congressional investigations during the 1950s
uncovered corruption in internal union affairs and revealed that the internal procedures
of many unions were undemocratic.
A. Norris-LaGuardia Act
B. Landrum-Griffin Act
C. Taft-Hartley Act
D. Wagner Act
How does the presence of facts that constitute promissory estoppel make a difference in
the law of offers and revocations?
A. It makes an option enforceable, even without consideration.
B. It does away with the requirement that rejections and revocations be communicated.
C. It makes an offer automatically revocable at any time.
D. It does away with the requirement that offers be definite.
Which of the following is true of contracts involving people suffering from mental
illnesses?
A. Contracts of people suffering from a mental defect at the time of contracting are
usually considered to be enforceable.
B. A person disaffirming on the ground of mental impairment need not return any
consideration given by the other party.
C. A person disaffirming on the ground of mental impairment is liable for the
reasonable value of necessaries.
D. A person incapacitated by mental impairments cannot ratify a contract if he/she
regains his capacity.
If a petition for bankruptcy is filed by a health care business:
A. the creditors bear the financial responsibility for the disposal of patient records
where there are insufficient funds to continue to store them.
B. the trustee is instructed to transfer patients in a health care business that is in the
process of being closed to an appropriate health care business.
C. the necessary costs of closing a health care business is borne by the adjudicating
court.
D. the automatic stay provisions apply to actions by the Secretary of Health and Human
Services to exclude the debtor from participating in federal health care programs.
In which of the following situations is a court is most likely to refuse to enforce a
noncompetition clause?
A. The clause is not ratified by the employer.
B. The employment contract which contains the clause is an implied-in-fact contract.
C. The clause restricts employees from engaging in a “common calling.”
D. The employment contract which contains the clause is a quasi-contract.
A(n) _____ is a limited partnership whose partners have elected limited liability status
for all the partners.
A. corporation
B. LLLP
C. S Corporation
D. LLP
A trademark is considered to be abandoned when:
A. the owner fails to use it.
B. it acquires a generic meaning.
C. it has been obtained by fraud.
D. it is suggestive or arbitrary.
Which of the following factors will be most important in determining if an express
warranty has been created?
A. Whether the statements made by the seller were in writing.
B. Whether the seller intended to create a warranty.
C. Whether the promises became part of the basis of the bargain.
D. Whether the sale was made by a merchant in the regular course of business.
When the offeror, as the master of the offer, specifies the precise time, place, and
manner in which acceptance must be communicated, it is termed as _____.
A. documentation
B. authentication
C. stipulation
D. notification
The Equal Pay Act (EPA) prohibits discrimination in pay based on gender.
_____ to land may be defined as any unauthorized or unprivileged intentional intrusion
upon another’s real property.
A. Trespass
B. Nuisance
C. Conversion
D. Battery
Salmond signs a note for the purpose of lending credit to John. Salmond also makes his
father Richard sign the note because of his shaky financial condition. This indicates that
Richard has signed the note in the capacity of a(n):
A. drawer.
B. accommodation party.
C. drawee.
D. indorser.
What is the term for a voluntary transfer of property to a donee from the donor?
A. Conveyance
B. Trust
C. Gift
D. Title
Passive investors follow the _____ rule: Either support management or sell the shares.
A. co-determination
B. vicarious liability
C. Wall Street
D. business judgment
John owns a parcel of land on which he wants to build an apartment building. However,
John’s land is currently a swamp; he wants to drain it. John should apply for a permit to
drain the swamp from:
A. the Army Corps of Engineers.
B. the Wetland Preservation Board.
C. the Environmental Protection Agency.
D. the National Institute of Health.
Patricia has requested extra payment because abnormal subsurface rock formations
made excavation on the construction site far more costly and time-consuming than
could have been reasonably expected. The court will:
A. enforce such modifications in contract.
B. allow the party to rescind such a contract.
C. consider the contract voidable.
D. consider the contract unenforceable.
Dart Corp. dismissed Ritz as its general sales agent. Dart notified all of Ritz’s known
customers by letter. Bing Corp., a retail outlet located outside of Ritz’s previously
assigned sales territory, had never dealt with Ritz. However, Bing knew of Ritz as a
result of various business contacts. After his dismissal, Ritz sold Bing goods, to be
delivered by Dart, and received from Bing a cash deposit for 20 percent of the purchase
price. It was not unusual for an agent in Ritz’s previous position to receive cash
deposits. In an action by Bing against Dart on the sales contract, which of the following
is true?
A. Bing will win the lawsuit because Dart’s notice was inadequate to terminate Ritz’s
apparent authority.
B. Bing will win the lawsuit because Dart, the principal, is an insurer of Ritz’s, the
agent’s acts.
C. Bing will lose the lawsuit, because Ritz lacked any express or implied authority to
make the contract.
D. Bing will lose the lawsuit because Bing was negligent while making a contract with
Ritz.
_____ protects the rights of those who are less privileged in society.
A. Rights theory
B. Justice theory
C. Rule utilitarianism theory
D. Profit maximization theory
April Roberts ordered hundred 19-inch color television sets from Carl Soans and
requested for a prompt shipment of the goods. Carl promptly shipped fifty 21-inch color
television sets and fifty 19-inch color television sets without informing April that the
shipment of nonconforming television sets was an accommodation. Which of the
following is true?
A. There is no acceptance because Carl’s shipment materially differed from the terms of
the offer.
B. There is an acceptance and April is bound to pay the reasonable value of the fifty
21-inch television sets she did not ask for.
C. There is an acceptance but Carl has breached the contract by shipping
nonconforming television sets.
D. There is a new offer that Carl has made by sending the nonconforming goods which
April can accept or reject.
The common law placed the risk of loss on _____ at the time of the loss.
A. the party which was the seller
B. the party which was the buyer
C. the party that had technical title
D. the party which was the carrier
Which of the following is an accurate statement about vertical mergers?
A. Vertical mergers take place between formerly competing firms.
B. Vertical mergers do not directly result in an increase in concentration.
C. Vertical mergers constitute a per se violation of Clayton Act Section 7.
D. Vertical mergers have minimal effects on economic efficiencies.
Ashburn had a big ranch in Georgia. One day Pamela stated, “I’d like to buy your sheep
for $50. They’re so cute!” to which Ashburn immediately replied, “Sure. That’s a deal!”
This cannot be enforced as a contract because of lack of:
A. consideration.
B. definiteness.
C. communication to offeree.
D. present intent to contract.
Henry and Barbara were sharing a Kool-Aid, and they were alarmed to find what
seemed to be a plastic object floating inside the drink. Distressed and nauseated, they
rushed to the hospital. On a doctor’s suggestion, they underwent several tests. In the
meantime, in an action for torts, Kool-Aid analysts proved that the object found in the
bottle was indeed a sugar mould. Under the given circumstances, will Henry and
Barbara get relief for emotional distress in an action for tort, when no damage has
occurred?
A. No. Since torts remedy accrues to parties as per the impact rule which states that tort
remedy flows from injuries sustained in an impact. There was no injury in this case.
B. No. They should have checked the cold drink before consuming it; the company is
hence, not liable.
C. Yes. Damages for emotional distress should be recoverable even in the absence of a
physical injury-producing impact.
D. Yes. The company is liable to its consumers because the impact rule does not apply
in such a case.
Which ethical theory justifies the protection of a neo-Nazi’s right to hateful speech,
even though the cost of such speech includes damage to relations between ethnic
groups, which may far outweigh any benefits the society receives from the speech?
A. Rights theory
B. Teleological theory
C. Profit maximization theory
D. Utilitarian theory
The Equal Credit Opportunity Act’s (ECOA) provisions apply only in the consumer
credit setting but not in the commercial credit context.