If the plaintiff brings a diversity of citizenship case in state court, it will remain there
and the defendant cannot remove the case to federal court.
In a deed of trust arrangement, the legal title to a real property is placed with a trustee.
Top-level domain names representing cultural identities are prohibited under the new
rules issued by the Internet Corporation for Assigned Names and Numbers.
A contract with an illegal object is not voidable.
The UCC-established rules for the formation of sales and lease contracts often differ
considerably from the common law.
A mistake made by both parties concerning a material fact that is important to the
subject matter of a contract is a mutual mistake of a material fact.
Judges of the special federal courts are appointed for a life term by the president of the
United States.
A purchaser does not acquire title to the goods purchased from a thief who has stolen
them.
The duty of care is a fiduciary duty.
A unanimous vote of the members of an LLC is required for appointing or removing a
manager.
An employer must not base an employment decision on an employee’s foreign accent in
spite of it being a hindrance to the employee’s job performance.
Principals are not bound by the authorized contracts of their independent contractors.
An oral order to stop payment of a check is invalid.
Ethics refers to a set of moral principles or values that governs the conduct of an
individual or a group.
If two or more secured parties claim an interest in the same collateral but neither has a
perfected claim, the first to attach has priority.
A certificate of deposit is not an order to pay.
Warranty liability is imposed whether or not the transferor signed the instrument.
Showing a statistical disparity between the percentages of protected class employees
and the percentage of the population that the protected class makes within the
surrounding community is enough to prove disparate-impact discrimination.
Title VII provides equal opportunity in employment for minority job applicants and
minority employees seeking promotion.
Negligence per se is a tort that permits a person to recover for emotional distress caused
by the defendant’s negligent conduct.
A member of a manager-managed LLC who is not a manager owes no fiduciary duty of
loyalty or care to the LLC or its other members.
A promissory note is evidence of the borrower’s promise to repay the debt.
Legal cause is defined as a point along a chain of events caused by a negligent party
after which this party is no longer legally responsible for the consequences of his or her
actions.
The customs and rules of the Law Merchant were absorbed into the common law.
EDGAR is the electronic data and record system of the Securities and Exchange
Commission.
An EU central bank, equivalent to the U.S. Federal Reserve Board, has been established
to set common monetary policy within the EU.
Today, in most states of the United States, the courts of law and equity have been
merged into one court.
The Securities Exchange Act of 1934 is a federal statute primarily designed to prevent
fraud in the subsequent trading of securities.
A negotiable instrument is considered canceled if it is destroyed or mutilated by
accident or by an unauthorized third party.
Litigation is a difficult, time-consuming, and costly process that must comply with
complex procedural rules.
The Statute of Frauds and the UCC require a written contract, whatever its form, to be
signed by the party against whom enforcement is sought.
The U.S. courts of appeals hear appeals from the district courts located in its circuit, as
well as from certain special courts and federal administrative agencies.
If there has been a breach of contract that cannot be adequately compensated through a
legal remedy, the breaching party is excused from nonperformance of its duties.
A(n) ________ is an order by the drawer to the drawee bank to pay a specified sum of
money from the drawer’s checking account to the named payee (or holder).
A) ordinary check
B) promissory note
C) bill of exchange
D) credit memo
Which of the following statements is true of an offer that was not communicated?
A) The offer stays valid for 30 days from the date of creation.
B) The offer cannot be accepted by the offeree if not communicated.
C) The offeree can claim an offer that was not communicated.
D) It is considered to be an implied term.
________ deeds are most often used when property is transferred between relatives by
gift or otherwise.
A) Quitclaim
B) Special warranty
C) General warranty
D) Grand
After careful deliberation, the U.S. Patent and Trademark Office (PTO) categorically
concluded that a proposed invention is novel, useful, and nonobvious. Which of the
following courses of action will the PTO undertake next as part of its evaluation
process?
A) Reject the patent application for the invention.
B) Approve the patent application for the invention.
C) Assign a patent number for the invention and affix the word “patent” on the patented
article.
D) Retract patent number for the invention and affix the word “patent” on the patented
article.
A shipment that is offered to a buyer as a replacement for the original shipment when
the original shipment cannot be filled is referred to as a(n) ________.
A) consideration
B) accommodation
C) surrogate
D) open delivery
Which of the following is a function of the state supreme courts?
A) conducting trials related to misdemeanor criminal law
B) hearing appeals from intermediate appellate state courts and certain trial courts
C) conducting trials related to felonies and civil disputes
D) reviewing the judgments and records of the lower courts and ratifying them
An offer to form a unilateral contract can be revoked ________.
A) before the offeree begins performance
B) after the offeree begins performance, but before the performance is completed
C) after completion of performance
D) only by the offeree
Which of the following statements is true about a special power of attorney?
A) It is an implied form of power of attorney.
B) It limits the agents powers to those enumerated in the agreement.
C) It allows the agent to act in any matters on the principal’s behalf.
D) It only allows certified lawyers to be agents.
A franchisor discloses a cautionary statement that reads, “Caution: These figures are
only estimates of what we think you may earn. There is no assurance you’ll do as well.
If you rely upon our figures, you must accept the risk of not doing so well.” This is an
instance of ________.
A) disclosure of earning projections based on actual data
B) disclosure of earning projections based on hypothetical data
C) non-disclosure of sales or earnings projections
D) fraudulent disclosure by the franchisor
Steve brings his watch to Knell Watches to be repaired. Knell Watches sells and repairs
watches. Steve entrusts his watch at Knells’ until it is repaired. The watch store repairs
the watch, but then sells it to Kevin, who buys the watch with a fraudulent check that
bounced. Kevin then resells the watch to his friend Jonathan, who is unaware of the
stolen nature of the watch. Who can legally claim ownership over the watch in court?
A) Jonathan
B) Steve
C) Knell Watches
D) Kevin
How are ethical rules established in Kantian ethics?
A) by a set of universal rules that are based on consistency and reversibility
B) by following principles that have been derived from holy books
C) by an individual’s feelings on what is right and wrong
D) by choosing the alternative that’s best for society as a whole
The three largest cola manufacturers in a country agree among themselves that each one
will sell the products only in certain predetermined geographical “territories.” This is an
example of ________.
A) accommodation
B) price fixing
C) market sharing
D) group boycott
What led to the creation of the chancery courts?
A) the insistence for a court system that emphasized legal procedure rather than the
merits of a case
B) the law courts’ inability to hear all the cases presented to them
C) the increase in overseas trade and proliferation of piracy
D) the unfair results and limited remedies provided by the law courts
Which of the following nations is one among the five permanent members of the UN
Security Council?
A) France
B) Japan
C) Germany
D) Italy
The act of a court to combine two or more separate lawsuits into one lawsuit is termed
as ________.
A) intervention
B) consolidation
C) class action
D) arbitration
Which of the following is a function of the U.S. Constitution?
A) create the three branches of federal government
B) promote a strong economy
C) establish the electoral college
D) permit the judicial review of laws
Ethan purchases a house for $250,000. He borrows $200,000 from StarCross Bank and
gives the bank a mortgage on the house for this amount. StarCross Bank fails to record
the mortgage. Ethan then applies to borrow $200,000 from Pentalon Bank. Pentalon
Bank reviews the real estate recordings and finds no mortgage recorded against the
property, so it lends Ethan $200,000. Pentalon Bank records its mortgage. Later, Ethan
defaults on both loans. In this case, which of the following would be true in case of the
foreclosure, if possible, on the collateral?
A) StarCross Bank can foreclose because they made the first loan.
B) Pentalon Bank can foreclose because they made a record of the mortgage.
C) The collateral has to be returned to Ethan since there is a violation of the recording
statute.
D) None of the parties involved can claim ownership of the collateral as it passes into
the public domain.
The injured party loses the right to sue if the lawsuit is brought after the ________
expires.
A) privity of contract
B) notice of assignment
C) future right
D) statute of limitations
Judges for federal courts are selected ________.
A) by election by the voters within the state where they preside
B) by the president, subject to confirmation by the Senate
C) by the U.S. Supreme Court justices
D) by the sitting federal judges within the same circuit
The ________ permits consumers to place fraud alerts on their credit files.
A) Fair Debt Collection Practices Act
B) Fair Credit Billing Act
C) Fair Credit Reporting Act
D) Fair and Accurate Credit Transactions Act
Which of the following federal agencies is empowered to enforce federal franchising
rules?
A) Federal Trade Commission (FTC)
B) Securities and Exchange Commission (SEC)
C) Federal Communications Commission (FCC)
D) Commodity Futures Trading Commission (CFTC)
Once a strike begins, the employer may continue operations by ________ to take the
place of the striking employees.
A) hiring replacement workers
B) temporarily demoting supervisors
C) acquiring crossover workers
D) acquiring wildcat strikers
The ________ is a federal statute that prohibits age discrimination practices against
employees who are 40 years and older.
A) FEPA
B) OWBPA
C) ADEA
D) EEOC
The geographical area served by each U.S. court of appeals is referred to as a
________.
A) district
B) county
C) range
D) circuit
Roundwell, Inc. purchases a manufacturing plant for $15 million, by paying $5 million
in cash as down payment, and borrowing the remaining $10 million from Home
Providence Bank. To secure the loan, Roundwell gives the plant as collateral to Home
Providence Bank. What kind of collateral arrangement is in place between Roundwell
Motors and Home Providence Bank?
A) a mortgage
B) a lease
C) an expropriation
D) an accommodation
To claim under disparate-treatment discrimination, the complainant must prove that he
or she ________.
A) is physically challenged
B) was rejected due to over-qualification
C) belongs to a Title VII protected class
D) is covered by Title I of the ADA
The new line of fairness-enhancing products marketed by Radiance has allegedly been
developed after using large-scale animal testing procedures. Insiders revealed that the
high levels of lead present in the cosmetics were in fact fatal for many of the animals.
Radiance is likely to be inspected for suspected criminal violations of the ________.
A) Food, Drug, and Cosmetic Act
B) Consumer Product Safety Act
C) Health Care Reform Act
D) Federal Trade Commission Act
Under the Sarbanes-Oxley Act, in order to audit a public company, ________.
A) the auditing committee must comprise only of public accountants
B) a public accounting firm must register with the PCAOB
C) all public accounting firms must assign an accountant who works closely with one
client over a long duration of time
D) all public companies must subject themselves to inspection and review by the board
twice a year
A contract under seal is considered a(n) ________.
A) formal contract
B) informal contract
C) void contract
D) quasi-contract
Which of the following federal statutes that regulate labor-management relationships
covers airline carriers?
A) Norris-LaGuardia Act
B) National Labor Relations Act
C) Railway Labor Act
D) Landrum-Griffin Act
A written modification to an oral contract is required if the oral modification to the
contract ________.
A) has been performed to an extent
B) is within the Statutes of Frauds
C) involves specially manufactured goods
D) is worth less than $500 in costs
Kicker’s, Inc. released a new kind of candy bar, but failed to mention on the packaging
that the bar contains gluten and nuts. Consequently, many consumers who are allergic
to these items suffered from severe allergic reactions on the consumption of these bars.
Which of the following can the injured customers cite as a defect in a strict liability
lawsuit against Kicker’s?
A) defect in design
B) defect in packaging
C) failure to warn
D) crashworthiness