Betty wants to hire a secretary who is “mature.” In particular, she wants to hire a
woman with experience and whose children are grown (so she will not have to be
staying home with sick children, etc.). She also wants to make sure the woman is of
‘sound, Christian character, with solid morals.”
To find such an employee, she ran the following ad in the newspaper: “Secretary.
Excellent Pay. Quiet professional office. Must not have young children. Must not be
opposed to Christian work ethic. References required. 555-1111 or write to P.O. Box
114, Ourtown, USA.”
Discuss the legal issues raised by Betty’s ad.
Future interests in land:
a. are presently existing nonpossessory rights that may or may not develop later.
b. are possessory interests because they permit the holder to take possession at some
point.
c. must create a right to, not merely the possibility of, possession at some time in the
future or they would be merely illusory.
d. cannot be bought and sold.
Which law regulates how federal agencies make rules, conduct investigations, hold
meetings and hearings, obtain information, and reach decisions?
a. The 1964 Civil Rights Act.
b. The Clean Agency Act.
c. The Administrative Procedure Act.
d. The Freedom of Information Act.
Vicki entered into a written contract to buy a car from Valley Motors. During the
negotiations, the sales representative said that the car had a two-year full warranty. The
written contract included a provision that stated, “This writing is the full and final
expression of the parties’ agreement; anything said before signing or while signing is
irrelevant.” The written contract did not include a warranty. Two months after Vicki
took delivery of the car, she discovered that the transmission needed to be replaced.
Vicki claimed that it was covered by the full warranty. Will Vicki be able to present
evidence as to the sales representative’s statements concerning the warranty?
a. No. The parol evidence rule will most likely exclude any evidence of the discussion
of the warranty.
b. Yes. The leading object rule will allow evidence as to the discussion of the warranty.
c. Yes. The evidence is needed because the contract is ambiguous.
d. No, because the contract was fully executed.
Generally, in comparison to a donee beneficiary, a creditor beneficiary has:
a. about the same legal rights.
b. substantially greater rights.
c. substantially fewer legal rights.
d. virtually no legal rights.
On January 8, Quastrar, Inc. sent Hylavian Company a letter offering to sell $10,000 in
restaurant supplies. On January 18, Hylavian mailed a letter to Quastrar accepting the
offer. Quastrar received the acceptance letter on January 20. On January 17, Quastrar
sent a letter revoking the offer. Hylavian received this letter on January A contract
between Quastrar and Hylavian:
a. was not formed because the revocation was effective before the acceptance was sent.
b. was not formed because the revocation was effective before the acceptance was
received.
c. was formed on January 18.
d. was formed on January 20.
Renita, a merchant, has received a signed, written confirmation from Merchants, Inc.
referring to goods she had not ordered. Renita should:
a. ignore the confirmation.
b. call the seller and object to the confirmation as soon as she gets back from her
two-week vacation.
c. object to the confirmation in writing within 10 days.
d. return the goods within two weeks of their delivery with a note attached saying she
will not pay for the goods.
Jack mails an offer to Joan that states, “I offer to sell you my car for $2000. If I don’t
hear from you in 10 days, I will assume you are willing to buy the car for the stated
price.” Jack hears nothing by the deadline and assumes he has a deal. What is the
result?
a. Jack has a deal. His offer was intended and contains definite terms.
b. Jack has a deal. Joan should have responded saying she is not interested in the car if
she didn’t want to be bound to the offer.
c. Joan is not bound. Generally an offeree must say or do something to accept an offer.
d. Joan is not bound. Ten days is not a reasonable amount of time to consider the offer
and accept by mail.
If a plaintiff is successful in proving that an auditor has violated Section 10(b) of the
1934 Act, the auditor has:
a. primary liability.
b. secondary liability.
c. contingent liability.
d. rebuttable liability.
The duties of the buyer include all of the following except:
a. acceptance of conforming goods.
b. payment for conforming goods.
c. delivery of the documents of sale to the seller as a tender of goods.
d. notifying the seller of rejection of non-conforming goods within a reasonable time.
Which of the following insurance policies continue for a stated period of time with the
premiums increasing with the age of the insured?
a. Double indemnity.
b. Term insurance.
c. Annuity contract.
d. Term insurance.
Henry David Thoreau felt that war was unjust and therefore refused to pay his taxes
when the United States declared war on Mexico. If Henry David Thoreau’s neighbor
agreed that war was unjust but paid his taxes because the law required him to pay the
tax, the neighbor would be applying the jurisprudence theory of:
a. Legal Positivism.
b. Natural Law.
c. Legal Realism.
d. Common Law.
Statutes of limitations:
a. define how much money the injured party can sue for under a breach of contract
claim.
b. define whether there has been substantial performance of a contract or a material
breach.
c. limit the time in which an injured party may sue.
d. only apply to the sale of goods. There is no statute of limitations on a service
contract.
A criminal case under the Securities Act of 1933 is prosecuted by:
a. the SEC.
b. the Justice Department.
c. the Department of the Treasury.
d. the FTC.
The correct order of payment of claims from the debtor’s estate would be:
a. secured claims, priority claims, unsecured claims.
b. secured claims, unsecured claims, priority claims.
c. priority claims, secured claims, unsecured claims.
d. priority claims, unsecured claims, secured claims.
Mentally infirmed Sasha contracts to purchase a piano for $2,500 in 60 monthly
installment payments. Six months later she tries to void the contract on grounds of
mental impairment. A court will:
a. normally void the contract without requiring anything further on Sashas part.
b. normally void the contract but will require Sasha to return the piano.
c. ordinarily not void the contract unless Sasha had a court-appointed guardian at the
time she entered into the contract.
d. not void the contract unless Sasha agrees to have the court appoint a guardian for her.
The doctrine of stare decisis:
a. makes the legal process more expensive.
b. is an equitable remedy.
c. makes the law more predictable.
d. is unimportant to the common law.
Ruppart Manufacturing has a contract for the sale of 100 cases of teaching supplies to
Teachers Co-op, Inc. Payment of the order is to be made in installments over the next
year. Ruppart Manufacturing keeps a security interest in the cases sold to assure
payment by Teachers Co-op, Inc. When the order is completed, Ruppart ships the order.
Legally:
a. both Ruppart and Teachers have an insurable interest in the supplies.
b. only Ruppart has an insurable interest in the supplies.
c. only Teachers has an insurable interest in the supplies.
d. neither Ruppart nor Teachers has an insurable interest in the supplies.
A merchant seller who would like to exclude the warranty of merchantability can do so
by doing which of the following?
a. The merchant can sell the goods “As Is.”
b. The merchant can sell the goods “With All Faults.”
c. The merchant can write conspicuously that the warranty of MERCHANTABILITY is
excluded.
d. All of the above.
Federal jurisdiction based upon a “federal question” includes cases based on:
a. the United States Constitution.
b. a federal statute.
c. a federal treaty.
d. All of the above.
Don was driving his truck when a board fell out of the truck bed and onto the road.
Alice, who was driving closely behind Don’s truck, tried to avoid the board, swerved
and struck a telephone pole, causing her severe injuries. Which of the following is
correct?
a. Don is strictly liable to Alice for her injuries.
b. In a comparative negligence state, the actions of Don and Alice will be weighed to
determine liability.
c. Don was not negligent in allowing the board to fall out of his truck.
d. Don is engaging in ultrahazardous activity.
Mohammad was an employee in the new product development department of Estay Inc.
Mohammad was directly involved in the development of a new product that Estay
intended to launch in 6 months. Estay took great care to keep information concerning
the new product a secret. Ceries, Inc., a competitor of Estay, persuaded Mohammad to
leave Estay to direct Ceries’ marketing department. Which statement is correct?
a. Mohammad can share with Ceries the confidential information he knows about
Estay’s new product because he was directly involved in its development.
b. Mohammad can share with Ceries the confidential information he knows about
Estay’s new product because his agency relationship with Estay is terminated.
c. Mohammad cannot share with Ceries the confidential information he knows about
Estay’s new product because of the equal dignities rule.
d. Mohammad cannot share with Ceries the confidential information he knows about
Estay’s new product because he has a duty not to disclose confidential information he
acquired during the agency.
In the case of scriveners errors (commonly known as typos), a court will usually:
a. reform the contract if it is clear that the mistake is not what the parties intended.
b. instruct the parties to rewrite the contract without the errors.
c. enforce the contract as written.
d. throw out the contract completely.
The case of Abkco Music, Inc. v. Harrisongs Music, Ltd. is a good example of
a. An agent competing with the principal.
b. An agent with a conflict of interest with the principal..
c. An agent breaching his fiduciary relationship with the principal..
d. All of these answers are correct.
Pat’s Pen Co. manufacturers and sells an inexpensive ball-point pen. Salley’s Stationery
purchases the pens for $.25 each in quantities of 1,000. Salley’s discovered that a
national chain, a competitor of Salley’s, buys the pen at $.20 for 1,000. If Salley’s
Stationery sues Pat’s Pen Co. for price discrimination:
a. Pat’s Pen Co. will win if it can prove that it has been selling to the national chain
continuously at the cheaper rate.
b. Pat’s Pen Co. will win if it can prove that it did not intend to economically harm
Salley’s Stationery.
c. Salley’s Stationery will win unless Pat’s Pen Co. can justify the price differential.
d. Salley’s Stationery will win since price discrimination is a per se violation with no
real defenses.
An express contract:
a. must be in writing.
b. may be inferred by the conduct of the parties involved.
c. has both parties setting forth their intentions.
d. is not valid in many states.
The term “issuer:
a. is not used in relation to commercial paper.
b. is an all-purpose term that means both maker and drawer.
c. is synonymous with drawee.
d. is used in relation to commercial paper only to indicate the bank which creates a
certificate of deposit.
An insurance contract is not considered to be a legalized form of gambling because:
a. one must have an insurable interest in the person being insured.
b. insurance contracts are underwritten by reputable companies.
c. insurance activities are regulated by the state department of insurance.
d. All of the above.
Linda assigns to Ben a right to receive rent payments. The law implies the following
warranty on Lindas part:
a. the tenant is solvent.
b. Linda actually has a right to the rental payments.
c. the tenant will actually pay.
d. No warranties are implied by law in an assignment.
A baseball team ordered 500 wooden baseball bats from Bats, Inc., for delivery on June
1. On May 15, the ball team received 500 aluminum bats instead of the wooden ones.
As of May 16, Bats, Inc.:
a. may cure before June 1.
b. has breached the contract and is liable for damages.
c. has breached the contract only if the baseball team rejects the goods.
d. may cure if done within a reasonable time, even if it is after June 1.
Which of the following events would probably excuse performance of a contract based
on commercial impracticability?
a. The price of a raw material increases slightly so that the contract will not be as
profitable.
b. An unforeseeable trade embargo causes prices to triple.
c. The promisor of personal services dies.
d. The subject matter of the contract is destroyed.
An accountant is liable for fraud to:
a. only her client.
b. only her client and any known user of her information.
c. any foreseeable user of her work product who justifiably relied on it.
d. any third party who used the information contained in her work product.
HBR Accounting hired Denise, a CPA, to prepare tax returns. Which statement is
correct?
a. Denise is a gratuitous agent and has a duty not to commit gross negligence.
b. Denise is an agent and has a duty not to commit ordinary negligence.
c. Denise, as a CPA, is an agent with special skills. She is held to a higher duty than
ordinary negligence.
d. Denise, as a CPA, is an agent with special skills. She is held to a lower standard than
ordinary negligence.
Under the TILA, for subprime mortgage loans, a lender:
a. may charge a prepayment penalty any time the loan is paid off before its due date.
b. must collect property taxes and homeowners insurance for all first mortgages.
c. may not change the amount of the monthly payment during the period of the loan.
d. may consider the value of the home in determining the borrowers ability to repay the
loan.
If an offer specifies no time limit in which to accept:
a. the offeree has 30 days to respond.
b. the offeree has 10 days to respond.
c. the offer is not valid and therefore it does not matter when the offeree responds.
d. the offeree has a reasonable period during which to accept.
To raise revenues, the City of St. Cloud required restaurants to purchase a special
permit if they wanted to serve food in an open-air patio. (This is in addition to he
sanitation inspection license.) While at Hola Taco, a restaurant in St. Cloud, a customer
notices that Hola Taco’s permit expired. This mean the customer is not legally required
to pay for her food.
Deontologists would agree that the increasing medical concern over obesity in the
United States justifies federal regulation of high fat, high sugar, low nutrition food
advertising during childrens television programs.
Artistic Framing, a business with $120,000 of unsecured debt, needs to file for
bankruptcy, but wants to continue in business. Discuss what chapter of the Bankruptcy
Code should be used, and discuss the effect of the 2005 amendment to the Code on the
proceedings.
Denise is a promoter for a proposed corporation, EVR-Young Corp. As promoter, she
signed a three-year lease to rent office space in an office park. She signed her name and
indicated below her signature she is signing as “promoter for EVR-Young Corp., a
company yet to be incorporated.”
EVR-Young is never incorporated. The lessor believes that Denise is personally liable
for any damages it will sustain as a result of the three-year lease having to be breached.
Is Denise personally liable? Explain.
Congress revised and reauthorized the Patriot Act, but the secret national security letter
provisions were later limited by a federal appeals court.
A statute of repose places an absolute limit on when a lawsuit may be filed regardless of
when the defect is discovered.
A company that engages in unethical behavior may suffer severe consequences.
Some contracting parties are intentionally vague in contract terms.
Raymond agrees to transfer an easement right to Sandra for $1,000. This contract is
within the statute of frauds and therefore needs to be in writing to be enforceable.
An assignment is effective but not necessarily enforceable from the moment it is made,
regardless of whether the assignor notifies the obligor.
How do the tort theories of negligent product liability and strict product liability differ
from each other? List and describe the elements an injured party must establish for
recovery under each cause of action.
You should hire a lawyer to review any legal papers you have to sign, including such
papers as lease agreements or car purchases.
Discuss the Miller test to determine if a creative work is obscene.
Discuss the tenant’s and the landlord’s basic duties under a landlord-tenant relationship.
Oxtron, Inc. arranged for two employees, Kaiya and Gary, to attend “The Business
Ethics 2008 Conference: Maintaining Credibility” in New York City. Although Gary
goes to New York, he does not participate in the conference. Instead, he takes in the
local attractions. Kaiya fully participated in the conference. Using ethical standards,
describe what Kaiya should do about Gary’s failure to participate in the conference.
Monumental, Inc. contracts with Champion Builders to erect a three-story office
building on a parcel of land it has purchased. Before construction begins, the local
zoning board changes the zoning of the parcel and those adjoining it to residential use
only. Monumentals contract with Champion is discharged.