The Organization of the Petroleum Exporting Countries consists exclusively of
countries from the Middle East.
Anti-deficiency statutes usually apply only to non-purchase money mortgages.
Almost all states have enacted innkeepers’ statutes that limit the liability of innkeepers.
Fraud in the inception is also known as fraud in the inducement.
If an accountant engages in actual or constructive fraud, a third party that relies on the
accountant’s fraud and is injured thereby may bring a tort action against the accountant
to recover damages.
Accommodation parties are guarantors of negotiable instruments.
Promoting social justice is a function of the law.
In a “member-managed” limited liability company, management power and the number
of votes allowed each member are determined by each member’s capital contribution.
There are three (3.) types of performance of a contract: 1.) superior performance; 2.)
partial performance; and 3.) subordinate performance.
In a mortgage, the debtor is the mortgagee.
A fully-performed oral contract that should have been in writing under the Statute of
Frauds can be rescinded by either party.
The United States Constitution gives the power to enact bankruptcy laws to the federal
government.
Under the moral minimum theory of the social responsibility of business, it is
acceptable for a business to injure others so long as the business adequately
compensates those who are injured.
Both tangible writings and intangible ideas may be copyrighted.
Jane Erickson takes her ten-month-old baby, Benjamin, to a hockey game. During
warm-ups, a player makes a ‘slap-shot” to the goal. The hockey puck flies off the ice,
over the protective barrier located around the rink and into the stands, striking and
seriously injuring Benjamin, who was in Jane’s arms when he was hit by the puck.
According to the assumption of the risk doctrine, Benjamin cannot recover for his
injuries.
Third parties usually cannot sue accountants for breach of contract, because the third
parties are merely incidental beneficiaries who do not acquire any rights under the
accountant-client contract.
The Uniform Partnership Act is the controlling law for both general and limited
partnerships.
In a limited partnership, a general or limited partner’s capital contribution can be in the
form of services rendered.
In order to meet the causation requirement in a negligence action, both causation in fact
and proximate cause must be proven.
Couples who immediately live together and intend a common law marriage have one,
whereas couples who live together a long time but do not intend a common law
marriage do not have one.
The CAN-SPAM Act is very weak in helping consumers ward off the spam that deluges
them daily.
Revised Article 9 (Secured Transactions) of the Uniform Commercial Code (UCC)
governs secured transactions in personal property.
A landlord does not have a right to limit the legal uses to which a tenant puts the
property.
An incidental third-party beneficiary can enforce the contract against the party who
promised to render performance.
Marital property consists of property acquired during the course of the marriage using
income earned by the spouses during the marriage, and separate property that has been
converted to marital property.
Nations, individuals, or businesses can have cases decided by the World Court.
The World Trade Organization was established by the United Nations in
The risk of loss rules are the same, regardless of whether a party has breached the sales
contract.
Express agency contracts can be either oral or written unless the Statute of Frauds
stipulates that they must be written.
Under Section 2 of the Sherman Act, monopolies are not outlawed, although acts of
monopolizing are outlawed.
If the required notice of a shareholders’ meeting is not given or is defective, any action
taken at the meeting is voidable.
In an easement appurtenant, the land over which the easement is granted is called the
dominant estate, and the land that benefits from the easement is called the servient
estate.
The implied warranty of fitness for a particular purpose can apply to merchants and
nonmerchants.
The lawfulness of government classifications based on sex is examined using an
intermediate scrutiny test.
In most states, a real estate broker’s contract to sell real estate must be in writing.
Chancery was a name for the courts where decisions were based on fairness in
circumstances, but the decisions could not differ from decisions of a law court.
Under the ULLCA, the articles of organization of a limited liability company must set
forth whether one or more of the members of the limited liability company are to be
personally liable for the LLC’s debts and obligations.
A promissory note is an order to pay.
In a foreclosure sale, any surplus must be paid to the mortgagee.
Milton Friedman was a strong critic of the theory of maximizing profits for
shareholders.
Bart Steveman is sitting in the first row at Fenway Park during a Yankee Red Sox
playoff game when the New York Yankee shortstop dives into the stands to catch a foul
ball. Bart suffers a broken arm when the player lands on him. He is placed in an
ambulance and on the way to the hospital the ambulance collides with another vehicle,
causing Bart to suffer two broken legs and a second broken arm. If Bart sues the Red
Sox and the Yankees:
A) the Yankees are liable for the original injury but not for the additional injuries.
B) the Red Sox are liable for the original injury but not for the additional injuries
C) the Yankees are liable for the original injury and the additional injuries.
D) the Red Sox are liable for the original injury and the additional injuries.
E) neither the Yankees nor the Red Sox are liable for any of the injuries.
What is a living will?
A) a will that is made while the testator is living
B) a validly-executed will of someone who is still living
C) a document that directs how one’s property should be distributed while the party is
still living
D) a document that expresses one’s wishes regarding healthcare decisions to be made in
the event that one becomes unable to make those decisions
E) a type of joint will that prevents a surviving and living party from changing his or
her bequeaths after one party dies
Jean says to Joan, “If you’ll promise to feed my dog each day while I am out of town
next week, I’ll pay you $100.” Joan replies, “I’ll absolutely do that, I hope you have a
nice trip.” Joan then feeds the dog, after which Jean paid her. At what point did a
contract come into existence?
A) when Jean made the offer to Joan
B) when Joan said that she would feed Jean’s dog
C) when Joan started feeding Jean’s dog
D) when Joan completed the final feeding of Jean’s dog
E) when Jean paid the $100 to Joan
Which of the following is true about the crime of bribery?
A) Only the person who receives the bribe can be convicted.
B) Only the person who gives a bribe and is successful in having it accepted can be
convicted.
C) Only the person who offers the bribe can be convicted, but that person is guilty
regardless of whether the bribe is accepted.
D) A party who actually accepts a bribe can be convicted, as well as the person offering
the bribe, regardless of whether it is accepted.
E) A party who even considers accepting a bribe can be convicted, as well as the person
offering the bribe, regardless of whether it is accepted.
Sarah is the president and CEO of a company that is experiencing financial problems.
She has decided to file for bankruptcy, and has asked you for advice. If she wants to
keep the business open, retain most of her employees’ jobs, and continue in business in
the future, she should file for:
A) Chapter 7.
B) Chapter 9.
C) Chapter 11.
D) Chapter 13.
E) Chapter 15.
Kristina, a buyer, enters into a sales contract with Shayda, a seller. The contract is
written and includes all of the major terms of the contract, except for the price to be
paid for the goods. The contract between Kristina and Shayda is:
A) Enforceable, if the price is not stated, then the price will be the “reasonable price” at
the time of delivery.
B) Enforceable, if the price is not stated, then Kristina must accept the goods and pay
whatever price Shayda tells her to pay.
C) Unenforceable, even if Shayda latter provides Kristina with a price, a contract must
have a fixed price at the time it is made to be valid under the UCC.
D) Unenforceable because the Statute of Frauds requires specific price terms in writing.
E) Whether the contract is enforceable depends on whether a firm offer was made.
Which of the following is true regarding acceptance of an offer?
A) Generally, an offeree must accept an offer by an authorized means of
communication.
B) The offer cannot stipulate that acceptance must be by a specified means of
communication.
C) Most offers expressly specify the means of communication required for acceptance.
D) The common law does not recognize implied means of communication.
E) An offer must be formally accepted in order for a contract to be formed.
In order to be considered legally insane for the purposes of avoiding a contract, a
person must:
A) be significantly less intelligent than the other party to the contract.
B) have been legally adjudicated to be insane.
C) have been insane to the point that the insanity was obvious to the other contracting
party.
D) have been incapable of understanding or comprehending the nature of the
transaction at the time it was entered into.
E) be insane at the time avoidance of the contract is sought.
Under the Uniform Computer Information Transactions Act, how long does a party
have in which to commence a cause of action?
A) one year after the breach was or should have been discovered, but not more than five
years after the breach actually occurred
B) one year after the breach actually occurred
C) one year after the breach was or should have been discovered, but not more than four
years after the breach actually occurred
D) two years after the breach was or should have been discovered, but not more than
five years after the breach actually occurred
E) two years after the breach was or should have been discovered, but not more than
three years after the breach actually occurred
Alice Johnson issued a note payable over 24 equal monthly installments. The note
contained a provision making the entire balance due immediately if Alice defaulted on
two consecutive installments. The note contained:
A) an acceleration clause.
B) a liquidated damages provision.
C) a guarantee of prompt payment.
D) a contingent executory payment.
E) a prepayment clause.
In considering whether a product contains a defective design, the courts will consider
the following except:
A) the degree of danger posed by the design.
B) the profitability of the product.
C) the likelihood of injury.
D) the social utility of the product.
E) the cost of producing a safer design.
An easement created when an owner sells land that he or she owns, but reserves an
easement on the land, is called (a)n:
A) easement by reservation.
B) easement by grant.
C) easement by prescription.
D) easement by necessity.
E) easement by implication
Which of the following is not a type of agency?
A) express agency
B) implied agency
C) apparent agency
D) agency by ratification
E) agency by certification
In relation to freedom of speech:
A) all speech receives the same degree of constitutional protection.
B) it is not an absolute right.
C) commercial speech receives no protection due to its profit motive.
D) most speech critical of the government can be restricted because such speech can be
destabilizing.
E) commercial speech receives the same protection as any other form of speech.
When an insider discloses material insider information to a non-insider tippee, the
tipper is liable for:
A) the tipper’s own trading only.
B) the tippee’s profits, but not the profits made by any remote tippees.
C) the profits made by the immediate tippee, as well as the profits made by any remote
tippees.
D) the profits made by all traders during the period before the information becomes
public.
E) only the pay the tipper received for providing the information to the tippee.
Mark was shopping for a used car in February. He went to Auto Mega World and test
drove a used 2001 Tiger XL. While driving the car, he looked at the climate control
center and noticed that the temperature lever was marked “cold” at one end in blue and
“hot” in red at the other end. Mark assumed that the “cold” marking meant that the car
had air conditioning. Mark wanted to finally have an air-conditioned car. He did not
discuss air conditioning in any way with the salesperson. Mark bought the car. When
Mark was showing off his new car to friends, one of them pointed out to him that the
car was not air-conditioned. In this circumstance:
A) Mark can avoid the contract on the basis of mutual mistake.
B) Mark can avoid the contract on the basis of unilateral mistake.
C) Mark can avoid the contract on the basis of fraud in the inducement.
D) Mark cannot avoid the contract on the basis of his unilateral mistake.
E) Mark cannot avoid the contract because this is a mistake of value.
Contracts entered into as a result of fraudulent inducement are:
A) void.
B) enforceable in equity but not by law.
C) voidable by the party who made the fraudulent inducement.
D) voidable by the innocent party.
E) voidable by either the party who made the fraudulent inducement or the innocent
party.
Henry took his Porsche to the shop for repairs, but it was not ready on Friday afternoon
as had been agreed to. Henry was then unable to rent the car to his sister on Saturday
for $400 to use in her wedding. Henry paid $60 to rent a car on Sunday for a trip to the
mountains. The car repair shop knew about neither of Henry’s planned uses of the car
that weekend. Which of the following statements is true?
A) Henry can collect for neither amount, because the car repair shop was unaware of
them.
B) Henry can collect for both amounts, because the shop was the cause of his losses.
C) Henry can collect for the car rental, but not for the money his sister would have paid.
D) Henry can collect for both amounts and will likely recover punitive damages as well.
E) Henry can collect nothing, because his greediness with his sister is against public
policy.
Under the doctrine of sovereign immunity, ________ are granted immunity from suits
in courts in other countries.
A) intellectual property violators
B) individuals
C) businesses
D) countries
E) individuals, businesses and countries
Mary purchases automobile insurance incorporating all types of coverage available.
Mary is driving home from work one afternoon when there is a severe thunderstorm
threatening the town in which she lives. She hears on the radio that this storm contains
large hail. She initially considers going directly home (without making a planned stop at
a building supply store) so that she can put the car in her garage, but she decides to take
a chance and stop at the store anyway. While she is in the store, heavy hail falls and
breaks out three of the windows in her car. Just as she is leaving, she notices a couple of
vandals, who break out the remaining windows of her car and flee. Which would be
covered under the comprehensive portion of Mary’s auto insurance policy?
A) both the hail damage and the vandalism damage
B) the vandalism damage, but not the hail damage, because she assumed the risk by
choosing to leave her car parked outside in the storm
C) Damage from neither source would be covered, because by choosing to park her car
outside in the storm, Mary was the proximate cause of both types of damage.
D) the damage from the hailstorm, but not the vandalism, because the vandalism was
the willful act of third parties who are responsible for the damage they caused
E) the damage from the hailstorm, but the vandalism damage only if the vandals are
caught and prosecuted
On a Monday, Josh, the owner of a restaurant, tells Betty the baker that he might need a
shipment of buns on Friday but he’s not sure. He tells her that if she doesn’t hear from
him by noon on Thursday, she should deliver the buns on Friday. Receiving no word on
Thursday, Betty delivers her buns on Friday. Which of the following is correct?
A) A bilateral contract was formed the moment they talked on Monday.
B) A contract was formed by Josh’s silence.
C) A contract was never formed, because silence can never be an acceptance.
D) A unilateral contract was formed when Betty delivered the buns on Friday.
E) The contract was executed on Thursday when Betty did not hear from Josh.
The primary goal of establishing workers’ compensation systems is to:
A) provide a more certain method for employees to recover for workplace injuries.
B) protect the court system from being burdened with lawsuits relating to workplace
injuries.
C) discourage workers from filing frivolous claims relating to workplace injuries.
D) prevent injuries in the workplace.
E) ensure that injured workers return to work as quickly as practical.
Based on the common law tradition, past court decisions become ________ for
deciding future cases.
A) inadmissible
B) precedent
C) binding
D) recommended
E) evidence
Which of the following is not a covered situation under the Family and Medical Leave
Act?
A) the birth of and care for a child
B) the placement of a child with an employee for adoption or foster care
C) a serious health condition that makes the employee unable to perform his or her
duties
D) care for a spouse, child, or parent with a serious health problem
E) care for a neighbor with a serious health problem
In April, John goes to a dealer and special orders a car with delivery due on June 1. The
dealer received a confirmation from the manufacturer on May 10 that the car would be
delivered to the dealer on May 26. The confirmation showed that the car would have
cruise control although John did not order cruise control. The salesperson decided to
simply sell the car to John at the original contract price, thus giving him the cruise
control free. When John went to pick the car up late on June 1, he refused to accept the
car, explaining to the salesperson that it was to be given to his elderly mother, and his
mother had difficulty using cruise control. What is true in this situation?
A) John cannot reject the car, because it is worth more than the car he ordered.
B) John can reject the car, and the dealer’s right to cure has expired.
C) John cannot reject the car if he did not tell the salesperson that it was for his mother.
D) John can reject the car, but the dealer has a reasonable time to cure beyond June 1.
E) John can reject the car, but the dealer has 48 hours by law under the UCC in which
to cure.
Which of the following is not one of the five major theories of ethics?
A) ethical fundamentalism
B) utilitarianism
C) ethical nihilism
D) Kantian ethics
E) Rawl’s social justice theory
What federal legal protection is there with respect to trade secrets?
A) Trade secrets are protected under the No Electronic Theft Act.
B) Trade secrets are protected under the Lanham Act.
C) Trade secrets are protected under the Uniform Trade Secrets Act.
D) Trade secrets are protected under the Economic Espionage Act of 1996.
E) Trade secrets are protected under the Landrum-Griffin Act.
Franchise law is:
A) state law.
B) federal law.
C) federal and state law.
D) state common law.
E) federal common law.
What is the significance of a contract being a “best efforts” contract?
A) Such contracts do not meet the consideration requirement, because one party does
not have an absolute effort to perform.
B) There is really no significance, because the parties to any contract are obligated to
use their best efforts in performing.
C) A promise to use best efforts does meet the consideration requirement, because the
duty to use best efforts is a sufficient duty.
D) These are contracts where one party agrees to buy all that the other produces, but
they do not meet the consideration requirements because the other party might produce
nothing.
E) Such contracts meet the consideration requirement because they are considered
implied-in-fact contracts.
Under which of the following rules does the first assignment in time prevail regardless
of notice?
A) the English rule
B) the American rule
C) the tangible token rule
D) the priority in assignment rule
E) the European rule