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A bank robbery has occurred, and the banker's association has offered a $1,000 reward
for information leading to the arrest and conviction of the robber. Several people are
claiming to be entitled to the money. Which of them is eligible?
a. The employees of the bank.
b. An on-duty sheriff's deputy in the county where the arrest occurred.
c. An off-duty deputy sheriff from a county other than the one where the arrest
occurred.
d. None of these are eligible.
To establish an environmental strict liability suit at common law, the plaintiff must
show that the:
a. defendant was negligent in her operations.
b. plaintiff was not negligent.
c. defendant is engaged in an abnormally dangerous activity in an inappropriate
location.
d. location for such activity is indeed appropriate.
Because of the harshness of the all-or-nothing contributory negligence rule, nearly all
states have now substituted the last clear chance doctrine for contributory negligence.
a. True
b. False
In some instances the same facts will give rise to an action for both false light and
defamation.
a. True
b. False
An obligation imposed by law where there has been no agreement or expression of
assent by word or act on the part of either party involved is a(n):
a. implied in fact contract.
b. express contract.
c. void contract.
d. quasi contract.
The U.S. District Court is the trial level court in the federal court system.
a. True
b. False
Barbara owes Arthur $2,000. On July 1, Arthur assigns the right to the $2,000 to Caleb.
Thereafter, on July 15, Arthur assigns the same right to David, who in good faith gives
value for it and knows nothing about the first assignee. In this case:
a. Caleb has the right to the payment of $2,000.
b. David has the right to the $2,000.
c. neither Caleb nor David can claim the $2,000.
d. The rule differs by state.
A specialized U.N. agency or a U.N. organ may seek an advisory opinion from the
International Court of Justice, but an individual or a sovereign state may not.
a. True
b. False
An act that is contrary to public policy or is morally reprehensible may constitute
duress.
a. True
b. False
A deed is not effective to transfer title to land until delivery.
a. True
b. False
Gary decided to borrow from Jones Bank since it promised that his loan interest rate
would be systematically reduced every year when the board met. The loan rate was
never reduced, but actually increased monthly. Gary refused to pay the interest
demanded and sued for rescission of the contract. The bank attempted to collect from
Lewis, a surety under the loan. Does Lewis have to pay?
a. Yes, because there is no defense.
b. No, because a fraud perpetrated upon Gary will be a defense.
c. Yes, since the surety obligation is separate from the underlying contract.
d. No, because the surety stands in the shoes of the debtor for all purposes.
Michael is 17 years old and earns extra money by repairing cars. Nathan, who is 21,
brings his car to Michael for repairs, and Michael ruins the brake system of the car
because of his inexperience. If Nathan sues Michael for negligence in performing the
auto repair contract, in most states Michael will have no liability, because the tort of
negligence and the auto repair contract are connected.
a. True
b. False
The Electronic Funds Transfer Act governs electronic transfers between financial
institutions, between financial institutions and businesses, and between businesses.
a. True
b. False
A plan of reorganization under Chapter 13 will be confirmed when the:
a. debtor has not been discharged before.
b. unsecured creditors are not discharged.
c. unsecured creditors receive the same amount as the secured creditors.
d. unsecured creditors receive at least as much as they would have if the debtor had
liquidated.
In an assignment or delegation, the third parties' rights or duties arise after the contract
is made.
a. True
b. False
The case of VonHoldt v. Barba & Barba Construction, Inc. held that:
a. the implied warranty of habitability does not include actions against a builder brought
by a subsequent purchaser for latent defects in an addition to a home.
b. the plaintiff's complaint should not have been dismissed by the lower court.
c. when a builder makes a significant addition to a previously built home, an action for
damages resulting from latent defects affecting habitability exists under the doctrine of
implied warranty of habitability.
d. All of these.
The Supreme Court interprets the Commerce Clause:
a. narrowly.
b. as granting virtually complete power to Congress to regulate the economy.
c. as restricting Congress to the coining of money and taxation.
d. to mean that the Court may invalidate legislation enacted by Congress when the
activity affects the individual states regulation of their own role in interstate commerce.
Jones, an agent of Rossi, is authorized to sell Rossi's ownership of wheat on the
commodities market on Monday. On Monday, however, the market opens with the
lowest prices for wheat in two decades. Jones must go ahead and sell Rossi's wheat on
Monday.
a. True
b. False
Section 402A of the Restatement applies only if the defective product is unreasonably
dangerous.
a. True
b. False
A contract in which both parties exchange promises is a:
a. voidable contract.
b. bilateral contract.
c. unilateral contract.
d. quasi contract.
Millie, a tenant, wrongfully abandons her apartment after six months, even though there
are six months left on her lease. If there is no survival clause in the lease, would the
landlord be able to hold Millie liable for rent?
a. Yes, but he must leave the apartment vacant.
b. Yes, after he gives notice to Millie.
c. Yes, after he relets the apartment.
d. No, the obligation to pay ended when Millie abandoned the apartment.
Carolyn agrees to sell Marianne an antique handmade lace tablecloth for $1,500. When
Carolyn discovers that her cousin wants it too, she breaks the contract with Marianne.
Marianne can ask the court to order:
a. injunctive relief.
b. specific performance.
c. restitution.
d. equitable rescission.
Which of the following, if any, are requisites for fraud in the inducement?
a. False representation of a fact that is material.
b. Representation is made with knowledge of its falsity and the intention to deceive.
c. The representation is justifiably relied on.
d. All of these.
e. Two, but not all of these.
Natures Finest, Inc. develops a fruit juice bottle design and label with distinctive shades
of orange, red, and green. Only the companys name and not the appearance of its
product can be a trademark.
a. True
b. False
If the written partnership agreement makes no provision for sharing profits and losses in
a limited partnership, they are shared equally.
a. True
b. False
Under Article 9 of the UCC, a pledge is:
a. the delivery of personal property to a creditor as security for the payment of a debt.
b. a requirement that the secured party and the debtor agree to certain collateral.
c. an equipment transfer before a forced sale.
d. a form of indispensable paper.
Under the UCC, __________ refers to the manner and extent to which the respective
parties to a contract have accepted successive tenders of performance by the other party
without objection.
a. course of dealing
b. usage of trade
c. course of performance
d. integrated document
An accountant who contractually promises to conduct an audit to detect possible
embezzlement is under a contractual obligation to provide an expanded audit beyond
generally accepted auditing standards.
a. True
b. False
Under the CISG, if the contract is avoided and the seller has resold the goods in a
reasonable manner and within a reasonable time after avoidance, the seller may recover:
a. the difference between the contract price and the resale price.
b. incidental damages only.
c. consequential damages.
d. Both the difference between the contract price and the resale priceand consequential
damages.
If the breach by the seller concerns the whole contract, the buyer may cancel the entire
contract.
a. True
b. False
The law does not change; it is based on unchanging and universal truths.
a. True
b. False
The U.S. Supreme Court is the final authority as to the constitutionality of any federal
or state law.
a. True
b. False
Although such a gratuitous promise would be otherwise unenforceable, under the UCC,
any claim arising out of an alleged breach of contract can be discharged by a written
renunciation signed and delivered by the aggrieved party.
a. True
b. False
Ownership of real property for a definite time or for the life of a person is a freehold
estate.
a. True
b. False
What are the consequences of a defective incorporation?
Identify three essential functions of law.
Identify five exceptions to the general rule that illegal contracts are unenforceable.
List the implied warranties imposed by law on an assignor who has received value for
the assignment.
Discuss the nature of agency, including the scope of agency purposes.
Richard agrees to supply Henry with all his needs of specially made shampoo for
Henry's beauty salon. Henry believes that Richard is a representative of a famous hair
products company, but he finds a letter to a competitor written by Richard two days
before Henrys agreement with Richard was signed, proving that Richard is a fraud.
Richard says that this letter may not be admitted in court since their contract is wholly
integrated. Is he correct?
What is the trustee in bankruptcy and what is the role of the trustee in bankruptcy
proceedings? What powers and duties does the trustee have and what sorts of
transactions the trustee can attack?
Define "promoter" in reference to a corporation.
Mr. Chickilini is a surety for Wayne on a debt owed to Melvin. If Wayne fails to pay,
what is Mr. Chickilini's defense to avoid payment of the debt?
What is the purpose of the Montreal Protocol?
Thomas borrowed $100,000 from First Bank, which asked that he both put up collateral
and provide a surety. Consequently Thomas provided the bank with a security interest
in his antique car collection and asked Victor to act as a surety. Victor agreed to do so
and signed a surety agreement with the bank. Thomas made several payments on the
loan and then asked First Bank for permission to sell three of his cars. First Bank
agreed, but it never notified Victor of the sale of the collateral. Thomas then defaults on
the loan. First Bank now wants Victor to pay the remainder of the loan. Must Victor
pay? Explain.
In what three situations will a seller recover the price of goods plus incidental damages?
Compare the liability of an intoxicated person to that of a person who is mentally ill.
How are their situations similar? How are they different with regard to contractual
capacity?
Carolee, Joanna, and Ellen form Capital City Partnership. Carolee contributes expertise;
Joanna, $15,000; and Ellen, $20,000. After a year, Joanna adds $12,000 as a loan. Ten
years later, Capital owes $44,000 to creditors, total assets are $112,000, and the partners
decide to dissolve the business. How will the assets be distributed under the UPA, and
what will each partner receive?
Wayne breaches a contract with Tim causing damages of $25,000 in lost profits, when
damages under ordinary circumstances would be $17,000. Explain under what
circumstances a court would award $25,000.
Discuss how parties show mutual assent and what standard is used to determine
agreement.
What is the difference between contributory negligence and comparative negligence?
Why have so many states adopted comparative negligence?
You are assigned to participate on a corporate committee responsible for creating a
program to comply with the Federal Organizational Corporate Sentencing Guidelines.
What should the program include, and what will be the effect of your companys
implementing an adequate compliance program?
