Fred is a concert violinist who is scheduled to perform at Carnegie Hall for the first
time. He buys what he is told is a Stradivarius violin from a well-known, reputable
dealer in quality violins, and he pays the going rate for a Stradivarius. He later learns
the violin is an imitation, although it is a good imitation, which fooled even the dealer.
In this case:
a. Fred has made a unilateral mistake and cannot avoid the contract.
b. the dealer has committed fraud in the inducement.
c. the sale is voidable by the purchaser for mutual mistake.
d. the sale may be rescinded, because the dealer has made a nonfraudulent
misrepresentation.
The United States and a Latin American country signed a treaty whereby the United
States agreed to assist the Latin American country in controlling drug traffic. The
United States, following the treaty, seized 100 square meters of land and bulldozed it,
because it was a suspected haven of drug smuggling. The land in question was in Latin
America, but belonged to an American citizen. Which of the following is correct?
a. The treaty will supersede any general Constitutional rights because the treaty gave
specific authorization for the act.
b. The act was not offensive to the Constitution, because it occurred in Latin America.
c. Constitutional rights apply to people, not to property.
d. Constitutional rights supersede treaties.
To rule on a lawsuit, a court must have __________ different types of jurisdiction.
a. one
b. two
c. three
d. four
Scott, a minor, sells his digital camera to Megan, who then sells it to Sherry. Under
these circumstances:
a. Scott retains the power of avoidance of the contract, since he is a minor, even after
the property is sold to Sherry.
b. if Sherry is a good faith purchaser for value and she buys the camera before Scott
elects to rescind, no rescission is permitted.
c. Megan and Sherry both received a voidable title regardless of whether they
contracted in good faith.
d. if Scott wants to rescind the transaction after the sale to Sherry, a good-faith
purchaser for value, he has no remedy or recourse.
Which of the following will destroy negotiability?
a. Making the instrument subject to the terms of another agreement.
b. Making the instrument payable in German marks.
c. Signing a check in pencil.
d. Signing a check with an “X.”
Reversions:
a. create a future interest in a third person.
b. may be transferred by deed or will and pass by intestate succession.
c. include the right to immediate possession for an indefinite time.
d. do not create a definite, existing interest in the property, but create a future interest.
If the National Tax Accountants Professional Association (TAPA) has recommended
that its members charge a minimum of $25 per hour for completing tax forms, this
recommendation is probably:
a. a per se price fixing violation of the Sherman Act.
b. not a violation of the Sherman Act, because it has been made by a professional
association.
c. not a violation of the Sherman Act, because a fee is different from a price.
d. subject to the rule of reason.
The defense of entrapment arises when:
a. a law enforcement official induces a person to commit a crime whether that person,
under ordinary circumstances, would have done so or not.
b. any person induces any other person to commit a crime when the person induced
would not ordinarily have done so.
c. a police officer or other government official or agent acts to induce an individual to
commit a crime when that individual would not ordinarily have done so.
d. law enforcement officials act aggressively to prevent a crime.
Which of the following is true with regard to the federal Electronic Funds Transfer Act?
a. It is primarily a disclosure statute.
b. It gives the same protections to customers that are found in Article 4.
c. It limits a customer’s liability for unauthorized transfers to $50 if the consumer
notifies the financial institution within two days after learning of the loss or theft.
d. Both (a) and (c).
The right of redemption would require:
a. a court order.
b. assent of all parties.
c. payment of the entire debt with interest.
d. payment only of past due installments.
Garnett, who was driving too fast for conditions, collided with a truck carrying
explosives. The truck was unmarked, so Garnett had no way of knowing what it
contained. The collision caused an explosion, which shattered glass in a building a
block away. The glass injured Ida, who was working inside the building. John, who was
walking down the street near the site of the collision, was seriously burned as a result of
the explosion.
a. Garnett’s negligent driving is the proximate cause of Ida’s injury.
b. Garnett’s negligent driving is the proximate cause of John’s injury.
c. Both Ida and John are within the zone of danger of the collision.
d. All of the above.
A statement signed by the required number of witnesses who observe the execution of a
valid will is called a(n):
a. validity clause.
b. ambulatory clause.
c. attestation clause.
d. fiduciary clause.
Which of the following activities is/are regulated by the federal government through its
exercise of the commerce power?
a. Federal crimes.
b. Consumer warranties and credit transactions.
c. Employee safety.
d. All of these are correct.
A(n) ___________ signs an instrument to lend his credit to an instrument, and his
liability is determined by the capacity in which he signs.
a. indorser
b. accommodation party
c. authorized agent
d. maker
Archie bets his friend Jerry $100 that the Packers will win the next Super Bowl. This is
an:
a. unconscionable contract and therefore illegal.
b. illegal wagering agreement.
c. agreement to obstruct justice and therefore illegal.
d. illegal restraint of trade.
The Freedom of Information Act and the Government in the Sunshine Act are different
names for the same statute.
Traditionally, the common law viewed a leasehold estate primarily as a contract, but
today it is viewed more as a conveyance of the use of land.
In order to be legally binding, a contract must be in writing.
The certificate of limited partnership need not be amended if a new general partner is
admitted or withdraws from the partnership.
Gerald, an agent, who makes a contract with Adele on behalf of Leon, an unidentified
principal, may maintain in Gerald’s own name a breach of contract action against Adele.
Any natural person having full capacity may enter a partnership.