In determining whether a party has given consideration, courts look at whether the
promises exchanged were of equal value.
Answer:
A bank does not owe a duty to its customer to pay any checks out of the account that
are more than six months old.
Answer:
A person who finds lost property has a better right to that property than anyone, other
than the TRUE owner.
Answer:
In a de facto corporation, the promoters substantially complied with all mandatory
provisions.
Answer:
Liability under Rule 10b-5 of the 1934 Act requires scienter.
Answer:
When one of the parties to a contract fails to perform his obligations, he enjoys a
variety of remedies for breach of contract.
Answer:
Corporations sometimes consciously choose to break the law if it poses acceptable
risks such as relatively light penalties for violation, if the benefits gained by doing so
are great.
Answer:
Marking of goods by the seller is a way of identification of goods.
Answer:
A negligent person is not liable for the proximate results of his/her negligence.
Answer:
A person who rescinds an illegal contract before any illegal act has been performed can
usually recover any consideration he has given the other party.
Answer:
The destruction of items that the promisor intended to use in performing would not
excuse nonperformance if it just made performance more difficult for the promisor.
Answer:
If a debtor has more than a dozen creditors, an involuntary petition to declare
bankruptcy must be signed by at least three.
Answer:
Courts grant equitable remedies to those who seek to enforce grossly inadequate
bargains on the grounds that such persons are entitled to the special treatment equity
affords.
Answer:
Corporations do not have inherent power to borrow money necessary for their
operations by issuing debt securities.
Answer:
Agents may not delegate to employees acts that involve no judgment or discretion.
Answer:
If the promisor’s performance will satisfy a legal duty that the promisee owes a third
party, the third party is a(n):
A. donee beneficiary.
B. incidental beneficiary.
C. creditor beneficiary.
D. implied beneficiary.
Answer:
Which of the following is a TRUE statement about the Civil Rights Act of 1964?
A. The act applies to employers engaged in an industry affecting interstate commerce
that have at least 10 employees.
B. Affirmative action is made illegal by the Act because it involves reverse
discrimination.
C. Discrimination based on religion is permitted where religion is a BFOQ.
D. Discrimination based on race is permitted where race is a BFOQ.
Answer:
An auction house puts a painting up for sale, which it believed to be and represented as
Pablo Picasso’s “Acrobat and Young Harlequin.” An anonymous Japanese buyer, also
believing it to be Picasso’s original work, bought it for $50 million. Sometime later the
buyer had the painting appraised for insurance purposes, and the appraiser discovered
that it was a forgery worth only a few thousand dollars. Can the buyer rescind the
contract? If so, on what basis?
A. The buyer cannot rescind because his mistake was negligent; he should have
investigated the authenticity of the work before bidding on it.
B. The buyer can rescind on the basis of unilateral mistake.
C. The buyer cannot rescind because the auction house did not intentionally mislead
him about the authenticity of the painting.
D. The buyer can rescind on the basis of mutual mistake.
Answer:
Publicly offered partnership interests:
A. are tax shelters for the original purchasers during the early years of ownership.
B. are of vital interest to persons hoping to actively manage a business.
C. are the primary method of creating general partnerships.
D. are generally unattractive to investors in the early years of ownership.
Answer:
When a buyer breaches a sales contract and the seller resells the goods, and makes a
profit from the resale, the seller:
A. may keep the profits.
B. must share the profit with the buyer who breached.
C. may not keep the profits.
D. must recover only incidental damages.
Answer:
Which of the following would be a justification for involuntary dissolution of a
corporation by a creditor?
A. Misapplication or waste of corporate assets.
B. Directors are in conflict, deadlock cannot be broken by shareholders, and the
corporation faces ruin.
C. Corporation is insolvent and not paying its debts.
D. Directors are acting illegally or unfairly.
Answer:
To reject goods, the buyer must:
A. notify the seller of the rejection.
B. specify the nonconformity after treating the good as his own.
C. desist from paying the seller in full.
D. never specify the defect to the seller.
Answer:
A law that holds that directors will have no liability for breach of the duty of care in the
absence of willful misconduct or recklessness and that does not require board or
shareholder action is called a(n):
A. cap on monetary damages statute.
B. charter option statute.
C. self-executing statute.
D. enabling statute.
Answer:
Charlie and Violet signed a lease to rent an apartment from Joey. After moving into the
apartment, they have a heated argument one day and Violet moves out. Under these
circumstances:
A. Joey may hold Charlie responsible for the entire rent.
B. Joey may hold Charlie liable for only half the rent.
C. there is an automatic termination of the lease by Joey.
D. Joey will have to file a suit against Violet for the rent.
Answer:
Which of the following is a feature of the Securities Exchange Act of 1934 but not the
Act of 1933?
A. It has several sections prohibiting fraud in securities transactions.
B. The 1934 Act requires additional information in the registration statement.
C. It has registration provisions for issuance of securities.
D. The 1934 Act requires periodic disclosure by issuers with publicly held equity
securities.
Answer:
The accountant issues a(n) _____ if the audited financial statements accurately reflect
the client’s financial condition in compliance with GAAP.
A. unqualified opinion
B. disclaimer
C. unaudited statement
D. opinion letter
Answer:
For a person to be convicted of criminal behavior, which of the following statements
would be TRUE?
A. The state must demonstrate a prior statutory prohibition of the act.
B. Insanity at the time the criminal act was committed can convict a defendant for it.
C. Criminal defendants are presumed guilty.
D. Those who commit a prohibited act before the effective date of the statute may be
prosecuted.
Answer:
What are the main goals of the Fair Credit Reporting Act (FCRA)? Under what
conditions is this act not applicable?
Answer:
Which of the following is TRUE of “anticipatory repudiation”?
A. It occurs if promisors, prior to the time for performance, indicate an intent not to
perform their duties under the contract.
B. Its indication can arise only from implicit actions and the other party can sue after
two weeks for breach of contract.
C. It occurs when the promisee’s performance fails to reach the degree of perfection the
other party is justified in expecting under the circumstances.
D. Its indication can arise only in the form of an express statement by the promisor and
the other party can sue for the breach immediately.
Answer:
If the governmental action has a reasonable relationship to the achievement of a
legitimate purpose, it is declared constitutional under:
A. strict scrutiny analysis.
B. intermediate scrutiny analysis.
C. rational basis analysis.
D. suspect classifications.
Answer:
When a buyer breaches a contract, the seller:
A. must deliver the goods to the buyer.
B. need not give any credit to the buyer for any expenses the seller saved because of the
buyer’s breach of contract.
C. may resell the goods to recover damages.
D. cannot reclaim value of goods if the buyer is insolvent.
Answer:
Jose gave Joon the permission to hunt on his land. While hunting, Joon discovered a
Civil War-era sword half buried in the dirt. Under these circumstances:
A. Joon is the owner of the sword.
B. Jose is the owner of the sword.
C. Jose and Joon share joint ownership of the sword.
D. the government is the owner of the sword.
Answer:
The difference between duress and undue influence is:
A. their remedy.
B. the interference with a party’s ability to resist entering into an agreement.
C. the relationship between the parties at the time of the contract.
D. the type of threat used.
Answer:
Constructive eviction is an unattractive option for some tenants because:
A. the tenant has to share the repair expenses with the landlord.
B. the tenant cannot terminate the lease.
C. the tenant is required to vacate the leased premises.
D. the tenant is required to vacate the leased premises and obligated to pay the rent for
the remaining period.
Answer:
If a court finds a contract to be unconscionable, the UCC gives it the power to:
A. enforce only the legal parts of the contract.
B. relieve one party from liability for the consequences of his/her own negligence.
C. prevent liability under willful misconduct or fraud.
D. enforce the contract in a way that avoids an unconscionable result.
Answer:
What is the legal standard for granting a motion to dismiss? What purpose does this
motion serve?
Answer:
When is strict scrutiny analysis triggered?
Answer:
Answer:
How can a plaintiff recover for trademark infringement?
Answer:
Define the legal meaning of “nuisance” and explain the two types of nuisances
recognized by the law, using a scenario to illustrate each type.
Answer:
Discuss how a director protects herself from potential liability by exercising her right
to dissent.
Answer: