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In the landlord-tenant relationship, the owner of the property is called the _____.
A. Landlord or lessor
B. Landlord or lessee
C. Holder or lessor
D. Holder or lessee
E. Holdee or lessee
Which of the following is one of the three basic types of subsidies?
A. Indirect subsidy
B. Actionable subsidy
C. International subsidy
D. Group subsidy
E. Quantitative subsidy
"Dress Shop Problems." Susie, who has a ladies' dress shop, reached an oral agreement
with Kim, a wholesaler, to purchase 100 dresses for $80 each, with the dresses to be
delivered within 30 days. Kim later orally agreed to a modification whereby she would
add ten belts to go along with certain dresses at no extra charge. Kim did so because she
wanted to maintain Susie's good will. Susie sent Kim a memo confirming their oral
agreement, including the modification, but heard nothing. When the dresses did not
arrive within 30 days, Susie checked with Kim. Kim told her that their agreement was
no good because Kim never signed anything and that the UCC does not apply in the
retail arena.
Which of the following is true regarding Kim's statement that the UCC does not apply
in the retail arena?
A. Kim is correct in that the UCC does not apply in the retail arena.
B. Kim is partially correct. The UCC does not apply in the retail arena if the parties
have had significant past dealings under common law.
C. Kim is partially correct. The UCC does not apply in the retail arena if the parties are
located in the same state.
D. Kim is partially correct. The UCC does not apply in the retail arena if the contract at
issue is for an amount under $10,000.
E. Kim is incorrect.
Which of the following is an investment swindle in which high profits are promised
from fictitious sources and early investors are paid off with funds raised from later
investors?
A. False entries
B. False token
C. False pretenses
D. Ponzi scheme
E. Pretexting
"Lakeside Property." Ronnie agreed to act as the agent of Sue in finding a piece of
lakeside property for her at a good price and also in obtaining a loan for her with which
to purchase the property. She agreed to pay him $500 for doing so. To assist Ronnie in
his duties, Sue disclosed to him confidential information about her finances and debts.
Ronnie decided that he needed help and paid Rick $300 to look for property for Sue.
Rick told Ronnie about a great deal on a piece of lakeside property that Bruce had for
sale. In fact, the deal was so good that Ronnie purchased the property for himself. When
Sue found out about the property Ronnie bought for himself, she complained to Ronnie.
He defended himself on the basis that he was not actually working for Sue when he
found out about the deal. At the time, he was playing golf with Bruce. He also told Sue
that he had hired Rick for $300 to assist him and that he could not be held liable
because he had turned the job over to Rick. He asked Sue for reimbursement of the
amount he paid Rick. Sue fired Ronnie threatening to sue him. Ronnie told Sue that he
would counterclaim for the $300 owed to Rick. Only after he was fired, Ronnie
disclosed to a number of parties information regarding Sue's spending habits which he
thought were excessive.
Which of the following is the most likely result if Sue sues Ronnie for purchasing the
property from Bruce instead of offering it to her?
A. Sue will lose because Ronnie had the right to act in his own best interest.
B. Sue will lose but only because Ronnie was not involved in work duties when he
heard about the property.
C. Sue will lose because Ronnie had validly assigned all duties to Rick.
D. Sue will win.
E. Sue will win only if she can establish that she expressly told Ronnie that he could not
assign the contractual duties under the contract.
In which of the following does a shareholder sue alleging that he has suffered damages
caused by the corporation?
A. Investigative action
B. Shareholder action suit
C. Shareholder's direct suit
D. Shareholder derivative suit
E. Active allocation suit
Which of the following is the result if a payee who receives an instrument with missing
information completes the missing information in a way that is inconsistent with the
intent of issuer, and the instrument has been clearly materially altered?
A. The person taking the instrument cannot become a holder in due course.
B. The alteration does not prevent a person taking the flawed instrument from becoming
a holder in due course.
C. There is no effect so long as the payee can establish that he or she did not receive
any more consideration than that to which the payee was entitled.
D. The instrument is considered materially altered, but it only prevents transfer to a
holder in due course if the holder in due course had knowledge that the payee had done
the alteration.
E. The instrument is considered materially altered, but it only prevents transfer to a
holder in due course if the transferee participated in the material alteration.
In most states, which of the following are exceptions to when the statute of frauds
would apply?
A. Admissions, partial performance, and promissory estoppel
B. Partial performance and admissions, but not promissory estoppel
C. Promissory estoppel but not admissions or partial performance
D. Promissory estoppel and partial performance, but not admissions
E. Admissions but not partial performance or promissory estoppel
Which of the following is a type of ADR?
A. Consultation
B. Mediation
C. Case argument
D. Case analysis
E. Focus grouping
Which of the following was the result in Yan Ju Wang v. George Valverde, the case in
the text in which the plaintiff, a holder of a valid Class C (noncommercial) driver's
license, applied for a Class B (commercial) driver's license but was caught cheating
when taking the Class B test resulting in the revocation by the state Department of
Motor Vehicles of his Class C license?
A. That the interpretation of the Department of Motor Vehicles of state law was correct
and that it had the authority to revoke the Class C license.
B. That the interpretation of the Department of Motor Vehicles of state law was
incorrect and that it had no authority to revoke the Class C license.
C. That although the interpretation of the Department of Motor Vehicles of state law
was correct, the department failed to satisfy applicable requirements in notifying the
plaintiff of its decision in regard to the Class C license and that the department's action
was therefore null and void.
D. That although the interpretation of the Department of Motor Vehicles of state law
was correct, applicable federal law prohibited the revocation of a Class C license due to
misconduct in regard to the testing procedures for a Class B license.
E. That although the interpretation of the Department of Motor Vehicles of state law
was incorrect, federal law prohibits fraud in connection with the application to operate
any motor vehicle thereby justifying the revocation of the Class C license.
Which of the following was the result in the case of Holmes v. Petrovich Development
Co. involving the issue of whether e-mail communications sent between an employee
and her attorney on an employer-owned computer were protected by the attorney-client
privilege?
A. That the communications were not protected by the attorney-client privilege because
it was sent by electronic means regardless of whether or not others had access.
B. That the communications were not protected by the attorney-client privilege because
others in the transmittal process had access to the communications.
C. That the communications were not protected by the attorney-client privilege because
the plaintiff was aware that the communications violated company policy and were
subject to monitoring.
D. That the communications were not protected by the attorney-client privilege because
the employer owned the computer used.
E. That the communications were protected by the attorney-client privilege.
"Air Improvement." Paula is very annoyed because a business near her neighborhood
has an incinerator that releases pollutants. She discussed the matter with her local city
council representative, Bruno, who told her that only the federal government can
enforce laws involving pollutants; that the government has done so through the
establishment of National Ambient Air Quality Standards; and that there is nothing she
as an individual can do. Paula tells the council representative that she considers the
emissions criminal. Bruno just shrugs and replies that industry is never subject to
criminal penalties under the Clean Air Act and that only the government can enforce the
Clean Air Act anyway.
Would there be any action under common law that would likely provide an avenue of
some relief for Paula?
A. Yes, an action for nuisance.
B. Yes, an action for trespass.
C. Yes, an action for annoyance.
D. A common law action for environmental assault would be available but only if Paula
could establish personal injury.
E. A common law action for environmental assault would be available but only if Paula
could establish personal injury and also reduced property value.
"Hair Stylist Woes." Maryann, a college student, went to see her hair stylist, Candy.
Maryann who had black, curly hair, requested straight, blond hair. Candy told her that
she could make that change, but that there would be significant upkeep involved. Candy
made the change, but Maryann did not do the upkeep required. She also falsely claimed
that Candy did not do what Maryann asked her to do, that Candy lied to her, and that
Candy was professionally incompetent. Maryann made the statements to friends of hers.
She also wrote an editorial in her college newspaper to the effect that Candy's shop
should be avoided at all costs because Candy was incompetent. In fact, Candy was a
good hair stylist and enjoyed a good reputation up until the time that Maryann started
her criticism. Candy threatened to sue Maryann for defamation, but Maryann told
Candy that Candy could not prevail because Candy could not prove loss of income.
Candy had to admit that while her reputation had been damaged somewhat and she felt
embarrassed and humiliated, the damage was primarily among the college population.
Her income kept increasing from other segments of the community, and she had
suffered no net loss. All her appointment times were booked and she could do no more
business.
The defamation printed in the school newspaper would be which of the following?
A. Libel but not slander.
B. Slander but not libel.
C. Libel and slander.
D. No tort was committed because an editorial, not a formal news report, was involved.
E. No tort was committed because the falsehood involved matters of appearance, not
business-related matters.
"Overextended Debtor." For his home, Dennis purchased a big screen television from
ABC Electronics and financed the purchase through ABC Electronics. Later, because
Dennis had bought a boat, a new car, an expensive engagement ring for his girlfriend,
and some other items, he was unable to continue making payments on the television.
The manager from ABC Electronics called 60 days after the sale and asked Dennis to
return the television. Dennis refused on the basis that ABC Electronics never perfected
its interest in the television. He also explained that he had later granted a secured
interest in the television along with his other goods to XYZ Credit in return for a loan.
No financing statement was filed on behalf of ABC Electronics although XYZ Credit,
with no knowledge of any interest of ABC Electronics, did file a financing statement.
What should the bank have done to terminate its interest in any property of Molly?
A. The bank should have filed a termination statement within 20 days.
B. The bank should have filed a termination statement within one month.
C. The bank should have filed a waiver statement within 20 days.
D. The bank should have filed a waiver statement within one month.
E. The bank should have filed a stopgap statement by the time Molly's next payment
was due had she not paid off the loan.
Section _____ of the Clayton Act prohibits anticompetitive mergers or acquisitions.
A. 2
B. 4
C. 6
D. 7
E. 10
Which of the following is true regarding the relevance of whether a tort committed by
an employee occurred within the time and space limits of employment?
A. It is relevant on whether the agent is liable for the tort or whether the principal alone
is liable.
B. It is relevant on whether the principal is liable for the tort or whether the agent alone
is liable.
C. It is relevant on the issue of what percentage of harm the agent must bear as opposed
to the principal.
D. It is relevant in regard to whether equitable relief is available.
E. It is not relevant.
Which of the following did the appellate court rule in Securities and Exchange
Commission v. Mutual Benefits Corp., the case in the text involving whether a viatical
settlement investment is an investment contract under securities laws?
A. That a viatical settlement investment is not an investment contract because no
significant post-purchase activity takes place in such contracts, and the expectation of
profits is not therefore based solely on the efforts of the promoter or a third party.
B. That a viatical settlement investment is not an investment contract because profit
depends entirely upon the mortality of the insured.
C. That a viatical settlement investment is not an investment contract because such
contracts are void as against public policy.
D. That a viatical settlement investment is an investment contract in that investors were
offered and sold an investment in a common enterprise in which they were promised
profits that were dependent on the efforts of the promoters.
E. That a viatical settlement investment is an investment contract because no significant
post-purchase activity took place, thereby establishing the dependence of profits on the
presale activities of the promoter.
When a mistake of fact occurs, ______ is absent.
A. Legal coherence
B. Bilateral understanding
C. Joint reasoning
D. Contractual concurrence
E. Legal assent
If insurance covers some type of business risk, the insurance is called ______
insurance.
A. Business loss
B. Profit loss
C. Commercial
D. Economy
E. Economic
Which of the following is a treaty with the purpose of significantly reducing, and in
some countries banning, the use of ozone-depleting air pollutants?
A. The United Nations Ozone Depletion Treaty
B. The Montreal Protocol
C. The Ozone Protection Agreement
D. The Tokyo Protocol
E. The Eastern Pacific Agreement
Which of the following provides for adjustment of debts of family farmers?
A. Chapter 6
B. Chapter 8
C. Chapter 10
D. Chapter 12
E. Chapter 20
Which of the following is an organization formed by individuals, who usually pool their
resources, to market products?
A. A cooperative
B. A consortium
C. A corporation
D. A universe
E. An enterprise
Which of the following is false regarding the employer-employee relationship?
A. The employee is subject to the control of the employer.
B. Generally, all employees are considered to be agents of the employer.
C. Employees who are not legally authorized to enter into contracts binding their
employer are nevertheless generally considered agents of the employer.
D. In an employer-employee relationship, the employee is subject to the employer's
control.
E. Independent contractors fall under the employer-employee relationship.
Many ______ are derived from Roman law.
A. Common law systems
B. Case law legal systems
C. Civil law systems
D. Socialist legal systems
E. Islamic legal systems
The ______ is the person who transfers possession of personality in a bailment
situation.
A. Transferor
B. Transferee
C. Novator
D. Bailor
E. Bailee
"Union Avoidance." Penny owned and operated a large book store with 50 employees.
She was aware of union organization attempts. She prohibited any discussion of the
union and the distribution of literature at any time, including during employee breaks
and lunches in the employee break room. She told employees that she would refuse to
grant a raise to any employee who supported the union. Penny was extremely unhappy
when the union obtained enough support for an election. At that point, she promised
employees that she would give a $1,000 bonus to any employee who voted against the
union. Surprisingly to Penny, employees who voted overwhelmingly supported the
union. On the other hand, employees who voted failed to constitute all employees of the
book store. A number of employees were absent on the day of the election and did not
vote. Penny stated that it was her understanding that the union would not be certified as
the bargaining representative of the employees because fewer than 50% of the total
number of the store employees voted for the union. Penny further stated that, in any
event, she would not deal with the union under any circumstances.
Which of the following is true regarding whether Penny's prohibition of discussion
regarding the union and the distribution of literature in support of the union was
objectionable under federal labor law?
A. Penny could legally prohibit all discussion regarding the union as well as all
distribution of literature in support of the union anywhere on her business premises.
B. Penny could legally prevent all distribution of union literature anywhere and anytime
on her business premises, but she could not prevent any discussion regarding the union.
C. Penny could legally prohibit all discussion regarding the union anywhere and
anytime on her business premises, but she could not prevent any distribution of union
literature.
D. Penny could likely legally prohibit discussion regarding the union and the
distribution of literature during work time, but not during nonwork time such as lunch
periods in the employee break room.
E. Penny could not legally prohibit any discussion of the union or any distribution of
literature on her business premises.
Under Article 2(A) of the UCC, a[n] ______ is a person who acquires the right to
possession and use of goods under a lease.
A. Buyer
B. Seller
C. Lessee
D. Lessor
E. Acquiror
A[n] ______ clause has been defined as one in which the terms are "manifestly unfair
or oppressive and are dictated by a dominant party."
A. Unconscionable
B. Unreasonable
C. Outrageous
D. Prohibitive
E. Unsupportable
"Hot Toaster." Rebecca bought a toaster from Super Store and brought it home. A friend
of hers, Greg, was at her house making toast. The toaster malfunctioned and shocked
Greg resulting in a small burn to his hand requiring medical attention. At a garage sale,
Rebecca also purchased a blender from a friend, Samantha, a nurse, with the intention
of making smoothies. Unfortunately, the blender was not powerful enough to make
smoothies. Assume that not all blenders are designed to provide the texture required for
good smoothies.
Which of the following is true regarding whether Samantha made an express warranty
to Rebecca that the blender would make smoothies?
A. Samantha made an express warranty by not speaking up regarding the blender's
power.
B. Samantha made an express warranty by not speaking up regarding the blender's
power only if Rebecca can prove that Samantha knew it was not a high-power blender.
C. Samantha made an express warranty by not speaking up regarding the blender's
power only if Rebecca can prove that Samantha knew she wanted to make smoothies.
D. Samantha made an express warranty by not speaking up regarding the blender's
power only if Samantha can prove that she, Samantha, was unaware that the blender
was not a high-power blender.
E. Samantha did not make an express warranty.
Which of the following is false regarding Société Anonymes (SA) and Société à
Responsabilité Limitée (SARL) companies in France?
A. SA companies offer shares to the public and must have only one shareholder.
B. SARL companies sell shares exclusively to company members.
C. French law requires that all SA companies appoint an independent auditor to verify
the legality of their accounts.
D. French law does not require that SARL companies appoint an auditor.
E. Members of SARL companies are liable only to the extent of their contributions to
the company.
