Which of the following occurs when a group within a corporation, usually management,
buys all outstanding corporate stock held by the public?
A. An asset purchase
B. A leveraged buyout
C. A management buyout
D. A corporate buyout
E. An illegal buyout
“Grooming Dispute.” Joshua has a successful dog grooming business called “Tub &
Dog.” He registered the business name for trademark protection. Sandy noticed how
well Joshua was doing and opened his own business called “Tub & Dog II.” Joshua is
unhappy about Sandy’s use of the name. He is also unhappy because Sandy is copying
Joshua’s practice of tying a bright orange bandana around each dog’s neck immediately
after grooming. Joshua sued Sandy for trademark infringement based upon the name
and the use of the orange bandana. Sandy replies that one reason Joshua should not
prevail is that he is involved primarily in the sale of dog grooming products while
Joshua is involved in the grooming of dogs. Sandy claims that his use of the orange
bandana is very rare because he does very little grooming. Sandy also defends on the
basis that actual confusion among consumers does not exist. Joshua insists that he
should prevail and notes that he is considering expanding into the product sales area.
What is the effect of Sandy’s claim that actual confusion among consumers did not
exist?
A. Evidence of actual confusion among consumers is a necessary predicate to recovery.
B. Evidence of actual confusion among consumers is a necessary predicate to recovery
only if secondary meaning cannot be established.
C. Evidence of actual confusion is necessary to recover only if secondary meaning is
relied upon as a theory of recovery.
D. Evidence of actual confusion is not a prerequisite for the plaintiff to recover.
E. Evidence of actual confusion is unnecessary if the plaintiff’s sales have decreased at
least 10% since the use of the alleged offending product began.
For which of the following is false regarding when a partner may demand an
accounting?
A. A partner may demand an accounting whenever the copartners wrongfully exclude a
partner from the partnership or from access to the books.
B. A partner may demand an accounting whenever any partner fails to disclose a profit
or benefit from the partnership.
C. A partner may demand an accounting whenever circumstances render an accounting
as “just and reasonable.”
D. A partner may demand an accounting for any time for any reason.
E. A partner may demand an accounting whenever the partnership agreement provides
for an accounting.
“Fighter.” Willy, a ninety-year-old wild bronco rider in the rodeo, had a will leaving all
his possessions to a girlfriend, Linda, age twenty-two. During a rodeo, Willy was placed
on a particularly wild bronco named “Fighter.” During the ride, Grumpy the clown
yelled out to Willy that Linda had suggested that particular horse. Willy was very
grumpy about that because he was having trouble controlling Fighter. Nevertheless,
Willy prevailed and collected the prize. Willy was so excited that he felt himself having
a heart attack. Just before he died, he yelled out, “Linda, you had me put on that crazy
horse, and I’m revoking my will. I’m dying, and I’m leaving everything to my other
girlfriend, Candy.” A number of witnesses heard his statement; and Grumpy, who had
always liked Candy more than Linda, promptly wrote down Willy’s statement. Linda
knew nothing about Candy and was very upset. She told Candy that Candy could have
nothing because Willy’s written will was still in effect. She also told Candy that Willy
was suffering from a mental illness and did not know what he was doing when he stated
that Candy should take everything. Willy’s daughter, Monique, age 65, also entered the
discussion stating that Linda had unfairly coerced Willy into writing a will leaving her
everything.
Which of the following is true regarding Monique’s claim that Linda unfairly coerced
Willy into naming her as a beneficiary in the written will and that the written will is
ineffective?
A. The written will is ineffective if Willy wrote it under circumstances by which Linda
took advantage of his weak physical or emotional condition to persuade him to write
the will leaving her everything.
B. The written will is ineffective only if a witness is available who will testify that
Willy admitted that he would never have left all his possessions to Linda if he were not
dependent on her for his wellbeing.
C. There is a presumption of undue influence based upon the age difference between
Linda and Willy.
D. Linda is legally entitled to a presumption of no undue influence because she was
Willy’s girlfriend at the time the will was written.
E. Linda is legally entitled to a presumption of no undue influence only if she can
establish through the testimony of a disinterested witness that Willy had asked her to
marry him.
Billy knows that he can bring his case against Bob in a state court in Tennessee. He is
unsure, however, of which county in which to proceed. Which of the following address
the proper county?
A. In personam jurisdiction
B. Venue
C. Subject-matter jurisdiction
D. Diversity jurisdiction
E. Long-arm jurisdiction
“Contraceptive Injuries.” Drug company ABC Drugs came out with a new birth control
pill guaranteed to prevent pregnancy for one year after the consumption of one pill. The
FDA approved warnings of the drug’s side effects including nausea and headache to be
provided with the pill. After it was initially put on the market, the company became
aware of some risks of dizziness from taking the drug. The company, however, did not
warn of that risk because the company was concerned that individuals might not buy
the pill, and federal law did not specifically require a warning regarding dizziness.
Belinda thought the pill was a great idea and obtained a prescription for it at a date after
the company became aware of the issues involving dizziness. She took one and felt fine
for a few days. Then, however, she began feeling dizzy. Her dizziness caused her to fall
breaking her leg on some steps. She later discovered that the birth control pill likely
made her dizzy. Belinda decided to sue under a state law claim for failure to warn,
however, she waited a number of years before bringing her action. The drug company
claimed that it had no duty to list dizziness as a risk because its warning complied with
all FDA requirements. The drug company also claimed that the time in which it could
be sued had expired both because Belinda waited too long after she was injured and
also too long from the date of product purchase.
The defense that Belinda waited too long after the product was purchased in which to
sue is a defense based upon which of the following?
A. The statute of limitations.
B. The statute of repose.
C. The statute of perpetuity.
D. The statute of time.
E. The statute of dates.
Which of the following would constitute false imprisonment?
A. Threatening to use immediate physical force to detain someone; refusing to release
property; and physical restraint, such as tying someone to a chair; but not moral
pressure.
B. Threatening to use immediate physical force to detain someone; physical restraint,
such as tying someone to a chair; and moral pressure; but not refusing to release
property.
C. Physical restraint, such as tying someone to a chair, but not threatening to use
immediate physical force to detain someone, refusing to release property, or moral
pressure.
D. Threatening to use immediate physical force to detain someone; refusing to release
property; physical restraint, such as tying someone to a chair; and moral pressure.
E. Physical restraint and threatening to use immediate physical force, but not refusing to
release property or moral pressure.
Mike, a resident of Georgia, sues Company A in state court in Georgia for negligence
alleging personal injury and property damage of $100,000 after a truck driven by an
employee of Company A strikes his pick-up truck in the rear. Company A is
incorporated in Delaware, has its headquarters in New York, but does a substantial
amount of business in Georgia. Company A seeks removal to federal district court, but
Mike opposes the motion. Which of the following is true regarding whether the case
may be properly removed to federal district court?
A. The amount in controversy satisfies diversity requirements; and if Company A’s
nerve center is in a state other than Georgia, then the case may be properly removed to
federal court.
B. The amount in controversy satisfies diversity requirements; and because Company A
is incorporated and has its headquarters in a state other than Georgia, the case may be
properly removed to federal court.
C. Because the amount in controversy satisfies diversity requirements and Company A
is incorporated in a state other than Georgia, the case may be properly removed to
federal court regardless of where Company A’s headquarters, nerve center, or principal
place of business is located.
D. Because the amount in controversy satisfies diversity requirements and Company A
is headquartered in a state other than Georgia, the case may be properly removed to
federal court regardless of where Company A is incorporated and regardless of the
location of its nerve center.
E. Because the amount in controversy fails to satisfy jurisdictional requirements,
regardless of the location of Company A, the case may not be removed to federal court.
Which of the following was the result on appeal in the Case Opener involving an appeal
of a decision of the Federal Trade Commission blocking a proposed merger between
Polypore and Microporous Products on the basis that it would substantially lessen
competition?
A. That the Federal Trade Commission erred in treating the merger as a vertical merger
instead of a horizontal merger and that the proposed merger should have been allowed
to proceed.
B. That the Federal Trade Commission erred in determining that the proposed merger
would substantially lessen competition and that the merger should have been allowed to
proceed.
C. That the Federal Trade Commission erred in asserting jurisdiction over the dispute
and that the matter would be remanded to the federal district court.
D. That the Federal Trade Commission properly determined that a horizontal merger
was involved that would substantially lessen competition.
E. That although the Federal Trade Commission erred in treating the merger as a
horizontal merger rather than as a vertical merger, the Commission properly determined
that the proposed merger would substantially lessen competition.
Even if they would normally have to be in writing, if applicable criteria are met, oral
contracts for _____ goods are enforceable.
A. Retailed
B. Wholesale
C. Collateral
D. Consumer
E. Customized
Which of the following was the result in the case in the text, Jack A. Kahn and Denise
W. Kahn v Stewart Mesher and Lieselotte Mesher, the case in which it was claimed that
in winding down a partnership, a defending partner wrongfully profited by failing to
make appropriate disclosures to other partners regarding an offer to purchase property
held by the partnership?
A. That the defending partner breached his fiduciary duty.
B. That the defending partner had no liability because his fiduciary obligations ended
when the winding-up process started.
C. That although the defending partner had fiduciary obligations, those obligations were
not breached.
D. That the complaining partner and defending partner were both guilty of breach of
fiduciary obligation and were, therefore, estopped from suing each other.
E. That the complaining partner had wrongfully caused dissolution of the partnership
and was, therefore, estopped from complaining about actions of the defending partner.
State consumer protection laws prohibiting used-car fraud may be known as ______
laws.
A. Orange
B. Prune
C. Lemon
D. Onion
E. Lime
Which of the following is a term used in bankruptcy for debtors who cannot pay their
debts in a timely fashion?
A. Statutory debtors
B. Insolvent debtors
C. Failed transactors
D. Foreclosed debtors
E. Acknowledged transactors
Which of the following is a bank receiving a transferred check during a collection
process excluding the first bank and the last bank?
A. Depositary.
B. Acknowledging.
C. Collecting.
D. Intermediary.
E. Transferring.
Which of the following occurs when a former holder of an instrument has the
instrument transferred back to him or her by negotiation or other means?
A. Cancellation
B. Renunciation
C. Reacquisition
D. Recourse
E. Release
Which of the following is not an example of consideration?
A. A promise to stay in a job until a particular project is complete.
B. A promise to your football coach to refrain from riding your motorcycle during
football season even though you love riding it.
C. A promise to cook dinner for your roommate for the next six months.
D. A promise to buy skis for $300 if you like them.
E. A promise to stop staying out late at night during exam week.
Which of the following is a boycott against an employer with whom the union is
directly engaged in a labor dispute?
A. A primary boycott
B. A secondary boycott
C. A signal boycott
D. A management boycott
E. An employee boycott
When will a union be certified as the bargaining representative of employees?
A. If the union receives a majority of the votes in the union election.
B. If the union receives two-thirds of the votes in the union election.
C. If a majority of the employees sign authorization cards and at least one-third of the
employees actually vote in favor of the union.
D. If two-thirds of the total employees in the company vote for the union.
E. If one-third of the total employees in the company vote for the union.
“Disputed Ring.” While working in the yard Tina found a beat up ring. Becca, an
eighteen-year-old teenager and neighbor, came over to visit and liked the ring. Tina
said, “You can have this old thing if you would like.” Becca replied, “I really like it –
Maybe it’s a real diamond!” Tina laughingly told her that there was a one in a billion
chance of that and that Tina was more likely to win the lottery. A few months later
Becca ran over to Tina’s house and told Tina that the ring was actually a diamond worth
thousands! Becca gave Tina the ring to examine. Tina put it in her pocket and told
Becca that she would never have given it to her if she had realized its value and that
possession was back where it had always belonged. Tina also told Becca that Becca
failed legally to accept the gift because neither party knew its true value and that
because Tina did not sign any document turning over title, it was impossible for legal
ownership to pass. Becca sues.
Which of the following is true regarding Tina’s statement that Becca could not have
validly accepted the ring?
A. If the ring is valued at $500 or over, then Tina is correct that Becca could not have
validly accepted the ring because a writing transferring title would have been needed to
validate acceptance.
B. If the ring is valued at $1,000 or over, then Tina is correct that Becca could not have
validly accepted the ring because a writing transferring title would have been needed to
validate acceptance.
C. Tina is correct that Becca could not have validly accepted the ring because a writing
transferring title would have been needed to validate acceptance.
D. Tina is correct that Becca could not have validly accepted the ring when she did not
understand its true value.
E. Tina is incorrect, and Becca validly accepted the ring as a gift.
Which of the following was created by the Sarbanes-Oxley Act to obtain greater
government oversight of public accounting firms?
A. The Public Accounting Firms Oversight Commission
B. The Public Company Accounting Oversight Board
C. The Securities Review Board
D. The Auditing Analysis and Review Board
E. The Certified Public Accountant Commission
Which of the following, if any, is needed in order for an assignment to be valid?
A. UCC 2-301 Form
B. UCC 4-305 Form
C. Business 2-547 Form
D. Business 4-298 Form
E. No form is required.
When may a court rule find parol evidence admissible to further the court’s
understanding of an agreement?
A. When a court determines that there is significant disagreement regarding the
complete and final version of the agreement.
B. When a court determines that a written agreement does not represent a complete and
final version of the agreement.
C. When a court determines that there is disagreement between the parties over
performance of the agreement once performance has actually started.
D. When a court determines that the plaintiff failed to do sufficient research to
determine if signing the agreement was advisable.
E. When a court determines that either party failed to do sufficient research to
determine if signing the agreement was advisable.
“Useless Friend.” Charles, who is very gullible, is friends with Bobby. Bobby, who
cannot be trusted, decides to try to bind Charles to a contract in Bobby’s favor. Bobby
has Charles sign a contract promising to wash Bobby’s car once a week for a month for
$80 per month in payment. The contract incorporated by reference terms on the back.
The terms on the back were in very small print and required Charles for one year to
cook dinner for Bobby, do his laundry, and clean his apartment. Bobby is also very
angry with his former girlfriend, Tessa, and decides to start rumors, that would
constitute the tort of defamation, such as that she has a vile disease, cheated on tests,
and stole from friends. Bobby wants to enlist the help of Charles in smearing Tessa but
knows that Charles would be hesitant to assist in his endeavors. One evening, however,
Charles drank too much beer and was clearly intoxicated – a fact apparent to Bobby.
Bobby had him sign a contract agreeing to defame Tessa for $50. When he sobers up,
Charles tells Bobby that he was drunk and that he has no intention of defaming Tessa,
who also happens to be Charles’ new girlfriend. He also finally takes a look at the
contract involving work for Bobby and tells Bobby that the contract is outrageous.
Which of the following is true regarding Charles’ claim that he had no obligation to
defame Tessa?
A. Charles is correct in that he could not be legally obligated to commit defamation.
B. Charles is correct only if it can be proven that the defamation would cause Tessa
money damages.
C. Charles is correct only if it can be proven that the defamation would cause Tessa
actual injury.
D. Charles is correct only if it can be proven that the defamation is undeserved.
E. Charles is correct only if it can be proven that he had a prior relationship with Tessa.
Which of the following is an order issued by an agency to appear at a particular time
and place and bring specified documents?
A. A subpoena
B. A subpoena duces tecum
C. A summons
D. A summons duces tecum
E. A required documented appearance
Which of the following occurs when goods are delivered to a buyer via a common
carrier, such as a trucking line?
A. A simple delivery contract
B. A common-carrier delivery contract
C. A goods-in-bailment contract
D. An average delivery contract
E. A delivery-carrier contract
Which of the following is an offer made by an offeree to an offeror relating to the same
matter as the original offer and proposing a substituted bargain differing from that
proposed by the original offer?
A. A revocation
B. An acceptance
C. A counteroffer
D. A cross offer
E. A bilateral offer
When a debtor sells collateral, he or she receives ____, something that is exchanged for
collateral.
A. After-acquired property
B. Subsequent-acquired property
C. Proceeds
D. Collateral
E. Post-financed funds
For negotiation, which of the following types of paper require only delivery of the
instrument to the holder by the payee?
A. Bearer
B. Delivery
C. Order
D. Transfer
E. Acknowledgement
If an agent makes _____ from the course of the employer’s business, the employer is
not liable.
A. A substantial departure
B. Any departure
C. A minute departure
D. An absolute departure
E. An unauthorized departure
Which of the following was the result in In Re Zappos.com Inc., v. Customer Data
Security Breach Litigation, the case in the text in which customers of Zappos claimed
that they were not bound to an arbitration agreement contained in a contract with
Zappos?
A. The court ruled for the plaintiffs for the following two reasons: (1) there was no
contract because plaintiffs did not assent to it, and (2) even if a contract existed, the
contract was illusory and unenforceable because Zappos could avoid promises at any
time.
B. The court ruled for the plaintiffs only because of its finding that no contract existed
based on the plaintiffs lack of assent.
C. The court ruled for the plaintiffs only because of its finding that the contract was
illusory and unenforceable because Zappos could avoid promises at any time.
D. The court ruled in favor of Zappos on the basis that even though some provisions of
the contract were unenforceable, because of the federal policy favoring arbitration
agreements, the arbitration clause itself was enforceable.
E. The court ruled in favor of Zappos on the basis that the contract was properly entered
into and was fully enforceable.