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The UCC states that a customer can postdate a check and that the customer has no
obligations to give the bank notice of the postdated check.
Substitution of a party to a contract is called guaranteeing.
There are no exceptions to the perfect tender rule.
Generally, a surrender of property must be in writing.
The most frequently awarded damages are compensatory damages.
The parol evidence rule aims to protect sales or lease contracts that the parties intend to
be the final expression of their agreement.
Before a partnership may be terminated, the partnership must experience the
winding-up stage, but not the dissolution stage.
In the case of a limited partnership, if the partners do not correctly fill or do not file the
certificate of limited partnership with the secretary of state, the limited partners will not
receive limited liability.
Workers first achieved the right to organize (join unions) during the 1800s.
Not all corporate speech is political speech.
To invoke the implied warranty of merchantability, the purchaser or lessee must have
purchased or leased the good from a merchant.
Agents who go beyond their authority when the principal is disclosed or partially
disclosed are liable to third parties for breach of contract, not breach of implied
warranty.
A gratuitous agent is one who acts without consideration.
Members of the board of directors of a corporation are elected by shareholders.
A contract stating "I assign all of my rights under the contract" will generally be
construed to be an assignment of rights but not duties.
On average, the U.S. Supreme Court hears 300 cases a year.
Public law controls disputes between private individuals or between groups and their
government.
The terms international law and comparative law do not mean the same thing.
The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 included only
minor changes to bankruptcy law.
Liquidated damages are identified after a contract breach occurs.
In Quebec all public signs and advertisements must be solely in French.
In all states parents are responsible for the torts of their minor children.
FOB and FAS are different terms with the same meaning.
A promise to do something that you are already obligated to do is generally a valid
consideration.
The test used to establish one's mental state when insanity is claimed is the same
regardless of the jurisdiction involved.
In order for the principal to be held liable when an agent signs a note on behalf of the
principal, the principal's name must be shown on the instrument.
A corporation must be incorporated in the state in which it has its principal place of
business.
All exculpatory clauses are unlawful.
Under our criminal laws that exist today, white-collar crime is not punishable by
imprisonment.
The U.S. Constitution establishes a system of government based on the principle of
federalism.
One consideration in determining whether consideration is sufficient to support a
contract for the sale of goods under the UCC is whether both parties received a good
deal under UCC rules and principles.
A note is a promise, by the maker of the note, to pay a payee.
An invention might be considered a trade secret.
When a federal law is at issue, state protection of an accountant-client privilege does
not apply.
Insurer American International Group (AIG) is well known in the insurance industry for
its ethical and cautious investments protecting investors.
Peremptory challenges in jury selection may not be racially based.
Which of the following was the result in the "Case Opener" in which Vitol sued Koch
Petroleum for delivering oil one day late causing Vitol to sustain a loss based on its sale
to another entity?
A. The court ruled that Koch Petroleum had substantially performed and that Vitol
could not recover.
B. The court ruled that Koch Petroleum had materially performed and that Vitol could
not recover.
C. The court ruled that Koch Petroleum had committed fraud in that the delay was
intentional and that Vitol could recover.
D. The court ruled that Koch Petroleum had violated the perfect tender rule and that
Vitol could recover.
E. The court ruled that both parties were in the wrong and that damages would be split
between the two.
Which of the following is a plea in which the defendant does not admit guilt but agrees
not to contest the charges?
A. Petit defense.
B. Information.
C. Nolo contendere.
D. Sine qua non.
E. Plea avoidance.
"Puppy Woes." Sam promised to sell Linda a Welsh Corgi puppy for $700 but backed
out of the deal. Linda sued Sam in state court for breach of contract and asked for a jury
to hear the case. During jury selection, one juror, Ann, said that she did not think she
could be fair to Linda because Linda did not appear to be a dog lover. Linda's lawyer
asked that Ann not hear the case on the basis that she could not be fair, and the judge
excused Ann. Linda also decided that another juror, Sandy, looked at her in a grumpy
manner so, without a reason given, Linda's lawyer asked the judge to excuse that juror
from serving. The judge did so. After the jury was chosen, Linda's lawyer made a
statement to the jury as did Sam's lawyer. Linda's lawyer then called to the witness
stand Brenda, a friend of Linda, who heard the discussion held between Linda and Sam
regarding the purchase of the puppy. Brenda testified under questioning by Linda's
lawyer that she heard Linda say that she would pay $700 for the puppy and that she also
heard Sam say that he would sell the dog for that amount. Unfortunately for Linda,
Brenda also testified in response to questioning by Sam's lawyer that Sam distinctly told
Linda that he would only sell the puppy to her if Linda came with cash for the puppy
within seven days. Linda did not show up with the money for ten days and Sam had
already sold the dog to someone else. The judge ruled in favor of Sam.
In choosing the jury, the lawyers were engaged in ______.
A. Voir dire
B. Jury analysis
C. Jury review
D. Ven dere
E. Shadowing
A corporation is a[n] ______ corporation in the state in which it is incorporated.
A. Domestic
B. Home
C. Recognized
D. Approved
E. Certified
The ____ allows recognized governments of WTO member states to bring an action
alleging a violation of the GATT.
A. Trade barrier agreement
B. Mediation/arbitration agreement
C. World dispute resolution agreement
D. Dispute settlement understanding
E. GATT violation accord
With which of the following does a network website address end?
A. .gov
B. .edu
C. .net
D. .org
E. .com
"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.
Which of the following is true regarding the effect of XYZ Electronics filing a security
interest?
A. The claim was perfected.
B. The claim was guaranteed.
C. The claim was secured.
D. The claim was acknowledged.
E. There was no effect because there can only be one security interest, and the bank
already had that.
Which of the following is involved in a situation in which a person refuses to perform
according to a contract unless the other person either signs another contract with the
one making the threat or pays that person a higher price than was specified in the
original agreement?
A. Fraudulent duress
B. Contractual duress
C. Negligent duress
D. Economic duress
E. Specific duress
What does the Federal Consumer Credit Protection Act state regarding how much a
debtor's wages may be garnished?
A. That a debtor must be able to keep the 75 percent of his or her weekly net income.
B. That a debtor must be able to keep 30 times the federal minimum wage.
C. That a debtor must be able to keep the greater of the following two options: 75
percent of his or her weekly net income or 30 times the federal minimum wage.
D. Nothing because the Federal Consumer Credit Protection Act does not address
garnishment.
E. Nothing because there is no Federal Consumer Credit Protection Act.
Doctor Sally was sued for malpractice based on allegedly removing the wrong body
part. Following discovery, it becomes clear that the plaintiff has no credible evidence
against Doctor Sally and that no reasonable jury could rule in the plaintiff's favor. How
should Sally's lawyer proceed?
A. The lawyer should make a motion for summary judgment.
B. The lawyer should make a motion for additional discovery.
C. The lawyer should make a motion to amend the answer in order to make a motion to
dismiss.
D. The lawyer should file a motion for judgment on the pleadings.
E. The lawyer should proceed to trial.
Sam, who owned an appliance store, contracted with Sharon to supply all the new
equipment for Sharon's new restaurant. Sharon wanted all the equipment by October
15th so that she could get the restaurant started and obtain holiday business. Sam and
Sharon entered into an agreement by which Sharon would pay Sam $300 per day for
every day he was late in providing the appliances. Which of the following is true
regarding the section of the agreement involving the late charges?
A. It is known as a liquidated damages provision which will be enforced by a court so
long as it is not so far out of reasonable range as to be punitive in nature.
B. It is known as a penalty provision which will be enforced by a court so long as the
plaintiff can establish proof of compensatory damages in at least the amount of
recovery requested.
C. It is known as a punitive damages provision which will be enforced by a court only
if wrongdoing or fraud on the part of the defendant can be established.
D. It is known as a consequential damages provision which will be enforced by a court
only if incidental damages can be established.
E. It is known as an invalid provision which will not be enforced.
"Parent Involvement." Marcy and George, both artists, discussed forming a partnership
to paint portraits. George's parents were interested in investing in the partnership, but
they wanted to avoid any liability. George suggested forming a limited partnership. He
told Marcy and his parents that they could do it very informally, that an oral agreement
was sufficient, and that the parents would be protected from liability. Although George
protested strongly on the basis that it was a waste of money, Marcy insisted that a
certificate of limited partnership be filed with the secretary of state. After a few months,
Marcy and George decided that they wanted to add a new partner, Betty, to the
partnership as a general partner. Betty had some expertise in the portrait field but,
unfortunately, she had also had some scrapes with local law enforcement. George's
parents objected strenuously to the admission of Betty. Marcy and George took the
position that the parents, as limited parents, had no say in the admission of a new
partner. George's father, who had an interest in painting and was concerned that the
partnership was not making very much money, decided to start coming to the
partnership studio to manage the business and attempt to bring it into profitability.
Are George and Marcy correct in that limited partners have no say regarding the
admission of new partners?
A. No, because in order to add a new partner, all partners, including limited partners,
must agree.
B. No, because in order to add a new partner, all general partners must agree and at
least one half of limited partners must agree.
C. No, because in order to add a new partner, at least one half of general partners and
one half of limited partners must agree.
D. They are correct only if all general partners agree that limited partners cannot vote
on the matter.
E. They are correct.
When a holder presents an instrument in a timely and proper manner, but acceptance or
payment is refused, the instrument has been ____.
A. Destroyed
B. Dishonored
C. Converted
D. Rejected
E. Refused
Bank teller Ben receives $1,000 from a customer for deposit into the customer's bank
account. Instead of placing the money into the customer's account, Ben puts it into his
pocket. Which of the following offenses has he committed?
A. Forgery
B. False entries
C. False token
D. Embezzlement
E. Cramming
Which of the following is not a right of a bailee?
A. The right to possess the bailed property during the term of the bailment.
B. The right to use the property in a manner consistent with the terms and purpose of
the bailment.
C. The right to alter the property in order to accomplish the reason for which the
bailment was entered into.
D. The right to retain the bailed property until payment is received.
E. The right to receive compensation for the bailment unless the bailment is gratuitous.
A contract or contract provision is said to be ______ if it is so unfair that a court would
be unreasonable if it enforced the contract.
A. Unconscionable
B. Unreasonable
C. Voidable
D. Viable
E. Ancillary
Which is true regarding a buyer's right to waive warranties?
A. A buyer may not waive warranties.
B. A buyer may waive implied warranties but not express warranties.
C. A buyer may waive express warranties but not implied warranties.
D. A buyer may waive both express warranties and implied warranties.
E. A buyer may waive express warranties and the implied warranty of fitness for a
particular purpose, but not the implied warranty of merchantability.
Which of the following is not a factor taken into consideration under the rule-of-reason
analysis?
A. The nature and purpose of the restraint on trade
B. The scope of the restraint
C. The effect of the restraint on business and competition
D. The effect of the restraint on the defending businesses
E. The intent of the restraint
Which of the following is a practice wherein an exporter sells products in a foreign state
for less than the price charged for the same or comparable goods in the exporter's home
market?
A. Price cutting
B. Disposal
C. Dumping
D. Profit maximizing
E. Subsidizing
Which of the following is not an example of an activity protected by the public policy
exception to the employment-at-will doctrine?
A. Testifying at hearings for workers' compensation claims.
B. Whistle-blowing.
C. Serving on jury duty.
D. Engaging in charitable activities.
E. Doing military service.
Which of the following is false regarding insurance and the international sale of goods?
A. Manufacturers typically have insurance only in their home country because, under
international law, the home country's law would be applied in the event of disputes.
B. Product liability awards may vary in amount from country to country.
C. Complications may arise from having insurance companies in several different
countries.
D. A manufacturers in Germany, for example, could seek insurance through a German
insurance company regardless of where its products are shipped.
E. Today, manufacturers are likely to have an insurance company in every country to
which they ship goods.
"Inattentive Driving." Molly, a first year law student, decided to skip class and drive off
campus to check on her new dress for the upcoming school dance. While driving, Molly
is busy talking on her cell phone with her friend Sharon to convince her to going to the
dance with Molly's brother who has a big crush on Sharon. Unfortunately for Molly,
there is a statute in her state outlawing talking on a cell phone while operating a motor
vehicle. Molly crashes into the side of Sam's new convertible when she looks down to
pick up a can of soda she just dropped onto her new jeans. A police officer just down
the street comes over to investigate. Molly explains to him that it was difficult to hold
the cell phone in one hand, the soda in the other, and also drive. The officer was not
impressed. Around that time Sam comes along. He is furious regarding the significant
dent in his new car. Molly says she has insurance and that she will cover the whole
incident. Sam says that is insufficient; but Molly says that under case precedent, that is
his only remedy. The officer is annoyed because it is his lunch break. He tells Molly
that she must obey duly authorized law, and proceeds to write several citations to
her.The law in Molly's state regulating cell phone usage would be classified as which of
the following?
A. A statute
B. A type of common law
C. An executive order
D. A uniform law
E. A negative law
"Secretary Visits." Carol wrote a will leaving half of her assets to her husband, Bruce,
and half to her adult daughter from a previous marriage, Amy. Carol, however, found
out that Bruce had been spending a lot of time with his secretary, Sharon. Angrily, Carol
typed on a new piece of paper that she stapled to her will, "You skunk, Bruce, you take
nothing. Amy gets it all." She then signed her name. Carol then took the will to her best
friend, Betsy, who signed as a witness verifying that Carol meant for Bruce to take
nothing. Carol was struck by lightning a few days later and died. Bruce told Amy that
the revision to the will meant nothing because, for one thing, it was not prepared by a
lawyer.
Which of the following, if any, is the correct term for a document that changes a will?
A. A testament
B. A documentary revision
C. A codicil
D. A revision
E. There is no document that changes or adds to a will because to revise a will, the
initial will must be revoked and a completely new will written.
Which of the following was the result in Campbell v. Robinson, the case in the text in
which the plaintiff claimed that the defendant wrongfully refused to return an
engagement ring when the marriage was cancelled?
A. That the defendant was entitled to keep the ring because the termination of the
engagement was the plaintiff's fault.
B. That the defendant was entitled to keep the ring because it was a completed gift
when she initially received it.
C. That a jury question was presented as to whether the plaintiff made an absolute gift
of the ring to the defendant after the termination of the engagement.
D. The under principles of equity, the plaintiff was entitled to keep the ring, but only if
she paid the defendant ½ of its value and that, otherwise, it would be sold with the
proceeds split between the parties.
E. That because the termination of the engagement was the defendant's fault, she was
required to return the ring.
Congress passed the Uniform Electronic Transactions Act (UETA).
Which of the following was the result on appeal in the case in the text In re Century
Aluminum Company Securities Litigation, the case in the text involving plaintiffs who
purchased secondary-offering shares and who attempted to sue under Section 11 of the
Securities Act of 1933 for misrepresentations allegedly released regarding the
secondary offering?
A. The court affirmed the trial court's dismissal of the case recognizing that it is
impossible as a matter of law for purchasers of aftermarket shares to have claims based
on Section 11 because Section 11 does not apply to secondary-offering shares.
B. The court affirmed the trial court's dismissal of the case recognizing that it is often
impossible for purchasers of aftermarket shares to have claims based on Section 11
because they normally purchase through brokers that do not acknowledge the source of
the shares.
C. The court affirmed the trial court's dismissal of the case recognizing that the
plaintiffs had not submitted sufficient evidence of misrepresentations.
D. The court allowed the case to proceed contingent on the plaintiffs submitting proof
by an expert that misrepresentations occurred.
E. Finding that the plaintiffs had met all prerequisites in regard to proof, the court ruled
that the case should be allowed to proceed to trial.
To hold an endorser secondarily liable on a check, a holder must present a check within
______ days of the endorsement.
A. 120
B. 90
C. 60
D. 50
E. 30
Which of the following is true regarding what is considered a commercially reasonable
manner by which notice of dishonor may be given to a secondarily liable party?
A. The only commercially reasonable manner for notice of dishonor recognized by the
UCC is certified mail.
B. The UCC recognizes two manners of delivery for notice of dishonor that are
considered commercially reasonable: written and electronic.
C. The only commercially reasonable manner recognized by the UCC for notice of
dishonor is written mail.
D. Due to advances in technology, the only commercially reasonable manner
recognized by the UCC for notice of dishonor is electronic communication.
E. The UCC recognizes that oral, written, and electronic communications are all
commercially reasonable ways in which to provide notice of dishonor.
"In Trouble." Bruno, an issuer of stock, may be in trouble. He sold stock in a new health
club venture before the effective date of registration. He did so because he was in
financial trouble due to other projects. Bruno thought that the health club venture would
be such a success that he would never get caught. Unfortunately, he was wrong. The
health club venture has significant problems, and investors are looking for some way to
hold Bruno responsible. Another problem Bruno has is that he inflated information
regarding the prospects of the health club in the prospectus. Rick, a new lawyer, told
Bruno that as far as he knew, Bruno could be fined for violations under the Securities
Act of 1933, but he could not be sent to jail. Bruno told Rick that was good news and
that no one should feel sorry for the investors because none of them made any effort to
check on information contained in the prospectus or to investigate the future
profitability of the health club venture. Bruno says that he plans to rely on the due
diligence defense. Bruno also asks Rick if he is aware of any other defenses. Bruno says
that once before he was held liable for a violation of the Securities Act of 1933, and he
does not want to be in trouble again.
Which of the following is true regarding Bruno's sale of securities before the effective
date of registration?
A. He will be able to avoid liability if he can establish the due diligence defense.
B. He will be able to avoid liability if he can establish that the investors who purchased
stock early were aware that the securities were sold before the effective date of
registration.
C. He will be able to avoid liability if he can establish that the sales before the effective
date did not directly result in any losses to investors.
D. That is not a violation of the securities laws.
E. He will almost certainly be liable because the 1933 act provides no defenses for that
violation.
Which of the following represents the legal ability to enter into a binding agreement?
A. Majority
B. Emancipation
C. Contractual knowledge
D. Contractual capacity
E. Informed consent
Sam openly used a trail on Kathy's farm to go fishing at the river for 30 years. Kathy
knew that he did so. She became angry at him over an event at the Senior Citizen's
Center and told him that he could no longer cut across her farm. What legal recourse, if
any, would Sam have, and why?
Identify and explain the elements of negligence.
Identify and describe the four elements that are necessary for a contract to exist.
Cindy ran her car over Hank in her company parking lot breaking his leg. That
happened because, without warning, Cindy's car brakes failed. Hank sues Cindy. Cindy
decides to do nothing because she sees no way that she can win the lawsuit because she
did indeed strike Hank. Is she right? Why or why not? What would you suggest that she
do in the civil litigation? Why is it important that Cindy proceed correctly and
immediately at this point in the litigation?
Define the offense of usury. Identify two legal exceptions identified in the text whereby
usury statutes will not be applied.
Maurice is excited because a developer plans a subdivision full of high priced homes
that will adjoin his property. Maurice is so pleased that he puts in a new swimming pool
to celebrate. Maurice believes that the subdivision will significantly increase the value
of his property. The developer, however, changes his mind and decides not to develop
the subdivision. Maurice is angry and asks if he can sue the developer, particularly
since he can establish reliance. What would you tell Maurice and why? Discuss whether
you agree with the law on this issue and why or why not.
List the ways by which a party's contractual obligations can be terminated.
Which of the following behavior may cause a court to not discharge a debt in a Chapter
7 bankruptcy proceeding?
Set forth the characteristics that a traveler's check must have.
What four criteria must be satisfied in order to obtain a patent on a product, process,
invention, or machine?
What must a party show in order to succeed on a claim of trade-dress infringement?
Set forth and describe the two types of self-dealing in which officers and directors
might engage and the penalty for doing so.
Set forth the options of an injured third party when a principal is found liable for a
misrepresentation made by an agent.
List and describe the four rights of directors as listed in the text.
Describe how e-commerce has inspired improvements in Internet postal technology.
