Which of the following is a business that exists because of an arrangement between the
owner of a trade name or trademark and a person who sells goods or services under the
trade name or trademark?
A. Joint venture
B. Franchise
C. Joint partnership
D. Consensual seller
E. Approved arrangement
When an employee commits a tort within the scope of the agency, which of the
following is true regarding liability of a principal who controls the employee’s
behavior?
A. The employer is liable.
B. The employer is not liable because as a matter of public policy, a person is singularly
liable for his or her torts.
C. In order to give the employer a chance to evaluate the employee, the employer is
liable only if the employee has worked for the employer for at least thirty days.
D. In order to give the employer a chance to evaluate the employee, the employer is
liable only if the employee has worked for the employer for at least seven days.
E. In order to give the employer a chance to evaluate the employee, the employer is
liable only if the employee has worked for the employer for at least six months.
“Baseball Trophies.” To recognize baseball players on his team, Bobby ordered from
Bruce 10 trophies showing a baseball player swinging a bat. The trophies were to be
delivered on May 1st for an award dinner to be held on May 20th. Bruce was unable to
obtain trophies showing a baseball player swinging a bat, but by May 13th, he did locate
some trophies with a baseball player holding a bat. The difference did not substantially
impair the value of the trophies, and thinking that the trophies would be acceptable,
Bruce delivered them on May 14th. Bobby glanced at the trophies, paid for them with a
check, and said nothing. On May 16th Bobby looked at the trophies more closely and
decided that he did not like them. He canceled payment on Bruce’s check, and Bruce
sued him for payment.
Considering only the issue involving the time set for delivery, what is the likely effect
of Bobby delivering the trophies after the agreed upon time?
A. Bruce has the right to rely on the failure of Bobby to deliver the trophies in a timely
manner and will likely prevail.
B. Bruce’s payment for the trophies without inspection and after the time called for by
the contract likely waived the performance provisions of the contract regarding the time
for delivery.
C. Bruce did not waive the performance provisions of the contract regarding the time
for delivery because he paid by check.
D. Bruce did not waive the performance provisions of the contract regarding the time
for delivery only because he canceled the check before it was cashed by Bobby.
E. Bruce cannot rely upon the performance provisions of the contract regarding the time
for delivery because he did not object within 24 hours of the delivery of the trophies
and, therefore, did not meet the UCC 24-hour rule.
Which of the following refers to the power of a court over persons appearing before it?
A. Subject matter jurisdiction
B. Individual jurisdiction
C. Personal jurisdiction
D. Litigation jurisdiction
E. Superior jurisdiction
An action against an accountant for failing to properly perform the job for which the
accountant was hired is referred to as a[n] _________ action.
A. Malfeasance
B. Malpractice
C. Impropriety
D. Misguidance
E. Misjudgment
Which of the following occurs when all the material elements of a contract are satisfied
even if some nonmaterial requirements may not be satisfied?
A. Substantial tender
B. Perfect tender
C. Substantial performance
D. Perfect performance
E. Adequate tender
Wayne was angry with Lynette because she would not go out on a date with him. Both
Wayne and Lynette worked for Big Grocery, a chain of grocery stores. Wayne worked
as a manager, and Lynette was a cashier. Big Grocery set up, maintained, and allowed
employees to use an online forum to post suggestions and complaints. Wayne and some
other employees posted derogatory comments regarding Lynette, criticized her for
refusing to go out with Wayne, and poked fun at her bust size and other personal
attributes. Lynette complained to Big Grocery’s human resource manager who told her
that the forum was open to all employees, that Big Grocery had a policy of not
interfering, and that Lynette should just post a reply. Discuss whether Big Grocery
should be required to intervene or whether Big Grocery is allowed to have an open
forum. Also, discuss what you ethically believe the law should be in this area.
“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 would be a possible defense to Bobby’s contract involving
chores based upon the size of the print on the back of the contract?
A. Substantive unconscionability
B. Unclear drafting
C. Procedural unconscionability
D. Outrageous wording
E. Adhesion conscionability
A ______ lease is a lease that (1) has a value of $25,000 or less and (2) exists between a
lessor regularly engaged in the business of leasing or selling and a lessee who leases the
goods primarily for a personal family, or household purpose.
A. Finance
B. Consumer
C. Regulated
D. Commercial
E. Retail
The rules and regulations put forth by legislatures are referred to as _______ law.
A. Administrative
B. Statutory
C. Uniform
D. Proper
E. Secondary
Which of the following was the result in Choices in Cmty. Living Inc., v. Petkus, the
case in the text, the case in the text in which the plaintiff alleged that the defendant
violated the Fair Housing Act (FHA) by discriminating against the cognitively disabled
in the provision of housing?
A. That the defendant did not violate the FHA because the FHA only prohibits
discrimination against the physically disabled, not individuals who have cognitive
disabilities.
B. That the defendant did not violate the FHA because zoning regulations prevented
renting the dwelling at issue to three or more unrelated people as requested.
C. That the defendant did not violate the FHA because of the reasonable belief on the
part of the defendant that the proposed renters would commit substantial waste and
damage.
D. That the defendant did not violate the FHA because the defendant established that
more desirable renters than the disabled applicants at issue were willing to rent the
property at issue.
E. That the defendant violated the FHA.
Which of the following is a comprehensive multilateral trading system designed to
achieve distortion-free international trade through the minimization of tariffs and
removal of artificial barriers?
A. The International Agreement on Nontariffs and Trade
B. The World Trade Organization Agreement
C. The General Agreement on Tariffs and Trade
D. The North and South American Free Trade Agreement
E. The European Free Trade Agreement
Which of the following is false regarding the process of attachment?
A. A creditor typically seeks an attachment as a prejudgment remedy in a legal action.
B. The creditor must file a lawsuit prior to seeking an attachment.
C. After attachment is complete, the creditor holds the property until judgment.
D. The court may attach the debtor’s personal or real property.
E. The court may attach the debtor’s checking and savings accounts.
Which of the following is defined by the UCC as any practice that members of an
industry expect to be part of their dealings?
A. Trade norm
B. Course of dealing
C. Anticipated trade dealing
D. Usage of trade
E. Course of performance
Order paper must be ______ as well as _____ to be negotiated.
A. Stamped with an allonge; delivered
B. Delivered; transferred
C. Transferred; delivered
D. Negotiated; held
E. Endorsed; delivered
Which of the following is true regarding the use of peremptory challenges based on
gender?
A. Peremptory challenges may not be based on gender unless a sexually based crime,
such as rape, is involved.
B. Only one peremptory challenge per party may be based on gender.
C. Peremptory challenges may be based on gender only so long as lawyers for all
parties agree.
D. Peremptory challenges may be based on gender.
E. Peremptory challenges may not be based on gender.
Which of the following is true regarding the rights of an employer who is held liable
and pays a third party, not because of the employer’s negligence, but under the doctrine
of respondeat superior based upon negligence of an employee?
A. The employer has no right to receive any reimbursement from the negligent
employee.
B. The employer has a right to recover only 50% of any amounts paid from a negligent
employee.
C. The employer has a right to recover all amounts paid from the negligent employee.
D. The employer can recover all amounts paid from a negligent employee but only if it
can be shown that the employee’s negligence was based upon the violation of a statute.
E. The employer can recover 50% of any amounts paid from a negligent employee but
only if it can be shown that the employee’s negligence was based upon the violation of a
statute.
“Hot Dress.” Doreen writes a check for a dress to Hot Dresses Inc., a small specialty
shop whose shares are owned primarily by Betty. Betty decided to go on an extended
European vacation and temporarily closed down the shop the day after Doreen wrote
the check. When Betty returned, she had a number of other things to do and did not take
Doreen’s check and some other checks to the bank for three months. Betty was
independently wealthy and only ran the shop as a hobby, so she had not been in need of
funds. When Betty finally took Doreen’s check to the bank, Betty requested that her
bank, ABC Bank, deposit the check into her account. When ABC Bank, however,
requested payment from Doreen’s bank, XYZ Bank, the check was dishonored because
of insufficient funds in Doreen’s account. Although Betty did not particularly need the
funds, she did not like to feel as if she had been cheated; therefore, she demanded that
Doreen make the check good.
Who among the following was the holder of the check?
A. Doreen
B. Hot Dresses Inc.
C. Doreen’s bank
D. Betty’s bank
E. There is no holder in this instance
Which of the following was the result in the case of Webster v. Blue Ship Tea Room
Inc., the case in which the plaintiff sued after getting a bone caught in her throat while
eating fish chowder?
A. That the plaintiff could recover based upon the implied warranty of merchantability.
B. That the plaintiff could recover based upon the implied warranty of fitness for a
particular purpose.
C. That the plaintiff could recover based on an express warranty.
D. That the plaintiff could recover based on either breach of an express warranty or
breach of the implied warranty of merchantability.
E. That the plaintiff could not recover because the bone was not a foreign substance to
the fish and should have been expected.
When would a defendant use the doctrine of res ipsa loquitur?
A. To allow the judge and jury to infer that more likely than not, the defendant’s
negligence was the cause of the plaintiff’s harm, even though no direct evidence of the
defendant’s lack of due care existed.
B. To allow the judge and jury to infer that more likely than not, the defendant’s
negligence was not the cause of the plaintiff’s harm.
C. To allow the judge and jury to presume the plaintiff is guilty of contributory
negligence.
D. To allow the judge and jury to presume the plaintiff destroyed evidence.
E. To allow the judge to hold the defendant liable under a strict liability theory.
What is the effect of a failure to comply with the statute of limitations?
A. It operates as a waiver of warranty rights under the contract.
B. There is no effect so long as the plaintiff can establish that he or she was not aware
of the statute of limitations.
C. It operates as a waiver of warranty rights only if the defendant can establish that the
plaintiff had actual knowledge of the statute of limitations.
D. It results in the plaintiff only having the right to sue for injunctive relief, not
damages.
E. It results in the plaintiff only having the right to sue for damages, not injunctive
relief.
UCC Section _____ requires good faith in the performance and enforcement of every
contract.
A. 1-203
B. 2-205
C. 3-301
D. 3-302
E. 1-007
“Fast Food Dilemma.” Richard, who just started at his new job as an assistant manager
at a fast-food restaurant, wants to make a good impression. He thinks that things are
going great. On only the second day on the job, however, he sees his boss Jill, the
manager, slink out of the restaurant with a big box of hamburger that she puts in her car.
Jill then speeds away. Richard is fairly certain that Jill did not pay for the hamburger.
Richard asks advice of his best friend, Bruce; his girlfriend, Sally; his sister, Jenny; and
his dad, Frank. Bruce says that there are no real objective standards and that Richard
should just decide what is best for him. Sally says that Richard should focus on the
consequences and focus on the greatest benefit to all involved. She believes that it will
do no real harm for Richard to keep his mouth shut because the fast-food restaurant is
making plenty of money and probably does not pay Jill enough anyway. Plus, getting in
trouble with Jill could cause problems at work, and if Richard loses his job, Richard and
Sally might have to put off their marriage. Jenny says that on balance the rule producing
the greatest good would be to tell Jill because stealing does not generally produce the
greatest satisfaction. Richard’s dad says that as a matter of principle Richard should tell
Jill because stealing is simply wrong.
Which of the following theories most accurately fits the advice given by Jenny?
A. Deontology
B. Act utilitarianism
C. Rule utilitarianism
D. Ethical relativism
E. Virtue ethics
If a manager has business transactions in one of the European Union countries and
wants to terminate an agency relationship, he or she would want to have access to
knowledge about which of the following?
A. Chapter IV of the Agency Relationship Law
B. Chapter VII of the Employment Relationship
C. Article VI of the European Union Regulations
D. Article VII of the European Union Regulations
E. Section X of the Agency Regulations
“Carpet Woes.” Beau went shopping at ABC Carpet. He saw some carpet he liked but
could not make up his mind. The manager at ABC Carpet wrote down the proposed
purchase price for him along with a statement that the price would be good for three
months. Two months later Beau went back to ABC Carpet to purchase the carpet.
Unfortunately, the price had gone up. Beau showed the manager his writing and
guaranteed price, but the manager said that the offer was no longer good. Although he
had to pay more than the ABC manager had initially promised, Beau proceeded to
purchase his carpet from XYZ carpet, and he also contracted with XYZ to do the
installation. Unfortunately, Beau almost immediately started to have problems with the
carpet. Beau told the sales manager for XYZ Carpet that he was planning on bring suit
for breach of warranty. The sales manager, however, told him that breach of warranty
provisions only applied to sales of goods and that the carpet purchase was for
installation, a service.
What kind of offer did the manager at ABC Carpet make to Beau?
A. An unenforceable offer
B. A firm offer
C. A consideration offer
D. An illusory offer
E. A mirror offer
Which of the following are stakeholders of a business?
A. Shareholders but not employees
B. Employees but not shareholders
C. Customers but not employees or shareholders
D. Management but not employees
E. Shareholders, employees, customers, and management
Which of the following are goods that conform to contract specifications?
A. Adequate goods
B. Transforming goods
C. Conforming goods
D. Reasonable goods
E. Superior goods
Which of the following describes conditions that are not explicitly stated but are
inferred from the nature and language of the contract?
A. Express
B. Implied
C. Conditional
D. Concurrent
E. At large
“Accidental Sale.” Robby entrusted his automobile to ABC Motors for repair. The
manager of ABC Motors, who did a very poor job with inventory, accidentally sold the
car to Connie. Connie, who paid cash for the car, had no idea that the car did not belong
to ABC Motors and paid fair market value for it. When Robby went to pick up the car,
he was very upset that it was gone. The manager of ABC Motors told him that he was
very sorry, but that his only recourse would be against Connie.
Which of the following is true regarding Connie’s rights to the car?
A. Connie can keep the car only if the repair shop voluntarily agrees to pay Robby the
fair market value of the car.
B. Connie can keep the car without paying anyone anything only if the repair shop is
bankrupt or insolvent.
C. Connie can keep the car without paying anyone anything extra.
D. Connie must give the car to Robby.
E. Connie must return the car to the repair shop.
“Presidential Profits.” Linda was president of a publicly traded tractor company, Tough
Tractors. Linda became aware that stock in her company would likely increase
significantly in value because her company had a contract to purchase the assets of
Rough Tractors. The boards of both companies wanted the information kept
confidential until the purchase was complete and a news release was made. Before the
news was made public, Linda immediately purchased a significant number of shares in
Tough Tractors. Linda also told her friend Frank about the contract to purchase assets
although she told him to keep it quiet because it had not been made public yet.
Nevertheless, unable to keep a secret, Frank told his brother, George. Frank and George
purchased a number of shares of stock in Tough Tractors prior to any public
announcement of the sale. After the public announcement was made and the purchase
of assets went through, Linda, George and Frank, all sold their shares in Tough Tractors
and made a nice profit.
For which of the following is George liable?
A. His own profits and also the profits of Frank.
B. His own profits and also the profits of both Frank and Linda.
C. His own profits regardless of whether he knew he was trading in information that
had not been made public.
D. Only his own profits and those of Linda.
E. Only his own profits and then only if it can be shown that he knew or should have
known that the material information was not public.
What is the effect of an unqualified, blank endorsement?
A. It turns previous order paper into bearer paper.
B. It turns previous bearer paper into order paper.
C. It turns a blank endorsement into a special endorsement.
D. It turns an allonge into an endorsement.
E. It turns an endorsement into an allonge.
Which of the following is a party who has authority to act on behalf of and bind another
party?
A. An agent
B. A principal
C. A warrantor
D. A transferor
E. A real endorser
Which of the following is not a type of entity that may be covered by Title VII?
A. Indian tribes
B. Private clubs
C. Unions
D. Employment agencies
E. Private employers with 10 or less employees
Which of the following requires a “pattern”?
A. The Racketeer Influenced and Corrupt Organizations Act.
B. The False Claims Act.
C. The Sarbanes-Oxley Act of 2002.
D. The crime of false pretenses.
E. The crime of false token.
Assume Bobby begins to cross the street in a jurisdiction that applies contributory
negligence. He does not go to a crosswalk but proceeds to illegally cross the street
without checking to see if any vehicles are coming. Slick sees Bobby in the street,
notices that he is not in the crosswalk, and proceeds to hit Bobby with his vehicle
because he believes that Bobby should be taught a lesson about how to cross the street.
Slick does slow down somewhat and only causes Bobby some significant bruising, but
Bobby is angry and sues. Which of the following is most likely to happen in a
contributory negligence jurisdiction?
A. Slick will not be held liable because Bobby was contributorily negligent.
B. Bobby will be able to recover despite proof of contributory negligence on his part
because Slick had a final clear opportunity to avoid the action that injured Bobby.
C. Bobby will win because of comparative negligence.
D. Slick will win because of the assumption of risk doctrine based upon the fact that
Bobby committed an offense by crossing the street where he did in violation of clearly
defined law.
E. Bobby will lose because Slick, at least, reduced his speed.