1) In Fuel Injection Products & Service Corporation’s suit against Gears & Cylinders,
Inc., the jury returns a verdict in Fuel Injection’s favor. Gears & Cylinders files a
motion asking the judge to set aside the verdict and begin new proceedings. This is a
motion for
a.a judgment in accordance with the verdict.
b.a judgment on the pleadings.
c.a new trial.
d.judgment n.o.v.
2) Lewis is a director of Mines & Refineries, Inc. Using information that is not
available to the public,Lewis makes a profit trading in Mines & Refineries stock. Lewis
is most likely liable for breach of
a.no duty or rule
b.the business judgment rule.
c.the duty of loyalty.
d.theduty of care.
3) Casey offers to sell a certain used forklift to DIY Lumber Outlet, but Casey dies
before DIY accepts. Most likely, Casey’s death
a.did not affect the offer.
b.shortened the time of the offer but did not terminate it.
c.extended the time of the offer.
d.terminated the offer.
4) Rica is asked to be a witness to Sade’s will. Before attesting to the will,
a.Rica does not have to read the will or be informed of its contents.
b.Rica must read the will and recite its contents.
c.Sade must orally tell Rica of the will’s contents.
d.Sade’s attorney must read the will aloud to Rica.
5) Without authorization, Lars contracts on behalf of Mina to have Nemo paint the
interior and exterior of Mina’s house. If Mina decides to ratify the contract, she must
affirm
a.all of the contract.
b.any part of the contract, with Lars liable to Nemo for the difference.
c.any part of the contract before performance begins.
d.any part of the contract at any time.
6) Gulf Bank receives a check drawn by Hayward. The check is received after the
established “cutoff” hour. Payment can be postponed without dishonor
a.indefinitely.
b.under no circumstances.
c.for thirty days.
d.until the following business day.
7) BeFriends Corporation uses the trademark of Community Life Inc., a social media
site, as a meta tag without Community Life ‘s permission. This may be permissible
a.if the appropriating site has nothing to do with the meta tag.
b.if the two sites appear in the same search engine results.
c.if the use is reasonably necessary.
d.under no circumstances.
8) Following negotiations, Office Park, Inc., enters into an informal contract with
Quality Janitorial Company for custodial services for Office Park’s buildings. This
means that the parties’ contract
a.requires no special form.
b.is freely open to either party’s interpretation.
c.is subject to change by either party, within reason.
d.is not yet completely formed.
9) Lark promises to buy Mac’s used textbook for $60. Lark is
a.an offeror.
b.an offeree.
c.a promisee.
d.a promisor.
10) Lou and Mike negotiate a deal to transfer stolen body building equipment for
counterfeit currency that Mike will attempt to spend at Now! Discount Mart. This
contract is
a.enforceable.
b.void.
c.voidable at the option of Lou or Mike.
d.voidable at the option of Now!
11) Metro Facilities, Inc., contracts to sell a parking garage to Nouveau Property
Company. The contract provides that if Metro does not close the deal by September 15,
it must pay Nouveau one-half of the contract price. This provision is not enforceable
because it is
a.a liquidated damages clause.
b.a waiver of breach clause.
c.a limitation-of-liability clause.
d.a penalty clause.
12) Cleo writes a check for $100 drawn on Debit & Credit Bank and presents it to
Elegant Jewelers for payment. If the check is not backed by sufficient funds, Cleo may
be prosecuted for
a.forgery.
b.fraud.
c.negligence.
d.nothing.
13) James works at Kay’s Breakfast Caf©. After work, in the parking lot, James finds a
diamond ring lost by Lani. Title to the ring is possessed by
a.James.
b.Kay’s.
c.Lani.
d.the state.
14) Stanley’s debt to Town Bank is past due. Town Bank obtains a judgment against
Stanley to collect the debt, but he refuses to pay. Town Bank asks the court to order
Stanley’s employer to pay a portion of his paycheck to the bank. This is a request for
a.a mechanic’s lien.
b.an order of garnishment.
c.an order that would violate most state laws.
d.a writ of attachment.
15) Omni Insurance Company violates a state licensing statute when selling an insur-
ance policy to Petra, in whose state Omni is not licensed to sell insurance. As a member
of the class of persons protected by the statute, Petra can
a.do nothing with respect to the policy.
b.enforce the policy or recover the amount of the premiums paid.
c.only enforce the policy.
d.only recover the amount of the premiums paid.
16) Fact Pattern 22-B1
Economy Bank issues a letter of credit in favor of Finish & Refining Company, a U.S.
firm, to facilitate an international sales contract to buy resources from Global Mining,
Ltd., a British company.
Refer to Fact Pattern 22-B1. Global Mining is entitled to payment when it
a.enters into the contract with Finish & Refining.
b.verifies that Finish & Refining has the money to pay for the purchase.
c.complies with the terms and conditions of the letter of credit.
d.asks to be paid.
17) Hobart, an officer with Investment Assets Corporation, misappropriates the firm’s
property through fraud. Later, Hobart and the corporation agree to a mutual release of
claims. Still later, Investment Assets discovers Hobart’s fraud and files a suit to recover
the misappropriated property. Most likely, the court will rule that Hobart
a.breached his duty of loyalty by failing to disclose his misconduct.
b.is not liable due to his duty to act in his own self-interest.
c.is not liable due to the firm’s failure to timely discover the fraud.
d.is not liable due to the mutual release of claims.
18) Jackson County enacts an ordinance to limit the number of new homes that can be
built within certain acreage. Klaus, the owner of a farm that he had hoped to subdivide
and sell as a single-family housing development, files a suit against the county, alleging
an unconstitutional taking without compensation. The court is most likely to rule in the
county’s favor if the purpose of the ordinance is to
a.further major developers’ interests.
b.impose preservation costs on property owners.
c.increase local tax revenue.
d.preserve local natural resources.
19) While sailboarding, Jolene is injured when Kilroy carelessly crosses her path.
Kilroy’s insurance company offers Jolene $50,000 to release Kilroy from liability, and
she accepts. Later, she learns that her injuries are more serious than she realized. The
release is
a.enforceable.
b.unenforceable because Jolene’s injuries are unforeseeably difficult.
c.unenforceable because Kilroy has a preexisting duty to pay.
d.unenforceable because the release is an illusory promise.
20) Farouk uses his computer to break into Global Financial Center’s computer. Farouk
is a
a.hacker.
b.virus.
c.phisher.
d.worm.
21) The term consideration refers to the legality of the subject matter of a contract.
22) Federal wiretapping law covers electronic forms of communication.
23) A person who transfers an instrument for consideration makes transfer warranties to
all subsequent transferees and holders who take the instrument in good faith.
24) Administrative agencies generally have no discretion over the type of hearing
procedures that they use.
25) A contract will be discharged if supervening circumstances make it impossible to
attain the purpose both parties had in mind when they made the contract.
26) In a contract, an exculpatory clause releases a party from liability in the event of
monetary or physical injury no matter who is at fault.