1) there is no tort liability for fraud or deceit where the defendant did not actively make
a false statement, but instead merely failed to disclose something.
2) normally, a motion for summary judgment requires that a court decide both questions
of fact and questions of law.
3) if no code rule applies to an issue regarding a sale of goods contract, the common
law rules apply.
4) antiassignment clauses in contracts are not enforceable.
5) a contract of adhesion is one that the courts will always enforce because of the strong
public policy underlying such contract.
6) directors should be shareholders of the corporation on whose board they serve.
7) as in the case of an assignee, the sublessee also acquires similar rights and duties
under the lease between the landlord and the tenant.
8) the bankruptcy abuse, prevention and consumer protection act of 2005 has
retrospective application and even applies to cases filed before 17th october 2005.
9) the statute of frauds does not cover contracts in which marriage is the consideration.
10) interrogatories are a form of discovery requiring a party to file written answers to
questions submitted to that party.
11) s agrees to sell b 10,000 widgets at a price of $1.00 per widget. after b breaches the
contract, s resells the widgets for $1.10 per widget in a public sale. s also saved $200 in
shipping costs. what amount does s owe b?
a.$1,200
b.$1,300
c.$1,000
d.nothing
12) which of the following is true about partnership rules for mining partnerships?
a.mining partnerships are easiest to dissolve.
b.the transferability of mining partnership interest is restricted.
c.a mining partner may sell his interest to another person.
d.the death of a mining partner affects a dissolution.
13) liability for consequential damages resulting from a breach of contract may also be
limited or excluded by agreement. will this limitation or exclusion be always enforced?
a.yes, it will always be enforced.
b.no, it will not be enforced if it would be unconscionable.
c.yes, if both parties agreed to it in the contract.
d.yes, it will be enforced in case of injury caused to a person by consumer goods.
14) a clause in a mortgage specifies that if the mortgaged property is sold, then the
remaining balance becomes immediately due and payable. this clause is called:
a.action and sale clause.
b.strict foreclosure clause.
c.due on sale clause.
d.subrogation clause.
15) which of the following can issue both national pollution discharge elimination
system (npdes) permits and industrial discharge permits?
a.states
b.the federal government
c.sewage treatment plants
d.the epa
16) on august 1, neptune fisheries contracted in writing with west markets to deliver to
west 3,000 pounds of lobsters at $4 a pound. delivery of the lobsters was due october 1
with payment due november 1. on august 4, neptune entered into a contract with deep
sea lobster farms which provided as follows: neptune fisheries assigns all the rights
under the contract with west markets dated august 1 to deep sea lobster farms. the best
interpretation of the august 4 contract would be that it was:
a.only an assignment of rights by neptune.
b.only a delegation of duties by neptune.
c.an assignment of rights and a delegation of duties by neptune.
d.an unenforceable third-party beneficiary contract.
17) on may 6, robbie entered into a signed contract with ed, whereby robbie was to sell
ed a painting having a fair market value of $350,000 for $130,000. robbie believed the
painting was worth only $130,000. unknown to either party, the painting had been
destroyed by fire on may 4. if ed sues robbie for breach of contract, robbies best
defense is:
a.risk of loss had passed to ed.
b.lack of adequate consideration.
c.mutual mistake.
d.unconscionability.
18) a general partner in a limited partnership believes that an lllp has been created
wrongly. in such a case, which of the following will apply?
a.he will be considered a limited partner of the limited partnership.
b.he will lose his management powers over the limited partnership.
c.he will have to share profits equally with all other partners.
d.he will have unlimited liability for the obligations of the limited partnership.
19) sometimes, an insurer may retain an attorney to defend the insured in a liability case
but can conclude later on, based on additional information, that it does not have the
obligation to pay any damages that may be assessed against the insured as a result of
the third partys claim. it can do so through a(n):
a.equity of redemption.
b.advance directive.
c.reservation of rights notice.
d.declaratory judgment.
20) patrick sues derek for negligence. at the trial, it is determined that patricks
negligence was 40% responsible for his injury, and dereks negligence was 60%
responsible. patricks losses total $10,000. under a pure comparative negligence system,
he will recover:
a.nothing.
b.$4000.
c.$6000.
d.$10,000.
21) which of the following is not an option for the buyer if the goods delivered by the
seller do not conform to the contract?
a.reject all of the goods
b.accept all of them
c.accept only part of a commercial unit and reject the rest
d.accept any commercial units and reject the rest
22) which of the following characterizes the statute of limitation?
a.the time period fixed by the statute of limitations is uniform throughout the states.
b.the recording of the contract stops the running of the statute of limitations.
c.the time period fixed by the statute of limitations begins when the contract is
recorded.
d.the time period for oral contracts is different from that of written ones.
23) both congress and state legislatures can make laws within areas covered under the
concurrent powers, unless congress preempts state regulation under the:
a.supremacy clause.
b.takings clause.
c.”checks and balances” system.
d.regulatory clause.
24) one of the elements that must be demonstrated before a challenged tying agreement
will be held to violate section 3 of the clayton act is that:
a.the tying product was available for purchase without the agreement.
b.the seller had substantial market power in the market for the tied product.
c.the sellers tying arrangements restrained a not insubstantial volume of commerce in
the tied product.
d.the challenged agreement involved two integrated components of a larger product.
25) someone confronted with an emergency requiring rapid decisions and action need
not employ the same level of caution and deliberation as someone in circumstances
allowing for calm reflection and deliberate action. this exception reflects the
consideration of _____ in a negligence case.
a.personal characteristics
b.context
c.special duties
d.negligence
26) many corporation statutes, unlike the mbca, state that the same person may not hold
the offices of _____ and _____.
a.president; treasurer.
b.president; secretary.
c.vice-president; secretary.
d.vice-president; treasurer.
27) a document that gives person a the right to act for person b, in the event, person a
becomes incapacitated is known as a:
a.durable power of attorney.
b.living trust.
c.right of succession.
d.codicil.
28) which of the following is true of noncommercial speech?
a.it does not cover political speech.
b.books, musical works, and journal articles are classified as noncommercial speech but
are not fully protected due to the existence of an underlying profit motive.
c.it receives the full benefit of the first amendment protection.
d.any kind of corporate speech is classified as noncommercial speech.
29) which of the following is a personal defense against a holder in due course?
a.fraud in the essence
b.forgery
c.breach of contract
d.minority or infancy
30) which of the following characterizes section 43 (a) of the lanham act?
a.it is a consumer remedy.
b.it addresses everything except advertisements.
c.it is available only to commercial parties.
d.it creates a state law of unfair practices.
31) donna is a partner of don-tel lawn care, a partnership in the business of providing
lawn care services. while mowing a lawn using a partnership mower, donna negligently
runs over a piece of metal, sending pieces of metal flying through the air. one piece hits
the clients patio door and shatters the glass. is donna liable to the client? are donnas
partners liable to the client?
32) mr. smithers is the owner of meany co. in the past few months, office stationary
supply orders have risen significantly from the same period in previous years due to a
sudden shortage in items such as paper. mr. smithers is convinced that employees are to
blame for the paper shortage because they are taking paper without permission for their
personal use. mr. smithers orders that all the supply rooms, copy rooms, lounges, and
the employee locker rooms be monitored with hidden surveillance cameras. discuss the
potential legal consequences if such an action is taken by meany co.
33) a music store lets laura take a guitar home with her so that laura might test how it
plays. after playing the guitar for a day, laura puts it on a sofa and forgets about it. two
weeks later, the guitar is damaged due to fire. who must bear the risk of loss for the
damage to the guitar?
34) courts may sometimes be sympathetic to an adult who has suffered losses due to a
minor who misrepresented his age. how so?
35) when petie and geri adams purchased a house in 1992, they insured it with
goodfriend insurance co. this property insurance policy has a policy limit (face amount)
of $125,000. that figure matched the fair market value of the house as of the time the
adams procured the policy. generally due to the declining property values in the small
town where the house was located, the house now has a fair market value of $101,000
as of august 1, 1997. on that date, the adams house was completely destroyed by fire, a
covered peril. the adams have filed a claim and proof of loss with goodfriend. if the
policy at issue is a valued policy, how much are the adams entitled to collect from
good-friend? why that amount? if the policy at issue is an open policy, how much are
the adams entitled to collect? why that amount?
36) isaac contracts to sell boyd all of his requirements of coal. in the past, boyd has
required between 1000 and 1500 tons of coal per year, but the contract contains no
estimate of boyd’s needs. in 1998, boyd’s needs increase dramatically, and it demands
10,000 tons of coal from isaac. is isaac obligated to sell boyd this amount?
37) rockchalk paving co., a kansas firm, paves public streets and highways in kansas
and the surrounding states of nebraska, colorado, oklahoma, and missouri. wildcat
pavers, inc., a paving contractor that competes with rockchalk in kansas, oklahoma, and
missouri, filed suit against rockchalk and jayhawk corp., another paving contractor.
wildcat alleges that rockchalk owns 65 percent of the outstanding stock of jayhawk and
that the defendants violated sections 1 and 2 of the sherman act by engaging in
collusive bid-rigging practices. the defendants have moved to dismiss for failure to state
a cause of action. should their motion be granted? explain your reasoning.
38) gamma company asks prudent prime westin llp (ppw), a cpa firm, to audit its
financial statements. gamma tells ppw that it plans to use the statements to obtain a loan
from fain bank. ppw prepares the statements. gamma uses the statements to obtain a
loan from shaw bank. the statements falsely state gammas financial position due to
ppws negligent preparation of them. when gamma defaults on the loan, shaw bank sues
ppw under the common law of negligence. does ppw have liability to shaw bank under
the rule of ultramares? does ppw have liability to shaw bank under the rule of the
restatement (second) of torts?
39) why are disguised gift promises involving nominal consideration nonbinding
because of the absence of consideration? explain with one example.