Which of the following is a requirement that leased premises be fit for ordinary
residential purposes?
A. Warranty of residence
B. Agreement of acceptability
C. Contract of residence
D. Implied warranty of habitability
E. Covenant of quiet enjoyment
Belinda purchases a couch from Good Furniture Store to use in her home. She pays for
the couch, and the store agrees to deliver it. Unfortunately, on the way to her house, the
vehicle overheats and burns, destroying the truck and the couch inside. Belinda asks for
a refund or another couch. The store owner refuses on the basis that risk of loss had
passed to Belinda. What would be the result of a lawsuit between Belinda and Good
Furniture Store under the UCC?
“Yard Mowing.” Paula agreed to mow John’s yard once a week for $50 per week
throughout the summer. Paula, however, was having trouble getting her money from
John. On one occasion, he in handwriting gave her in IOU saying “I, John Jones, owe
Paula Smith $50.” A couple of weeks later, John did not have the money to pay Paula
what he owed her, and he handwrote the following on a piece of paper and gave it to
her: “I, John Jones, promise to pay Paula Smith or to bearer, the sum of $100 on
Monday, July 22, 2013.” Paula quit mowing John’s yard; and, disgusted with John,
Paula assigned both documents to Vince. When Vince presented the documents to John,
John refused to pay on the basis that after inspecting the yard, he decided that Paula was
doing a poor job. Vince told him the documents constituted negotiable instruments, but
John pointed out that he had not signed the documents with his signature at the end.
Which of the following is true regarding the effect on negotiability of John’s
determination that Paula did a poor job mowing the yard?
A. Paula’s performance prevents the instruments from being negotiable only if John
meets the burden of proof of establishing to the judge by a preponderance of the
evidence that Paula did a poor job mowing the yard.
B. Paula’s performance prevents the instruments from being negotiable only if Paula
meets the burden of proof of establishing to the judge by a preponderance of the
evidence that she did an acceptable job mowing the yard.
C. Paula’s performance prevents the instruments from being negotiable only if John
meets the burden of proof of establishing to the judge by a preponderance of the
evidence that Paula did a poor job mowing the yard, and if Paula signed and provided to
John a document agreeing that the instrument would lack negotiability unless she
properly performed.
D. Paula’s performance prevents the instruments from being negotiable only if Paula
meets the burden of proof of establishing to the judge by a preponderance of the
evidence that she did an acceptable job mowing the yard and that she did not sign any
document agreeing that the instrument would lack negotiability upon John’s objection.
E. Manner of performance is not one of the listed elements for a finding of
negotiability.
Jack went into a hardware store to purchase a saw; and as to a particular saw, the
salesclerk said, “This saw will cut through metal.” Jack purchased the saw. What kind
of warranty, if any, did the salesclerk make through the statement?
A. The salesclerk made an express warranty, a warranty of trade usage, and a warranty
of fitness for a particular purpose.
B. The salesclerk made a warranty of fitness for a particular purpose, but not an express
warranty of a warranty of trade usage.
C. The salesclerk made an express warranty and a warranty of trade usage, but not a
warranty of fitness for a particular purpose.
D. The salesclerk made an express warranty, but not a warranty of fitness for a
particular purpose or a warranty of trade usage.
E. The salesclerk made a warranty of trade usage, but not a warranty of fitness for a
particular purpose or an express warranty.
Which of the following identifies states that did not meet National Ambient Air Quality
Standards?
A. Failure states
B. Marginal areas
C. Nonattainment areas
D. Misguided states
E. Sick states
Which of the following is true regarding type of judicial liens?
A. Attachments, writ of execution, and garnishment are types of judicial liens.
B. Writ of execution and attachments are types of judicial liens, but garnishments are
not.
C. Garnishments and writ of execution are types of judicial liens, but attachments are
not.
D. Writ of execution are a type of judicial lien, but garnishments and attachments are
not.
E. Attachments are a type of judicial lien, but garnishments and writ of execution are
not.
Which of the following is true if it is determined that harm befell bailed property due to
an “act of God”?
A. The bailee is liable for harm to the bailed property arising out of the bailee’s ordinary
or gross negligence.
B. The bailee is liable for harm to the bailed property arising only out of the bailee’s
gross negligence.
C. The bailee is liable for harm to the bailed property caused by even the slightest lack
of due care on the part of the bailee.
D. The bailee is strictly liable for harm to the bailed property.
E. The bailee is not liable for harm to the bailed property.
Which of the following is false regarding a limited partnership?
A. There must be at least one general partner.
B. There must be at least two limited partners.
C. The partnership must use the word “limited” in its title.
D. The parties must file a certificate of partnership with a state office to create it.
E. If a limited partner dies, the limited partnership is usually unaffected.
Which of the following was the result on appeal in Robert M. Tafoya v. Dee S. Perkins
involving a sale of partnership property and the applicable statute of limitations on an
action for an accounting when there was no agreement on the matter between the
withdrawing partner and other partner involved?
A. That the plaintiff’s suit was timely because the statute of limitations on an action for
an accounting as to a partnership does not begin to run until all property owned by the
partnership is sold and that the statute of limitations, computed as of that point, is six
years.
B. That the plaintiff’s suit was timely because the statute of limitations on an action for
an accounting as to a partnership does not begin to run until all property owned by the
partnership is sold and that the statute of limitations, computed as of that point, is two
years.
C. That the plaintiff’s suit was timely because there is no statute of limitations on an
accounting as to partnership property so long as one of the partners is living.
D. That the plaintiff’s suit was untimely because the statute of limitations on an action
for an accounting as to a partnership begins to run when the withdrawing partner ceases
to be associated with the business resulting in dissolution and that the statute of
limitations, computed at that point, is six years.
E. That the plaintiff’s suit was untimely because the statute of limitations on an action
for an accounting as to a partnership begins to run when the withdrawing partner ceases
to be associated with the business resulting in dissolution and that the statute of
limitations, computed at that point, is two years.
“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 the proper designation under the UCC for the television?
A. It is a consumer good
B. It is a pledge
C. It is an allonge
D. It is unsecured property
E. It is equipment
Which of the following was the result in the case in the text Mary Kay Inc., v. Janet
Isbell involving whether the defendant had a franchise that was wrongfully terminated?
A. That under federal law, no franchise existed.
B. That under state law, no franchise existed.
C. That under federal law a franchise existed; but that under applicable law, the
franchise was not wrongfully terminated.
D. That under state law a franchise existed; but that under applicable law, the franchise
was not wrongfully terminated.
E. That under state law a franchise existed that was wrongfully terminated.
Which of the following was propounded by prominent legal scholars, recruited by the
American Law Institute?
A. The Restatement of the Law Second, Contracts.
B. The Convention on Contracts for the National Sales of Goods.
C. Common law.
D. Common law and the Convention on Contracts for International Sales of Goods.
E. The Convention on Contracts for the National Sales of Goods and the Restatement of
the Law Second, Contracts.
Which of the following is false in regard to an insurer’s right to cancel a policy of
insurance?
A. An insurer who rightfully cancels a policy is not required to a refund of premium
payments covering future time periods.
B. Typically a grace period is required before a policy may be cancelled.
C. State statutes usually govern the circumstances under which an insurer may cancel a
policy.
D. If an insured fails to pay premiums after a certain period, the insurance company
may cancel.
E. Car insurance may be canceled if the insured loses her license because of a driving
violation.
In which of the following types of ownership does each co-owner have the right to sell
his or her interest without the consent of the other owners, have the right to own an
unequal share of the property, and the right to own property subject to the right of a
creditor to attach his or her interest?
A. Joint tenancy
B. True tenancy
C. Tenancy in common
D. Joined tenancy
E. Tenancy by the entirety
“Scuba Gear.” Shirley is a popular manufacturer of scuba gear. Before she allows a
store to carry her line of scuba gear, she requires that the store owner agree that her line
is the only line of scuba gear the store will carry. She also requires that if a store carries
her line of scuba gear, it must carry her line of wet suits. Sales of other manufacturer’s
gear and wet suits have begun a steady decline. She is accused of violating antitrust
laws. Shirley, however, replies that she is simply conducting good business practices.
Trudy, the president of ABC Scuba, calls Shirley and tells her that she is prepared to
bring suit against Shirley for antitrust violations. Shirley tells Trudy that although she is
not in violation, that only the government could take action against her, and that the
government is way too busy to get involved in a dispute over scuba gear.
Which of the following is true regarding whether Shirley’s arrangement that if a store
carries her line of scuba gear, it must carry her line of wet suits is legal?
A. It is legal.
B. It is legal unless the items at issue may not be used together.
C. It is per se illegal.
D. If the tying arrangement leads to competitive harm, the court will likely find the
arrangement to be illegal.
E. The agreement is legal only if use of the wetsuit enhanced the performance of the
scuba gear which is unlikely.
The ____ facilitates international cooperation in opening markets and provides a forum
for future trade negotiations and the settlement of international trade disputes.
A. World Trade Organization
B. Generally Favored Nation Organization
C. National Trade Organization
D. International Cooperation Agreement
E. International Marketing Agreement
Under which of the following theories may a plaintiff be able to proceed even if the
plaintiff cannot trace an injury caused by a product to any particular manufacturer?
A. The shared liability theory.
B. The market share theory.
C. The trade theory.
D. The shared market liability theory.
E. The shared production theory.
Shares are ______ when the corporation will not issue physical stock certificates.
A. Approved
B. Unapproved
C. Unacknowledged
D. Acknowledged
E. Uncertificated
Which of the following is true regarding the case opener, the case in which Martha
Stewart was charged with insider trading after selling stock in a company based on
information that her stockbroker gave her that the CEO of the company and his
daughter had just sold all of their company stock?
A. She was not convicted of insider trading and sentenced to jail.
B. After a jury trial she was found innocent of insider trading and did not go to jail for
anything.
C. She was not convicted of insider trading, but she went to jail for convictions relating
to statements made to SEC investigators.
D. She pled guilty to lesser offenses on all counts, paid a large fine, and all charges
were dismissed.
E. Charges were dismissed after she agreed to repurchase all shares of stock.
Which of the following is an example of a dram shop act?
A. A statute which requires bar owners to have a license before operating a bar.
B. A statute which allows bartenders and bar owners to be held liable for injuries caused
by individuals who become intoxicated at the bar.
C. A statute that prohibits any bars on certain streets in the jurisdiction.
D. A statute which allows the selling of beer but not hard liquor.
E. A statute which requires bar owners to post a bond before opening for business in a
jurisdiction.
Which of the following is true regarding the relationship between negotiability and an
unconditional promise or order to pay?
A. There is no such requirement in order to find negotiability.
B. A promise or order to pay must be specific and not be implied in order for
negotiability to be found.
C. Simply acknowledging a debt satisfies the negotiability requirement of an
unconditional promise to pay.
D. A common IOU is sufficient to satisfy the negotiability requirement of an
unconditional promise to pay.
E. An offer of unconditional partial payment satisfies requirements of negotiability.
Which of the following is true regarding private trials?
A. They may allow defendants to hide wrongdoing from the public.
B. Those who lack funds must use a slower public system, but information from private
trials is open to the public, similar to trials in state or federal court.
C. They are generally slower than regular litigation.
D. They are a form of state or federal litigation closed to the public to protect the
identity of litigants in certain sensitive situations.
E. They unfairly discriminate against corporations because by law in some cases
corporations must pay the costs involved for indigent plaintiffs.
“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.
Which of the following would describe Linda in providing information about the asset
sale to Frank?
A. Tipper
B. Provider
C. Providee
D. Tippee
E. There is no descriptive term for Linda because she did nothing wrong.
As of the date of text publication, what was the status of the lawsuit Pelman v.
McDonald’s, the case in which the plaintiffs asserted that McDonald’s engaged in a
scheme of deceptive advertising that in effect created the impression that McDonald’s
food products were nutritionally beneficial and part of a healthy lifestyle?
A. The case was dismissed and plaintiffs are appealing.
B. The case settled.
C. The judge had refused to dismiss the plaintiffs’ claims, and the case is moving
forward as a class action.
D. The judge ruled that only minor plaintiffs could sue, and their case is moving
forward on a class action basis.
E. The judge ruled that only plaintiffs who could prove that they had eaten a sufficient
amount of food at McDonald’s could sue and also that the plaintiffs could not proceed
on a class action basis.
The ______ is the promise that a landlord makes in a lease that the tenant has the right
to quietly enjoy the land.
A. Promise of tranquility
B. Agreement of quiet
C. Covenant of quiet enjoyment
D. Contract of enjoyment
E. Contract of tranquility
Which of the following is true regarding the reduction of the impact of moral hazard by
insurers?
A. It is not possible for insurers to reduce the risk of moral hazard, and this is seen as a
risk of doing business.
B. Insurers refuse to pay claims believed to result from the effects of moral hazard.
C. The only avenue for insurers seeking to reduce moral hazard is through the use of
deductibles.
D. The only avenue for insurers seeking to reduce moral hazard is through refusing to
insure those who have previously made multiple insurance claims.
E. Insurance companies lessen the impact of moral hazard by requiring that individuals
with insurance make co-payments or pay a deductible.
Which of the following is a term for gifts made during someone’s lifetime, not in
contemplation of death?
A. Inter vivos gifts
B. Sustainable gifts
C. In rem gifts
D. Probable gifts
E. Causa mortis gifts
Which of the following is true regarding the manner in which the exclusionary rule is
derived from the U.S. Constitution?
A. It is specifically set forth in the Fourth Amendment.
B. It is specifically set forth in the Fifth Amendment.
C. It is specifically set forth in the Sixth Amendment.
D. It is specifically set forth in the Eighth Amendment.
E. No section of the U.S. Constitution specifically states the provisions of the
exclusionary rule.
“Horse Tracks.” Martha, Greg, and Prudence decided to form a corporation called
Horse Tracks to raise horses. They all began the corporate creation process by arranging
for necessary capital and financing. They raised capital from their friends by making
deals whereby their friends would purchase stock in the new corporation. After the
corporation was formed, a problem arose with a contract for feed that Martha, Greg,
and Prudence had entered into while organizing the corporation. Belinda, the seller of
the feed claimed that she had not been fully paid and threatened to sue the corporation.
The contract Martha, Greg, and Prudence had with Belinda did not reference liability
after the new corporation came into legal existence. Martha, Greg, and Prudence asked
for a novation, but were uncertain as to whether that would occur.
What were Martha, Greg, and Prudence seeking by requesting a novation in regards to
the lawsuit threatened by Belinda?
A. An agreement by which the corporation would be substituted as the debtor instead of
Martha, Greg, and Prudence so long as the corporation made a profit in its first year of
existence.
B. An agreement by which Martha, Greg, and Prudence would be discharged from the
debt so long as the new corporation agreed to do an agreed upon amount of business
with Belinda for a certain period.
C. An agreement by which Martha, Greg, Prudence, Belinda, and the corporation would
agree that the corporation would be liable to Belinda, and that Martha, Greg, and
Prudence would be released.
D. An agreement by which Martha, Greg, Prudence, Belinda, and the corporation would
agree that the company would be liable to Belinda for one half the debt and that Martha,
Greg, and Prudence would be liable for only one half of the debt.
E. An agreement by which Belinda agreed to delay her claim for one year in order to
give the corporation a chance to make a profit.
At what age does protection against age discrimination arise under the Age
Discrimination in Employment Act?
A. 60
B. 50
C. 45
D. 40
E. 35
In the process of negotiation, what is meant by the term “delivery”?
A. The physical handing of an instrument from someone entitled to it to the person
intended to receive it.
B. The passing of a warranty that the instrument is collectible.
C. The passing of a warranty that an instrument qualifies as a negotiable instrument.
D. The passing of a warranty that the recipient is a holder.
E. The passing of a warranty that the recipient is a holder in due course.
Which of the following is a deposit that is preauthorized and performed on a customer’s
account through an electronic terminal?
A. A point-of-sale.
B. An authorized deposit.
C. A transferred deposit.
D. A direct deposit.
E. An approved deposit.
Under which of the following circumstances may a credit card company not bill a
consumer for a damaged item that is unknowingly purchased with the card?
A. The consumer purchased the item in the same state as the consumer’s home or within
100 miles of the consumer’s home.
B. The consumer purchased the item in the same state as the consumer’s home or within
100 miles of the consumer’s home, and the item cost more than $50.
C. The consumer purchased the item in the same state as the consumer’s home or within
100 miles of the consumer’s home; the item cost more than $50; and the consumer made
a good-faith effort to resolve the dispute, such as asking the store for a refund.
D. The consumer purchased the item in the same state as the consumer’s home or within
100 miles of the consumer’s home; the item cost more than $50; the consumer made a
good-faith effort to resolve the dispute, such as asking the store for a refund; and the
seller had a history of providing defective merchandise.
E. The credit card company may always charge the consumer, and it is up to the
consumer to get a refund from the merchant.
When a person dies without a will, it is said that he or she died _____.
A. Testate
B. Testacy
C. Intestate
D. Unwilled
E. Unprobated
Which of the following is false regarding implied agency and apparent agency?
A. An implied agency as well as an apparent agency may be created by conduct.
B. Circumstances may determine the extent of implied agency.
C. Implied agency may conflict with express authority.
D. Apparent agency is also known as agency by estoppel.
E. If a principal in an alleged apparent agency situation denies that an agency existed,
the third party alleging agency must demonstrate that he or she reasonably believed,
based on the principal’s conduct, that an agency relationship existed.