The Stolen Book. Betty tells Susan that Bob stole her business law book from her car.
The next day Susan confronts Bob and slaps him for stealing her book. Bob has Susan
arrested for slapping him. Susan sues Bob for damages in the amount of the book and
for maliciously having her arrested. Claiming that she lied, Bob sues Betty for
defamation. The prosecution by the government against Susan for slapping Bob
involves which of the following?
A. Public law
B. Private law
C. Administrative law
D. Both public and private law
E. Comprehensive law
When is an insurable interest in the buyer created in a simple delivery contract?
A. When money is transferred
B. When the items are delivered
C. When the buyer takes possession
D. When the goods are identified to the contract
E. When the goods are tendered for delivery
A person who creates an endorsement is called a(n) _________________.
A. allonge
B. transferor
C. transferee
D. endorser
E. endorsee
Scuba Diving. Marcy invented a new type of mask for scuba divers that was not subject
to fogging. She agrees to allow Jenny to manufacture and sell the mask. She receives a
sum of money for every mask that Jenny sells. Marcy also entered into an agreement
with Frank to allow him to sell the masks but only if he also purchased non-patented
diving suits from Marcy. All parties proceeded to do very well with their sales.
Marcy’s agreement with Jenny allowing Jenny to sell the mask is referred to as which of
the following?
A. A license
B. A patent agreement
C. A trade agreement
D. An illegal agreement
E. A franchise agreement
Which of the following do not meet the UCC definition of a good?
A. Real estate
B. Corporate stocks
C. Copyrights
D. Neither real estate, corporate stocks, nor copyrights meet the definition of good
E. Real estate and corporate stocks do not, but copyrights do meet the definition of
good
Disputed Ring. While working in the yard, Tina found a beat up ring. Becca, an
eighteen-year old teenager and neighbor, came over to visit and liked the ring. Tina
said, “You can have this old thing if you would like.” Becca replied, “I really like it –
Maybe it’s a real diamond!” Tina laughingly told her that there was a one in a billion
chance of that and that Tina was more likely to win the lottery. A few months later
Becca ran over to Tina’s house and told Tina that the ring was actually a diamond worth
thousands! Becca gave Tina the ring to examine. Tina put it in her pocket and told
Becca that she would never have given it to her if she had realized its value and that
possession was back where it had always belonged. Tina also told Becca that Becca
failed legally to accept the gift because she did not know its true value and also because
Tina did not sign any document turning over title. Becca sues. Which of the following
describes the type of gift at issue?
A. A gift causa mortis
B. A gift inter vivos
C. A gift inter mortis
D. A gift causa vivos
E. A donative gift
Which of the following is false regarding officers of a corporation?
A. Officers are executive managers.
B. Officers run the day-to-day business of the corporation.
C. In most cases an individual may serve as both a director and an officer.
D. The rules of agency do not apply to the work of officers.
E. Qualifications required of officers are set forth in the corporate articles and bylaws.
The expectations that a community places on the actions of a business are referred to as:
A. Social responsibility of business
B. Business ethics
C. Values
D. Standards of business conduct
E. Business decisions
What do the words “deliver to the order of seller” indicate in a goods-in-bailment
contract?
A. A negotiable document
B. A nonnegotiable document
C. A shipment contract
D. An origin contract
E. An execution contract
________________ give preference to shareholders to purchase shares of a new issue
of stock.
A. Acknowledged rights
B. Superior rights
C. Preemptive rights
D. Selective rights
E. Benefit rights
Which of the following occurs when one party threatens physical harm or extortion to
gain consent to a contract?
A. Duress
B. Undue influence
C. Durable fraud
D. Criminal influence
E. Duress and undue influence, but not durable fraud
___________________ interprets and enforces the National Labor Relations Act.
A. The Federal Union Board
B. The Collective Bargaining Board
C. The National Labor Relations Board
D. The Mandatory Negotiations Board
E. The Federal Labor Oversight Board
When will a party’s negligence not permit the party to escape liability for an
unauthorized signature?
A. Any type of negligence will result in a party being unable to escape liability for an
unauthorized signature.
B. The issue of negligence is irrelevant as to the issue of whether a party may escape
liability for an unauthorized signature because a party is always liable for an
unauthorized signature.
C. A party who is negligent may not escape liability for an unauthorized signature if the
party whose signature was forged behaved so negligently as to substantially contributes
to the making of the forgery.
D. A party’s negligence will not permit the party to escape liability for an unauthorized
signature only if the negligence amounts to a finding of recklessness.
E. A party’s negligence will not permit the party to escape liability for an unauthorized
signature only if the negligence involved a certified check.
Which of the following is called straight bankruptcy?
A. Liquidation
B. Reorganization
C. Reformation
D. Acknowledgment
E. Avoidance
Generally, assuming no negligence on the part of the victim, when an endorsement on a
check has been forged and properly reported to the bank, which party is the party
ultimately liable for the loss?
A. The drawer.
B. The first party to accept the forged instrument.
C. The first legitimate endorser of the instrument.
D. The bank of the first party to accept the forged instrument.
E. The bank of the drawer even if proper notice was given of the forgery.
What was the result in Scott v. Mid-Carolina Homes Inc., the case in the text in which
the defendant attempted to rescind a contract to sell a mobile home because its
salesperson was acting under a mistake of fact when he gave the plaintiff the sales
price?
A. The seller was allowed to rescind the contract because a unilateral contract was
involved.
B. The seller was allowed to rescind the contract because a bilateral contract was
involved.
C. The seller was allowed to rescind the contract because the mistake involved a price
differential of over 25%.
D. The seller was allowed to rescind the contract because the mistake involved a price
differential of over 50%.
E. The seller was not allowed to rescind the contract.
The Burial Emporium. Fred operates a funeral home called Fred’s Burial Emporium.
Fred likes to keep things simple. He has one flat price with no itemization and requires
that customers purchase a complete package from him if they want any services
whatsoever. Fred also goes door-to-door selling funeral packages. He tries to visit
neighborhoods in which there has been a recent death because residents in the
neighborhood will have final arrangements on their minds. He believes and informs
customers that once customers sign a contract for burial services, there is no backing
out. Fred also obtains a good deal of business from phone solicitation. He enjoys calling
late at night, between 10 p.m. and 11 p.m., when people are tired, but before they go to
bed. He believes that if people do not feel well, they are more likely to consider funeral
arrangements. After some pesky consumer complaints, the Federal Trade Commission
and other federal agencies investigate Fred. He hires a good lawyer with his profits in
an attempt to stay out of trouble. Which of the following is true regarding Fred’s
practice of requiring a complete package purchase from him if the consumer desires any
funeral services?
A. There is no problem with that practice under federal law.
B. There is no problem with that practice under federal law so long as Fred informs
customers of that prior to entering into any sales talk and negotiation.
C. That practice is prohibited by federal law.
D. That practice is prohibited by federal law unless Fred gives a 10% discount as
compared to the average price of funeral services in his state.
E. That practice is prohibited by federal law unless Fred gives a 20% discount as
compared to the average price of funeral services in his state.
Under the UCC, if a contract or a contract provision is so unfair that a court would be
unreasonable if it enforced the agreement, the contract is deemed _____.
A. unconscionable
B. unreasonable
C. voidable
D. viable
E. ancillary
Sexual Harassment ADR. Jenny is very angry with her supervisor, Sleaze, at the
Mexican fast-food restaurant at which she works which is owned by an international
company located in Mexico. He has been making inappropriate sexual comments to her
and other employees. Jenny decides to sue and retains a lawyer, Brice. Brice talks with
the owners of the restaurant and is informed that Jenny signed an agreement to arbitrate
any claims. Brice tells Jenny that it is completely up to her and that if she wishes, she
can disregard the arbitration agreement and proceed to court. Jenny informed Brice
about other employees who had complained about sexual harassment and entered into
mediation agreements. Brice promises her that he will get copies of all documents and
everything that was taken down by the court reporter at those mediations. He also tells
Jenny in response to her question about the possibility of mediation in her case to forget
it because mediation is pretty much the same thing as arbitration. What is the effect of
the arbitration agreement on Jenny’s ability to file an action in court?
A. The arbitration agreement would not affect Jenny’s ability to file a court action in a
sexual harassment case although it would bar her right to file a court action in other
types of cases.
B. The arbitration agreement would completely bar Jenny’s ability to file a court action.
C. By law the arbitration agreement may only delay for 60 days Jenny’s ability to file a
court action.
D. By law the arbitration agreement may only delay for 6 months Jenny’s ability to file
a court action.
E. More information is needed regarding the provisions of the arbitration agreement
before it can be determined if it would bar an action in court.
__________________ is provided to a plaintiff if the EEOC decides not to sue on
behalf of the plaintiff.
A. A termination of claim letter
B. A reinstatement letter
C. A referral letter
D. A right-to-sue letter
E. None of these because if the EEOC decides not to sue, then the case has no merit;
and a plaintiff may not bring a civil suit.
Not So Rich Uncle. Bruce is attempting to convince Sally to marry him. He promises
her that if she will marry him, he will buy a new Mercedes automobile for her within
six months of the marriage and take her on a world tour within a year of the marriage
date. Sally reluctantly agrees, and they sign an agreement by which Bruce agrees to
provide the Mercedes and world tour. Bruce and Sally marry on January 1.
Unexpectedly, on March 1, Bruce’s supposedly rich uncle, Frank, dies. Frank has no
living relatives other than Bruce, and Frank’s will leaves everything to Bruce who is
also appointed executor. In attempting to settle the estate, Bruce agrees orally to pay out
of his own pocket debts of Frank totaling $10,000. Sally is concerned about Bruce’s
doing so. Bruce tells her not to worry because he will get all the money back when the
estate settles. Bruce admits to a number of friends that he agreed to settle the debts out
of his own pocket because he needed to obtain assets from the estate in a hurry. The
assets were needed in large part to satisfy his obligations to Sally. Surprisingly, it later
came to light that prior to his death Frank had signed away all his assets to his girlfriend
in Argentina. There was nothing left in the estate for Bruce to inherit. Bruce disavowed
his agreement to pay $10,000 to various creditors. Which of the following is the
appropriate term for the marriage agreement entered into between Bruce and Sally?
A. Marital solution agreement
B. Marital dissolution agreement
C. Prenuptial agreement
D. Marriage acknowledgement agreement
E. Marriage consideration agreement
Used Car Problems. Marcy purchased a used car from ABC Motors. Six months later
the police seized the car from Marcy on the basis that it was a stolen vehicle. Marcy
asked for her money back from ABC Motors. The manager there told her that the car
was not stolen; that even if it were stolen, ABC Motors acted in good faith with no
knowledge of a theft; and that, therefore, no refund was legally required. ABC Motors
had also sold a used car to Frank who wrote a bad check for the car and left town but
not before he sold the car to Betty who paid $1,100, a fair price for the car, believing
that Frank had all rights to sell it. ABC Motors asked Betty to return the car, but she
told ABC to forget it. Assuming that ABC Motors was an innocent purchaser from the
thief, which of the following is true regarding Betty’s obligations, if any?
A. She is not required to return the car because Frank held voidable title, not void title.
B. She is not required to return the car under the UCC because she paid over $1,000 for
it.
C. She is required to return the title because Frank held voidable title, not void title.
D. She is required to return the title under the UCC because she paid under $5,000 for
it.
E. Under the UCC, the car should be sold with ABC and Betty splitting the proceeds.
Useless Friend. Charles, who is very gullible, is friend 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.
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 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 and that he has no intentions of going
through with any of it. Which of the following is true regarding Charles’ claim that he
had no obligation to defame Tessa?
A. Charles is correct in that he could not be legally obligated to commit defamation.
B. Charles is correct only if it can be proven that the defamation would cause Tessa
money damages.
C. Charles is correct only if it can be proven that the defamation would cause Tessa
actual injury.
D. Charles is correct only if it can be proven that the defamation is undeserved.
E. Charles is correct only if it can be proven that he had a prior relationship with Tessa.
When must a disaffirmance of a contract based on minority occur?
A. Before or within a reasonable time of the minor’s reaching the age of majority
B. Within 30 days of the minor’s reaching the age of majority
C. Within 60 days of the minor’s reaching the age of majority
D. Within 90 days of the minor’s reaching the age of majority
E. Within one year of the minor’s reaching the age of majority
Title VII applies to employers who have ______ or more employees for ______
consecutive weeks within one year and who are engaged in a business that affects
commerce.
A. 15; 20
B. 50; 20
C. 15; 30
D. 20; 50
E. 20; 52
Accidental Sale. ABC Motors ordinarily deals in used cars and also does some amount
of repair work. Robby entrusted his automobile to ABC Motors to have the oil changed
and get new brakes. The car was parked in the lot along with other cars, some of which
were for sale. The manager of ABC Motors accidentally sold the car to Connie because
she saw it and took it upon herself to offer a good price. The manager was attempting to
increase the shop’s profit margin. Connie had no idea that the car did not belong to ABC
Motors. When Robby went to pick up the car, he was very upset that it was gone. The
manager told Robby that he was very sorry, but that he was not negligent and only
made an honest mistake. According to the manager, Robby accepted the risk of this type
of loss; and his only recourse was against Connie. Which of the following is true
regarding the manager’s statement that Robby’s only recourse is against Connie?
A. The manager is correct.
B. The manager is incorrect only if Robby has a writing signed by a representative of
the repair shop guaranteeing the safety of the car.
C. Because the sale to Connie was an accident, the manager is correct only if Connie
can be found and served with process.
D. The manager is correct only if Connie’s deal was for less than 10% of the fair market
value of the car.
E. The manager is incorrect.
The idea that we should interact with other people in a manner consistent with the
manner in which we would like for them to interact with us is called ______.
A. the Equalization Rule
B. the Ethical Realization Rule
C. the Silver Rule
D. the Golden Rule
E. the Ten Commandments Rule
With a(n) ______ instrument, the payee or subsequent holder can demand actual
payment at any time.
A. time
B. demand
C. recourse
D. nonrecourse
E. immediate
Crimes committed under criminal laws are prosecuted by which of the following?
A. Only injured individuals
B. Any interested person whether injured or not
C. State government only
D. The federal government only
E. The state or federal government
What was the result in Janky v. Batistatos, Lake County Conventions & Visitations
Bureau, the case in the text in which it was claimed that an e-mail constituted
acceptance of a settlement offer?
A. That the e-mail was insufficient to constitute an acceptance because of its electronic
nature.
B. That the e-mail was insufficient to constitute an acceptance because no settlement
funds were forwarded in conjunction with the e-mail.
C. That the e-mail was insufficient to constitute an acceptance because the parties had
not specifically agreed that acceptance could be made in that manner.
D. That the e-mail was insufficient to constitute an acceptance because it was
insufficiently specific.
E. That the e-mail was sufficient to constitute an acceptance.
In the U.S., at-will employment applied in all states with no exceptions until ______.
A. 1920
B. 1932
C. 1944
D. 1959
E. 1964