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Shareholders may not be held personally liable for a defective corporation's actions.
An injunction is a court order that either forces or prohibits a party from doing
something.
A ratified contract is still voidable.
If a person's mental deficiencies have resulted in his being adjudicated insane and a
guardian has been appointed for him, he has no capacity to enter into contracts and any
contract he attempts to enter into is void.
A defendant cannot be found liable for battery if the contact was consented to.
Liquidated damages are identified after a contract breach occurs.
The main purpose of tort law is to punish the defendant.
Under employment-at-will, an employee may quit at any time.
In Kelo v. City of New London, the U.S. Supreme Court ruled that as a matter of law, the
government violates the Fifth Amendment by taking private property and selling it for
private development.
A party only has a limited number of challenges for cause in jury selection.
A corporation is considered alien in states in which it conducts business but is not
incorporated.
Lost property and mislaid property are the same legal theories.
In general, Chinese government officials who are convicted of accepting bribes will be
punished with the same sentence as U.S. government officials convicted of the same
offense.
The United States Supreme Court has held that corporate political speech is protected to
the same extent as individuals' political speech.
State courts may provide opinions on hypothetical situations so that the plaintiff can
determine what type of damages she may incur.
Real property includes land and everything permanently attached to it.
If a defendant is found not guilty in criminal court, that defendant may still be liable for
his or her actions in civil court.
Federalism is a system of government in which power is divided between the legislative
and executive branches of government.
For an assignment to be valid, the assignor must file the assignment with the court.
If the contract contains a clause in which an event must occur in order for a party's duty
to arise, then that contract contains a condition subsequent.
More than half the states remain contributory negligence states.
The term ADR refers to the resolution of legal disputes through methods other than
litigation.
A franchise is a business arrangement between an owner of a trade name or trademark
and a person who sells goods or services under the trade name or trademark.
The Communications Decency Act gives immunity to providers of interactive computer
services for liability they might otherwise incur on account of material disseminated by
them but created by others.
A buyer may revoke acceptance of nonconforming goods under any circumstances.
A limited partnership and a limited liability partnership refer to the same type of
business organization.
Constitutions and statutes are complete in the sense of covering the detailed rules that
affect government and business relations.
Federal Regulations prohibit the advertising of cigarettes on radio and television but
allow ads for smokeless tobacco.
The laws of intellectual property protect tangible property.
To be successful in an intentional tort, the plaintiff must show that the defendant
intended to harm the plaintiff.
A substitute check is a check that is substituted for a lost check.
The purpose of securities regulation in China is similar to that of the SEC in the United
States.
Executive agencies are cabinet level agencies.
Under the UCC, the agreement begins when the offeror makes an offer to the offeree.
The ideal tender rule requires that the seller deliver goods in conformity with the terms
of the contract.
Tying arrangements are an illegal agreement in which the sale of one product is linked
to the sale of another.
States may have slightly different definitions of each tort.
The UCC is a statutory source of contract law that is applicable to transactions
involving the sale of goods.
A conditional contract is an agreement that becomes enforceable only on the happening
or termination of a specific condition.
Nondisclosure of a contract involves the active hiding of the truth about a material fact.
A condition ______ is a future event that terminates the obligations of the parties when
it occurs.
A. precedent
B. subsequent
C. concurrent
D. at large
E. certain
Under UCC Sections 2-615(a) and 2A-405(a), a delay in delivery or nondelivery, in
whole or in part, is not a breach in circumstances in which performance has been made
______ because a contingency has occurred that was not contemplated when the parties
reached the agreement.
A. unreasonable
B. unprofitable
C. less profitable
D. impracticable
E. more difficult
Failure to make payments on a loan is __________________________.
A. value
B. default
C. collateral
D. perfection
E. PMSI
Which of the following is an example of an inherently dangerous activity?
A. Driving a vehicle.
B. Operating an airplane.
C. Dynamite blasting in a populated area.
D. Burning trash.
E. Babysitting.
In which forum is the violation of public laws addressed?
A. State legislatures
B. Federal Congress
C. Community consensus
D. Courts
E. All of these
Scruffy. Sam is engaged in the criminal activity of growing marijuana in his home. A
couple of police officers while randomly passing through the neighborhood saw Sam go
to the mailbox. They thought that he looked a little scruffy, and they were concerned
that they had not made a sufficient number of arrests in the past month. They decided to
"check out" Sam. Therefore, they immediately broke down Sam's door, searched his
home, and arrested him. The police officer in charge told Sam that because marijuana
was involved, he lost his rights against self-incrimination and that he might as well
confess. Sam proceeded to confess to growing marijuana and a number of other crimes.
The judge was so angry with Sam that he threw him in jail for two months without any
kind of hearing. Sam's lawyer is concerned that the judge has not granted Sam a
hearing. Which of the following is one right that the judge has violated?
A. Sam's right to substantive due process.
B. Sam's First Amendment rights.
C. Sam's right to procedural due process.
D. Sam's Fourth Amendment rights.
E. Sam's Second Amendment rights.
Which of the following is the misappropriation of trust funds or money held in a
fiduciary capacity?
A. False entries
B. Defalcation
C. False pretenses
D. Ponzi scheme
E. Pretexting
A party who is _____ liable is responsible for paying the amount designated on an
instrument if the primarily liable party defaults.
A. primarily
B. secondarily
C. warranty
D. UCC
E. preventable
What is the primary source of authority for the federal regulation of businesses in the
United States?
A. The Supremacy Clause
B. The Commerce Clause
C. The Full Faith and Credit Clause
D. The Contract Clause
E. The Tenth Amendment
According to the United Nations as discussed in the text, which of the following is true
regarding e-government, meaning the delivery of government services through digital
information technologies, including the Internet?
A. It is important because it reduces the cost of government while improving the quality
of services and citizen access.
B. It is important because although it increases the cost of government, it improves the
quality of services and citizen access.
C. It is important because it enables the government to keep closer track of perceived
criminal activity.
D. It is not important because face-to-face interaction with government employees is
more efficient and cost effective.
E. It is not important because Internet sites cannot be kept sufficiently up-to-date to
handle complex governmental issues.
Express authority is often referred to as ______ authority.
A. absolute
B. inherent
C. actual
D. noticed
E. approved
Which of the following references a problem occurring when a buyer and a seller
purport to make an agreement, but pre-printed forms do not match?
A. The parallel issue.
B. The matching issue.
C. The battle of the forms.
D. The lack of completeness issue.
E. The minor deviance issue.
Chewer. The state in which Susan lives has a statute prohibiting dogs running at large.
All dogs are required to be on a leash whenever they are off the owner's premises.
Susan's dog, while not on a leash, visits the home of a neighbor down the street. While
there, the dog carries off an expensive pair of shoes belonging to Robert. The shoes are
chewed and destroyed. A neighbor informed Robert of what had happened. Robert
commented that he never should have left his $300 shoes lying on the deck in the first
place but that he expects to be repaid by Susan. Robert found out that the dog had
carried away a number of shoes and other articles in the neighborhood, chewing them to
pieces. Susan did nothing to warn anyone. Robert thinks that she should be punished for
her activities, which would perhaps deter her from allowing the dog to run loose. What
type of damages would Robert seek in order to punish Susan and to deter her actions in
regard to letting the dog run free?
A. Punitive.
B. Compensatory.
C. Nominal.
D. Liquidated.
E. There are no such damages available.
Which of the following is false regarding the UCC's signature requirement for a
negotiable instrument?
A. An "X" will suffice if the party intended that the mark be placed on the instrument
and uses that mark to identify himself.
B. A signature may be made by means of a device or machine.
C. A signature may be made manually.
D. The signature of an agent on behalf of the principal binds the principal and satisfies
the signature requirement.
E. None of these.
Which of the following is a fact-finding jury that determines if a defendant is guilty or
not guilty?
A. A grand jury
B. A petit jury
C. A deciding jury
D. An empowered jury
E. A true bill jury
Stacy, located in Florida, is entering into a contract with Natasha, located in Russia, for
the purchase of snow globes to sell to people who do not typically get to see snow.
Stacy is familiar with the UCC but uneasy about what law would apply should she have
a dispute with Natasha regarding the contract. She would like for Florida law to apply.
Which of the following is the best advice to Stacy?
A. Stacy should attempt to have a contract clause inserted providing that the law of
Florida would govern any dispute.
B. While a requirement that Florida law would govern the dispute would likely be
deemed unconscionable, Stacy should attempt to have a contract clause inserted
providing that international law would govern any dispute.
C. There is nothing that Stacy can do because Russian law, the law of the seller, would
govern any dispute.
D. Stacy does not need to do anything because, as a matter of law, Florida law, the law
of the buyer, would govern any dispute.
E. It depends on the value of the contract. If it is in an amount over $1,000, Stacy
should attempt to obtain a provision in the clause that Florida law governs; otherwise,
she has no option but to allow a court to later determine the conflicts issue.
Maurice contracted with Suzanne to feed and walk her Corgi mix dog, Baby, for $100
while Suzanne was on vacation for one week. One day before Suzanne was to leave,
Maurice came over and said that Baby would be a significant amount of trouble and
that he would have to receive $150 in order to walk and feed Baby. Suzanne reluctantly
agreed. When she returned from vacation, she handed Maurice $100 and refused to pay
more. Maurice threatens to take her to small claims court. What would be the likely
result?
A. Maurice will lose based on economic duress.
B. Maurice will lose based on undue influence.
C. Maurice will lose based on fraud.
D. Suzanne will lose because she breached the amended contract with Maurice.
E. Suzanne will lose because she breached the amended contract with Maurice unless
she can establish that the prevailing rate for walking and feeding a dog for one week is
no more than $100.
Which of the following is true regarding whether an agent's signature may satisfy the
requirement of negotiability that the signature of a maker or drawer appear?
A. An agent's signature on behalf of his or her principal binds the principal and satisfies
the signature requirement for negotiability.
B. An agent's signature on behalf of his or her principal cannot bind the principal and
does not satisfy the signature requirement for negotiability.
C. An agent's signature on behalf of his or her principal binds the principal and satisfies
the signature requirement for negotiability only if specific authorization from the
principal allowing the agent to act on the specific transaction at issue is attached to the
document.
D. An agent's signature on behalf of his or her principal binds the principal and satisfies
the signature requirement for negotiability only if the instrument is for an amount over
$1,000.
E. An agent's signature on behalf of his or her principal binds the principal and satisfies
the signature requirement for negotiability only if the instrument is in an amount of
$1,000 or less.
Banking Problems. Constance and Blair are both loan officers at ABC Bank. Constance,
being somewhat dishonest, tells Henry, a customer of the bank who is wealthy and
rarely checks the status of outstanding loans and balances, that she is collecting money
for a local animal shelter. She asks him to sign a pledge that he will contribute $50 to
the animal shelter. In fact, she had him sign a promissory note made out to her for
$5,000, which she later endorsed to Richard. Henry proceeds back to one of his
businesses, a used car dealership. Taylor comes in to purchase a used car. He and Henry
agree that Taylor will purchase a used car for $3,000. Martha also comes in, and she
and Henry agree that she will purchase a used car for $4,000. Both Taylor and Martha
make out promissory notes payable to Henry. At the end of the day, Henry is looking
through the notes and decides that Taylor's was mistakenly made out for $3,000. Henry
mistakenly, but honestly, believed that the deal was for $3,500. Therefore, he changes
the note to reflect that Taylor owed $3,500. Henry, on the other hand, simply did not
like Martha. He decided that $4,000 was not enough for the car. Accordingly, he
changed the note to $4,500. Which of the following is true regarding Taylor's liability to
Henry?
A. Because of the alteration, Taylor is not liable to Henry for any amounts under the
promissory note.
B. Taylor's obligation will be enforced only in the amount of $3,000.
C. Taylor's obligation will be enforced in the amount of $3,500 unless Taylor has a
writing signed by Henry to the effect that the deal was for $3,000. No other evidence
would be allowed.
D. Unless Taylor has a written document from Henry to the effect that the agreement
was for $3,000 only, Taylor and Henry will be legally required to split the remainder
with Taylor being held responsible for $3,250.
E. Unless Taylor either has a written document from Henry showing that the agreement
was for $3,000 or unless he can get Henry to admit that the agreement was for $3,000,
then Taylor will be required to pay $3,500 because the obligation was upon Taylor to
obtain confirmation of the terms of the original agreement.
Lake House. Harry has two houses, a house on the lake and a house in town. Rebecca
wants to buy the house on the lake. Harry and Rebecca orally agree that Rebecca will
buy the house on the lake for $300,000. Harry hurriedly writes out a contract providing
that he would sell "his house" to Rebecca for $300,000. Harry signs the top of the
document. Rebecca does not sign at all. No merger clause is included in the contract.
Harry backs out of the contract, and Rebecca sues him. He tells the judge that the
statute of frauds is not satisfied because he did not sign the document at the end and
also because Rebecca did not sign at all. He also tells the judge that, at any rate, the
agreement referred to the house in town, not the house on the lake; and that under the
parol evidence rule, he had the right to identify the correct house. Which of the
following is true regarding Harry's assertion that the statute of frauds is not satisfied
because he did not sign the document at the end?
A. Harry is correct.
B. Harry is incorrect because while the statute of frauds would require his signature on
the document, there is no requirement that the signature be at the end.
C. Harry is incorrect because the statute of frauds did not require his signature so long
as the selling price was referenced.
D. Harry is incorrect because the statute of frauds did not require his signature so long
as the type of subject matter involved was referenced.
E. Harry is incorrect because the statute of frauds did not require his signature so long
as both the selling price and the type of subject matter involved was referenced.
Which of the following is generally defined as a relationship between a principal and an
agent?
A. Agency
B. Principality
C. Combination
D. Employment
E. Authorization
Under the UCC, contracts for the sale of goods must be in writing in order to be
enforceable if they are valued at _____ or more.
A. $100
B. $500
C. $1,000
D. $1,500
E. $5,000
In a(n) _____ franchisor provides the franchisee with the formula or necessary
ingredient to manufacture a product.
A. distributorship
B. manufacturing arrangement
C. chain-style business operation
D. approved business franchise
E. acknowledged standards operation
________________ is the period beginning when an issuer begins to think about
issuing securities and ending when the issuer files the registration statement and
prospectus with the SEC.
A. The initial filing period
B. The beginning filing period
C. The prefiling period
D. The required filing period
E. The waiting period
A person who contracts with another to do something for him but who is not controlled
by the other nor subject to the other's right to control with respect to his physical
conduct in the performance of the undertaking is a(n) ______________.
A. employee
B. independent contractor
C. authorized contractor
D. task-specific contractor
E. partial contractor
Pet Police. Millie breeds German Shepherd dogs. Bernard, who lives down the street,
took in a stray dog loosely identified as a Corgi-plus. The dog, Casanova, would
definitely be classified as a mixed breed. Bernard allowed Casanova to roam freely.
Unfortunately, Casanova went to visit Millie's pure-bred German Shepherd. Puppies
resulted which were Shepherd and Corgi-plus puppies. Millie was incensed. She started
a campaign to round up all of the stray dogs, including Casanova, and haul them off to
the animal shelter. She picked up a few cats as well. She posted signs all over the
neighborhood saying that no animal, neither dog, cat, nor fowl, should come into her
yard and that she was going to begin shooting the next time, period. Understandably,
Bernard and some of the other neighbors take offense. Bernard comes to Millie's house
while she is working in the yard. He walks behind her and shoves her. Millie did not see
him coming. Millie turned around and proceeded to have a heated conversation with
Bernard. Millie drew her fist back and told Bernard that she was going to punch him in
the nose. Millie started to punch Bernard but he stepped back, and all she managed to
do was jab him in the shoulder, causing no actual pain. Sally, who was going by on the
street, saw Millie attempting to hit Bernard. Sally came over and grabbed Millie's
hands, pinning Millie's hands behind her back. Millie's threat to punch Bernard in the
nose constitutes a(n) ____________.
A. assault and battery
B. battery
C. assault
D. justified retribution
E. negligence
New Furniture. Penny purchased $3,000 worth of furniture from Bob's furniture shop.
Through an arrangement with Bob, Penny financed the purchase through a financing
company called Let Us Help You. Twenty-nine days after the goods were delivered to
her, Penny had a disagreement with Let Us Help You regarding the amount of interest
she would be required to pay. She notified Bob on that day that she was rejecting the
goods. Bob claimed that she did not properly reject the furniture and also that she acted
in bad faith. Penny says that she properly rejected and denies that she acted in bad faith.
She also says that, in any event, she cannot be charged with both wrongful rejection and
also bad faith because of double jeopardy. Which of the following is true regarding the
claim of Bob that Penny failed to act in good faith?
A. Bob is incorrect because under the UCC Penny had 30 days in which to reject the
goods.
B. Bob is incorrect only if Penny can establish that Let Us Help You miscalculated the
amount of interest she owed.
C. Bob is incorrect only if Penny can show that the goods were overpriced.
D. Bob is correct because Penny made no claim that the goods were nonconforming.
E. Bob is correct only if Bob can show that the goods were priced at reasonable market
value.
Which of the following was the result on appeal in In re Girolamo Afonica, the case in
the text in which the debtor, without a certificate of title, transferred a vehicle securing a
loan of over $11,000 to another party purportedly because the debtor's ex-wife objected
to the presence of the car in the driveway?
A. That the debt was nondischargeable in bankruptcy because the debtor acted to
defraud the bank.
B. That the debt was nondischargeable in bankruptcy because the debtor acted willfully
and maliciously to cause injury to the collateral.
C. That the debt was nondischargeable in bankruptcy both because the debtor acted to
defraud the bank and because the debtor acted willfully and maliciously to cause injury
to the collateral.
D. That the debt was totally dischargeable in bankruptcy because proof of fraud was not
established.
E. That because the debtor acted willfully and maliciously to cause injury to the
collateral, only 50% of the debt was dischargeable.
Although most state statutes allow for longer terms, for how long do directors typically
serve?
A. Three years
B. Two years
C. One year
D. Four years
E. Five years
A(n) _________ occur(s) when one person places another in fear or apprehension of an
immediate, offensive bodily contact.
A. battery
B. assault
C. assault and battery
D. negligence
E. strict responsibility
Agencies that have characteristics of both executive and independent agencies are
known as what type of agency?
A. Combined
B. Hybrid
C. Joined
D. Registered
E. Judicial
The Federal Trade Commission considers ________________, abusive action by
telemarketers.
A. using profane or obscene language toward a customer
B. calling a person who has previously requested to be taken off the particular seller's
calling list
C. calling a residence before 8 a.m.
D. using profane or obscene language toward a customer, calling a person who has
previously requested to be taken off the particular seller's calling list, and calling a
residence before 8 a.m.
E. using profane or obscene language toward a customer and calling a person who has
previously requested to be taken off the particular seller's calling list, but not calling a
residence before 8 a.m.
Describe a franchise that is a distributorship and give an example of a distributorship.
List what is required in order for an offer to be considered a firm offer under the UCC.
Also discuss the effect if a firm offer is silent as to time and compare that with the result
of silence as to time under the common law.
Set forth the Howey three-part test for determining if a security exists.
Define a bilateral contract and a unilateral contract, and give an example of each.
What must a prosecutor show in order for a corporation to be held criminally liable for
the acts of an employee?
Explain the WH process of ethical decision-making.
Discuss five ways to punish white-collar criminals discussed in the text. Discuss the
pros and cons of each.
Set forth the requirements generally required for a check to be considered properly
payable.
What does the Truth-in-Savings Act require regarding information to be provided to
customers before accounts are opened?
Suzanne wants to open a legal litigation support business and market to attorneys for
their needs in court preparation such as copying, preparation of exhibits, and the service
of subpoenas. She expects to hire three employees to assist her. Assuming she has
sufficient funding, what type of business forms would you encourage her to adopt and
why?
Maurice wishes to purchase a small restaurant named "Tasty Burger" in his community
from Todd who tells Maurice that, while he loves the teenagers who have frequented his
establishment, he is tired of flipping burgers and wants to spend more time fishing on
the lake. Maurice has Todd sign a covenant not to compete prohibiting Todd from
opening a restaurant within 25 miles of Tasty Burger for five years. Assuming that the
covenant was drafted properly, is it likely to be enforced? Discuss arguments for and
against covenants not to compete in the sale of a business.
Define the term "admission" in relation to contracts under the statute of frauds. Discuss
the pros and cons of the rule on admissions, and whether you think courts should
recognize admissions.
Identify and discuss the two separate elements of causation.
According to the text, what are three criticisms of arbitration when compared to
traditional litigation?
Identify where a trademark is registered, what one should do when requesting
registration and what the governmental office involved would then do. Identify
circumstances under which a trademark will not be accepted for registration.
List the exceptions to title warranties.
Set forth the disadvantages of forming a corporation.
Sam, who is elderly, is very annoyed because he continues to receive magazines and
books in the mail from a publisher. He had not requested the publications and has no
idea why they started coming. The letters that come with the publications instruct him
to return any magazines or books that he does not want. Understandably, postage is
becoming expensive for Sam. What law protects him and what option does he have, if
any?
