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1) in the absence of a decision by the members of an llc, any member can demand the
distribution of profits prior to the dissolution of the llc.
2) a warranty that amounts to a guarantee that the house is free of latent defects that
would render it unsafe or unsuitable for human habitation is called implied warranty of
habitability.
3) an advertisement offering a reward for the return of lost property is usually treated as
an offer for a unilateral contract.
4) the age discrimination in employment act protects people aged 40 and over from age
discrimination.
5) normally, the implied authority of a winding up partner includes no power to borrow
money in the name of the partnership.
6) the transfer of an instrument:
a.vests in the transferee any right of the transferor, to enforce the instrument.
b.bars the transferee from attaining the rights of the transferor.
c.vests in the payor any right of the transferor, to enforce the instrument.
d.bars the transferor to pass on his rights to the transferee.
7) which of the following characterizes searches?
a.it is covered by the fourteenth amendment.
b.warrants are not required for a search on private property.
c.consensual searches without warrants violate the fourth amendment.
d.customs searches are valid without a warrant.
8) _____ rulemaking procedures provide limited rights to interested parties to
cross-examine agency witnesses.
a.formal
b.executive
c.informal
d.hybrid
9) which of the following doctrines empowers courts to declare the actions of other
government bodies unconstitutional?
a.judicial review
b.federal supremacy
c.federalism
d.separation of powers
10) which of the following characterizes the effect of incapacity caused by mental
impairment?
a.a person formerly incapacitated by mental impairment cannot ratify a contract if
he/she regains his capacity.
b.if a contract is found to be voidable on the ground of mental impairment, the person
who lacked capacity at the time the contract was made has the right to disaffirm the
contract.
c.if a court has found a person mentally incompetent after holding a hearing on his
mental capacity and has appointed a guardian for him, the contract is considered
voidable.
d.the contracts of people who are suffering from a mental defect at the time of
contracting are usually considered to be void.
11) sally seeks to list her home with barry, a real estate broker. sally and barry agree that
barry will receive a commission if the home sells within 90 days, regardless of who
actually causes the sale of the property. sally and barry have a(n):
a.open listing contract.
b.exclusive agency contract.
c.exclusive right to sell contract.
d.restrictive covenant contract.
12) three of the following render an instrument nonnegotiable; one does not affect
negotiability. which of the following does not affect negotiability?
a.a draft that says: pay to the order of sue smith once she repairs my computer.
b.an instrument that says only: this confirms my $1,000 debt to sue smith.
c.a note that says: payment is conditional upon the terms of the mortgage between the
parties dated june 1, 2000.
d.a notes that says: this note is secured by the property described in the parties
mortgage of june 1, 2000.
13) which of the following characterizes a coinsurance clause with regard to property
insurance?
a.it prohibits the insured from obtaining an amount of insurance which would be less
than the coinsurance percentage multiplied by the fair market value of the property.
b.it encourages the insured to be more careful in preventing losses since the insured is
always at least partially at risk when a loss occurs.
c.it permits the insured to receive an amount in excess of the policy amount when there
has been a total loss and the insured carried the required coverage under the
coinsurance clause.
d.it will result in the insured sharing in partial losses when the insured has failed to
carry the required coverage under the coinsurance clause.
14) filenes basement filed for bankruptcy in may 2009. in november 2009, filenes
basement started its going-out-of-business sales. are such price discriminations legal?
a.no, such discounts are per se illegal under section 7 of the clayton act.
b.yes, such discounts are legal because filenes basement can legally set resale prices.
c.yes, such discounts are legal under the statutory defense of changing conditions.
d.no, such discounts are illegal considering they are provided only for a limited time.
15) the sherman act provides that individuals criminally convicted of violating it may
be:
a.fined up to $1 million per violation and may be imprisoned for as long as 5 years.
b.fined up to $500,000 per violation and may be imprisoned for as long as 10 years.
c.fined up to $500,000 per violation and may be imprisoned for as long as 5 years.
d.fined up to $1 million per violation and may be imprisoned for as long as 10 years.
16) in january 2003, evan sold a television set that he stated as hdtv ready to zora. three
months later, zora learned that the television set was not hdtv ready. for each of the
three major views on the part of the basis of the bargain requirement for express
warranty liability under ucc section 2-313, explain what the court will need to know
before making a decision.
17) federal regulation is considered to be officially "pervasive" when:
a.congress has given an administrative agency broad regulatory power in a particular
area.
b.there is literal conflict between the measures by different states.
c.the state regulation is an obstacle to federal regulations.
d.there is a conflict regarding a federal issue between private citizens.
18) which form of damages is intended to give the victim of the breach of contract the
benefit of the bargain?
a.compensatory
b.punitive
c.nominal
d.liquidated
19) which of the following is sufficient condition for courts to allow reformation in a
written insurance policy?
a.the insurers misunderstanding about a contract term
b.the insureds misunderstanding about a contract term
c.a fraud committed by the insurer
d.an increase in the market value of the insured property
20) which of the following is true of an agent who has the authority to appoint a
subagent?
a.an agent becomes a principal with respect to the subagent.
b.an agent is able to appoint a subagent without the principals knowledge.
c.an agent has the authority to appoint a subagent when the situation involves a
nondelegable duty.
d.an agent has the authority to appoint a subagent when the co-agent demands such an
appointment.
21) jody, a consumer, ordered a computer from dwindex technologies. after jody validly
rejected the computer due to its nonconformity to the contract, dwindex insisted that
jody return it. jody refused, and instead just held the computer for dwindex to retrieve
it. is jodie obligated to return the computer?
22) explain the term usage of trade. what happens if there is a conflict between the
express terms of the contract and trade usage?
23) steve weighs 465 pounds and looks like it. steve goes to a store and says that he
would like to buy a hammock suitable for someone like himself to sleep in. he makes it
clear that it is up to the salesman to select a suitable hammock. the salesman selects a
hammock that is perfectly suitable for a normally-sized person but that cannot support
someone of steves weight. relying on the salesmans recommendation, steve buys the
hammock. after he is injured when the hammock collapses because it cannot bear his
weight, steve sues the store. can steve recover under the implied warranty of
merchantability? assume that the store is a merchant with respect to hammocks.
24) sleazeco, inc. was the respondent in an adjudicative proceeding initiated against it
by the federal trade commission. dissatisfied with the decision rendered by the
administrative law judge, sleazeco wishes to appeal. where does sleazeco take its
appeal? what is the nature of the review in such an appeal?
25)
26) on july 1, acledes bank attaches and perfects a security interest in all of the playo
inc.s present and after-acquired equipment. on july 15, richard sells and delivers to a
new toy manufacturing machine to playo inc. richard attaches a security interest in the
machine on july 16 and perfects it by filing on july 17. which security interest has
priority and why?
27) dr. matt fornfeld, a physician practicing as a sole proprietor, falls behind in his
payments to first bank, a creditor to whom he owes $275,000. first bank agrees to take
reduced payments from matt, but wants more money if matts practice becomes more
profitable. matt agrees to pay first bank at least $4,000 per month up to a maximum of
15 percent of his profits. does this agreement make first bank a partner with matt?
28) what is the main difference between a void contract and a voidable contract? give
examples of each.
29) describe the three criteria that need to be fulfilled to enforcing a noncompetition
clause.
30) explain the position adopted by legal positivists regarding law.
