If an event must occur before a party’s duty to perform arises, it is called a condition
precedent.
Answer:
A bearer instrument can be validly negotiated and transferred without indorsement.
Answer:
An individual who joins an existing partnership has no liability for partnership debts
that arose prior to his joining the partnership.
Answer:
The losing party in arbitration cannot appeal the arbitrator’s decision in a regular court
on the basis that the decision was unwise.
Answer:
If you buy a pair of jackets and charge it to your MasterCard account, secured credit
has been extended to you.
Answer:
Indorsing an instrument, “Pay to Sara Garcia,” limits payment to Sara Garcia and
further negotiation becomes void.
Answer:
The Commerce Clause of the U.S. Constitution gives states exclusive power to regulate
interstate commerce (commerce among the states).
Answer:
The Code requires both the original owners as well as the good faith purchasers of
goods to bear the burden of collecting from their fraudulent buyers.
Answer:
Tangible property is taxable in the state where its owner lives.
Answer:
A seller may entrust goods to a potential buyer to give him/her a chance to decide
whether or not to buy the goods.
Answer:
The highest appeals court in a jurisdiction cannot overrule a precedent case.
Answer:
A durable power of attorney terminates upon the incapacity of the principal.
Answer:
Under the UCC, cashing a “payment in full” check discharges the obligation of debt.
Answer:
A corporation that merges into another is dissolved.
Answer:
Where damage to leased property arises through no fault of the tenant, that tenant still
has a duty to take interim steps in order to prevent further damage from the elements.
Answer:
A bank that cashes a check with a forged indorsement on it cannot be liable for
conversion.
Answer:
According to the rule of _____ if a promisee’s performance was rendered before the
promisor’s promise was made, then it can never serve as consideration, even though it
may meet the “legal value” part of the test.
A. past consideration
B. preexisting duty
C. forbearance
D. promissory estoppel
Answer:
Which of the following is TRUE of the Safe Drinking Water Act?
A. A public water system is defined to include any supplier of water to the public that
has 30 or more service connections or serves 250 people or more at least 180 days a
year.
B. The standards must be met by “public water systems” and applied at the point the
drinking water enters the water distribution system.
C. The standards are not applicable to private water suppliers but only to municipalities
that provide water to their citizens.
D. While states are required to enforce the drinking water standards, the federal
government does not have the right to enforce them.
Answer:
Agents who are under the control of their employer/principal as to both the objective of
their work and the means used to achieve it are:
A. distributors.
B. independent contractors.
C. employees.
D. commercial agents.
Answer:
As used in the UCC, the concept “reasonable”:
A. is a practical standard used to gauge what people really do in the marketplace.
B. is a theoretical concept based on the “reasonable person standard” of tort law.
C. refers to the capacity to contract.
D. refers to what a reasonable person would do in the marketplace.
Answer:
Joe pays Ann to mow his lawn and Ann mows Danna’s lawn by mistake. Danna peeps
out her window and sees Ann mowing, yet says nothing to Ann about her mistake since
Danna needs to have her lawn mowed. When Ann approaches Danna for payment,
Danna refuses, arguing that she had never asked Ann to mow her lawn. Under these
circumstances, Ann can recover payment from Danna under:
A. void contract.
B. quasi contract.
C. executory contract.
D. express contract.
Answer:
Under the UCC, a sales contract can be created:
A. if the contract is reduced to writing.
B. in any manner sufficient to show agreement, including conduct.
C. when the offeror forms subjective intent to contract.
D. when the contract contains the price terms.
Answer:
Rule 10b-5 prohibits any person from making a misstatement or omission of a material
fact in connection with:
A. the purchase and not the sale of securities.
B. the mortgage of a property.
C. the purchase or sale of any security.
D. the purchase or sale of a property.
Answer:
Implied warranties:
A. imposed by law are absolute.
B. protect the buyer in ownership of the goods bought.
C. warrant that the goods are free of any liens or claims of other parties.
D. establish responsibility on the seller for the quality of the goods sold.
Answer:
A qualified indorsement:
A. changes the negotiable nature of the instrument.
B. can only be used with a blank indorsement.
C. can only be used with a special indorsement.
D. eliminates the contractual liability of the indorser.
Answer:
Alma was suffering from a terminal disease. Because she distrusted attorneys, she wrote
a statement in her own handwriting, labeling it “My Last Will and Testament.” The
statement contained a provision specifying that Alma wanted all of her property to go to
her church at her death. She signed the statement, stored it in her jewelry box and she
told her friend Willa of its location. When Alma died, Willa produced Alma’s statement.
Willa is now attempting to have the statement admitted to probate as Alma’s will.
Alma’s grown children claim that Alma died intestate and that they should inherit her
property. If Alma’s state recognizes holographic wills:
A. Alma’s will is void and her children will inherit.
B. the church will inherit Alma’s property.
C. Alma’s children and the church will split Alma’s property under the doctrine of
nuncupative.
D. the will can be declared void and the property can go to the state.
Answer:
Privilege is not a common defense to which of the following intentional torts?
A. False imprisonment
B. Trespass to land
C. Interference with contract
D. Disparagement
Answer:
Which of the following is included in the Fifth Amendment?
A. The prohibition against double jeopardy
B. The prohibition against excessive bail and fines
C. The exclusionary rule
D. The right of confrontation
Answer:
Under the UCC’s “battle of the forms”:
A. timely expression of acceptances creates a contract even if it includes terms that are
different from those stated in the offer.
B. timely expression of acceptances creates a contract only if it includes terms that are
identical to those stated in the offer.
C. if one of the parties is a merchant, the additional terms in the offeree’s form are
included in the agreement.
D. no contract is created when the attempted acceptance is expressly conditional on the
offeror’s agreement to the terms of the acceptance.
Answer:
Sam contracted with Roadies Garage for customized pink seat covers on a new Porsche
he intended to gift his fiancé a week later on her birthday. Two days before the
delivery was due, Sam broke his engagement and told Roadies that he was no longer
interested in getting the seat covers. Under a clear breach of contract by Sam, what is
the best option Roadies has to mitigate their loss?
A. They can coerce Sam into buying the covers.
B. They can complete the job as per Sam’s specifications and readily sell it at the
contract price to another person as pink seat covers are most sought after by customers.
C. They can stop the manufacturing and claim incidental damages from Sam.
D. They can sell the uncompleted covers for their scrap or salvage value as those were
custom made and could not be sold to anyone other than Sam.
Answer:
Section 3 of the Clayton Act applies to:
A. service contracts.
B. TRUE consignments.
C. anticompetitive behavior.
D. monopolies.
Answer:
Which of the following statement is TRUE of the Sarbanes-Oxley Act of 2002?
A. It requires foreign accounting firms to register with the Public Company Accounting
Oversight Board if they audit public companies.
B. The act reduces criminal penalties for securities fraud.
C. Its registration and reporting provisions apply only to U.S. companies listed on U.S.
securities exchanges.
D. Section 106 of the act deals expressly with national accounting firms.
Answer:
An injured buyer can recover consequential damages if:
A. expenses incurred during storage of goods do not conform to those called for in the
contract.
B. he covers.
C. the goods are not consumer products.
D. he can show that he could not have prevented the damage by obtaining substitute
goods.
Answer:
Which of the following is TRUE about the doctrine of res ipsa loquitur?
A. It is one of the basic principles of the causation of negligence.
B. It puts the burden on the plaintiff to show that the injury was not caused by his or her
negligence.
C. It is applicable to cases where the defendant has exclusive control of the thing that
caused the injury, and is reluctant to disclose facts that prove liability.
D. It offers protection to those who are injured while making a reasonable attempt to
rescue someone endangered by the negligent person’s act.
Answer:
The statute that allows finders of property to clear their title to the property after taking
steps to see whether the TRUE owner can be located is:
A. the estray statute.
B. the statute of limitations.
C. the statute of repose.
D. the nonclaim statute.
Answer:
The Equal Pay Act of 1963 was passed as an amendment to the:
A. Employment Retirement Income Security Act.
B. Labor-Management Relations Act.
C. Fair Labor Standards Act.
D. National Labor Relations Act.
Answer:
The municipality of College Town enters into a contract with Streetz to have the town’s
roads repaired. Katie is a resident of College Town and is considered a(n):
A. donee beneficiary.
B. incidental beneficiary.
C. implied beneficiary.
D. creditor beneficiary.
Answer:
A partner has express authority to do whatever he/she is authorized to do by:
A. the written articles of partnership.
B. the written articles of incorporation.
C. customs and usages of a particular partnership.
D. customs and usages of similar businesses in a particular area.
Answer:
The offeree may accept an offer within a reasonable time by any reasonable means of
communication:
A. if the parties are dealing by telephone.
B. if the offeror suggests a method or a place of communication in the offer.
C. if the written offer is lost in transit.
D. if the offer merely suggests a method or place of communication or is silent on these
points.
Answer:
Section 2 of the Sherman Act:
A. outlaws monopolies.
B. outlaws the act of “monopolizing.”
C. outlaws monopolies and monopolizing.
D. outlaws contracts, combinations, and conspiracies.
Answer:
Chapter 11 of the Bankruptcy Code deals with ___.
A. liquidations
B. consumer debt adjustments
C. reorganizations
D. fishing operations
Answer:
What happens if a buyer rejects the tender of goods?
Answer:
When is a discharge permit required under the Clean Water Act?
Answer:
Describe the insurable interests required in life and property insurance.
Answer:
List the five major judicial approaches to third-party negligence actions.
Answer:
Acme Corp. made a public offering of its shares. Stein bought 100 shares at $10 each.
Three months later, Acme announced that it planned to merge with another company.
Under the terms of the merger, Acme shareholders would receive $14 per share, which
was $1 more than the market price on the day prior to the announcement. Acme’s
shareholders approved the merger. Stein did not vote for or against the merger, but he
turned in his shares and received $14 for each share. Stein later argued Acme’s directors
acted improperly in approving the merger. He also believed the price he and other
shareholders received was grossly inadequate. Will Stein be able to enforce his
appraisal rights?
Answer:
Why are some securities exempted from the registration provisions of the 1933 Act?
Give two examples of such securities. Are they exempted from the antifraud provisions
of the act as well?
Answer:
Describe the purpose of the Fair Housing Act.
Answer:
Explain the test for mental incapacity in contract law.
Answer:
Irma bought a pint-sized thermos bottle from “Kash N’ Karry.” After a couple of
months of use, she poured coffee into it one morning and was adding some milk when it
exploded, sending shards of glass into her face and injuring her eye. Irma testified that
she had not dropped the thermos and had not abused it. She sued “Kash N’ Karry,”
claiming, among other things, breach of warranty of merchantability. Under the UCC,
was the warranty of merchantability breached?
Answer: