A tenant is responsible for the care and upkeep of leased property, and is required to
make major repairs if the damage was caused by his/her own negligence.
Answer:
A new trial is required in case where a case is remanded by an appellate court.
Answer:
Some fire insurance policies contain a coinsurance clause that can operate to limit the
insured’s right to recovery.
Answer:
The TRIPS agreement stipulates that trademarks, service marks, and geographical
indications must be registered in order to be protected.
Answer:
All corporate actions can be taken only through board initiative.
Answer:
Even behavior that affects only intrastate (purely local) commerce is within the scope
of the federal antitrust laws.
Answer:
When indorsing an instrument, the holder must spell her name in the same way as it
appears on the instrument.
Answer:
Instruments are goods that will be so affixed to real property that they are considered a
part of the real property.
Answer:
Claims and defenses to payment of an instrument that go to the validity of an
instrument are known as real defenses.
Answer:
After the bankrupt person has paid all the required fees, creditors are no longer able to
file objections to the discharge of the bankrupt.
Answer:
For a public nuisance to occur, the nature of the harm must involve the loss of
enjoyment of property.
Answer:
The doctrine of unconscionability does not apply to leases.
Answer:
Jim and Slater want to buy a car. As they don’t have sufficient money, they plan to steal
their neighbor’s car and sell it. This is a valid contract.
Answer:
A bailor, in a bailment for mutual benefit, can be held liable for injuries sustained by
the bailee if the rented property is not fit for the purpose for which it was rented and
causes injury.
Answer:
A person with inside information must either disclose the information before trading or
refrain from trading.
Answer:
Richard borrowed $100 from his friend, Leonard Smith. Richard signed a handwritten
note stating, “I promise to pay $100 to the order of Leonard Smith.” Under these
circumstances:
A. the note is negotiable because it is a simple contract.
B. the note is not negotiable because it does not acknowledge the reason for the debt.
C. the note is not negotiable because it does not state the time payment is due.
D. the note is negotiable because it meets the requirements for negotiability.
Answer:
Privity of contract:
A. is the relationship between the parties in a contract.
B. is the best defense in case of negligence in action.
C. limits the duty of care owed to third-parties.
D. states the rights enjoyed by any natural person who is in the household of the buyer.
Answer:
In an action for liability based on negligence:
A. a contractual relationship is involved and it does matter whether or not the buyer
dealt directly with the manufacturer.
B. the manufacturer’s duty of care extends to all persons who might foreseeably be
injured if the manufacturer does not exercise its duty of care.
C. disclaimers in contracts are usually effective to shield a manufacturer or seller
against liability for negligence to consumers.
D. the obvious danger rule can be used for complete defense.
Answer:
A freeze-out:
A. occurs when a majority shareholder is “frozen out” by the management regarding
such issues as a reduction or elimination of dividends.
B. can be easily reversed in court.
C. results in the minority shareholder having little influence in important corporate
issues such as loss of employment.
D. occurs mostly in S Corporations.
Answer:
One difference between fraud and misrepresentation is that:
A. there is no requirement of materiality in fraud cases.
B. in fraud cases, the injured party has the additional option of suing in a tort action for
the resulting damages.
C. misrepresentation requires knowledge of the falsity of the misstatement, but fraud
doesn’t.
D. false statements of opinion can be fraud, but not misrepresentation.
Answer:
Legal positivists:
A. believe that law should be shaped by public policy and morality.
B. confine their legal analysis to the plain meaning of the words.
C. believe that law must always look to equitable exceptions to the law on the books.
D. consider public policy and their own sense of morality when interpreting the law.
Answer:
Massachusetts courts require that the parties expressly create a(n) _____ before a
corporation can be held liable for preincorporation contracts.
A. adoption agreement
B. novation
C. incorporation regulation
D. operating agreement
Answer:
Jen decides to trim the sides of her hedge with her electric lawn mower and is injured
in the process, Jen:
A. cannot recover in strict liability because she misused the electric lawn mower.
B. can recover in strict liability even though her use of the lawn mower to trim the sides
of her hedge was not foreseeable by the manufacturers.
C. can recover in strict liability because the lawn mower was per se dangerous.
D. cannot sue all market manufacturers of electric lawn mowers, but only the
manufacturer she has a contract with for dangerous product design.
Answer:
Walter puts an ad in the paper as follows: “$500 reward for the return of my golden
ring.” Albrecht finds the ring and returns it to Walter, but he refuses to pay Albrecht the
$500. Which of the following statements is TRUE regarding this case?
A. Because the ad was merely a solicitation of offers, there was no contract until Walter
accepted Albrecht’s offer to find the ring.
B. Albrecht may not recover the money because he did not contact Walter before he
began his search.
C. Because Albrecht did not pay Walter to keep the offer open, Walter is free to revoke
and need not pay Albrecht anything.
D. The ad was an offer for a unilateral contract, which Albrecht accepted by returning
the ring; Walter is therefore bound to pay Albrecht the $500.
Answer:
A de facto corporation exists where:
A. the promoters had substantially complied with all mandatory provisions.
B. an honest attempt was made to comply with the mandatory provisions of the
corporate statue, yet the attempt still failed in some material respect.
C. a person holds himself out to be a representative of a corporation, yet no real attempt
to incorporate has been made.
D. the corporation can be challenged by a third party.
Answer:
Which of the following statements is TRUE about apparent authority?
A. Only a general agent can have apparent authority.
B. Only a special agent can have apparent authority.
C. If the agent justifiably believed he had authority, his authority would be apparent.
D. If a third party justifiably believed the agent had authority, the agent’s authority
would be apparent.
Answer:
The difference between a regulatory and revenue-raising statute depends on:
A. legislative intent.
B. enforceability.
C. the constitutionality of the statute.
D. societal interest.
Answer:
The functional interchangeability test helps to determine if:
A. a firm controls a very high percentage share of the relevant market.
B. the plaintiff has standing to bring an antitrust suit.
C. there has been joint action.
D. the defendant had an anticompetitive intent.
Answer:
Which of the following statements is TRUE for justifiable reliance?
A. Misrepresentation of public facts amounts to justifiable reliance.
B. It cannot lead to rescission of a contract if the victim was aware of the truth.
C. It can lead to rescission of a contract if there is no connection between a
misrepresentation and the complaining party’s entry into the contract.
D. It is an important element of unilateral mistake.
Answer:
Under the UCC, a lawsuit for breach of a sales contract must be filed:
A. as soon as the breach is detected.
B. within one year after the breach is detected.
C. within 10 years after the breach occurs.
D. within four years after the breach occurs.
Answer:
Under the revised Article 9 of the Uniform Commercial Code:
A. the debtor is required to sign a security agreement to create an enforceable interest in
the collateral that supports the loan obligation.
B. the security interest in the after-acquired property cannot attach to that property until
the debtor obtains some property rights in the new property.
C. the creditor cannot use the collateral to protect his interest in repayment of the
money advanced to the debtor by covering future advances.
D. the creditor is not allowed to file an “authenticated record” in substitution for a paper
“financing statement” using e-commerce applications.
Answer:
The UCC differs from the United Nations Convention on Contracts for the
International Sale of Goods (CISG) in that:
A. the UCC does not require contracts to be in writing, CISG requires contracts for the
sale of goods in excess of $500 to be in writing.
B. the CISG applies to the sale of consumer transactions while the UCC governs both
consumer and commercial transactions.
C. the UCC holds merchants to higher standards in some circumstances, while the
CISG does not make a distinction between merchants and non-merchants.
D. the CISG applies to both consumer and commercial transactions, while the UCC
applies only to commercial sales of goods.
Answer:
Smiley is heavily involved in the management of a certain business. If Smiley dies,
under which of the following circumstances would the business entity be considered
legally dissolved as a result of Smiley’s death?
A. If the business is a corporation.
B. If the business is a partnership and Smiley is a partner in it.
C. If the business is either a partnership (and Smiley is a partner in it) or a close
corporation.
D. If the business is a Subchapter S corporation.
Answer:
To avoid problems, many courts hold a contract to be bilateral:
A. only as a last possible resort.
B. whenever possible.
C. in a way different from the approach taken by the “Restatement.”
D. occasionally.
Answer:
Rocky is a shareholder of Specific General, Inc., a large corporation having thousands
of shareholders. Because he wishes to communicate with other shareholders concerning
matters related to corporate business, Rocky makes a written request that Specific
General’s management provide him access to a list containing the names of all
shareholders of the corporation. Citing the administrative burden that would be created
if requests of such nature were granted routinely, the Specific General management
informed Rocky of its policy that shareholders could not review such records. If
management persists in denying Rocky access to the shareholder list, Rocky:
A. can bring suit to enforce his right to examine the shareholder list as he has proper
purpose.
B. cannot hold Specific General liable because his request lacks proper purpose.
C. can appeal for amendment of the corporation’s laws.
D. has to abide by the rules incorporated by the management of the corporation.
Answer:
Identify the TRUE statement regarding the idea of public policy.
A. The court’s view of public policy is determined by what the court believes is in the
best interests of society.
B. Public policy is resistant to any social or economic change.
C. Courts have limited discretion in determining what constitutes a violation of public
policy.
D. The limited discretionary powers provide the legal system minimal flexibility which
ensures a strict adherence to policies.
Answer: