Which of the following is true regarding whether a nonemployee may hold an employer
liable under Title VII for harassment of an employee?
A. An employer cannot be held liable in such cases because the employer has no control
over the nonemployee.
B. An employer is liable as a matter of law in such cases because an employer has an
absolute duty to provide a work environment that is free of harassment.
C. An employer may be held liable in such cases if the employer knows that a customer
repeatedly harasses an employee, yet the employer does nothing to remedy the
situation.
D. An employer may only be held liable in such cases if quid pro quo harassment is
involved.
E. An employer may only be held liable in such cases if disparate-impact harassment is
involved.
Which of the following is false regarding federal independent agencies?
A. Independent agencies are governed by a board of commissioners.
B. The president appoints the commissioners of independent agencies with the advice
and consent of the Senate.
C. The commissioners may be removed in the discretion of the president.
D. No more than a simple majority of an independent agency can be members of any
single political patty.
E. The agencies are generally not located within any department.
Which of the following was propounded by prominent legal scholars, recruited by the
American Law Institute?
A. The Restatement Second of the Law of Contracts.
B. The Convention on Contracts for International Sales of Goods.
C. Common law.
D. Both common law and the Convention on Contracts for International Sales of
Goods.
E. Both the Convention on Contracts for International Sales of Goods and the
Restatement Second of the Law of Contracts.
Which of the following is the most popular form of business ownership in the U.S.?
A. Sole proprietorship
B. Limited partnership
C. Limited liability partnership
D. Corporation
E. Limited liability company
Which of the following constitutes taking an instrument for value in order to be
considered a holder in due course?
A. Providing consideration for the instrument
B. Providing a bargained-for promise in return for the instrument
C. Taking the instrument in exchange for a promise that has already been performed
D. Taking the instrument after beginning performance on a promise in return
E. All of these
A(n) ____________________ is a document a corporation files with the state
explaining its organization.
A. certificate of organization
B. articles of incorporation
C. proof of incorporation
D. proof of capitalization
E. establishment of corporation
Supreme Court. Jim, who is a bit eccentric, says that he is fed up with the way a certain
employer in his town treats employees and that he is going to sue that employer in an
effort to improve matters. Jim also says that he is going to start his case at the appellate
court level, skipping over all those “lesser” judges. Jim says that those justices will
surely hear him out and that he will also seek a jury. Although he is not a lawyer, Jim
believes that the offenses of the employer are so severe that the justices will appreciate
his attempt to make things better for the employees involved. Will Jim get a jury at the
appellate court level?
A. Only if the opposing party agrees.
B. In some states but not in others.
C. Only if he is in federal court.
D. Only if he is in state court.
E. No.
Which of the following is money stored electronically on microchips, magnetic strips,
or other computer media that would allow for the elimination of physical currency?
A. Electronic funds.
B. Electronic medium.
C. Digital cash.
D. Digital resources.
E. Electronic resources.
A ______ is a person or party that has an obligation to the secured party.
A. creditor
B. debtor
C. secured creditor
D. secured debtor
E. transaction debtor
Clients who feel that they have suffered damages as a result of a professional’s breach
of his or her duty of care can bring a negligence case against the professional referred to
as a _____________ case.
A. malfeasance
B. malpractice
C. mistake
D. physician liability
E. physician guilty
In a(n) ______ debt, the parties either dispute the fact that any money is owed or agree
that some money is owed but dispute the amount.
A. disputed
B. unacknowledged
C. uncertain
D. liquidated
E. unliquidated
Which of the following was the result in the Case Opener, the case in which the plaintiff
attempted, almost a year after attaining the age of majority, to disaffirm contracts for
aviation courses on the basis that he had entered into the contracts as a minor?
A. That it was unreasonable for the plaintiff to wait so long after attaining the age of
majority to attempt to disaffirm and that the contracts would be enforced.
B. That the services were necessaries entitling the defendant to enforcement of the
contracts.
C. Both that it was unreasonable for the plaintiff to wait so long after attaining the age
of majority to attempt to disaffirm and that the contracts would be enforced and that the
services were necessaries entitling the defendant to enforcement of the contracts.
D. That the contracts would be enforced against the plaintiff’s parents but not against
the plaintiff.
E. That it was not unreasonable for the defendant to disaffirm his contracts almost a
year after attaining the age of majority and that the disaffirmance would be allowed.
A type of draft that allows the payee to demand payment at any time from a holder is a
_____.
A. time instrument
B. demand instrument
C. shelter principle
D. holder in due course
E. holder of course
Which of the following does not satisfy the requirement that to be negotiable an
instrument must be payable at a time certain or on demand?
A. The instrument states a specific date for payment.
B. The instrument is dated and then states “payment will be made 5 days after the above
date.”
C. An instrument that permits an extension of the payment and also a fixed time for
payment, but the maker does not have the right to extend the time of payment
indefinitely.
D. An instrument that states, “payment will be made 10 days after delivery of the
goods.”
E. An instrument that permits acceleration of payment and has a fixed date of payment
if the acceleration clause is not affected.
____________________ is a term for profits kept by a corporation for reinvestment.
A. Added earnings
B. Retained earnings
C. Approved income
D. Added profit
E. Saved profit
____________________ are financial instruments designed as notes, stocks or bonds
which are issued by corporations to raise capital for corporate expansion.
A. Acknowledgements
B. Securities
C. Stock and bond options
D. Investment options
E. Funding agreements
Convertibles. Barry, a new car dealer, advertised that a new brand of convertible called
Wind would be available at his dealership for the price of $10,000 each. He had only
three Wind vehicles, however; and when those were sold, he tried to convince shoppers
to purchase a much more expensive new convertible at a price of $25,000. Kathy, a
customer who decided to purchase one of the more expensive vehicles needed financing
in order to do so. She had $10,000 to pay on the car and sought a loan from ABC Bank
for the remainder. She wanted the loan for a specific amount of time. ABC Bank offered
her the loan and she agreed. The only information she received from ABC Bank was
confirmation that she borrowed $15,000 at an 8% interest rate. After receiving several
complaints, the Federal Trade Commission disapproved of Barry’s action in regard to
the Wind vehicles. Claiming that his advertisement was misleading, the Commission
proceeded to issue a cease-and-desist order prohibiting deceptive advertising involving
Wind vehicles and also in regard to any other vehicles Barry offered for sale. Which of
the following terms references the cease-and-desist order entered by the Federal Trade
Commission involving not only Barry’s sales of Wind, but also his sales of all other
vehicles?
A. A multiple cease-and-desist order
B. A multiple-product order
C. A combined order
D. A superlative order
E. An exceptional order
Bank Robbery. Victor robbed Safe Bank of a significant sum of cash. Safe Bank offered
a reward of $10,000 for anyone who captured or provided information leading to the
capture of Victor. Ted, a police officer in town, promised Safe Bank officials that he
would apprehend Victor. While on duty, Ted arrested Victor at a hamburger joint in
town. He found Victor based upon a hunch he had after Ursula, who dated Victor, told
him about various places Victor enjoyed eating. The bank refuses to pay either Ursula
or Ted any of the reward money. In a lawsuit between the bank and Ursula, regarding
the reward funds, who is likely to prevail and why?
A. The bank is likely to prevail because Ursula only provided past consideration.
B. The bank is likely to prevail because Ursula was tainted by being Victor’s girlfriend.
C. The bank is likely to prevail because no valid bilateral contract existed.
D. Ursula is likely to prevail because a valid bilateral contract existed.
E. Ursula is likely to prevail because an enforceable unilateral contract exists based on
her provision of information leading to the capture of Victor.
Without the exchange of consideration by the parties, the courts will
____________________.
A. automatically find in favor of the offeree
B. automatically find in favor of the offeror
C. not enforce the parties’ agreement
D. only award nominal damages
E. seek a determination by a jury
Lottery Winnings. Frank, a hypochondriac who was also very compulsive, was having
minor surgery to repair a bone spur on his foot. He had just purchased a lottery ticket
for a chance at the grand prize of $30,000,000. Frank’s girlfriend, Bubbles, went with
him to the hospital. While in the waiting room, Frank said to her, “Bubbles, I may not
make it out of this bone spur surgery. Take my lottery ticket. If I don’t make it, I hope
you win and live it up, but please don’t get another boyfriend.” Bubbles replied, “I could
never be happy without you.” A nurse saw and heard the whole exchange. Frank came
out of the surgery just fine but with a sore foot. While he was recuperating, that
evening, Bubbles watched the lottery drawing and discovered that Frank’s ticket was
indeed the winning ticket. She immediately moved out and collected the winnings.
Frank saw her on television with her new boyfriend, George. She appeared to be very
happy. He checked the numbers and discovered that she won off of his ticket. Frank
says that the lottery money is his. Which of the following is true regarding rightful
ownership of the lottery money?
A. Frank’s gift was automatically revoked when he recovered, and the lottery ticket and
any proceeds are validly his.
B. Although the gift was not automatically revoked on his recovery, Frank has the right
to revoke the gift and recover the lottery proceeds.
C. The gift was not automatically revoked on his recovery and since Frank did not
revoke the gift prior to Bubbles cashing the ticket, he has no rights to any funds.
D. Frank has the right to all funds only because Bubbles has a new boyfriend.
E. Frank has no rights because once he gave the ticket to Bubbles, he gave up all his
rights to it.
Which of the following is true regarding the Uniform Commercial Code?
A. It has been adopted federally and is therefore applicable in all states.
B. It has been individually adopted by all states completely and in the same manner.
C. It became the law in each state that adopted it in whole or in part and state laws
differ somewhat.
D. It was defeated and voted down by an act of Congress.
E. It was replaced by the Restatement of the Law Second, Contracts.
The U.S. Constitution establishes how many branches of government?
A. Two
B. Three
C. Four
D. Five
E. Six
If a(n) _____ contract exists, the administrator of an offeror’s estate must hold an offer
open until it expires in accordance with the contract.
A. bilateral
B. unilateral
C. complete
D. option
E. bilateral or option
_______________ damages are a small amount of money given to recognize that a
defendant did indeed commit a tort in a case in which there were no compensable
damages suffered by the plaintiff.
A. Nominal
B. Compensatory
C. Punitive
D. Retaliatory
E. Revenge
The doctrine of ______ is used in the context of the principal/employer-agent/employee
relationship.
A. superior respondeat
B. respondeat superior
C. stare decisis
D. res superior
E. supre superior
Scheming Friends. Willy very much wants to rent a basement apartment in Weaver’s
home. Willy threatens to tell all Weaver’s friends that he and Weaver had been arrested
for illegally smoking marijuana unless Weaver rents the apartment to him for $100 per
month. Weaver reluctantly agrees to rent the apartment to Willy for that amount. Willy
also wants to buy Weaver’s car. Weaver runs back the odometer on the car before Willy
test-drives it. Willy is impressed by the low mileage and agrees to buy the car. Finally,
Weaver offers to sell Willy a ring for Willy’s fiancée. Weaver tells Willy that the ring is
a diamond and believes that to be true. After the deal is made, however, a jeweler friend
of Weaver’s informs him that the ring is a fake. When Willy shows up with the money,
Weaver says nothing. He just hands Willy the ring and takes the money. Later, Willy
finds out that the odometer was run backwards from another friend to whom Weaver
confided. Willy also finds out from his girlfriend that the ring is a fake. Which of the
following would be the most likely result if Weaver attempts to rescind the agreement
to rent the apartment?
A. He will be able to rescind the agreement based upon Willy’s threat of extortion.
B. He will be able to rescind the agreement based upon the threat to Willy’s economic
interests.
C. He will be able to rescind the contract because of a misrepresentation.
D. He will not be able to rescind the contract because he agreed to it.
E. He will not be able to rescind the agreement unless he can show that he was not
actually convicted of the crime alleged.
Which of the following is a corporation that has not substantially met the requirements
of the state incorporation statute, but courts recognize it as a corporation for most
purposes to avoid unfairness to third parties who believed it was properly incorporated?
A. A de jure corporation
B. A de facto corporation
C. A corporation by estoppel
D. A corporation by reservation
E. None of these because an alleged corporation that has not substantially complied
with state requirements for incorporation is not considered a corporation at all although
it may be considered a partnership in order to protect innocent parties
Robby calls Bobby on the telephone and threatens to come over and break his nose.
Which of the following is true?
A. Robby’s conduct constitutes a battery.
B. Robby’s conduct constitutes an assault.
C. Robby’s conduct constitutes both a battery and an assault.
D. Robby’s conduct does not constitute an assault because there is no question of
immediate bodily harm.
E. Robby’s conduct does not constitute an assault because contact has not yet happened.
If the buyer in an oral contract for the sale of land has paid any portion of the sale price,
has begun to permanently improve the land, or has taken possession of the land, the
courts will consider the contract partially performed, under
_______________________.
A. substantial performance
B. partial performance
C. sales substantiation
D. the purchase proof rule
E. the sales proof rule
Which of the following is sometimes referred to as an implied-in-law contract?
A. Quasi-contracts
B. Express contracts
C. Implied-in-fact contracts
D. Express contracts and implied-in-fact contracts
E. Express contracts and quasi-contracts
____________ are interpretations of consumer laws created by the Federal Trade
Commission to encourage businesses to stop unlawful behavior.
A. Consumer guides
B. Consumer recommendations
C. Business interpretations
D. Industry guides
E. Business requirements
Which of the following are types of warranties?
A. Express and unknown
B. Implied and understood
C. Acknowledged and express
D. Express, implied, and acknowledged
E. Express and implied, but not acknowledged
Which of the following is a consideration of courts in determining whether a person is
an incidental or intended beneficiary?
A. The courts ask if a reasonable person in the position of the party in question would
believe the contracting parties intended to benefit the party in question.
B. The courts ask if it is substantially certain that the contracting parties intended to
benefit the party in question.
C. The courts ask if it can be proven beyond a reasonable doubt that the contracting
parties intended to benefit the party in question.
D. The courts ask if the party in question paid something for the rights.
E. The courts ask if the party in question paid at least $500 for the rights.
Mary sells handmade earrings for a living. Susan is a new lawyer and a friend of Mary
who gives legal advice to Mary in return for earrings. Susan tells Mary that under the
Magnuson-Moss Act she is required to provide all buyers with a written warranty
setting forth their rights as consumers. Mary asks if there is not a way around that
because she is tired of complaining customers who do not take care of their earrings and
that she would love to find a way to provide no warranties whatsoever. Which of the
following is true regarding Susa’s advice and warranties on the earrings?
A. Susan is wrong, and Mary is free to disclaim warranties.
B. Susan is partially correct, and Mary must provide a limited written warranty under
the Magnuson-Moss Act.
C. Susan is correct, and Mary must provide a full written warranty under the
Magnuson-Moss Act.
D. Susan is partially correct, and Mary must provide a limited written warranty under
the Magnuson-Moss Act only if her average gross sales are over $5,000.
E. Susan is partially correct, and Mary must provide a full written warranty under the
Magnuson-Moss Act only if her average gross sales are over $5,000.
Assume Bob is driving and suddenly has an unexpected heart attack causing him to run
over a student crossing the street breaking the student’s leg in the process. Which of the
following is true?
A. The student can recover upon a showing of injury. Nothing else is required.
B. The student may recover only if the student can show that he/she was in the marked
crosswalk.
C. It is unlikely that the student can recover because the accident could not have been
avoided even with reasonable care.
D. The student can recover only if it can be shown that Bob had insurance.
E. The student can recover only if the student can establish that he/she did not have any
medical insurance.