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Which of the following occurs when a defendant makes a first appearance?
A. A magistrate determines whether there was proof beyond a reasonable doubt for the
arrest.
B. A magistrate determines whether there was probable cause for the arrest.
C. A magistrate determines whether the defendant was properly booked.
D. A magistrate determines whether there was proof beyond a reasonable doubt for the
arrest and also whether the defendant was properly booked.
E. None of these.
If nothing is stated to the contrary in terms of an auction, an auction is presumed to be
_____.
A. without controls
B. with controls
C. without reserve
D. with reserve
E. without qualifications
Which of the following 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. The Internet Communications Act of 2000.
B. The Interactive Computer Services Protection Act of 2004.
C. The Communications Decency Act of 1996.
D. The Internet Communications Protection Act of 1998.
E. The Blog Protection Act of 2001.
What is the legal significance in most states when a minor misrepresents his or her age?
A. That if a competent party relies on a misrepresentation in good faith, the minor gives
up the right to disaffirm the agreement.
B. That the minor must restore the competent party to that party's precontract position
before obtaining the disaffirmance.
C. That the minor may disaffirm but that the competent party has the right to sue the
minor in tort and recover damages for fraud.
D. That misrepresentation does not affect the minor's right to disaffirm the contract.
E. That misrepresentation results in the minor receiving a return of only half the
consideration he or she supplied.
In Trouble. Bruno, an issuer of stock, may be in trouble. He sold stock in a new health
club venture before the effective date of registration. He did so because he was in
financial trouble involving other ventures of his and needed additional funds. Bruno
thought that the health club venture would be such a success that he would never get
caught in regard to the stock sale. Unfortunately, he was wrong. The health club venture
was going very poorly and investors were looking for some way to hold Bruno
responsible. Another problem Bruno has is that he inflated information regarding the
prospects of the health club in the prospectus. Investors bitterly complained. Rick, a
new lawyer, told Bruno that as far as he knew, the SEC could fine Bruno under the
Securities Act of 1933 but could not send him to jail. Bruno told Rick that was good
news and that no one should feel sorry for the investors because none of them made any
effort to check on information contained in the prospectus or to investigate the future
profitability of the health club venture. Bruno says that he plans to rely on the due
diligence defense. Bruno also asks Rick if he is aware of any other defenses. Bruno says
that he has never previously been in trouble with the SEC. Which of the following is
true regarding Bruno's plan to rely on the due diligence defense in regard to all charges?
A. He will be able to do so if he can establish that the purchasers would have had
reasonable grounds to question the registration statement had they reviewed it with due
diligence.
B. He will be able to do so if he can establish that the purchasers would have had
reasonable grounds to question the prospectus had they reviewed it with due diligence.
C. He will be able to do so if he can establish that the purchasers would have had
reasonable grounds to question either the registration statement or the prospectus had
they reviewed them with due diligence.
D. He will not be able to use that defense unless he can establish that he reviewed the
registration statement and the prospectus, and had reasonable grounds to believe that
the registration statement was accurate and had no omission of material facts.
E. He will not be able to rely on that defense because he is an issuer.
_______________ was the first federal legislation regulating food and drugs.
A. The Applied Food, Drug, and Cosmetic Act
B. The Pure Food and Drugs Act
C. The Food and Drug Safety Act
D. The Consumer Safety Act
E. The Congressional Safety Act
Farmers who want to pool certain crops together to ensure that they get a high market
price for their crops should form a ______________.
A. business trust
B. syndicate
C. joint venture
D. joint stock company
E. cooperative
Which of the following is false regarding the Telephone Consumer Protection Act of
1991?
A. It forbids telephone solicitation using an automatic telephone dialing system.
B. It forbids telephone solicitation using a prerecorded voice.
C. It makes it illegal to transmit advertisements via fax unless the recipient agrees to the
fax transmission.
D. Only the Federal Communications Commission can take action to enforce the act.
E. If a telemarketer willfully violates the act, the court can decide to triple the amount
owed to the consumer.
Which of the following is true regarding transportation costs when the designation FOB
is used?
A. The selling price includes transportation costs.
B. The selling price does not include transportation costs.
C. Both the buyer and seller bear transportation costs with the costs apportioned at a
rate of 50% to the buyer and 50% to the seller.
D. Both the buyer and seller bear transportation costs with the loss being proportioned
75% to the buyer and 25% to the seller.
E. Both the buyer and seller bear transportation costs with the loss being proportioned
25% to the buyer and 75% to the seller.
Which of the following must a plaintiff prove to win a recovery in a negligence case?
A. Duty, breach of duty, and causation.
B. Duty, causation, and damages.
C. Duty and causation only.
D. Causation, proximate cause, and damages.
E. Duty, breach of duty, causation, and damages.
Priscilla, who worked for a dry cleaner, came up with a great new idea for a type of
press that speeded up the process immensely. She quit her job, hired labor and
purchased materials, and manufactured a number of the presses. She sold the presses to
her friend Phil for resale. Phil began advertising and distributing the press, but was
notified by ABC Company that the sales violated its patent. After investigation, Phil
determined that ABC had the better argument and demanded that Priscilla refund the
purchase price. Priscilla declined on the basis that she had no idea that a patent on a
similar press was in existence. Who will likely win the dispute and why?
A. Phil will likely win because Priscilla violated the implied warranty of
merchantability.
B. Phil will likely win because Priscilla violated the implied warranty of fitness for a
particular purpose.
C. Phil will likely win because Priscilla violated the warranty of title.
D. Priscilla will likely win because she had no knowledge of any previous patent.
E. Priscilla will likely win both because she had no knowledge of any previous patent
and also because the duty was on Phil to investigate whether any patents existed prior to
his purchase of the presses.
The Stolen Book. Betty tells Susan that Bob stole her business law book from her car.
The next day Susan confronts Bob and slaps him for stealing her book. Bob has Susan
arrested for slapping him. Susan sues Bob for damages in the amount of the book and
for maliciously having her arrested. Claiming that she lied, Bob sues Betty for
defamation. The action Bob has against Betty for defamation involves which of the
following?
A. Criminal law
B. Civil law
C. Insider law
D. Both criminal and civil law
E. Administrative law
Styling Shenanigans. Candy, who operated a hair and nail salon called "Up Sweep," had
a crush on Bruce, a stylist there. He paid her no attention. Finally, Candy told him that
to get her approval of his new blow dryer request, he needs to take her on a date and
give her a kiss. Bruce reluctantly did so. When they returned to work, Candy proceeded
to make suggestive comments to Bruce in front of other employees and to request that
he rub her shoulders. When she passed Bruce's station, she would caress him while he
worked. Candy also decided that Robert was cute, and she showered him with the same
type of attention. Robert enjoyed the attention, but Bruce was offended and filed a
claim against Candy for sexual harassment. Bruce asked Robert to join in on the claim.
Robert said that it personally never bothered him; but that if Bruce can collect, then he
wants in on the action. Bruce told Robert that he is going to see a psychologist to
substantiate his claim and that Robert should consider doing likewise. Robert tells him
that he has no interest in seeing a psychologist but that his case is as strong as Bruce's.
Robert says that while he found Candy entertaining, in all fairness, he should be able to
recover if Bruce does so. Of which of the following types of harassment were Candy's
caresses and suggestive statements?
A. Quid pro quo
B. Hostile work environment
C. Sexual annoyance
D. Quid pro quo, hostile work environment, and sexual annoyance
E. Quid pro quo and hostile work environment, but not sexual annoyance
The defendant will not be found liable for defamation, regardless of intent or
knowledge of the falsity of the claim, if which privilege exists?
A. Simple.
B. Complex.
C. Defamation.
D. Absolute.
E. None of these.
___________ of the Civil Rights Act of 1964 deals with discrimination in employment.
A. Title VII
B. Title VI
C. Title V
D. Title IV
E. Title III
Which of the following refer to state securities laws?
A. Pink-sky laws
B. Blue-sky laws
C. Orange-sky laws
D. Brown-ground laws
E. Green-grass laws
Under Title VII of the Civil Rights Act, which of the following occurs when a plaintiff
establishes a prima facie case in an action alleging disparate-treatment discrimination in
employment in the form of an illegal discharge?
A. The plaintiff wins.
B. The burden shifts to the defendant to articulate a legitimate, nondiscriminatory
reason for the discharge.
C. The burden shifts to the defendant to establish beyond a reasonable doubt that
discrimination did not occur.
D. The burden remains with the plaintiff to prove discrimination beyond a reasonable
doubt, a special standard in disparate-treatment cases.
E. The burden remains with the plaintiff to establish damages to a reasonable certainty.
Under the UCC which of the following is true if goods are identified at the time the
parties entered into a contract and these goods are partially destroyed through no fault
of the parties before risk passes to the buyer?
A. The contract is void.
B. The buyer may inspect the goods and decide whether to (1) treat the contract as void
or (2) ask the seller for a reduction of the contract price and then accept the damaged
goods.
C. The buyer has five days in order to determine whether to void the contract or
proceed under it.
D. Unless the parties can agree on a price, the matter must be submitted to arbitration
for a determination as to an appropriate price.
E. Unless the parties can agree on a price, the contract is voidable at the option of the
seller who does not wish to remedy any problems.
Which of the following permits qualified issuers to register securities that they will sell
on a delayed or continuous basis in the future?
A. Delayed registrations
B. Continuous registrations
C. Approved registrations
D. Shelf registrations
E. None of these because that practice is illegal
Junk Food. Mary Dogood, a member of the school board in ABC County, is appalled at
the amount of junk food in the schools. She convinces the state legislature to pass an
ordinance that no stores may sell any unhealthy, junk food within 500 feet of any school
or day care center. A teacher of political science raises the issue of whether the
regulation is valid and is told that it is a valid exercise of the jurisdiction's police power
to protect its citizens. Convenience stores balk at the regulation and challenge it in
court. What do courts generally presume regarding laws passed in accordance with
states' police power?
A. There is no presumption.
B. That the law is valid.
C. That the law is invalid.
D. That the law is valid unless it involves a First Amendment right.
E. That the law is valid unless it involves the commerce clause.
If the incorporator or promoters make an error or omission during the incorporation
process, courts may rule that the organization is not a corporation, in which case the
organization is a(n) ______ corporation.
A. illegal
B. defunct
C. uncertified
D. defective
E. expelled
Which of the following is true regarding whether the shape of a product or package may
be a trademark?
A. The shape of a product may be a trademark if it is nonfunctional, but the shape of a
package may not be the subject of a trademark.
B. The shape of a product may be the subject of a trademark if it is functional, but the
shape of the package may not be the subject of a trademark.
C. The shape of a product or package may be a trademark if it is functional.
D. The shape of a product or the shape of a package may be a trademark if it is
nonfunctional.
E. The shape of a package may be a trademark if it is nonfunctional, but the shape of a
product may not be the subject or a trademark.
Creaky and Toady. Beverly decides to go on a great trip to Hawaii. She needs someone,
however, to take care of her two dogs, Creaky and Toady, while she is gone. Creaky has
hives, and Toady passes gas frequently because of a digestive problem.
Beverly hires Frank three months in advance and they reach a contractual arrangement
whereby he will be paid $200 for keeping the dogs for two weeks. Frank comes over
two months before Beverly is set to leave, takes one look at Creaky and Toady, and
declares that they are too creepy to be around. Beverly then hires Alice who agrees to
care for Creaky and Toady. Two weeks before Beverly is set to leave, however, Alice
calls and tells her that she just broke both her legs in an automobile accident, sustained
other injuries, and has been put on bed rest for two months. Finally, Alice hires Betty to
care for the dogs and heads off to Hawaii where she has a great time. Unfortunately,
when Beverly returns home, she finds that Betty fell in love with Creaky and Toady and
has absconded with them. It was a month before Beverly was able to get a court order
requiring their return. Which of the following is true regarding Frank's refusal to keep
Creaky and Toady?
A. He committed an anticipatory repudiation.
B. He is not guilty of any breach because he gave Beverly sufficient warning that he
was not willing to perform.
C. He is not guilty of any breach because of the frustration of purpose doctrine.
D. He is guilty of an immaterial breach because of the low value of the contract.
E. He is guilty of a nominal breach.
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 the most likely result if Henry
refuses payment on the promissory note that was endorsed to Richard claiming that he
never signed it?
A. He will be liable because an official banking document was involved.
B. He will not be liable because a party is never liable when the party signed a
negotiable instrument without knowing that it is, in fact, a negotiable instrument.
C. He will be liable without further inquiry unless he can establish that the note had not
been endorsed to a holder in due course.
D. He can claim fraud in the factum and whether he is liable or not will depend upon
whether a court determines that he should have known what he was signing.
E. He can claim fraud in the inducement.
Inattentive Driving. While cutting class and driving off campus to check on her new
dress for the upcoming formal, Molly, a busy college student, is busy talking on her cell
phone with her friend Sharon in an attempt to talk Sharon into going to the dance with
Molly's brother, who has a big crush on Sharon. Unfortunately for Molly, there is a
statute in her state outlawing talking on a cell phone while operating a motor vehicle.
Molly crashes into the side of Sam's new convertible when she looks down to pick up a
can of soda she just dropped onto her new jeans. A police officer just down the street
comes over to investigate. Molly explains to him that it was difficult to hold the cell
phone in one hand, the soda in the other, and also drive. The officer was not impressed.
Around that time Sam comes along. He is furious regarding the significant dent in his
new car. Molly says she has insurance and that she will cover the whole incident. Sam
says that is insufficient. The officer is annoyed because it is his lunch break. He tells
Molly that she must obey the law, and proceeds to write several citations to her. The law
in Molly's state regulating cell phone usage would be classified as which of the
following?
A. A statute
B. A type of common law
C. An executive order
D. A uniform law
E. A negative law
Overextended Debtor. Dennis purchased a big screen television from ABC Electronics
and financed the purchase through ABC Electronics based on an agreement granting
ABC Electronics a security interest in the television and requiring that Dennis make
monthly payments. Three months later, because Dennis had bought a boat, a new car,
and an expensive engagement ring for his girlfriend, and some other items, he was
unable to continue making payments on the television. The manager from ABC
Electronics called and asked Dennis to return the television. Dennis refused on the basis
that ABC Electronics never perfected its interest in the television. Which of the
following is the term for the type of agreement Dennis had with ABC Electronics?
A. A pledged money interest.
B. A collateralized interest.
C. A purchase-money security interest.
D. A security perfection interest.
E. A cash deferred security interest.
Tutoring Concerns. Wally and Sally want to go into business together and plan on
offering a tutoring service to high school and college students. Wally proposes that they
share control of the business and split profits equally and not bother with a written
agreement. Sally, however, is concerned about being able to pay their debts since they
will have to rent tutoring space and purchase computers and supplies. She is also
concerned about parents and students who may sue if the students' test scores do not
improve. She tells Wally that she just bought a new boat and car, and that she does not
want her assets to be in jeopardy. She tells Wally that they should form a corporation to
shield their personal assets. Wally, however, says their personal assets are not in danger
with his proposal because they are a business and that, furthermore, forming a
corporation would likely result in double taxation. Is Wally correct that with his
proposal that they share control of the business and split profits equally, there could be
no personal liability for debts?
A. Yes, he is correct so long as they do not reach an agreement in writing.
B. Yes, he is correct because they will be considered a partnership regardless of whether
any agreement is in writing.
C. Yes, because so long as they have nothing in writing, their arrangement will be
considered a joint venture.
D. No, he is incorrect because members of the corporate form chosen would be
personally liable for debt.
E. No, he is incorrect because partners have personal liability for debt.
Melinda, who works in a jewelry store owned by Cindy, was picking up some
gemstones for use in the store. On the way back to the jewelry store, she went through a
drive-through fast food restaurant to get a soda. While in line, she negligently bumped
the vehicle in front of her that was owned by Ralph. Melinda did not have insurance.
Ralph asked Cindy to pay for the damage to his bumper. Cindy refused on the basis that
she never gave Melinda authority to stop for a soda. Should Cindy be held liable, and
why or why not?
Hair Stylist Woes. Maryann went to see her hair stylist, Candy. Maryann, who had
black, curly hair, requested straight, blond hair. Candy told her that she could make that
change, but there would be significant upkeep involved. Candy made the change, but
Maryann did not do the upkeep required. She also falsely claimed that Candy did not do
what Maryann asked her to do, that Candy lied to her, and that Candy was
professionally incompetent. Maryann made the statements to friends of hers. She also
wrote an editorial in her college newspaper to the effect that Candy's shop should be
avoided at all costs because Candy was incompetent. In fact, Candy was a good hair
stylist and enjoyed a good reputation up until the time that Maryann started her
criticism. Candy threatened to sue Maryann for defamation, but Maryann told Candy
that Candy could not prevail because Candy could not prove loss of income. Candy had
to admit that while her reputation had been damaged somewhat, the damage was
primarily among the college population. Her income kept increasing from other
segments of the community, and she had suffered no net loss. Statements made by
Maryann to her friends that were defamatory of Candy are what type of defamation?
A. Libel.
B. Slander.
C. Both libel and slander.
D. Neither libel nor slander because an editorial was involved.
E. Neither libel nor slander because the falsehood involved matters of appearance not
business-related matters.
Which of the following was the result in the case in the text Black Star Farms LLC v.
Jerry Olive, Arizona Department of Liquor License and Control, the case in which it
was alleged that an Arizona law limiting direct sales of wine by producers was
unconstitutional on the basis that it discriminated against out-of-state wineries?
A. That the law discriminated against out-of-state wineries in violation of the dormant
Commerce Clause.
B. That the law discriminated against out-of-state wineries in violation of the regular
Commerce Clause, not the dormant Commerce Clause.
C. That the law discriminated against out-of-state wineries in violation of the dormant
Commerce Clause but that it was a valid exercise of the state's police power.
D. That the law discriminated against out-of-state wineries in violation of the equal
protection clause of the Fourteenth Amendment.
E. That the law was valid and did not discriminate against out-of-state wineries.
Administrative law involves:
A. applications.
B. licenses.
C. decision making.
D. applications and licenses.
E. applications, licenses, and decision-making.
_______________ is the illegal buying or selling of a corporation's stock or other
securities by officers and directors in breach of a fiduciary duty.
A. Statutory insiders
B. Insider trading
C. Misappropriation theory
D. Tipping
E. Restricted securities
