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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. 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. The buyer and seller with the loss being proportioned 75% to the buyer and 25% to
the seller.
E. The buyer and seller with the loss being proportioned 25% to the buyer and 75% to
the seller.
A[n] ______ beneficiary is a third party who benefits from a contract in which the
promisor agrees to pay the promisee's debt.
A. Creditor
B. Donee
C. Incidental
D. Promised
E. Avowed
"Revenge." Jane, a first year law student, while walking to school in inclement weather,
accidentally slipped on ice knocking down Greg, another first year law student,
breaking his glasses. He was very angry with Jane and let the air out of one of her car
tires. Greg also decided to sue Jane for negligence claiming as damages $300 for his
broken glasses. He decided that he already knew all about the law and did not need a
lawyer. Greg sued Jane in state court. Jane, in the same lawsuit, brought an action
against Greg for letting the air out of her tire. At the trial in state court, Jane told the
judge that a friend, Susie, told her that she saw Greg let the air out of Jane's tire. The
judge disallowed Jane's testimony on that issue. Susie, however, who was in the
courtroom also came and testified to that effect. The state court judge ruled in favor of
Jane. Greg said that he was not giving up and that he would seek double damages on
appeal in federal court. Jane and Greg live in different states when not attending school.
After the trial, Jane reported Greg's action of letting the air out of her tire to the police
who said that they would proceed with a criminal action against Greg. Greg goes to see
Alex, a recent graduate who had just passed the bar, and asked Alex to represent him in
a federal court appeal.
What standard of proof would the trial judge have applied when ruling on the case?
A. A preponderance of the evidence standard
B. A standard of proof beyond a reasonable doubt
C. A standard of proof by a margin
D. A standard of certainty in proof
E. A standard of proof beyond a reasonable question
"Diving fiasco." Mike, who owns a dive shop in the U.S., takes a group of his
customers diving in U.S. waters. Mike is aware that the area where the divers will be
visiting is occasionally visited by sharks. He is also aware that, while sting rays are
usually tame, they can become aggressive when fed. Mike did not reveal that
information to the group of divers going with him because in his experience, as soon as
customers hear of even a hint of danger, they refuse to pay and go on the trip. The
divers go down into the water, and some have squid with which to feed the sting rays.
During the dive, one of the sting rays becomes agitated and latches onto diver Susie's
arm. Susie is so disconcerted that she drops her regulator (her breathing device) from
her mouth and is in considerable difficulty. Another diver, Billy, encounters a shark
which snaps at him. Fortunately, the shark does not bite him but does damage his diving
equipment. He is also in distress. Mike, who is in charge of the dive, does nothing but
return to the boat because the dive turned out to be more trouble than expected. Wendy,
another diver on the trip, also returns to the boat without doing anything to help the
divers in distress. Sam, on the other hand, goes to rescue the divers who are in distress.
He manages to assist them, but in the process, he pulls his back and requires medical
care. All divers return to the boat and are very unhappy with Mike.
Billy, the diver who had damaged equipment because of the shark incident wants to sue
Mike for damages. Which of the following is the most likely result?
A. Billy will win because Mike should have warned him about the occasional
appearance of sharks.
B. Billy will lose because Mike had no duty to warn him of anything.
C. Billy will lose because he did not sustain physical injury.
D. Billy will win only if he can establish that he had a contract with Mike whereby
Mike agreed to reveal harmful conditions.
E. Billy will win only if he can establish that he did not have insurance to cover the
equipment.
Owners of which of the following types of stock own a portion of a corporation but do
not enjoy any preferences?
A. Acknowledged
B. Complex
C. Common
D. Preferred
E. Simple
Which of the following involves the active hiding of the truth about a material fact?
A. Concealment
B. Nondisclosure
C. Negligence
D. Masking
E. Veiling
Which of the following is false regarding what is necessary in order for goods to be
merchantable?
A. That goods pass without objection in the trade or market for similar goods.
B. That goods be fit for the ordinary purposes for which such goods are used.
C. That goods be adequately contained, packaged, and labeled as the agreement may
require.
D. That goods conform to the promises or affirmations made on the container or label,
if any.
E. That goods be sold without variation.
A[n] ______ corporation is a business incorporated in another country.
A. Visiting
B. Foreign
C. Interstate
D. Alien
E. Approved
"Sexual harassment ADR." Jenny works at the Mexican fast-food restaurant which is
owned by an international company located in Mexico. Jenny is very angry with her
supervisor, Sleaze, as he has been making inappropriate sexual comments to her and
other employees. Jenny decides to sue and retains a lawyer, Brice. Brice talks with the
owners of the restaurant and is informed that Jenny signed an agreement to mediate and
also to arbitrate any claims. Jenny informed Brice about other employees who entered
into such agreements and later complained of harassment. Brice promises her that under
federal law, he is legally entitled to get copies of all documents used during any other
mediations and arbitrations and that he is also entitled to get detailed information
regarding what was said and agreed upon by them. Brice also tells Jenny that, while he
is not going to bring it up now, if they so choose, Brice and Jenny can avoid the
arbitration agreement because under a new federal law, such agreements cannot be
enforced if one of the companies involved is internationally based. He also tells Jenny
in response to her question about the possibility of mediation in her case to forget it
because mediation is pretty much the same thing as arbitration. Brice tells Jenny that an
option is to arbitrate and, if the outcome is bad at arbitration, file a court action in
federal court. Brice says that the federal court judge would not consider an arbitrator's
decision in making a determination.
Assuming the Uniform Mediation Act provisions apply, did Brice correctly tell Jenny
that mediation is nearly the same as arbitration?
A. No, he was incorrect. There are major differences between mediation and arbitration.
B. He was correct because the only difference between the two involves the length of
the proceeding.
C. He was correct because the only difference between the two involves cost.
D. He was correct because the only difference between the two involves whether a
court reporter is present.
E. He was correct because the only difference between the two involves the type of
evidence that may be considered.
"Styling Shenanigans." Candy, who operated a hair and nail salon called "Up Sweep,"
had a crush on Bruce, a stylist there who was one of her employees. He paid her no
attention. Finally, Candy told him that if he wanted to keep his job and get the new
professional blow dryer he requested, he needed to take her on a date and give her a
kiss. Bruce reluctantly did so. After the date, 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, another of her employees, 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 Candy's attention never personally 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, that such substantiation is necessary, 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. He says that while he
found Candy entertaining, he should be able to recover if Bruce recovers.
What type of harassment, if any, was involved in Candy's indication to Bruce that if he
wanted to get a new blow dryer and keep his job, then he needed to take her out on a
date?
A. Quid pro quo.
B. Hostile work environment.
C. Sexual discrimination.
D. Targeted.
E. None because at that point she had not physically touched him in any manner.
In which school of jurisprudence is the concept of stare decisis rooted?
A. The historical school
B. Legal realism
C. The cost-benefit analysis school
D. Positivism
E. Cultural reenactment
Which of the following represents a partner's right to an interest in the partnership?
A. A partner has no right to an interest in the partnership.
B. The right is composed only of the partner's share of profits.
C. The right is composed only of the partner's right to return of capital contributed by
the partner.
D. The right is composed only of the partner's right to return of capital contributed by
the partner and any wages due.
E. The right is composed of a combination of the partner's share of the profits and a
return of capital contributed by the partner.
What have most states done with regard to unsolicited merchandise received from a
seller?
A. Most states have passed laws providing that unsolicited merchandise does not have
to be returned and the recipient may keep it as a gift, with no contract being formed.
B. Most states have passed laws providing that unsolicited merchandise must be
returned to the seller within 7 days.
C. Most states have passed laws providing that unsolicited merchandise must be
returned to the seller within 10 days.
D. Most states have passed laws providing that unsolicited merchandise must be
returned to the seller within 30 days.
E. Most states have passed laws providing that unsolicited merchandise must be
returned to the seller within 60 days.
One way parties can indicate their desire to create an integrated contract is through the
use of a[n] ______ clause.
A. Complete
B. Merger
C. Adhesion
D. Bilateral
E. Acknowledged
The ______ rule is a common law rule that addresses the admissibility of oral evidence
as it relates to written contracts.
A. Oral admissibility
B. Oral evidence
C. Parol evidence
D. Frauds evidence
E. Deficient evidence
If leased premises become unsuitable for use because of a landlord's wrongful or
omitted act, a[n] ______ eviction has occurred.
A. True
B. Actual
C. Constructive
D. Absolute
E. Legal
When no actual damages result from the breach of a contract, the court may award the
plaintiff ______ damages.
A. Consequential
B. Punitive
C. Liquidated
D. Nominal
E. Repugnant
Which of the following is true if an owner entrusts the possession of goods to a
merchant who deals in goods of that kind?
A. The merchant can transfer all rights in the goods to a buyer in the ordinary course of
business.
B. The merchant can only transfer voidable title until any funds in the possession of the
merchant are transferred to the owner.
C. The merchant can only transfer void title until any funds in the possession of the
merchant are transferred to the owner.
D. The merchant can only transfer temporary title until any funds in the possession of
the merchant are transferred to the owner.
E. The merchant must have any purchaser sign a document acknowledging that the
purchaser will return the goods upon the request of the owner.
Which of the following is a term for gifts made in contemplation of death?
A. Inter vivos gifts
B. Sustainable gifts
C. In rem gifts
D. Probable gifts
E. Causa mortis gifts
A[n] ______ is a term identifying the person who receives insurance proceeds in the
event of injury or damage.
A. Receiver
B. Obtainer
C. Insured
D. Beneficiary
E. Identified
Which of the following was the result in Electronic Privacy Information Center v.
National Security Administration, the case in the text involving whether the National
Security Council (NSC) was required to respond under the Freedom of Information Act
(FOIA) to a request made by the plaintiff and referred to the NSC by the National
Security Administration (NSA)?
A. That the NSC was subject to the FOIA but that it only had to respond to requests
made directly to it, not to requests referred to it by another agency such as the National
Security Administration (NSA).
B. That the NSC was subject to the FOIA and that it was required to produce the
information requested by the plaintiff.
C. That the NSC was subject to the FOIA but that the proper procedure was for the NSC
to provide the documents to the NSA for review prior to production to the plaintiff.
D. That the NSC was not subject to the FOIA and that it was not required to respond to
the request.
E. That the NSC was not subject to the FOIA but that it was required to respond to the
plaintiff's request because the request was directly provided to the NSC by the NSA, an
agency subject to the FOIA.
Which of the following describes co-ownership by married couples allowing full
ownership by the surviving spouse when the other spouse dies?
A. Joint tenancy
B. Cooperative tenancy
C. Tenancy in common
D. Joined tenancy
E. Tenancy by the entirety
Which of the following is an agreement by which the debtor agrees to pay a debt even
though it could be discharged?
A. A settlement
B. A reaffirmation agreement
C. An acknowledgement agreement
D. An accord and compromise
E. An affirmance
Which of the following is an example of a negotiable instrument?
A. Checks but not drafts or promissory notes
B. Drafts and checks, but not promissory notes
C. Promissory notes, but not drafts or checks
D. Promissory notes and checks, but not drafts
E. Checks, drafts, and promissory notes
"Family Dispute." When Trudy and Mark married, they both had children from
previous marriages. After their marriage, Trudy and Mark purchased a home together as
tenants by the entirety and lived there for many years. Mark died when he was 93 and
Trudy was 95. Mark's will left any property he owned to his son, Alex, who promptly
told Trudy that she needed to get out of the house. Trudy told him to forget it. Trudy
died a week later. Her will left everything she owned to her daughter, Samantha, who
moved in the home and refuses to leave. Mandy, who had loaned Mark $10,000, has
filed a claim against any heir of Mark or Trudy, including Alex and Samantha, claiming
an interest in the home to satisfy the debt Mark owed her.
Which of the following is true regarding Mandy's claim for the $10,000?
A. She has no interest in the house on which to base a claim.
B. She may obtain a lien on the house.
C. She can require that Samantha pay it based on Samantha's inheritance interest in the
house.
D. She can require that Alex pay it based on Alex's inheritance interest in the house.
E. She can require that both Alex and Samantha pay it based upon their inheritance
interests in the house.
To which of the following does the federal Freedom of Information Act not apply?
A. Congress
B. The federal courts
C. The executive staff of the White House
D. The Internal Revenue Service
E. State or local governments
Which of the following are general statements about directions in which an agency
intends to proceed with respect to its rule-making or enforcement activities?
A. Policy statements
B. Interpretive statements
C. Planning notices
D. Review statements
E. Warning notices
Which of the following is true regarding tools of discovery?
A. The only tool of discovery is interrogatories.
B. Depositions are the only tool of discovery available to plaintiffs, but defendants may
use both interrogatories and depositions.
C. Summary motions, interrogatories, and depositions, are tools of discovery available
to all parties.
D. Interrogatories and depositions are tools of discovery available to all parties, but
summary motions and requests to produce documents are not tools of discovery.
E. Interrogatories, depositions, and requests to produce documents are all tools of
discovery available to all parties.
"Diving fiasco." Mike, who owns a dive shop in the U.S., takes a group of his
customers diving in U.S. waters. Mike is aware that the area where the divers will be
visiting is occasionally visited by sharks. He is also aware that, while sting rays are
usually tame, they can become aggressive when fed. Mike did not reveal that
information to the group of divers going with him because in his experience, as soon as
customers hear of even a hint of danger, they refuse to pay and go on the trip. The
divers go down into the water, and some have squid with which to feed the sting rays.
During the dive, one of the sting rays becomes agitated and latches onto diver Susie's
arm. Susie is so disconcerted that she drops her regulator (her breathing device) from
her mouth and is in considerable difficulty. Another diver, Billy, encounters a shark
which snaps at him. Fortunately, the shark does not bite him but does damage his diving
equipment. He is also in distress. Mike, who is in charge of the dive, does nothing but
return to the boat because the dive turned out to be more trouble than expected. Wendy,
another diver on the trip, also returns to the boat without doing anything to help the
divers in distress. Sam, on the other hand, goes to rescue the divers who are in distress.
He manages to assist them, but in the process, he pulls his back and requires medical
care. All divers return to the boat and are very unhappy with Mike.
Which of the following is true regarding whether Wendy and Sam had a duty to come to
the assistance of the divers in peril?
A. Neither Wendy nor Sam had a duty to go to the aid of the divers who were in peril.
B. Wendy and Sam had a duty to go to the aid of the divers in peril only if Mike refused
to do so.
C. Wendy and Sam did not have a duty to go to the aid of the divers in peril unless they
were the first to see the problem.
D. Wendy and Sam had a duty to assist the divers in peril only if they were acquainted
prior to the dive with the divers who were in peril. They had no duty to help strangers.
E. Sam and Wendy had a duty to help the divers who were in peril if personal safety
was involved but not if the only issue was damage to property.
A business manager may consider it wrong to terminate a person whose spouse has
terminal cancer because a firm has an absolute obligation to support its employees
when they are vulnerable, period. The business manager is acting consistently with
which ethical theory?
A. Deontology
B. Ethical relativism
C. Act utilitarianism
D. Ethical fundamentalism
E. Rule utilitarianism
