Administrative agencies:
A. rarely have both the power to issue regulations and the power to investigate when
such regulations have been violated.
B. may make regulations that are advisory in nature, but cannot make regulations that
have the force of law.
C. are, in theory, part of the executive branch of government, but they may also perform
legislative and judicial functions.
D. are, in theory, part of the judicial branch of government, but they may also perform
legislative and executive functions.
Answer:
Identify the TRUE statement regarding unconscionable contracts.
A. It protects clauses in fine print or in such technical language that an ordinary person
would not understand their meaning.
B. They may result when a party with superior bargaining power imposes unfair terms
on the other party.
C. They work on the basic assumption that public interest is best served by free
competition.
D. They are provisions in a contract that attempts to relieve one party from liability for
the consequences of his/her own negligence.
Answer:
When interpreting contracts, courts:
A. give technical words an ordinary meaning.
B. give ordinary words their usual meaning.
C. give ambiguous words in favor of the party who drafted the contract.
D. give non-technical words any meaning intended by the defendant.
Answer:
The practical difference between the remedies for misrepresentation and fraud is that:
A. a victim of misrepresentation can only sue for punitive damages.
B. a victim of fraud can sue for punitive damages as well as for damages from the tort
of deceit.
C. a victim of fraud cannot sue for punitive damages.
D. a victim of misrepresentation can only rescind the contract.
Answer:
The vice president of a corporation:
A. keeps the minutes of meetings of the shareholders and directors.
B. has charge of the funds of the corporation.
C. has implied and apparent authority.
D. has no authority by virtue of that office.
Answer:
Section 11(a) imposes liability on accountants for:
A. misstatements or omissions of material facts furnished in registration statements.
B. inadvertent error in the information provided by the client.
C. accidental miscalculations in audits.
D. statements of opinion.
Answer:
“Testamentary capacity” refers to:
A. the legal capacity to make a valid will.
B. the limit on how much property can be inherited by a given individual.
C. the ability to give gifts to the testator’s issues or descendants.
D. the lack of awareness of the value of the property by the testator.
Answer:
A “turnkey operation” refers to:
A. a franchise in which the franchisor builds and equips the place of business and leases
it to the franchisee.
B. a limited liability partnership in which partners frequently rotate in and out.
C. a franchise operated by a person as his/her own personal property.
D. a franchise in which the franchisee carries out the advertisement campaigns.
Answer:
Most cases charged with undue influence involve:
A. force or threat of injury resulting in economic damages.
B. misstatements about the content or legal effect of something usually contained in a
form or preprinted contract.
C. unilateral or mutual mistakes resulting in serious injustice.
D. long-time advisers of elderly/sick people, who are alleged to have gotten the victim
to make gifts/sales at unfair prices.
Answer:
Pete offered Liz a job at his new law firm. In anticipation, Liz quit her job at Mega
Firm, bought a new computer and invested in a new set of law books. Shortly before
her anticipated start date with Pete’s firm, Pete informed Liz that he had changed his
mind, and no longer wanted her. Liz may recover under the doctrine of:
A. unjust enrichment.
B. promissory estoppel.
C. unilateral contract.
D. express contract.
Answer:
Gregg Biglieri moves into a tough Philadelphia neighborhood and opens a repair shop.
He is harassed by the local gang leader who wants to extort money from him. He
promises to pay Johnson, a police officer whose beat includes Gregg’s store, $50 a week
to “keep an eye on the store” while walking his beat. Which of the statements is TRUE
with respect to Gregg’s situation?
A. The local gang leader will keep his promise of not harassing Gregg for money as
long as Gregg pays him $50 a week.
B. The cop can sue Gregg for not keeping his promise of paying 50$ per week.
C. Johnson being a public officer, his duties towards Gregg is not consideration.
D. In this case, Gregg is the promisee and Johnson is the promisor.
Answer:
Trademark dilution laws:
A. protect “distinctive” or “famous” marks from unauthorized uses even when
confusion is not likely to occur.
B. are intended at protecting consumers rather than focusing on protecting the
investment of trademark owners.
C. permit a company to quickly penetrate a foreign market without incurring the
substantial financial and legal risks associated with direct investment.
D. require the licensee to transfer any inventions it derives from the licensed technology
to the licensor.
Answer:
The near privity approach was adopted by courts in contrast to the strict privity rule of
the:
A. Balancing approach.
B. Reasonably Foreseeable Users approach.
C. Ultramares approach.
D. Restatement approach.
Answer:
Under the E-Sign Act:
A. consumer consent need to be given only once when multiple transactions are
involved.
B. the price and procedure for withdrawing consent must be spelled out.
C. E-businesses are permitted to impose consent withdrawal fees on consumers in all
situations.
D. a digital signature does not have the same effect as one written in ink on paper.
Answer:
This statute places a ceiling on director liability for breach of duty, however, the board
and shareholders may act to lower the ceiling.
A. Charter option statutes
B. Self-executing statutes
C. SEC oversight statutes
D. Cap on monetary damages statutes
Answer:
When a person, whom a regulatory statute seeks to protect, enters into an agreement in
violation of the statute, the protected person:
A. is only allowed to enforce the agreement.
B. may recover only for economic loss.
C. cannot recover for any loss but may enforce the agreement.
D. may either enforce the contract or recover any consideration he/she has parted with.
Answer:
Kirby subscribed to purchase 100 shares of stock to be issued by Globule, Inc., an
already existing corporation. Globule accepted the subscription. The price set forth in
the subscription agreement was $10 per share. The par value of the stock was $8 per
share. When the time came for Kirby to pay the amount of his subscription, Kirby paid
only $6 per share, claiming that such amount represented the fair value of the shares.
Globule delivered the stock certificates to Kirby, but demanded the other $4 per share.
Is Kirby liable for the other $4 per share?
A. No, because regardless of what the subscription price was, he cannot be forced to
pay more than the fair market value of the shares.
B. Yes, because Globule’s delivery of the stock certificates implied its rights to collect
the extra $4 from Kirby.
C. Yes, because regardless of the fair value, a purchaser is liable for stocks issued for
less than the par value.
D. No, but he is liable for another $2 per share.
Answer:
Angela went to “Hairs R Us” to have her hair colored flame red and to get a permanent
wave. Unfortunately, the hair color contained a chemical that reacted with the
permanent wave solution resulting in Angela’s hair turning a bright green and falling
out. Under these circumstances, would a court be likely to apply the Code provisions in
determining the rights and responsibilities of the parties?
A. Code provisions would not apply because Angela entered into a contract which was
predominantly a service contract.
B. Code provisions would not apply because Angela is not a merchant.
C. Code provisions would probably apply because any contract involving the sale of
goods is governed by the Code.
D. Code provisions would probably apply because Angela’s hair is tangible personal
property.
Answer: