Identify what law would govern: (a) a sale of a computer between a U.S. company and
a U.S. consumer; (b) an insurance policy sale between a U.S. company and a U.S.
consumer; and (c) a sale of manufactured goods between a U.S. manufacturer and a
buyer in another country.
Which of the following is true about the vesting of an intended beneficiary’s rights?
a. The promisor and promisee may provide that the benefits will never vest.
b. States are consistent in their rules as to when vesting occurs.
c. Vesting cannot require the third party to change position in reliance on the promise
made for his benefit.
d. Regardless of whether an intended beneficiary’s rights have vested, the promisor and
promisee may, by later agreement, vary those rights.
A significant trend affecting business has been the bringing of defamation suits against
former employers by discharged employees. Such suits comprise approximately what
share of all defamation lawsuits?
a. One fifth.
b. One fourth.
c. One third.
d. One half.
The statutory provisions governing dissolution and liquidation usually prescribe
procedures to safeguard the interests of the corporation’s creditors. These procedures
include:
a. the required mailing of notice to known creditors.
b. a general publication of notice.
c. the preservation of claims against the corporation.
d. All of the above.
Jessup and Lange are having a dispute regarding some property. They want to have a
binding resolution to their dispute, but they would prefer to have the dispute handled
privately and by someone with special expertise. The best form of dispute resolution for
their problem would be:
a. litigation.
b. arbitration.
c. mediation.
d. a summary jury trial.
Employee privacy:
a. is protected by the common law “invasion of privacy” torts.
b. relates to drug and alcohol testing.
c. relates to polygraph testing.
d. All of these are correct.
The process whereby a court “rewrites” or “corrects” a written contract to make it
conform to the true intentions of the parties is:
a. injunction.
b. reformation.
c. specific performance.
d. rescission.
All of the following are types of illegal insider trading EXCEPT:
a. officers or directors who pass valuable information to someone who trades in the
company’s stock and then is repaid in some way.
b. an officer or director who makes a direct profit on an investment based on
information gained just after the public announcement of a major development.
c. an officer or director who buys stock and options through overseas financial
institutions in his own company prior to a public announcement of information which
greatly enhances the value of the stock.
d. an officer or director of a company who related information for a fee to investment
bankers on companies his company is planning to target for takeover.
Phyllrox Co., a large manufacturer, purchased a forklift from Brown’s Equipment Co.
Phyllrox made a $14,500 down payment and signed a promissory note for $3,500.
Brown’s sold the note to Corporate Bank and received $3,400. After Phyllrox used the
forklift for two weeks, it broke down and could not be repaired. Phyllrox refuses to
make any more payments to Corporate Bank. In this case:
a. Phyllrox can assert the failure of the forklift as a defense to making payments to
Corporate Bank.
b. Corporate Bank is a holder in due course.
c. All of these are correct.
d. None of these are correct.
David enters into a contract to give Edward the right of first refusal on a tract of land
owned by David. David subsequently offers the land to Fred without first offering it to
Edward. An appropriate remedy for Edward to seek would be:
a. injunction.
b. liquidated damages.
c. reformation.
d. punitive damages.
a. Discuss primary liability on a note; on a check.
b. What is secondary liability? What must be done before a person with secondary
liability can be sued? Who has secondary liability on a note? Who has secondary
liability on a check?
c. How does liability on the instrument differ from warranty liability?
Which of the following is NOT a negotiable instrument?
a. A check.
b. A draft.
c. A certificate of deposit.
d. A stock certificate.
In the Parlato v. Equitable Life Assurance Society case, the appeals court held:
a. the ‘public notice rule’ was binding under the facts of this case.
b. the principal had a duty to give notice to the third party in this case.
c. that the principal is responsible for torts its agent or former agent commits against
unknown third parties because the principal has the ability to select agents.
d. under the circumstances of this case, the agent’s apparent authority with regard to the
third party terminated along with his actual authority when his employment by
Equitable ended.
The board approves a proposed amendment to deny existing preemptive rights to Class
A preferred, and to issue stock in a new Class D preferred that would be accorded
liquidation preference after all other classes of preferred stock. Preferred Classes B and
C would remain the same. Which of the following would be true?
a. Only Class B and C shareholders vote.
b. A majority of Class A, B, and C shareholders all together would be needed to pass the
amendment.
c. Class B and C shareholders would not be entitled to vote at all.
d. Class A and C shareholders would vote together.
A survival clause refers to:
a. a remainder in a life estate.
b. a possibility of reverter.
c. a provision in a lease contract providing that the tenant’s eviction for non-payment of
rent will not relieve her of liability for damages equal to the difference between the rent
specified in the lease and the rent the landlord is able to obtain when reletting the
premises.
d. All of the above.
Mark tells Leslie that his stereo has quadraphonic speakers because he was told that
when he bought it. Leslie buys the stereo, but it does not have quadraphonic speakers.
Is Mark liable for breach of warranty?
a. No, because he did not know his statement was false.
b. No, because he did not promise her that the speakers were quadraphonic.
c. Yes, because the statement was false.
d. Yes, because Mark was not acting in good faith.
The legal doctrine upon which Justice Cardozo based his decision in the Palsgraf case
is the doctrine of:
a. res ipsa loquitur.
b. proximate cause and foreseeability.
c. negligence per se.
d. assumption of the risk.
Arnold wrote a defamatory letter regarding Bill which he did not show to anyone, but
which he posted on a bulletin board in the laundromat. Arnold has committed:
a. the tort of slander.
b. the tort of libel.
c. neither libel nor slander, because there has been no publication of the letter.
d. the tort of false light.
In what situations is the accountant-client privilege recognized?
a. It is only recognized in federal court proceedings.
b. It is recognized by virtue of the common law in most states.
c. It is recognized only in those states that have enacted statutes creating such a
privilege.
d. It is recognized in most states by reason of court decisions.
Match each statement with the correct term below.
a. Security interest in land created by a written document.
b. Co-ownership in which each tenant holds an undivided interest with no right of
survivorship.
c. Commingling of identical goods belonging to different people so that the owners
cannot identify their individual property.
d. Property not in a physical form.
e. Temporary transfer of possession of personal property by one party (the bailor) to
another (the bailee).
f. A security interest by possession.
g. Absolute ownership of real property.
h. Person who dies without a valid will.
i. Co-ownership with the right of survivorship; requires the presence of the four unities.
j. The right to remove the natural resources from the land of another.
k. Revocable permission to use land of another.
l. Ownership of real property for an indefinite time or for the life of a person.
m. The principal method of public control over private land use.
n. A formal document transferring any type of interest in land.
o. The acquisition of title to land by open, continuous, and adverse occupancy for a
statutorily prescribed period.
p. The power of a government to take (buy) private land for public use.
q. Private restrictions on real property contained in a conveyance, widely used in
subdivisions.
r. Fiduciary relationship in which legal title to property is held by one party for the use,
enjoyment, and benefit of another.
s. A written instrument executed with the formalities required by statute whereby a
person makes a disposition of his property to take effect after his death.
t. The court’s supervision of the management and distribution of a decedent’s estate.
u. The person named in the will and appointed by the court to administer the will.
v. An addition to or revision of a will executed with all the formalities of a will.
w. Limited right to use another’s land in a specific manner.
x. Document of title issued by a carrier to a shipper as a receipt of goods for
transportation.
y. Intentional relinquishment of a known right.
1) confusion
2) tenancy in common
3) zoning
4) freehold estate
5) trust
6) bailment
7) joint tenancy
8) waiver
9) bill of lading
10) easement
11) pledge
12) fee simple
13) license
14) deed
15) profit à prendre
16) mortgage
17) probate
18) eminent domain
19) intangible property
20) codicil
21) adverse possession
22) restrictive covenants
23) executor
24) will (testament)
25) intestate
The bulk sales portion (Article 6) of the Code applies only to transfers in the ordinary
course of business.
How does the liability of a common carrier differ from that of an ordinary bailee with
regard to property that is lost or damaged while in possession of the carrier?
The risk of loss for ‘sale or return” is the same as for a sale “on approval.”
A fundamental difference exists between the breach or nonperformance of a contractual
promise and the failure or nonhappening of a condition.
Discuss the contractual conditions of performance to the satisfaction of someone.
Under general contract law, an antecedent debt (a preexisting obligation) is
consideration.