Liquidated damages will be invalidated if they are unreasonably large or small.
Once a partnership is dissolved, all liability for the actions of the partners ends.
At the expiration of the term of a “term” limited liability company, the limited liability
company can only be continued if all the members vote unanimously for its
continuation.
Unborn young animals (such as unborn cattle) are identified when the young are
conceived.
Sometimes, a husband and wife enter into an agreement during their marriage setting
forth the distribution of property upon death or termination of marriage. This is called a
post hoc ergo propter hoc agreement.
When a bank certifies a check, it agrees in advance (1.) to accept the check when it is
presented for payment and (2.) to pay the check out of funds set aside from the
customer’s account and either placed in a special certified check account or held in the
customer’s account.
Most states do not restrict the use of limited liability partnerships to certain types of
professionals.
If both parties waive their right to a jury, the trial will occur without a jury.
The legislative and judicial branches of government have established laws that enforce
the moral minimum of social responsibility on corporations.
If the federal government has chosen not to regulate an area of interstate commerce that
it has the power to regulate under its Commerce Clause powers, this area of commerce
is subject to what is referred to as the Dormant Commerce Clause.
Unless otherwise stated in a security agreement, if a debtor sells, exchanges, or disposes
of collateral subject to such an agreement, the secured party automatically has the right
to receive the sale proceeds of the sale, exchange, or disposition.
A partner who supplies sixty percent of the partnership’s operating capital is
automatically entitled to sixty percent of the partnership’s profits, if there is no
agreement to the contrary.
Civil unions usually provide gay partners with rights, benefits, and responsibilities
similar to opposite-sex marriage.
Intellectual property licensing agreements are relatively standard agreements that
generally convey similar rights to licensees.
Each state has a separate, independent court system.
Security for the repayment of a note is called collateral.
Quasi in rem jurisdiction is jurisdiction that allows a plaintiff who obtains a judgment
in one state to try to collect the judgment by attaching property of the defendant located
in another state.
Generally accepted auditing standards are standards for the preparation and
presentation of financial statements.
In a negligence action, defendants with a particular expertise or competence are
measured against a “reasonable professional” standard.
If separate property is commingled with marital property during the course of the
marriage, or if the owner of the separate property changes title to the separate property
by placing the other spouse’s name on title to the property, the separate property is then
considered a marital asset.
Workers’ compensation benefits are paid according to judicial discretion and/or jury
verdicts.
Promissory notes are the most common form of negotiable instrument used in the
United States.
A customer list is not considered a trade secret.
Anticipatory breach of a contract is also known as anticipatory reconciliation.
The “median income test” under the 2005 Act uses national median income statistics as
a qualifying measure for Chapter 7 eligibility.
Under the Securities Act of 1933, in an “intrastate offering” exemption, there is no
maximum dollar amount that can qualify.
A title is voidable if the seller has stolen the goods.
The purchaser of a cashier’s check is not required to have a checking account at the
issuing bank.
Express bailments must be in writing.
Franchises may be granted to sell and distribute products, but not to perform services.
The Consumer Product Safety Commission (CPSC) is empowered to collect data
regarding injuries caused by consumer products.
A law that protects trade dress is the Lanham Act.
Where there is an anticipatory repudiation, the non-breaching party’s obligations under
the contract are ________.
A) non-dischargeable
B) discharged by the occurrence of a condition precedent
C) discharged by the occurrence of a condition subsequent
D) discharged by the occurrence of a concurrent condition
E) discharged
A certificate of deposit is called a “jumbo” CD when it is valued at:
A) $10,000.
B) $25,000.
C) $50,000.
D) $75,000.
E) $100,000.
Which of the following parties is not an accredited investor for purposes of the “private
placement” exemption under the Securities Act of 1933?
A) a person with a net worth of at least $1,000,000
B) a corporation or partnership with total assets in excess of $5,000,000
C) a director of a corporation that is the issuer
D) a person who had an income of at least $200,000 in the most recent year, but who
has no expectation of earning $200,000 in the current year
E) a registered investment company
A party who is owed an obligation of performance is called an:
A) obligor.
B) obligee.
C) assignor.
D) assignee.
E) offeree
Marvin Airlines is an established airline that is suddenly experiencing competition from
a new airline, Cheapflites, in some of its markets. Cheapflites is a “no-frills” airline
with a marketing policy that all of its tickets are fully-refundable. Marvin Airlines has
rescheduled many of its flights to leave fifteen minutes later than the Cheapflites flight
for the same route. Before the departure of each Cheapflites flight, a Marvin employee
goes to the Cheapflites waiting area with a megaphone and announces that Marvin will
allow Cheapflites passengers to fly on Marvin for $10 less than the cost of their
Cheapflites ticket, and get full service as a bonus. Because the Cheapflites tickets are
fully-refundable, most Cheapflites passengers accept the offer. Under the antitrust and
unfair competition laws, which of the following is most likely true?
A) Marvin is not in violation of any laws, unless it has monopoly power.
B) Marvin is not in violation of any laws, unless it has agreed with at least one other
airline to engage in this activity.
C) This is an illegal “tying” arrangement, because Marvin makes its offer only to those
people who also have a Cheapflites ticket.
D) Marvin is likely in violation of Section 5 of the Federal Trade Commission Act, even
if it is not in violation of the specific provisions of the antitrust laws.
E) Marvin is not in violation of any laws, because seats on a “no-frills” airline would
not be considered a substitute for seats on a “full-service” airline.
Generally, a successful plaintiff in a trade secret action can:
A) recover the profits made by the offender from the use of the trade secret.
B) recover for damages.
C) obtain an injunction prohibiting the offender from divulging or using the trade
secret.
D) criminally prosecute the defendant
E) recover the profits made by the offender from the use of the trade secret, recover for
damages, and obtain an injunction prohibiting the offender from divulging or using the
trade secret.
In the first 120 days after the granting of an order for relief in a Chapter 11 bankruptcy,
who can file a plan of reorganization?
A) the debtor only
B) the debtor, and any creditors’ committee
C) the judge only
D) the judge, any creditors’ committee, and any individual creditor not part of a
committee
E) the debtor and the judge only
The first meeting of the board of directors after the bylaws are filed is called the:
A) promoters’ meeting.
B) adoption meeting.
C) initiation meeting.
D) organizational meeting.
E) novation meeting.
Title II of the Genetic Information Nondiscrimination Act (GINA) makes it illegal for
an employer to discriminate against job applicants and employees based on genetic
information.
Jean’s grandmother, “Moms,” lives in an assisted-living facility, but she has not sold her
home of many years. Jean is Moms’ favorite granddaughter, especially since Jean visits
Moms frequently, even though Jean lives several hundred miles away. As a favor to
Moms when visiting her, Jean checks on Moms’ vacant house. Jean decides to move to
the town where Moms lived. Jean gets copies of the keys made, and moves into Moms’
home without Moms’ knowledge or permission. Jean treats the house as her own, even
bringing her German Shepherd to live with her. The neighbors erroneously assume that
Moms knows Jean is living there. Moms is very appreciative of what she thinks are
Jean’s long trips to visit her, not knowing that Jean is living in her house. Although
Moms likes Jean very much, she absolutely would not want Jean living in her house.
Jean lives in Moms’ house for several years, and her goal is to acquire the house by
adverse possession. In these circumstances:
A) Jean has earned the right to the home because of her care for Moms.
B) Jean cannot acquire the home through adverse possession from a relative.
C) Jean has acquired a life estate pour autre vie.
D) Jean can acquire the home by adverse possession if she continues to meet the
adverse possession requirements for the required period of time.
E) the presence of Jean’s vicious German Shepherd will prevent her from meeting the
“peaceful” requirement of adverse possession.
It could be argued that the most ethical companies that do the best for society follow
parts of which of the following theories?
A) maximizing profits and moral minimum
B) moral minimum and stakeholder interest
C) stakeholder interests and maximizing profits
D) corporate citizenship and maximizing profits
E) moral minimum and corporate citizenship
Sean sells some real estate, conveying a deed “to Jimmy Johnson, so long as the
property is used as a working cattle ranch, and if not so used, the land returns to the
grantor.” This land is held in:
A) fee simple absolute.
B) fee simple defeasible.
C) fee simple, subject to a remainder.
D) life estate.
E) fee simple per se.
The advantage of a holder in due course over a simple holder of an instrument is that
the holder in due course can:
A) indorse the instrument “without recourse,” thus limiting his liability.
B) transfer the instrument to others, thus using it as a substitute for money.
C) collect on the instrument, even if it has been forged.
D) collect on the instrument if the maker or drawer asserts a personal defense.
E) collect punitive damages from a party who wrongly does not pay a negotiable
instrument.
Kevin’s car is in for repairs, so Kevin borrows Gloria’s car at no charge. While Kevin is
driving on the highway, one of the tires goes flat. Kevin is disgusted and makes no
effort to change the tire, although he knew how to do so. Kevin leaves the car on the
highway, gets a ride, and picks up his own car. The next day, Kevin tells Gloria about
the car. She goes to pick it up, but someone has stolen it. Which of the following
describes Kevin’s responsibility to Gloria in a state applying the traditional
classifications of bailments?
A) Kevin owed only a slight duty of to protect the bailed property, and he therefore has
no responsibility to Gloria for the loss of the car.
B) Kevin owed a duty of reasonable care to protect the property, failed to act
reasonably, and is responsible to Gloria for the loss of the car.
C) Kevin owed a great duty of care to protect the bailed property, and he is therefore
liable to Gloria for the loss of the car.
D) Kevin had no duty to Gloria.
E) Kevin owed a duty of reasonable care to protect the property, but the act of theft by
an unknown third party was an intervening event that absolved him of liability for the
loss of the car.
The Equal Employment Opportunity Commission has the power to do the following
except:
A) pass amendments to the Civil Rights Act of 1964 and other anti-discrimination
statutes.
B) file suits to enforce anti-discrimination statutes on behalf of complainants.
C) conduct investigations related to anti-discrimination laws.
D) interpret anti-discrimination statutes.
E) encourage reconciliation between employees and employers.
In 2010, the United States Congress enacted the ________ Wall Street Reform and
Consumer Protection Act to regulate hedge funds, derivatives, and abusive practices in
the securities industry.
A) Dodd-Frank
B) Dodd-Oxley
C) Sarbanes-Oxley
D) Sarbanes-Dodd
E) Sarbanes-Frank
Mike is a house painter who orally offers to paint Betty’s house for $2,000.00 by May
1st. Betty orally promises to pay Mike $2,000.00 for the paint job if he completes it by
May 1st. This is a(n):
A) void contract.
B) quasi-contract.
C) executed contract.
D) bilateral contract.
E) implied-in-fact contract.
Regarding the Nuclear Regulatory Commission and the Environmental Protection
Agency, which of the following is true about the regulation of nuclear power plants and
radiation pollution?
A) The Nuclear Regulatory Commission regulates all aspects of nuclear power plant
operation and nuclear waste disposal.
B) The Nuclear Regulatory Commission licenses and monitors the operation of nuclear
power plants, while the Environmental Protection Agency regulates the disposal of
nuclear waste and thermal pollution from power plants.
C) The Nuclear Regulatory Commission licenses and monitors the operations of nuclear
power plants and regulates thermal pollution from the plant, while the Environmental
Protection Agency regulates the disposal of nuclear waste.
D) The Nuclear Regulatory Commission licenses nuclear power plants, while the
Environmental Protection Agency regulates all aspects of the construction and
operation of the nuclear power plant, as well as the disposal of nuclear waste.
E) The Nuclear Regulatory Commission regulates thermal pollution from nuclear power
plants and emissions from uranium mines, while the Environmental Protection Agency
licenses the construction of nuclear power plants.
In general, trademark protection is granted based on whether the trademark is:
A) novel and useful.
B) the original creation of the trademark registrant.
C) understandable to the general public.
D) distinctive.
E) marketable.
In order for the firm offer rule to be valid, which of the following must occur?
A) A merchant must offer to buy, sell or lease goods.
B) A merchant must give an oral assurance that the offer will not be revoked.
C) A merchant must offer to buy, sell or lease goods and provide an oral assurance that
the offer will not be revoked.
D) A merchant must offer to buy, sell or lease goods and provide a written assurance
that the offer will not be revoked.
E) A merchant or non-merchant must offer to buy, sell or lease goods and provide a
written assurance that the offer will not be revoked.
Assume that the state of Kansas passes a law requiring all automobiles sold in Kansas
to have built-in child restraint systems. Assume federal regulations covering
automobiles have no such requirement and do not reference the subject. Assume also,
that the required restraint systems would make automobiles safer for children, but that
they would add considerably to the cost of the automobiles and require extensive
changes in design to meet the Kansas requirements. Which of the following is most
likely true?
A) The Kansas statute would probably be considered a burden on interstate commerce
and thus unconstitutional.
B) Because the required modification is a better design, the law would be constitutional.
C) Because the statute does not conflict with a federal statute or regulation, it could not
be found to be unconstitutional.
D) If all manufacturers of automobiles stopped selling them in Kansas, there could be
no constitutional violation because interstate commerce would not be involved.
E) The Kansas statue would likely be a violation of due process rights under the U.S.
Constitution.
Under a sale on approval which of the following is not considered acceptance, sufficient
to create a sale?
A) stating, “these look good to me, i’ll keep them”
B) taking delivery of the goods
C) failure to notify the seller of rejection of the goods within the agreed upon time
frame
D) using the goods inconsistently with the purpose of the trial
E) buyer paying for the goods to use them for a trial period.
In noncarrier cases, unless otherwise agreed, where is the place of delivery for a sale of
goods located at the seller’s place of business?
A) the seller’s place of business
B) the buyer’s place of business
C) the lender’s place of business
D) the trustee’s place of business
E) the bailee’s place of business
Which of the following is true about comparative negligence and contributory
negligence?
A) Most states that once used comparative negligence now apply contributory
negligence instead.
B) They are two names for the same defense.
C) In order to avoid liability for an unintentional tort, the defendant must prove the
presence of both defenses.
D) Comparative negligence is used with intentional torts, while contributory negligence
is used with unintentional torts.
E) Comparative negligence allows the plaintiff to make a partial recovery, whereas
contributory negligence does not.
One of the major reasons for the passage of the Economic Espionage Act (EEA) was to
address the ease of stealing trade secrets through computer espionage and using the
Internet.
An environmental ________ addresses any proposed legislation or major federal action
that significantly affects the quality of the natural and human environment.
A) impact statement
B) consent decree
C) declaratory judgment
D) assessment statement
E) assessment decree
When is the earliest a buyer can claim an insurable interest in goods?
A) when title passes to the buyer
B) when the risk of loss passes to the buyer
C) when the seller identifies the goods to be sent to the buyer
D) The buyer does not have an insurable interest until the goods are delivered.
E) The buyer does not have an insurable interest until the goods are shipped.
Makers of promissory notes and certificates of deposit have ________ liability for the
instruments.
A) conditional
B) stipulated
C) primary
D) secondary
E) tertiary
The defendant’s attorney can call additional witnesses and introduce other evidence to
counter the plaintiff’s rebuttal. This is called the ________.
A) rejoinder
B) rebuttal
C) conjoinder
D) parler
E) absolution
Which of the following is true about “no-fault” automobile insurance?
A) It means that if there is no fault on the part of the insured, there will be no payment
by the insured’s insurance company.
B) A driver’s insurance company pays for the injuries to that driver, regardless of who
was at fault in the accident.
C) No-fault insurance is broad, usually providing coverage for lost wages, pain and
suffering, and punitive damages.
D) No-fault insurance is lower-cost coverage, available only to good drivers who have
never been at fault in an accident.
E) All states have enacted no-fault insurance for automobile accidents.
How broad should the “business judgment” rule be in protecting officers and directors
from liability for their actions? What is the purpose of the rule? What are the difficulties
in its application?
Does the requirement for a plaintiff in a negligent case to prove foreseeability make
sense? Should not a defendant be responsible for all the actual consequences of the
careless conduct? Is it fair that an injured party might be able to recover from no one?
Does the great increase in the sale of goods over the Internet have any implications for
the perfect tender rule?
For years Slim Shifty, a shady lawyer, has had a practice of billing clients for more time
than he actually spent on cases. He sends these bills to clients through the mail. Of what
offenses is Slim guilty and why?
What is the logic behind the three different levels of duty of care owed for bailments,
depending on who benefits from the bailment? Should these distinctions be eliminated?
If so, what is the appropriate level of care to apply to all bailments?
Powdersurf is a manufacturer of snowboards. Powdersurf is an aggressive marketer, and
new to this product line. Powdersurf has adopted several strategies to help it rapidly
build market share. One approach was to begin an advertising campaign that criticizes
its competitor’s products. For example, it has made several claims, known to be false,
about the materials used in the competitor’s boards. It has also made claims about a
tendency of one competitor’s boards to break during use. This was based on an
independent lab’s report that later proved to be false. Lastly, Powdersurf made several
allegations about the president of the leading competitor, primarily claiming that it was
the opinion of Powdersurf that he did a poor job as president. Discuss any tort claims
that might be brought against Powdersurf and their likely resolution.
Assume the three largest automobile manufacturers get together and agree to set certain
prices for their automobiles based upon features. Is there any problem with this
agreement under the Sherman Act, and if so, what is the problem, and under what rule
would the agreement be analyzed?
When Kitty was 16 years old, she was arrested for shoplifting, underage drinking and
stealing a car. Five years later, all three convictions were expunged from her record.
(Expungement means that all records of the arrests are sealed and removed from the
public record.) Kitty is now a CPA and is running for County Treasurer. She is well
respected in the county, working with numerous charitable organizations, lecturing on
ethics to elementary and secondary school children, serving as a scout leader for her
children’s troop and serves on the board of directors for two prominent corporations in
the county. Her opponent is way behind in the polls and asks her father, the long time
county District Attorney for advice. Dad remembers the three expunged convictions and
supplies the information to his daughter who announces the information to the press
who prints a front page story. Kitty, now a model citizen is ashamed and devastated.
She can’t sleep, her daughters are being taunted in school, parents are removing their
children from her troop and she’s been removed from her board positions. The charities
are distancing themselves from her and schools have told her she’s not who they want
teaching ethics. Finally, after losing an overwhelming lead in the polls, she loses the
election. Does she have a cause of action against her opponent? Why or why not?
Should shareholders use shareholder resolutions to encourage responsibility of
corporations in which they invest, or should investors make those judgments by simply
not investing companies whose policies they oppose? Which approach is more
effective?
Roberta wants to start a corporation to perform “pet sitting” services in her town. She is
trying to decide on a name for her corporation. How should she go about doing so?
Assume that Congress has passed a statute ordering that the national minimum wage
shall be $7.50 per hour. California, bowing to protests by employers claiming certain
financial ruin, passes a state statute authorizing a minimum wage for California
businesses at $7.00 an hour. At the same time, New York, with its employers also
claiming certain financial ruin, nevertheless passes a state statute creating a state
minimum wage of $8.00 per hour. Assume that both laws apply to employer-employee
relationships wholly within the respective states. If a worker in California and an
employer in New York brought suit challenging the state laws, how should the courts
decide?
Why should a sole proprietor be personally liable for the torts and contracts of a
business?
You visit one of your professors in his office and notice approximately ten umbrellas in
the corner. You ask if he collects umbrellas, and he replies that he has taught for about
twenty years, and that the umbrellas have been left in his classroom by students. Rather
than leaving them in the room, he takes them and announces the next day that he has
found an umbrella, and that the owner should come to his office to claim it. He even
puts a statement on his syllabus that items left in the classroom will be taken to his
office for safekeeping, and that students are free to visit and check his “lost and found”
whenever they cannot find their property. What are the professor’s obligations with
respect to the property and the students who own the property? Has the professor acted
appropriately?
Gloria goes to a local used car dealership to look for a car. The dealership’s owner
shows her a car and states that it “runs like a champ” and that it only has 50,000 miles
despite being eight years old. In fact, the car had 150,000 miles but the dealership had
altered the mileage. Gloria, who works at a garage as a mechanic, looks the car over
and discovers a number of problems but thinks to herself that she is able to fix them
herself at low cost and with little problem. In particular she notices the tool marks
where the used car dealership had turned back the mileage on the odometer. After
negotiating a reasonable price she buys the car. That afternoon she starts to work on the
car and discovers that the repairs were more extensive than she realized and calls the
dealership, which refuses to take the car back. If she sues for fraud, what is the likely
outcome?
Sara has graduated law school and passed the bar so she is setting up her office. She
calls a rug installer and a carpenter to have her office carpeted and to have custom built
desk constructed. Her office is oval so the rug will need to be custom cut and fitted and
the door is such that normal desks cannot fit through so she needs one made in pieces
that would be constructed inside the office. She is also 4′ 11″ so she wants the desk
sized to fit her. Both contracts are for over $500 and are oral. When the workmen arrive
with the cut rug and the desk in pieces, she informs them that she has changed her
mind, doesn’t want what they agreed to provide and won’t pay. She has invoked the
Statute of Frauds to terminate the contract. If she is sued will she be successful?