Mei issues purchase order to June for goods which costs $25,000. June agrees to
provide the same but she doesn’t sign the purchase order. Mei can file a suit for the
breach of contract.
Real property includes land but does not include residential buildings and permanent
structures.
A drawee has no liability on a draft unless it certifies or accepts the draft.
If the bailee returns the goods in a damaged condition, there is a rebuttable presumption
of negligence on the part of the bailee.
Property can be transferred by a will, if it is validly executed.
Corporation law authorizes a shareholder to bring a class action on behalf of the
corporation and for its benefit.
Today, social and economic regulations generally receive rational basis review when
they are challenged on the grounds of equal protection.
The finder of lost property has better rights to the property than anyone, including the
original owner.
SuperMart Inc. operates a franchise operation. Mr. Jones purchased a right to open a
SuperMart but the agreement has a vertical restraint, Mr. Jones is not allowed to market
or seek customers beyond 25 miles of his franchise store. This agreement is per se
illegal.
The UCC provides that a lawsuit for breach of a sales contract must be filed within a
year after the breach occurs.
If the insured misrepresented material facts in the application for insurance, the
insurance policy becomes void.
The Family and Medical Leave Act requires employers to pay employees while they
take leave for one of the reasons stated in the act.
Under the public policy exception to employment at will, most courts limit “public
policy” to the policies advanced by existing law.
Susie Q. signs a promissory note with her typical signature, a X. Susie’s mark will be
sufficient to be considered a signature and establish liability in the instrument.
As a general rule, if a tenant abandons the leased property before the expiration of a
lease, the landlord has a duty to mitigate damages.
A partnership will be bound by the legal admissions or representations of its partners.
A contract of adhesion is one that the courts will always enforce because of the strong
public policy underlying such contract.
As a general rule, a principal is not liable for torts committed by independent
contractors while performing the principal’s business.
When Carol Whittaker makes an offer to a contractor Jacob Phelps directing him to
inform her of his acceptance through registered letter mail, she is making an ambiguous
offer.
To encourage people to cancel illegal contracts, courts will allow a person who rescinds
such a contract before any illegal act has been performed to recover any consideration
that he has given.
A partner is under no duty to maintain the secrets of the business.
Dave, who is in financial trouble, has ten creditors. An involuntary bankruptcy petition
against Dave requires that three of these creditors sign.
If the seller delivers defective goods to the buyer, the buyer can recover the value of the
goods as warranted minus the value of the goods received.
A subcontractor is a person who contracts with the owner of a property to build or
remodel.
A principal is always liable for the acts of his agent.
The primary source of power for a corporation is the GATT (General Agreement on
Trade and Tariffs).
If an instrument is an order to pay, it must contain an unconditional order.
Workers’ compensation protects not only employees, but independent contractors as
well.
Most property insurance policies are open policies that allow the insured to recover the
fair market value of the property, subject to the limits in the policy.
A state’s courts may exercise jurisdiction over a foreign corporation that has contacts in
the state.
An individual must be acting in good faith in order to become a holder in due course of
a negotiable instrument.
Federal antitrust laws have been extensively applied to activities affecting the
international commerce of the United States.
The EPA’s “tailoring rule” would require certain new large sources to address their
greenhouse gas emissions as they get permits.
A corporation with one person who is the only shareholder, officer, and director will
have its corporate veil pierced, making that person personally liable for all the
obligations of the dominated corporation.
Emancipation is a formal agreement in writing to terminate a parent’s right to control a
child and receive services from him.
Special deterrence results when punishment of a wrongdoer deters other persons from
committing similar offenses.
The seller is obligated to resell the goods in cases where the buyer refuses to accept
goods that conform to the contract.
The buyer cannot recover any incidental damages.
Copyright protect is a state government action.
The Contract Clause applies only to state laws that impair past contracts—contracts
made before passage of the state law in question.
What is the nature of the principal if a third party knows that the agent is acting for the
principal and also is aware of the principal’s identity?
A. Unidentified
B. Nonexistent
C. Disclosed
D. Undisclosed
_____ believe that prevention of socially undesirable behavior is the only proper
purpose of criminal penalties.
A. Utilitarians
B. Ethical pragmatists
C. Virtue ethicists
D. Deontologists
Andy works for Sparkles, a jewelry store. While selling a zircon-studded ring to a
customer, Andy falsely states that the zircon is a diamond. The customer, delighted to
find a diamond ring at an affordable cost, buys the ring. If the customer files a lawsuit
for damages, which of the following will most likely be the court’s verdict?
A. Andy had the actual and apparent authority from Sparkles to make true statements,
hence Sparkles is liable for Andy’s misrepresentations.
B. Andy will be held liable for the misrepresentation and will have to pay damages to
the customer and to Sparkles.
C. The customer will be held responsible since he was negligent in the purchase, but
may receive a small percentage of damages from Sparkles.
D. Andy will be held liable for the misrepresentation to the customer, and will have to
pay him damages.
While in the course of employment with Marco, Inc., Payne was injured. Marco has
complied with the state’s mandatory workers’ compensation statute. Marco’s workers’
compensation carrier has asserted the following defenses to Payne’s claim for workers’
compensation benefits:
I. Marco was free from any wrongdoing.
II. Payne assumed the risk by disregarding Marco’s safety procedures.
III. Payne’s injury was intentionally self-inflicted.
Which defense(s) asserted by the workers’ compensation carrier, if proven, will prevent
Payne from recovering?
A. I only
B. II only
C. III only
D. I and II
What is the term for the FTC’s interpretation of the laws it administers?
A. Industry guides
B. Advisory appeal
C. Executive order
D. Legislative act
Which of the following is generally true about the Federal Trade Commission’s (FTC)
regulations of the holder in due course rule?
A. Some states have eliminated the holder in due course rule by repealing the previous
version of Article 3 and refusing to adopt the new version.
B. The FTC has seriously limited the rule’s impact in consumer credit situations in
which the consumer signs a note or an installment sales contract, or gets financing from
a third party.
C. These changes in the holder in due course rule reflect the economic power and
political influence of business interests, especially banks.
D. Overall, the FTC’s changes in the holder in due course rule are insignificant,
especially in consumer cases.
The outer limit on a firm offer is:
A. 1 month.
B. 3 months.
C. 6 months.
D. 1 year.
Section 404 of the Sarbanes-Oxley Act of 2002 is considered controversial because:
A. sensitive corporate information has to be published which may be detrimental to a
company.
B. a company has to significantly increase its budget to comply with Section 404.
C. the procedure for complying with Section 404 is lengthy, complicated, and time
consuming.
D. Section 404 results in diminished corporate responsibility of the officers of a
company.
Palmer goes to a truck dealership and asks for a truck capable of handling a 5000-pound
load. He makes it clear that it is up to the salesman to select an appropriate truck.
Without saying anything about the truck’s load-carrying capacity, the salesman selects a
certain truck for Palmer. Relying on the salesman’s choice, Palmer buys the truck in
question. However, the truck can only handle a 2500-pound load. Palmer wants to sue
the dealership because he didn’t get the truck he desired. Which of the following
product liability theories gives Palmer his best chance of recovery?
A. Express warranty
B. Implied warranty of fitness
C. Implied warranty of merchantability
D. Section 402A
In which of the following circumstances are offerors free to revoke their offers?
A. In case of common law rule on revocation.
B. In case of unilateral contracts.
C. In case of the availability of an option.
D. In case of a promissory estoppel.
Under the recent amendments to Article 4, postdated checks:
A. are now invalid and create no obligation to pay on the drawee bank’s part.
B. are not properly payable by the drawee bank until the date on the check.
C. may be paid by the drawee bank before the date on the check unless the customer
has given notice to the contrary.
D. may be paid by the drawee bank unless the customer gives notice of the postdating
in a way that at least partially describes the check.
Adam decides to eat food despite knowing that it is adulterated and brags about it to
Dee. Later Adam falls sick from infection. Adam sues the supplier of the said food for
injury suffered by him. The defense which can be taken by the food supplier is:
A. contributory negligence.
B. assumption of risk.
C. product misuse.
D. comparative responsibility.
Technoco, Inc., a manufacturer of computers and related equipment, has been requiring
wholesalers and retailers who purchase computers from it to also purchase printers as a
condition of buying computers. One of Technoco’s customers has challenged the
legality of this practice. Which of the following factors would weigh against the
illegality of this practice?
A. Evidence that Technoco’s computers are generally considered to be inferior to those
of its competitors.
B. Evidence that many other computer manufacturers will sell computers without
requiring purchases of printers.
C. Evidence that Technoco is a small company whose total printer sales in the period in
question amounted to $19,000.
D. Evidence that Technoco’s computers are generally considered to be superior to those
of its competitors.
Which of the following is true about a nontrading partnership?
A. Its regular business is buying and selling merchandise.
B. It has no normal borrowing needs.
C. It borrows money to avoid cash flow problems.
D. It has an inventory.
Speedster is an automobile manufacturing company that has a factory in Seattle,
Washington. It has placed Keith McShane, the operations head of the factory, in charge
of investigating the firm’s decision whether to move the factory to Qingdao, China.
Keith is against the idea of the factory relocating to Qingdao because his fellow
Americans will lose their jobs to the Chinese. Therefore, he is desperately searching for
information that favors Seattle over Qingdao. Which of the following prescribed
guidelines for ethical decision making will Keith need to focus on to make an unbiased,
ethical decision?
A. Will the shareholders offer support?
B. What facts impact my decision?
C. How can I increase the number of shareholders?
D. Which decision will allow me to retain my job?
Which of the following is NOT covered by Article 2 of the UCC?
A. Vehicles
B. Appliances
C. Stocks
D. Books
A loan made by a partner to partnership business is:
A. a part of partnership capital.
B. a part of the partnership’s assets.
C. a liability of the partnership business.
D. a partner’s contribution to the partnership business.
Which of the following is true of the Check 21 Act?
A. It allows banks to handle limited number of checks electronically.
B. It has made it mandatory for banks to return the canceled checks to the customers.
C. It authorizes banks to transform information they receive in electronic form back
into a paper copy of the check.
D. It requires that banks keep the customers’ original checks for a specified period of
time.
In the sale of a home, which of the following would likely be treated as a fixture?
A. A couch to match the upholstery
B. A ceiling fan
C. A lawn mower
D. A new console table
In the eventuality of nondelivery by the seller, which of the following would be reduced
from the amount of damages claimed from the seller?
A. The difference between the contract price of the goods and their market price at the
time he learns of the seller’s breach
B. Incidental damages
C. Expenses saved
D. Consequential damages
The American legal system gives considerable power to the jury; however, it also has
devices for limiting that power. The _____ provides a judgment to one party before the
jury gets a chance to decide the case.
A. motion to dismiss
B. motion for a new trial
C. motion for summary judgment
D. motion for a directed verdict
What section of the UCC mandates that a bank signature must appear on a certified
check?
A. 1-103
B. 3-409
C. 3-223
D. 6-105
Bob contracts to sell Ben 15 bales of hay. A bale is the accepted commercial unit in hay
transactions. Ben accepts only 9 1/5 of the 20 bales. Under the UCC, Ben is considered
to have accepted:
A. all 20 bales.
B. 10 bales.
C. 9 bales.
D. nothing.
Under the Takings Clause, a “taking”:
A. occurs when the government uses formal eminent domain procedures to condemn
private property.
B. can only be of land, and not of other kinds of property.
C. cannot occur through government regulation that merely diminishes the value of
private property.
D. cannot occur by simply an invasion of private property.
A distinction between a surety and a cosurety is that only a cosurety is entitled to the
right of/to:
A. contribution.
B. exoneration.
C. subrogation.
D. reimbursement.
A cosurety has the right to contribution, i.e., he/she can collect the shares paid on behalf
of the others.
The equitable remedy of specific performance is most likely to be awarded by a court in
which of the following circumstances?
A. Sale of a Da Vinci original where the seller refuses to deliver
B. Sale of a perfume bottle which the seller refuses to deliver
C. A promisee’s failure to perform at a charity event
D. A promisee’s failure to deliver a contract of employment
Which of the following is an inaccurate statement about the insurable interest
requirement?
A. The beneficiary named in a life insurance policy may recover under the policy if she
possessed an insurable interest in the relevant person’s life at the time she (the named
beneficiary) procured the policy but no longer possessed the insurable interest at the
time the relevant person died.
B. When an equitable interest in a property translates into a legal interest, it is
considered to be an insurable interest.
C. Persons who are business partners are generally held to possess insurable interests in
each others’ lives.
D. A policy owner may recover under a property insurance policy if he possessed an
insurable interest in the relevant property at the time he procured the policy but no
longer possessed the property.
The term ripeness in reference to a lawsuit arising out of administrative decisions
means:
A. The plaintiff has been victorious in their actions against the agency
B. The plaintiff has exhausted all necessary administrative remedies before engaging in
judicial remedies
C. The plaintiff is pro-se, meaning they have no attorney and represent themselves
D. The action is against an international agency
In determining whether an offeree accepted an offer, the court is looking for the same
_____ on the part of the offeree that it found on the part of the offeror.
A. present intent to contract
B. inquiry regarding terms
C. subjective standard
D. silent acceptance
Which of the following is the most rigorous standard of judicial review of agency
factual judgments as provided by the APA?
A. Beyond reasonable doubt review
B. Substantial evidence test
C. De novo review
D. Arbitrary and capricious test
Why is an offeree’s silence regarding a contract not considered to be an acceptance of
it?
What is meant by the term “National Priority List”?
Is the installation of a battery in an automobile subject to Article 2 of the UCC or to the
common law of contracts? Why?
Assume that sellers of alcohol for consumption on the premises (i.e., bars, taverns, and
the like) are heavily regulated under Montana law. The state’s statutes and regulations
impose a licensing requirement, mandate the posting of signs (in open-to-the-public
portions of the bar) concerning the minimum drinking age and the possible hazards of
alcohol consumption, and establish numerous other requirements that bar owners must
meet. Montana law also authorizes the Montana Liquor Control Commission (MLCC),
a state agency that administers the statutes and regulations on sellers of alcohol, to
conduct administrative inspections of bars and taverns in order to determine whether
the required signs are posted and the other legal requirements are being met. The statute
providing for these inspections states that the MLCC need not obtain any sort of
warrant before conducting such an inspection. MLCC investigators recently conducted
a warrantless inspection of the Pink Elephant Lounge, a Butte, Montana tavern owned
by Edna Sternwallow. The inspection revealed the absence of the required drinking age
and warning signs. Following a hearing, the five MLCC commissioners suspended the
Pink Elephant’s liquor license for a year (a penalty allowed by Montana law for a
violation of the sign-posting requirement). Sternwallow appealed to an appropriate
Montana court, which is conducting a de novo review according to state law.
Sternwallow argues that the evidence obtained through the warrantless inspection
should be excluded because the inspection violated the Fourth Amendment. Will
Sternwallow succeed with this argument? Explain.
On May 1, S sells goods to B. B immediately resells the goods to C, who buys in good
faith and pays cash. On May 2, S learns that B was insolvent when it accepted the
goods. On May 3, therefore, S demands return of the goods from B. B says: “Sorry
about that, but I sold them to C.” Can S recover the goods from C?
An attorney acquires confidential information about a certain client. However, he
discovers that this information is important for the affairs of a second client. In this
situation, two duties are in conflict. What are these two conflicting duties? How does
agency law resolve the conflict?
State and federal declaratory judgment statutes do not allow parties to determine their
rights and duties when their controversy has not advanced to the point where harm has
occurred and legal relief may be necessary.
State securities laws are known as “blue sky laws”.
TRUE
State securities laws are frequently referred to as blue-sky laws, since the early state
securities statutes were designed protected investors from promoters.
Selena joins Kona’s management consulting business. They do not indicate whether
Selena is Kona’s partner, but Selena receives 34 percent of the profits of the business
and makes decisions regarding which clients the business should accept. Two years
later, Selena leaves the business to start a singing career. Selena claims she owns a
portion of the value of the business. Is Selena correct?
Tuff Ruff LLP, a CPA firm, is engaged to audit the financial statements of Stuvver
Company. During the audit, Tuff Ruff discovers that Stuvver has been illegally
dumping toxic chemicals on a 40-acre plot of land behind its main manufacturing plant.
What is Tuff Ruff’s public duty regarding Stuvver’s illegal dumping?
Ed is an officer and director in Baldwin Properties Inc. Ed is primarily responsible for
finding and purchasing property for development. While on a business trip financed by
Baldwin, Ed found property for sale at 65 percent of the fair market value. Ed wanted to
purchase the property for himself. May he do so? Discuss.
Abraham, who is a partner in Adona’s firm, has been declared a terrorist by the court
following investigations of a criminal case. His partners at the firm want to expel him
from partnership but they are not ready to give his interest in partnership. Is Abraham
entitled to his interest in partnership?
Jerry is a janitor for Marry Hotel. Jerry negligently left a mop and a bucket of water in
the hallway. Gina, a guest of the Marry Hotel, exited her guest room and tripped over
the bucket. She broke her leg. Who is liable? Discuss.
Due to Susan Sharp’s many fraudulent misstatements, Nelly Nice buys Susan’s car.
Nelly writes Susan a check for $5,000 in payment. Susan immediately negotiates the
check to Patty Proper, who qualifies as a holder in due course. In the meantime, Nelly
discovers that the car is junk and makes a timely and proper stop-payment order to her
bank. However, when Patty presents the check for payment, the bank pays it anyway. Is
the bank required to recredit Nelly’s account?
Wanda contracted to sell Mike 100 boxes of ball bearings. The contract did not specify
a place of delivery. The ball bearings now reside at Wanda’s place of business. Wanda
refuses to ship the 100 boxes to Mike, and Mike refuses to come to Wanda’s place of
business to pick them up. Who is right? Why?