When a negotiable instrument is transferred, the transferor warrants all EXCEPT:
a. that the transferor is a holder in due course of the instrument.
b. all signatures are authentic.
c. as far as she knows the issuer is solvent.
d. the instrument has not been altered.
To form an LLC, a charter and an operating agreement must be filed with the Secretary
of State in the jurisdiction where the business will operate.
a. True
b. False
The Federal Trade Commission will not allow the sale of franchises that are unfair to
the franchisee.
a. True
b. False
In some industries it is a routine practice to draft contracts permitting imperfection in
the sellers goods, thereby limiting the effect of the perfect tender rule by the parties
agreement.
a. True
b. False
What is the major distinction between executive and independent agencies?
a. Executive agencies govern business issues while independent agencies regulate
individual matters.
b. The President has greater control over executive agencies.
c. The Administrative Procedure Act regulates independent agencies but not executive
agencies.
d. Subpoenas may be issued by independent agencies; executive agencies do not have
subpoena power.
Ted and Janet were married and owned a piece of jungle property in a tenancy by the
entirety. When Janet died, her will left of all her real property to T.J., their adult son.
T.J. claims he is the sole owner of the jungle property. Ted objects and files a lawsuit
for sole ownership of the jungle property.
a. Ted will win because property owned in a tenancy by the entirety includes rights of
survivorship for the surviving spouse. Ted will get the title to the entire property.
b. Ted will win only a one-half interest in the jungle property. T.J. will own the other
one-half interest because Janet had the right to will her half of the property to anyone
she chose.
c. Ted will lose and forfeit his entire interest in the whole property because a tenancy by
the entirety means that one party owns the entire property.
d. None of the above.
Judge Zellar was asked to decide if the plaintiff should see the documents to be
produced as a result of interrogatories directed to the defendant. The judge viewed the
documents alone and decided that they should be made available to the plaintiff. The
judge made:
a. an in camera inspection.
b. a motion to compel answers to interrogatories.
c. a request for admission.
d. a request for the production of documents.
The European Unions e-Privacy Directive requires websites to provide an “opt-out
option for sites that use tracking tools.
a. True
b. False
SharCo and Blyron Productions are each applying for a television license. In deciding
which applicant is better qualified, the FCC will hold an initial hearing before:
a. the OSHA.
b. an administrative law judge.
c. an administrative mediator.
d. a House-Senate Conference Committee.
If the seller has made a substantial beginning in manufacturing customized goods, then
an oral contract may be enforceable regardless of the amount of money involved in the
contract.
a. True
b. False
The National Labor Relations Act requires the union and the employer to reach an
agreement through good-faith collective bargaining.
a. True
b. False
Which of the following is true about injuries that occur on leased property?
a. The tenant is liable for an injury to an invited guest, no matter where on the property
the injury occurs.
b. The landlord is liable for injury only to the tenants.
c. The landlord is liable for injuries to tenants and guests that occur in common areas.
d. The tenant is liable for injuries in common areas if he has noticed a dangerous
condition, but not notified the landlord.
Which of the following is NOT an advantage to plaintiffs alleging racial discrimination
and filing under the Civil Rights Act of 1866?
a. a four-year statute of liminations
b. unlimited compensatory and punitive damages
c. assistance in filing from the Equal Employment Opportunity Commission
d. applicability to all employees, not just those with 15 or more employees
Mike owns a house in a poor area of a large city. Mike is on disability and his total
monthly income is $700. A sales representative visits his home, selling a water
purification system. Mike signs a contract that calls for monthly payments of $500 for
the next 10 years. The water system is worth no more than $1000. Mike thought he was
signing a permission slip allowing the salesman to conduct a free water test to
determine the toxins in the water. How would a court most likely describe this contract?
a. The contract is fully enforceable as written.
b. The contract is unenforceable because it is unconscionable.
c. The contract is enforceable, but only up to the value of the water system.
d. The contract is unenforceable because it is exculpatory.
Peggys credit card debts are mounting as her costs of insurance and fuel have
dramatically increased and her income, from sporadic free-lance jobs, has dropped.
Chapter 13 of the Bankruptcy Code will allow her to reorganize her debt while she
keeps most of her assets.
a. True
b. False
In a contract modification, the phrase, “charged with such amendment means:
a. the party who suggested the change.
b. the party who will benefit from the change.
c. the party who will be adversely affected by the change.
d. the party who did NOT suggest the change.
When a contract falls within the statute of frauds but is not reduced to a writing, the
contract is:
a. illegal.
b. unenforceable.
c. void.
d. voidable.
The Fair Debt Collection Practices Act prohibits which of the following practices?
a. A debt collector falsely representing himself as a lawyer.
b. A debt collector telephoning the debtor at 8:00 a.m.
c. Visiting a debtor at work if the employer permits personal visits.
d. Using neighbors to locate the debtor.
Generally, mandatory arbitration provisions in a contract are valid.
a. True
b. False
Real property consists of:
a. buildings.
b. air rights.
c. plant life.
d. All of the above.
Jurisdiction is:
a. the study of law.
b. the authority of a court to decide a particular type of case.
c. a federal court concept.
d. applicable only to appeals courts.
Trein, Inc. entered into a one-year, $1 million contract with Mia, a sports celebrity, to
promote Trein’s products. E-presto Inc., a competitor of Trein, was interested in having
Mia promote its products and knew of her contract with Trein. E-presto offered Mia a
three-year, $5 million contract. Mia left Trein and signed with E-presto. Which
statement is correct?
a. Trein is liable for tortious interference with a contract.
b. Mia is liable for tortious interference with a contract.
c. E-presto is liable for tortious interference with a contract.
d. Both Mia and E-presto are liable for tortious interference with a contract.
Which of the following warranties provides that the goods will be useable for the
ordinary purposes for which they are used?
a. Infringement.
b. Fitness for a particular purpose.
c. Merchantability.
d. Title.
Which of the following promises ordinarily must be in writing to be enforceable?
a. Promises made as a part of a prenuptial agreement.
b. The agreement to sell a car for $1500.
c. The promise by an executor of an estate to pay a debt of the decedent.
d. All of the above.
While hunting, Roger enters Adeles property without permission and is injured by
falling into a ditch that was obscured by the underbrush. Under the common law, Adele
is liable for Rogers injuries.
a. True
b. False
Tyron purchased a vacant lot and entered into a contract with BZ Inc. to construct a
shopping center on the site. Douglas heard about this contract and built a restaurant on
an adjoining piece of property because of the planned shopping center. Tyron was
unable to raise the necessary capital and was unable to perform the contract with BZ,
Inc. Douglas sued Tyron for breach of contract as a third party beneficiary. Douglas will
probably:
a. win as a third party creditor beneficiary.
b. win as a third party donee beneficiary.
c. lose as a third party incidental beneficiary.
d. lose as a third party creditor beneficiary.
Which of the following is NOT true under the Electronic Communications Privacy Act?
a. An intended recipient of an e-mail has the right to disclose it to third persons.
b. ISPs are prohibited from disclosing the content of electronic messages to anyone
other than the addressee, even if the disclosure is necessary for the performance of the
ISP’s service.
c. An employer has the right to monitor workers’ e-mail if the monitoring occurs in the
ordinary course of business or the employer provides the e-mail system.
d. To access e-mail messages that have been stored for 180 days or less, the government
must first obtain a search warrant.
John was a licensed physician in Michigan. When he retired to Florida, he started
providing medical services to the people in his condo, relying on his Michigan license.
Isaac, John’s next-door neighbor, owed John $2000 for medical services. John will be
able to enforce the contract he made with Isaac.
a. True
b. False
Tu-thumbs buys a used paint sprayer from the local paint store. The sprayer had a large
sign on it which said “ASIS.” The dealer made no promises or statements concerning
the performance of the paint sprayer. When Tu-thumbs attempts to spray paint his
house, the trigger on the sprayer sticks in the “on” position and before Tu-thumbs can
pull the electrical cord to cut the power, paint is sprayed all over his prize Borzoi dog
that is scheduled to be shown in a dog show the next day. Tu-thumbs sues the
dealership. Who wins?
a. Dealer wins; there were no express warranties and all implied warranties have been
successfully disclaimed.
b. Tu-thumbs wins; he can recover on the basis of express warranties.
c. Tu-thumbs wins; he can recover on the basis of the implied warranty of
merchantability because the word “merchantability” was not used in the disclaimer.
d. Dealer wins; even though there were implied warranties, the damage to the dog could
not have been foreseen.
Many states prohibit a seller from disclaiming implied warranties in the sale of
consumer goods.
a. True
b. False