Quasi-contracts and implied-in-law contracts are interchangeable terms.
A principal can ratify an agent’s act before the agent’s act occurs.
Under common law, parties to a contract can decide who will bear the risk of loss.
Distribution of profits for any purpose is considered to be evidence that a partnership
exists.
Unless otherwise expressly stated, an auction is considered an auction without reserve.
The automatic perfection rule applies to a purchase money security interest in consumer
goods.
Punitive damages are not allowed in strict liability actions.
Inquiries are written questions submitted by one party to a lawsuit to another party.
In terms of the priority of distributing bankruptcy estate assets, federal tax obligations
are immediately below that of the expenses of administering the estate.
Gifts and donations to religious organizations are exempt from ever being considered as
given under undue influence.
Parties enter into licensing agreements through contracts.
The “English rule” provides that the first assignment in time prevails, regardless of
notice.
Parol evidence may not be admitted in court if it corrects an obvious clerical or
typographical error.
A collateral promise occurs when the person making the promise agrees to be liable for
the debt of another person.
A security agreement may provide that the security interest attaches to property that was
not originally in the possession of the debtor when the agreement was executed. This
interest is usually referred to as a transparent lien.
Partners are jointly and severally liable for the torts and/or breaches of trust of the
partnership.
It would be a violation of the right to equal protection under the U.S. Constitution for a
state to pass a merchant protection statute allowing merchants, but not other citizens, to
stop and detain suspected shoplifters.
If a buyer accepts nonconforming goods, the buyer may not seek remedies against the
seller.
Evidence of a serious crime, such as murder, is usually presented to a summary jury.
A “constructive” trust is implied from the conduct of the parties.
All states mandate that in order for a plaintiff to recover for the tort of negligent
infliction of emotional distress, the plaintiff must demonstrate some form of physical
injury to accompany his or her emotional distress.
Hostile tender offers can be made without any prior attempt by a tender offeror to
acquire the target company through a voluntary merger or purchase.
Parents have an obligation to provide food, shelter, clothing, medical care, and other
necessities to their children until a child reaches age twenty-one (21.).
The concept of consideration is that the parties to a contract should carefully consider
the contract’s terms before they decide to enter into the agreement.
Intent to deceive is also called scienter.
Ethical relativism has been criticized because action that is usually thought to be
unethical would not be unethical if the perpetrator thought it was in fact ethical.
United States Supreme Court justices are nominated by the Senate and confirmed by the
president.
Under social contract theory, each person is presumed to have entered into a social
contract with all others in society to obey moral rules that are necessary for people to
live in peace and harmony.
Confusion occurs if two (2.) or more persons commingle fungible goods.
To be enforceable, a contract must arise from a bargained-for exchange.
If there is a default on a secured credit transaction, the only remedy is litigation.
Supervening events cannot be an effective defense in a strict liability product liability
case.
The beneficiary of a life insurance policy is the person whose life is insured.
The terms of a software click-wrap license are typically negotiable.
Real property can become personal property if it is removed from the land.
If the buyer or lessee makes partial or full payment for goods before they are received,
and the seller or lessor becomes insolvent within 10 days after receiving the first
payment, the buyer or lessee may recover the goods from the seller or lessor.
A contract that is entered into because of undue influence is voidable by the innocent
party.
In order to be in violation of Section 5 of the Federal Trade Commission Act, the party
must also be in violation of another provision of the antitrust laws.
Under the social contract theory of societal justice, members of society are obligated to
obey the moral rules of society regardless of whether others obey those rules.
In an antitrust case where a plaintiff is challenging a proposed merger involving the
defendant (who wants the merger to be approved,) which of the following is true about
the likely arguments the parties will make regarding the relevant market?
A) Any arguments are usually pointless, because relevant markets are usually clearly
determined in advance.
B) Both parties will likely argue for a narrowly-defined relevant market.
C) The plaintiff will argue for a narrowly-defined relevant market, and the defendant
will argue for a broadly-defined relevant market.
D) The plaintiff will argue for a broadly-defined relevant market, and the defendant will
argue for a narrowly-defined relevant market.
E) Both parties will argue for a broadly-defined relevant market.
The Family Medical Leave Act makes an employee eligible for leave when they have
worked:
A) a minimum of twelve months and 1,250 hours.
B) a minimum of nine months and 1,250 hours.
C) a minimum of six months and 1,250 hours.
D) There is no specific requirement, other than being a full-time employee.
E) There is no specific requirement, other than being either a full-time or part-time
employee.
Play4Ever Sporting Goods is a retailer of sporting goods. In 2001, Play4Ever borrowed
$1,000,000 from Third National Bank, granting Third National a security interest in “all
presently owned and after-acquired inventory.” Third National filed a financing
statement in May 2002. In early January 2002, Play4Ever borrowed $200,000 from
Rocksolid Bank in order to purchase some new inventory. Play4Ever and Rocksolid
signed a written security agreement, with the new inventory as collateral, and Rocksolid
immediately filed a financing statement. Prior to the Play4Ever’s receipt of the
inventory, Rocksolid sent written notice to Third National Bank of the new security
interest. If Play4Ever defaults on both loans, which of the following is true?
A) Third National has priority on all inventory of Play4Ever, because of the
after-acquired property clause.
B) Third National has priority on all inventory of Play4Ever, except that Rocksolid has
priority on the specific inventory acquired with the money from the $200,000 loan.
C) Third National has priority on all inventory of Play4Ever acquired before the
$200,000 loan, and Rocksolid has priority on all inventory acquired after the $200,000
loan was made.
D) Third National has priority on all inventory of Play4Ever acquired before the
$200,000 loan, Rocksolid has priority on the specific inventory acquired with the
proceeds from the $200,000 loan, and the two banks have equal priority on any other
inventory acquired after the $200,000 loan was made.
E) Third National has priority on all inventory.
Which of the following is not typically covered in a franchise agreement?
A) territory
B) licensing of intellectual property
C) required payments
D) quality control standards
E) confidential business plans
All but which of the following is exempt from registration with the Securities and
Exchange Commission?
A) securities issued by any government in the United States
B) securities issued by nonprofit issuers
C) insurance and annuity contracts issued by insurance companies
D) securities issued in a corporate reorganization in which one security is exchanged for
another security
E) long-term notes and drafts that have a maturity date that exceeds one (1.) year
Which of the following is not a requirement in order to obtain property by adverse
possession?
A) Possession must be open, visible and notorious.
B) Possession must be with the original owner’s actual knowledge that the possessor
intends to eventually acquire the property through adverse possession.
C) Possession must be actual and exclusive.
D) Possession must be continuous and peaceful.
E) Possession must be hostile and adverse.
Peter runs an auto air conditioning repair shop. Because of the phase-out of the
ozone-depleting refrigerants used in older auto air conditioners, auto air conditioning
repairers have become subject to numerous new laws and regulations, some of which
are costly and burdensome to comply with. Although it costs him more, Peter decides to
follow all the statutes and regulations so long as everyone else does the same. Peter has
reached his decision in accordance with:
A) ethical relativism.
B) utilitarianism.
C) ethical fundamentalism.
D) Kantian ethics.
E) Rawls’s social justice theory.
The standard of whether advertising is “false and deceptive” is whether it would
mislead:
A) a reasonable person with a seventh-grade level of education.
B) the particular plaintiff involved in the lawsuit.
C) a reasonable consumer.
D) a consumer sophisticated with respect to the type of product that was advertised.
E) an expert in the industry associated with the product.
The right to go on someone else’s property and remove something is called:
A) a license.
B) an easement by grant.
C) a profit.
D) an easement appurtenant.
E) eminent domain.
A party may enter a plea of ________, whereby the accused agrees to the imposition of
a penalty but does not admit guilt.
A) nolo contendere
B) absolution
C) prayer for judgment continued
D) no mas
E) summary judgment
The majority of litigation against accountants results from:
A) tax preparation.
B) the preparation of opinion letters.
C) the preparation of financial statements.
D) the preparation of audits.
E) the preparation of balance sheets.
Unless otherwise agreed, the buyer or lessee has the right to ________ goods that are
tendered, delivered, or identified in a sales or lease contract prior to accepting or paying
from them.
A) inspect
B) reject
C) revoke acceptance of
D) reverse engineer
E) rescind
Which two states were cited in the textbook as having homestead exemptions without a
maximum dollar limit?
A) Texas and New York
B) Florida and California
C) New York and Florida
D) New York and California
E) Texas and Florida
Which of the following agency agreements gives an agent the broadest range of
powers?
A) a general power of attorney
B) a special power of attorney
C) a general attorney-in-fact
D) a special attorney-in-fact
E) an implied power of attorney
Jane wishes to create a corporation to operate an art gallery. She completes the articles
of incorporation, and mails them to the appropriate state office. She then leases space,
hires a receptionist, buys supplies, and contracts with artists to exhibit their artwork, all
on behalf of her corporation. Sometime later, the state issues its certificate of
incorporation.
A. Discuss the liability of Jane and the corporation with regard to the contracts Jane has
made with third parties.
B. Based on the above fact situation, discuss whether a “novation” has occurred.
In order to become a holder in due course, one must take a negotiable instrument
without notice of the following except:
A) that the instrument is overdue.
B) that the instrument has been dishonored.
C) that the instrument was signed by an agent.
D) that there was a claim to it by another person.
E) that there is a defense against it.
Which of the following is true about the statute of limitations under the UCC?
A) The limitations period is always four years.
B) The limitations period cannot exceed four years.
C) The limitations period cannot be less than two years.
D) The limitations period depends only on the terms of the specific contract.
E) The limitations period is set under the UCC and cannot be changed by the parties.
Undue influence is characterized by one party being put at a disadvantage in a contract
due to:
A) a party taking advantage of superior knowledge about the subject matter in a
contract.
B) a party taking advantage of economic advantage in a transaction.
C) a party taking advantage of it being less urgent for that party to reach an agreement.
D) a party taking advantage of a fiduciary relationship.
E) a party taking advantage of the other party’s legal circumstances.
Limitations of remedies in licenses subject to UCITA are ________.
A) unenforceable
B) unenforceable, barring unjust enrichment
C) enforceable
D) enforceable, unless they are unconscionable
E) enforceable in equity, but not by law
Mario and Bongo are computer programmers in different divisions at the same
company. Mario knows that Bongo’s wife is pregnant for the first time and has just
learned that she will be having triplets. Mario sends Bongo a signed, written memo
offering to sell his minivan to Bongo for $12,000. Realizing that this is a good deal,
Bongo responds with a signed letter saying that he’ll take the minivan for $12,000, but
that is premised on Mario giving the interior a thorough cleaning. Mario never responds
in any way to the statement about the cleaning, but Mario and Bongo have several
additional communications regarding details of payment, transfer of title, etc. When
they meet to exchange money, keys, title, etc., Bongo refuses to go through with the
deal because the interior has not been cleaned. Which of the following is true in this
situation?
A) Because the change in Bongo’s acceptance was not a material change, Mario has
duty to clean the minivan.
B) There is an enforceable contract for the sale without a duty to clean the van.
C) A court would likely order specific performance for Mario to clean the minivan.
D) There is no contract because the response contained terms different from the offer.
E) The written confirmation rule means that Mario has a duty to clean the minivan.
Karl is the vice president of a medium-size corporation that operates retail sporting
goods stores in seven states. Karl has considerable stock that he purchased and received
over the years while working there. Karl has purchased no stock for the last three years,
because all his excess funds have gone for college expenses for his oldest son. Karl’s
daughter will begin college in the fall, and Karl needs to sell some stock. Karl knows
that one of the retail locations where the corporation owns the real estate was once used
as a toxic dump. The corporation is legally obligated to clean up this site, and the costs
will have a material effect on the corporation’s net income for several years. This
information is not yet public. Karl can:
A) freely sell his stock without any liability, because it has been more than six months
since he purchased any stock.
B) sell his stock, but only if he tells the purchaser about the liability for cleaning up the
toxic waste.
C) sell his stock only to an accredited investor.
D) not sell his stock under any circumstances until the information about the toxic
waste becomes public.
E) sell his stock, but only if he agrees to repurchase it within one year, subject to the
buyer’s request.
Willie gave his girlfriend Reba a gold necklace for her birthday. The next day, Reba
broke up with Willie and started dating his best friend, Waylon. Willie is furious and
heartbroken. He becomes so upset that he commits suicide. Can Willie’s estate get the
necklace back from Reba?
A) Willie’s estate can recover the necklace, because a donor is entitled to revoke or
withdraw a gift within a reasonable period of time.
B) Willie’s estate can recover the necklace, because Reba paid no consideration for the
gift.
C) Willie’s estate cannot recover the necklace, because it was a gift “causa mortis.”
D) Willie’s estate cannot recover the necklace, because it was an “inter vivos” gift.
E) This was not a gift, because Willie would not have intended to give Reba the
necklace had he known about Reba and Waylon.
In Alba v. Kauffman, the court ruled that specific performance regarding the sale of land
and 19th century farmhouse:
A) did not apply because monetary damages were sufficient to bring justice.
B) did not apply because the Alba’s filed suit before the settlement date so Kauffman
had not yet breached the contract.
C) applied because land is always considered unique.
D) applied because the land was not unique but the farmhouse was.
E) applied because a non-breaching party always has a choice between monetary
damages and equitable remedies.
When a person or organization petitions the court to become a party to a lawsuit
between other because they have an interest in the lawsuit, this is called:
A) intervention.
B) involvement.
C) interdiction.
D) intercession.
E) intrusion.
Slimy took photographs of Susie while she was sunbathing in her backyard and posted
them on his web site operated by ABC Corporation, an Internet service provider. ABC
Corporation did not know what Slimy had done. Slimy told all his friends to take a
look, and Susie ended up finding out about the pictures. Because Slimy had no money,
Susie decided to sue ABC Corporation for all the embarrassment and invasion of her
privacy. What would be the likely result of that lawsuit?
A) Susie will recover damages from ABC Corporation because as a matter of law, the
corporation is responsible for what is sent over its network.
B) Susie will recover against ABC Corporation, but only if she can show that Slimy is
not likely to have funds within the next year with which to pay a judgment for invasion
of privacy.
C) Susie will lose in the lawsuit, but only because she was wearing a tasteful bathing
suit at the time the photos were taken and should not have been embarrassed.
D) Susie will lose the lawsuit because legally, an Internet service provider in such a
situation is not considered a publisher or speaker of any information provided by an
individual such as Slimy.
E) Susie will lose unless she can show at one least one previous incident when a user of
ABC Corporation posted inappropriate photographs on a web site.
Mary was at a party given by friends of her boyfriend. It was summer and the guests
spent most of the time outdoors. Mary fell in love with a crystal serving dish being
used, and when no one was looking, slipped it into her purse. She took the dish home
and placed in her kitchen cabinet. Under the definitions under common law, what
crimes has Mary committed?
A) burglary and larceny
B) robbery and burglary
C) larceny and receiving stolen property
D) larceny
E) larceny and robbery
In April 2010, Mary joins an architectural firm as a new partner in a general
partnership, bringing the total partnership to five partners. Mary invests $40,000 in
order to be admitted to this partnership. In June, the partnership is sued for malpractice
in connection with a building designed in 2009 by a partner who resigned in January
2010. In November 2010, a jury awards $300,000 in connection with the case. What is
the maximum amount that Mary could be liable for in connection with this lawsuit?
A) nothing, because the partner who caused the problem is no longer in the partnership
B) nothing, because the malpractice was committed before Mary became a partner
C) $40,000, the amount of Mary’s investment
D) $60,000, one-fifth the amount of the judgment
E) $300,000, the total amount of the judgment
When there is not a breach of the sales contract, who bears the risk of loss in noncarrier
cases?
A) the buyer bears the risk of loss
B) the seller bears the risk of loss
C) the merchant-seller bears the risk of loss, but not the non-merchant seller
D) the merchant-buyer bears the risk of loss, but not the non-merchant buyer
E) both the seller and buyer bear the risk of loss equally
What is the effect of a “continuation agreement” among partners in a general
partnership?
A) It prevents a partner from being able to dissolve the partnership without the express
written approval of the other partners.
B) It converts a “partnership-at-will” to a partnership for a term.
C) It prevents a partnership from being dissolved by events that would otherwise cause
dissolution.
D) It provides for the automatic formation of a new partnership upon dissolution of the
existing partnership.
Partnerships
E) It limits the personal liability of partners for obligations of a partnership, once the
partnership has been dissolved.
A(n) ________ assignment clause prohibits the assignment of rights under the contract.
A) pro-
B) quasi-
C) anti-
D) non-delegable
E) implied