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All express contracts must be in writing to be valid.
Because of the unfair results and the limited remedy available in the law courts, the
Court of Chancery was established.
A proxy always grants the holder of the proxy the right to vote as the holder of the
proxy desires.
Secured credit refers to credit where there is a second party to pay the debt in the event
that the original debtor does not.
The Fourth Amendment prohibits persons from being tried twice for the same crime.
As part of the filing requirements, a limited partnership must have a written agreement
specifying how profits and losses are to be divided.
Shareholders must attend a shareholders' meeting to vote.
A sole proprietor bears the risk of loss of the business.
The Fair Labor Standards Act applies to private employers and employees engaged in
the production of goods for intrastate commerce.
Article II of the United States Constitution establishes the legislative branch of
government.
A buyer or lessee may obtain specific performance of a sales or lease contract if the
buyer or lessee files notice within 10 days of a breach that specific performance is
demanded.
The CAN-SPAM Act is designed to eliminate spam.
When a payee or holder receives a check, he or she can either go to the payer bank and
present the check for payment in cash, or deposit the check into the depository bank.
The Clean Water Act regulates the temperature of water discharged into public
waterways.
According to the maximizing profits theory, the interests of constituencies such as
employees, suppliers, and residents of the communities in which businesses are located
are important to consider in determining the social responsibility of businesses.
The test for actual cause is this: "But for" the defendant's conduct, would the accident
have happened?"
The unemployment compensation program is run at the federal level to ensure equality
of benefits across the country.
Placing someone in a "false light" constitutes an invasion of privacy.
Parents are liable for their children's contracts for necessaries of life if they have not
adequately provided such items.
A person who provides contract services without the appropriate license required by a
revenue-raising statute cannot enforce the contract or recover payment for services
rendered pursuant to the contract.
In a bailment, the party to whom the property is delivered for safekeeping, storage, or
delivery is the bailor.
A party has given consideration for a contract if that party suffers a legal detriment,
even if the other party does not receive a benefit.
Deductible clauses provide that insurance proceeds are payable after the insured pays a
coinsurance.
If a U.S Supreme Court decision results in a tie vote, the case is remanded to the Court
of Appeals for a new trial.
The doctrine of reformation holds that the only way to correct a contractual provision
that does not reflect the intentions of the parties is by mutual agreement of the parties.
Under the moral minimum theory of the social responsibility of business, businesses are
presumed to operate in order to generate profits and thus have minimal moral
obligations.
Many professional athletes' contracts contain a clause permitting an assignment of the
contract.
A holder who either (1.) releases an obligor form liability or (2.) surrenders the
collateral without the consent of the parties who would benefit thereby does not
discharge those parties from their obligation on the instrument.
Picketing is lawful, even if it obstructs customers from entering the employer's place of
business.
In an action "in equity," the judge decides the equitable issue.
A mutual mistake of fact is more likely to result in a party being able to rescind a
contract than is a mutual mistake as to value.
A threat of future harm or moral pressure is not considered false imprisonment.
A corporation's shareholders own the corporation.
Jewish law is decided by rabbis, who are scholars of the Torah and other Jewish
scriptures.
If a client authorizes an attorney to settle a case within a certain dollar amount and the
attorney does so, the settlement agreement is binding.
The seller's recovery for providing a minor the necessaries of life is based on the legal
doctrine of contract.
In a Chapter 11 bankruptcy, the creditors' committee is usually composed of:
A) all unsecured creditors, and the three largest secured creditors.
B) the seven largest unsecured creditors.
C) the seven largest unsecured creditors, and all secured creditors.
D) the three largest secured creditors, and the three largest unsecured creditors.
E) the four largest unsecured creditors.
The Uniform Commercial Code has been adopted:
A) by fewer than one-half of the states.
B) by most, but not all, of the states.
C) at least in part by all states.
D) in its entirety by all states.
E) in part by one-half of the states.
Which of the following is false regarding zoning laws?
A) They are used to establish use districts such as designating areas residential.
B) They are used to restrict the height and size of buildings on a building site.
C) Once established, no deviations from the zoning code are permitted.
D) They are usually formulated by a zoning commission.
E) Zoning laws act prospectively.
In many instances, the parties to a contract unintentionally benefit a third party when a
contract is performed. In such situations, the third party is referred to as a(n) ________
beneficiary.
A) creditor
B) donee
C) third-party
D) incidental
E) accidental
Which of the following is true regarding membership sharing of limited liability
company profits and losses?
A) Unless otherwise agreed, members share LLC profits and losses equally.
B) Members share LLC profits and losses equally, and this distribution cannot be
changed by agreement between LLC members.
C) Unless otherwise agreed, members share LLC profits and losses proportionally,
depending on the date they become members of the LLC.
D) Members share LLC profits and losses proportionally, depending on the date they
become members of the LLC, and this distribution cannot be changed by agreement
between LLC members.
E) Unless otherwise agreed, members share LLC profits and losses proportionally,
depending on the value of the capital contribution members made to the LLC.
The Uniform Franchise ________ requires a franchisor to make specific presale
disclosures to prospective franchisees.
A) Memorandum
B) Offering Circular
C) Disclosure Statement
D) Memorandum of Understanding
E) Acceptance Statement
Which of the following best describes who may be a partner in a limited partnership?
A) an individual
B) an individual and a corporation
C) an individual, a corporation, and a limited partnership
D) an individual, a corporation, a limited partnership and an estate
E) an individual, a corporation and an estate
An exculpatory clause is also called a(n) ________ clause.
A) release of liability
B) quantum meruit
C) esse quam videri
D) tort reform
E) public policy
The legal rule of ________ knowledge means that the principal is assumed to know
what the agent knows.
A) attributed
B) imputed
C) asserted
D) implied
E) transferred
Karen is going downtown to shop. She pulls her car into a parking lot, stops, pays and
receives a ticket, parks her car, and leaves. Karen keeps her keys, and she may retrieve
her car at any time. Several hours later when Karen returns, she learns her car has been
stolen. Which of the following statements best describes this situation?
A) This is a bailment.
B) This is not a bailment, because there is no personal property.
C) This is not a bailment, because the garage is considered merely a lessor of space in
this situation.
D) This is not a bailment, because the bailee had no duty to return the goods.
E) This is not a bailment, because there was no compensation paid.
What was the court's decision in Willsmore v. Township of Oceola, Michigan, in which
the plaintiff sought clarification regarding the ownership of money found within a
suitcase he found while hunting?
A) Because the suitcase was placed in a hole and the time was taken to intentionally
cover it up, the suitcase was mislaid and not lost, so Willsmore as the finder had no
rights.
B) Powell, the owner of the property where the suitcase was found, had superior rights
to any finders of personal property on his real estate.
C) The Township's Lost Property Act was unconstitutional, because requiring finders to
forfeit fifty percent of the value of any found property is excessive, and violates
common law principles giving one hundred percent of the found property to the finder.
D) Willsmore complied with all required notice and posting provisions of the
Township's Lost Property Act, so he was entitled to his share of the money.
E) Because $383,840 found in a watertight suitcase, buried and hidden in an
unoccupied property, was obviously money from a criminal activity, Willsmore had no
claim to the funds, and the money therefore goes to the Township.
Which of the following is true about security agreements and financing statements?
A) These are two terms for essentially the same document.
B) Both must be filed in order to perfect a security agreement.
C) Both must exist in order for a security interest to attach.
D) The financing statement gives constructive notice to the world of the existence of the
related security agreement.
E) The security agreement is unenforceable until a financing statement has been filed.
Which of the following is true about the difference between express and implied
warranties?
A) Express warranties apply to merchants and implied warranties apply to all sellers of
goods.
B) Express warranties apply to merchants and implied warranties apply to
nonmerchants.
C) Express warranties arise from words or conduct of the parties and implied warranties
arise automatically by operation of law.
D) Express warranties can never be limited, but implied warranties can be disclaimed.
E) Implied warranties cannot be disclaimed, but express warranties can be disclaimed.
The Farm Union represents farm workers, some of whom are employed by Vino
Wineries. The union is on strike against Vino, and it is picketing all liquor stores that
sell Vino products. The picketers are asking that no one buy anything from any liquor
store that carries Vino products. There has been no violence. This picketing is:
A) an illegal secondary boycott.
B) a legal secondary boycott.
C) an illegal "common situs" picket.
D) a legal "common situs" picket.
E) a legal primary picket.
Under the ________, an arrangement is considered an investment contract if there is an
investment of money by an investor in a common enterprise and the investor expects to
make profits based on the sole or substantial efforts of the promoter or others.
A) Howe
B) Lowe
C) Dewey
D) Howey
E) Cheatham
Which of the following is true about a "buy-and-sell" agreement among corporate
shareholders?
A) They are most often entered into among shareholders of large, publicly-held
corporations, since it is otherwise difficult to monitor the large number of stock
transactions.
B) They always provide for the purchase of shares by the corporation, in the event a
shareholder desires to sell shares.
C) They can provide for the sale of shares to either the corporation or to other
shareholders at the price specified in the agreement.
D) They usually also contain an agreement for a voting trust.
E) They are enforceable, but only if the agreement provides for a fair price.
Most federal circuits of the federal appellate court system are determined based on:
A) geography.
B) the subject matter of the case being appealed.
C) whether the case is criminal or civil.
D) the amount in controversy in the appeal.
E) whether the appeals come from state or federal courts.
What is the term for the buyer's right to make the shipment conform under some
circumstances if the buyer delivers nonconforming goods?
A) the time to conform rule
B) the right to make perfect
C) the reasonable delay doctrine
D) the right to cure
E) the good faith obligation
An instrument that is not payable to a specific payee or indorsee is ________.
A) legally unenforceable
B) a void contract
C) avoidable contract
D) order paper
E) bearer paper
The Hart-Scott-Rodino Antitrust Improvement Act led to rules requiring that:
A) certain activities are classified as "per se" violations.
B) failing companies be rescued through mergers, whenever possible.
C) violators of antitrust laws be liable for treble damages.
D) mergers be allowed if United States competitiveness in world markets is improved.
E) the Federal Trade Commission and the Justice Department be notified in advance of
any merger involving certain firms.
Which of the following is true about witnesses who attest to a will?
A) The witnesses must be close family members.
B) The witnesses need not be family members, but must have known the testator for a
reasonable length of time.
C) If the witnesses are beneficiaries under the will, most states either ignore the will
provisions in favor of the witnesses, or invalidate the entire will.
D) The witnesses must witness the writing of the will and the testator's signing of the
will.
E) The witnesses cannot be witnesses for wills of more than one person within the same
family.
A party who wants to avoid a contract on the basis of unconscionability must prove all
of the following except:
A) the parties possessed severely unequal bargaining power.
B) the weaker party was fraudulently misled into entering the contract.
C) the dominant party unfairly used its unequal bargaining power to obtain oppressive
or unfair contract terms.
D) the weaker party had no reasonable alternative.
E) Unconscionability is not a reasonable basis, either legally or equitably, for avoiding a
contract obligation.
The defendant's case must
A) rebut the plaintiff's evidence.
B) prove any affirmative defenses asserted by the defendant.
C) prove any allegations contained in the defendant's cross-complaint.
D) rebut the plaintiff's evidence, and prove any affirmative defenses asserted by the
defendant.
E) rebut the plaintiff's evidence, prove any affirmative defenses asserted by the
defendant, and prove any allegations contained in the defendant's cross-complaint.
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 ________.
A) Dormant Commerce Clause
B) Dormant Supremacy Clause
C) Surreptitious Commerce Clause
D) Surreptitious Supremacy Clause
E) Equitable Commerce Clause
In a situation where one party to a contract has lied about the nature of the document
that the parties are signing, the type of fraud that would most likely be present is:
A) fraud in the inception.
B) fraud in the inducement.
C) fraud by concealment.
D) fraud by undue influence.
E) fraud in the substance.
Which of the following situations creates a sale that falls under UCC sales law rules?
A) Dr. Mackey agrees to teach at yahoo university for 1 year
B) Katherine makes a contract to purchase a shed that requires assembly. The contract
price is for $8,000.00 which includes $400.00 for labor.
C) Katherine contracts to pay Mike $880.00 to have her bedroom painted. $800.00 is
for labor and $80.00 is for the paint.
D) Abc rentals rents a cement mixer to Katherine.
E) All of the above are UCC sales contracts.
The National Labor Relations Board supervises which type(s) of union elections?
A) contested elections
B) uncontested elections
C) contested and uncontested elections
D) neither contested nor uncontested elections
E) only elections in which both the employer and the union request supervision
In connection with the pleadings in a lawsuit, what is an answer?
A) the response of the defendant to questions posed by the judge
B) the response of the plaintiff to questions posed by the judge
C) the response of the defendant to the plaintiff's complaint
D) the response of the judge to the plaintiff's complaint
E) the responses of the plaintiff to questions posed by the judge
The main objective of Article 3 of the UCC and the law of commercial paper is to:
A) create a nonnegotiable instrument.
B) create legal money.
C) create an instrument to be accepted in place of money in commercial transactions.
D) guarantee the payment of all transactions.
E) prevent fraud.
Someone who believes that moral decisions should be made such that the greatest
amount of good in total results from his or her actions believes in which moral theory?
A) ethical relativism
B) utilitarianism
C) ethical fundamentalism
D) Kantian ethics.
E) Rawls's distributive justice theory
In a shipment contract, the seller must do all of the following except:
A) arrange for adequate insurance to cover loss or damage to the goods while in transit.
B) place the goods in the possession of the carrier.
C) contract for the proper and safe transportation of the goods.
D) obtain and deliver any appropriate documents related to the sale and shipment.
E) notify the buyer of the shipment.
When a person enters into a contract with the intent to confer a benefit or gift to an
intended third party, the contract is called a ________ contract.
A) Good Samaritan
B) Solomonic
C) donee beneficiary
D) residual
E) declaratory
On September 1, Mike enters into an agreement with Kelly to purchase 100 sets of
headphones. The contract entered into between Mike and Kelly is a shipment contract.
On September 10, Kelly identifies the 100 sets of headphones that will be sent to Mike.
On September 15, Kelly ships the headphones. Mike receives the headphones on
September When does Kelly's insurable interest terminate?
A) on September 1
B) on September 10
C) on September 15
D) on September 20
E) Kelly never had an insurable interest.
What are the three general requirements for determining if a gift is complete, and what
is their importance? How does this fit with the contract law principal that a court will
not enforce a gift promise?
How does the equitable distribution of property differ from community property
distribution? Is the concept of community property fair?
Fred is an officer at Hill Corporation. Fred, with no inside information, buys four
hundred shares of Hill stock in May at $40 per share, and in July, sells two hundred
fifty shares at $60 per share. Is Fred liable for short-swing profits?
One night at a restaurant, Mark and Mary wrote up an agreement on a couple of napkins
about a construction project whereby Mark would build a room addition to Mary's
house. Mark said he would do this in exchange for Mary agreeing to transfer an empty
piece of land that she owned to Mark. It took two napkins because the agreement would
not fit on a single napkin. Mark signed one of the napkins, but Mary signed neither. The
contract price was $30,000. A few days later Mark saw the plans, which were more
complex than he expected. Discuss the enforceability of this contract.
Bart, Dale and Bill form a limited liability company. They each own a one-third interest
in the company, and agree to divide profits and losses on that basis. The operating
agreement was silent regarding the transfer of an interest, and it did not address the
status of a transferee. Bart sells his interest to Milly for $10,000. The company earns
$99,000 in profits. and Milly informs Dale and Bill that she is their new member. They
say "no way," and that she can forget about a share of the profits. Who is right under the
Uniform Limited Liability Company Act, and why?
Assume Susie borrows $500 for school tuition from Sneaky Slim and gives him a note
for that amount payable with interest in the amount of $25 due in one year. Slim
cleverly alters the note to say $5,000 with interest of $500 due in one year. Slim then
negotiates the note to Alice who negotiates it to Bob. A year later, Bob asks Susie for
payment of $5,500. Who is liable to whom for payment, and for how much?
Brandon, an artist, was commissioned to paint an oil portrait of the governor of
Delaware. When Brandon was called away to Europe to paint the portraits of the royal
family of Sweden, he asked Cameron, a very famous artist, to totally take over the
governor's portrait project. The governor agreed. What has occurred and is it
permissible by the courts? What would the result be if the governor did not approve?
Zelda went on the website for a store specializing in ladies' fashions. Zelda wanted to
place an order for a new dress. On the order form she filled in her order. She then typed
in that she expected a 10% discount. Zelda received the dress, but she was billed for the
regular price with no discount. Zelda calls the store and says that she owes 10% less
because her counteroffer was accepted by prompt shipment. Is Zelda right, and why or
why not?
Why did proponents of the Sarbanes-Oxley Act believe that the Act was needed, and
will it result in more accurate reporting of financial results?
Amanda tells her roommate and best friend Brandie, (both are over 21 years old) that
she will pay her $1,000 if she gives up smoking for one year. Brandie refrains from
smoking for one year, but Amanda feels that she is not required to pay. How would the
court decide and why?
Soda Corporation developed a great tasting lemon-lime drink called Zoom. Soda
Corporation grants franchises whereby franchisees keep their own name, but they may
display a sign advertising that they offer Zoom soda, and franchisees are provided with
mixing instructions for the drink. Big Burger owned one of the franchises. A customer
at the franchise spilled a cup of Zoom on the floor. An hour later, another customer
slipped and fell. The injured customer sued both Big Burger and Soda Corporation.
Discuss whether the injured customer will likely be able to recover against Soda
Corporation.
Bob runs a factory that makes ladies' clothing. Bob needs a certain type of silk sold by
Alice. Bob calls Alice and tells her that he needs 1,000 yards of silk. Alice tells Bob that
she cannot guarantee anything but that she will do her best. Alice tells Bob that she will
sell him the silk for a 10% markup on what she has to pay. Bob says that is fine. Later,
Bob is having financial problems and decides he doesn't want the silk. Unfortunately,
Alice calls the next day and tells Bob that she has located 900 yards of silk and that she
would like payment. Bob wants out of the deal. He says that there was a lack of
consideration and that he never even knew how much he would have to pay. What
would a judge likely rule?
Would it be better if proof of actual deception was required in order to prove a "false
and deceptive" advertising claim under Section 5 of the Federal Trade Commission
Act? Is it unfair to penalize advertisers when no actual deception can be shown?
You have started a very successful restaurant business, and now own thirteen profitable
restaurants. Besides good food, the decor and ambience of your restaurants give them a
distinct competitive advantage over other restaurants. Customers have approached you
about opening up additional restaurants in other states. You do not want to affiliate with
partners, nor do you want to spend considerable time traveling. Your attorney has
suggested franchising, and guarantees that a contract can be written which protects the
trade name, service marks and other particulars of your business. Your only concern is
potential liability, should a franchisee's customer become injured or sick at a franchise.
What is your liability exposure as a franchisor, and what can you as a franchisor do to
protect yourself?
Mary recently purchased her first new car. After driving the car for a few months, it
developed a severe vibration problem at certain speeds. She took it to the dealer, and
they fixed the car at no charge under the warranty. A few weeks later, the problem
gradually reappeared. Mary has come to you to get some general information about her
options under her state's lemon law. Although you do not know the specifics of the
lemon law in her state, provide Mary with an overview of how state lemon laws work,
and a summary of her rights.
Susan purchases a new blow-dryer from Sizzle Corporation and sends the company her
warranty card. She uses the blow-dryer for a few months without incident. Meanwhile,
the manufacturer, Sizzle Corporation, discovers that after a few months of usage, some
of the dryers overheat and catch on fire. Sizzle sends out notices to everyone who
purchased a blow-dryer warning of the fire danger; but Sizzle was slow, and it took two
months to get out the notices. Susan got the notice and planned to return the blow-dryer.
She went ahead, however, and continued using the dryer until it was convenient for her
to make the return. Unfortunately, prior to Susan returning the dryer, it overheated and
burned a significant area on Susan's expensive, antique bedroom chest. Susan wants to
sue Sizzle Corporation. Discuss the legal issues involved.
Barry is the computer systems director for a medium-sized consulting firm. One night
Barry is at happy hour at a local bar talking about his job with some people he has just
met. Barry mentions that he needs to buy computers for the three new persons the firm
has recently hired. One of the persons he has just met, Tom, asks Barry what kind of
computers he plans to purchase. Barry says, "I'm not sure. I'm still checking out what's
available." Tom says, "Well, I can get you anything you want for much less than the
stores." A week later Barry calls Tom and says he is interested in the Cyber-mega 4000
model, and would order three if the price was right. Tom quotes a price, which is about
half the normal price. Three days later Tom comes to Barry's office with the three
computers. Barry is curious why only one is in a box and Tom replies, "Oh, I thought
you wouldn't want the trash in your office. I also already sent in the warranty cards for
you to save you the trouble." Later it is learned that the computers were stolen a few
days before Tom took them to Barry. Is Barry or the consulting firm guilty of receiving
stolen property?
Identify the following instrument, identify the role of each party, and identify the
characteristics of the instrument.
To: Morgan Associates Date: May 7, 2011
Pay to the order of: Henry H. Higgins,
One thousand and 00/100 Dollars, on June 7, 2011
Mareena Kaluchi
Mareena Kaluchi
Is it fair that the Environmental Protection Agency may set ambient air standards
without consideration as to what the cost will be to certain industries? Is this unfair
discrimination against industries that will cause them to incur overly-burdensome costs
of compliance?
