Members of the European Union have delegated substantial powers to the European
Union Commission, including the authority to enact legislation and to take enforcement
actions to ensure member compliance with the European Union treaty.
In a “chain-link” franchise, the franchisor licenses the franchisee to make and sell its
products or services to the public from a retail outlet serving an exclusive geographical
territory.
Cumulative voting gives a minority shareholder a better opportunity to elect someone to
the board of directors.
Corporate officers are responsible for the corporation’s day-to-day operations.
The implied warranty of habitability requires that leased premises be fit, safe, and
suitable for ordinary residential use.
Under the ULLCA, the articles of organization of a limited liability company must set
forth the name of the limited liability company.
A “tenancy for years” will automatically renew if no notice is given by the lessor or the
lessee of intent to terminate the lease.
Transfer warranties and presentment warranties are both implied warranties.
A material breach allows the other party to rescind a contract.
The parties participating in a joint venture have the right to engage in the management
of the joint venture, based upon the amount of their capital contributions.
Through straight (noncumulative) voting, a majority shareholder can elect the entire
board of directors.
A bearer instrument is payable to anyone in physical possession of the instrument who
presents it for payment when it is due.
Strategic alliances have the same protection as mergers, joint ventures, or franchising.
The only difference between a shipment and destination contract is who bears the risk
of loss.
The Analytical School of jurisprudence maintains that the law is shaped by logic.
An indorsement can be both blank and qualified.
A writ of execution is a court order directing the sheriff or other government official to
seize the debtor’s property in the debtor’s possession and authorizing a judicial sale of
that property.
Licensing statutes enacted to raise money for the government are called extractive
statutes.
Bankruptcy petitions may be filed by the debtor without the assistance of an attorney or
filing service.
In property law, “accession” occurs when the value of personal property increases
because it is added to or improved by natural or manufactured means.
The Americans with Disabilities Act requires that new construction be built in such a
manner as to be readily accessible to and usable by disabled individuals.
A written stop-payment order is effective for one (1.) year.
The Anticybersquatting Consumer Protection Act protects any individual’s name from
being registered by another person.
Our country’s form of government is referred to as federalism.
On the board of directors of a corporation, an outside director is a director who is not
also an officer of the corporation.
An indorsement is the signature of the maker, drawer, or an acceptor.
A corporation is terminated if a shareholder dies, becomes insane or goes bankrupt.
In a Chapter 13 bankruptcy, a “composition” agreement is one in which the payment
period for the debtor to repay debts is extended.
Quasi-contract law attempts to prevent unjust enrichment where no contract actually
existed.
Jeremy Bentham is the best-known proponent of duty ethics.
Written disclaimers must be conspicuously displayed to be valid.
In a limited liability partnership, all of the partners are limited partners who lose only
their capital contribution in the LLP if the LLP fails.
Negligent infliction of emotional distress requires that the defendant commit an
outrageous act against the plaintiff.
The WTO has jurisdiction to enforce the most important and comprehensive trade
agreements in the world among its more than 150 member nations.
The CAN-SPAM Act prohibits spammers from using falsified headers in e-mail
messages, including the originating domain name and e-mail address.
Usually, a misrepresentation of law is not actionable as fraud.
The World Wide Web consists of millions of computers that support a standard set of
rules for the exchange of information called Hypertext Transfer Protocol.
The Interstate Commerce Commission (ICC), a federal administrative agency, is
empowered to enforce the CAN-SPAM Act.
The Nuclear Regulatory Commission and the Environmental Protection Agency share
authority over regulation of nuclear energy.
ABC Corporation, a large corporation, calls Joe’s Plumbing Service to do a large
amount of plumbing work. Joe does the work but before he can collect the money, Jane,
a disgruntled employee of ABC Corporation, goes to the bookkeeper at ABC
Corporation and says that her company did the work and that she should be paid. She
does not represent herself as an agent of Joe’s but claimed that her own company was
involved in doing the work. The bookkeeper gives Jane a check for the full amount.
Jane leaves, cashes the check at Community Bank, and is never heard from again. Who
is ultimately liable for this loss, assuming Jane cannot be found?
A) Joe’s Plumbing Service
B) Community Bank
C) ABC Corporation
D) the Federal Deposit Insurance Corporation
E) the State Banking Commission
Strict liability is:
A) conditional liability.
B) comparative liability.
C) contributory liability.
D) presumptive liability.
E) liability without fault.
Under current law, the statutory period for patent protection begins to run at the time
that:
A) the inventor finalizes the idea for the patent.
B) a working model for the invention is completed.
C) the patent application is filed.
D) the patent is actually issued.
E) the first unit of the patented invention is sold.
Justin bought a computer from a retailer. His son was injured when the glass on the
monitor shatters while he is using it. He sued only the wholesaler under strict liability in
tort, not the manufacturer because the manufacturer had gone bankrupt. The jury
determined that this was a manufacturing defect that existed when the computer left the
factory and caused the son’s injury. Which of the following is true?
A) The full amount of damages may be recovered from the wholesaler.
B) Only 50% of the damages may be recovered from the wholesaler.
C) The wholesaler is not liable for any amount, since only the manufacturer may be
sued.
D) The wholesaler is not liable for any amount, since the manufacturer has gone
bankrupt and the wholesaler could not get any reimbursement.
E) The wholesaler is not liable because negligence cannot be established.
In a hospital, nurses are paid less than janitors. The nurses need more education to
become nurses than the janitors need to become janitors. The janitors must lift heavier
objects than the nurses, but the nurses have more responsibility than the janitors. This
discrimination in the amount paid to nurses and janitors is:
A) legal, because the jobs are not similar.
B) illegal, because the nurses need more education.
C) illegal, because the nurses have more responsibility.
D) legal, because the janitors need to lift heavier items.
E) legal, because the nurses have better working conditions than do the janitors.
According to ________, if an action would increase the good of twenty-five people by
one unit each and an alternative action would increase the good of one person by
twenty-six units, the latter action should be taken
A) ethical relativism
B) ethical absolutism
C) ethical fundamentalism
D) utilitarianism
E) Kantian ethics
Pre-organization subscription agreements, interests in oil, gas, and mineral rights, and
deposit receipts for foreign securities are examples of ________.
A) common securities
B) preferred securities
C) statutorily-defined securities
D) investment contracts
E) warrants
Ricardo operates a great health club and would like to sell franchises. He is concerned,
however, that franchisees will take steps to terminate their franchise agreements in
order to compete with him after learning his successful strategies for doing business.
What contract provision should Ricardo put in the franchise agreements in order to
provide himself with legal protection?
A) a covenant not to do business
B) a covenant not to compete
C) an arbitration agreement
D) a quality control standard
E) From a strict legal standpoint, there is nothing Ricardo can do to protect himself.
The right to ________ refers to the right to recover goods from a seller or lessor who is
wrongfully withholding the goods.
A) rejoinder
B) replevy
C) levy
D) equity
E) absolution
The English common law can be divided into cases decided by:
A) law courts, equity courts, and merchant courts.
B) law courts, magistrate courts, and merchant courts.
C) magistrate courts, merchant courts, and equity courts.
D) district courts, superior courts, and appellate courts.
E) small claims courts, district courts, and superior courts.
Under the doctrine of ________ tort, commonly referred to as negligence, a person is
liable for harm that is the ________ consequences of his or her action.
A) unintentional; foreseeable
B) intentional; foreseeable
C) unintentional; unforeseeable
D) intentional; unforeseeable
E) unintentional; unreasonable
John needs a new car and goes to the local dealer for Worldwide Motors, a global car
manufacturer. John negotiates a deal with the local dealer to buy a new midsize model,
the Albatross, for $22,000. The dealer cost on this car is $19,000. John then decided
against the Albatross and breached the contract. John had not yet made any payment to
the dealer. Later, the dealer then sold this car to another customer for $21,600. The
dealer also incurred $200 in costs connected with John’s canceled order. Assuming that
the dealer is allocated only twelve Albatrosses for the year and can get no more, how
much can it recover in damages from John?
A) $400
B) $600
C) $3,000
D) $3,200
E) $2,600
A floating lien can attach to which of the following?
A) after-acquired property only
B) sale proceeds only
C) future advances only
D) after-acquired property and future advances, but not sale proceeds
E) after-acquired property, sale proceeds, and future advances
What does it mean for liability on a negotiable instrument to be secondary liability?
A) The liability is for a small amount.
B) The liability arises only if the party with primary liability defaults and does not pay.
C) There are two parties to share the secondary liability.
D) It means that the liability relates to a two-party negotiable instrument.
E) It means that the party only owes one-half of the debt
What is the significance of a “defect” in a products liability case based on strict
liability?
A) It is not necessary, but it can be used to eliminate the need to prove that there was an
injury.
B) It is a required element in the proof of such a case.
C) Its presence would allow punitive damages to be awarded.
D) Its presence would eliminate liability for the defendant.
E) The party who caused the defect is the only one who can be held liable.
A transfer of an interest in a limited liability company:
A) may not be made without the express, written permission of all other members.
B) is personal property, and may be transferred in whole, but not in part.
C) is personal property, and may be transferred in whole or in part.
D) does not entitle the transferee to receive distributions to which the transferor would
be entitled.
E) is a “per se” violation of the Uniform Limited Liability Company Act.
As a general rule, advertisements for the sale of goods are treated as:
A) offers.
B) acceptances.
C) invitations to make an offer.
D) invitations to make a counteroffer.
E) invitations to make an acceptance.
A bill of lading is:
A) a document of title that is issued by a carrier-bailee to the bailor when goods are
received for transportation.
B) a bill issued by the bailor to the carrier-bailee when goods are delivered for
transportation.
C) a bill for shipping charges issued by the bailee.
D) a bill for shipping charges issued by the bailor.
E) a bill for any incidental expenses incurred in transporting the goods.
An act by a corporation that is beyond its express or implied powers is called a(n)
________ act.
A) unconstitutional
B) sua sponte
C) ultra vires
D) Ultramares
E) corporate veil
Which of the following is true about the Sherman Act?
A) Liability under Section 1 for restraint of trade requires an agreement with another
party, but liability under Section 2 for monopolization does not.
B) Liability under Section 2 for monopolization requires an agreement with another
party, but liability under Section 1 for restraint of trade does not.
C) Liability under either Section 1 or Section 2 requires an agreement with another
party.
D) A business can be held liable under either Section 1 or Section 2 without an
agreement with another party.
E) A violation of Section 1 is “per se” proof of a violation of Section 2.
Which of the following is not one of the general kinds of indorsements?
A) blank
B) assigning
C) special
D) restrictive
E) qualified
Guarantors:
A) are secondarily liable, and their agreement may be oral.
B) are secondarily liable, and their agreement must be in writing.
C) are primarily liable, and their agreement may be oral.
D) are primarily liable, and their agreement must be in writing.
E) have no actual liability, but instead act as references or character support for the
borrower.
The purpose of the Immigration Reform and Control Act of 1986 is:
A) for the employer to attest to having inspected an employee’s documentation,
establishing that he or she is a United States citizen, or is otherwise entitled to work in
the United States.
B) for the employer to grant a waiver from work visa requirements for foreign workers.
C) for the employer to document illegal aliens working in the United States.
D) to document that the employer is complying with the Civil Rights Act of 1964 with
respect to employment discrimination on the basis of national origin.
E) for the employer to document the date an immigrant arrived in this country.
In connection with a shareholder agreement to restrict the transfer of stock, how does a
“right of first refusal” work?
A) A shareholder desiring to sell shares must first offer those shares to the other existing
shareholders, or to the corporation.
B) The corporation has the right to prevent a shareholder from selling shares.
C) A shareholder who sells shares retains the right to vote those shares, and the
purchaser only receives the right to receive any dividends declared.
D) Members of the board of directors have the right to reacquire shares sold by a
shareholder so someone not a party to the agreement cannot acquire them.
E) A shareholder who sells shares retains the right to dividends, and the purchaser
retains the right to vote the shares and to receive their fair market value upon corporate
liquidation.
The corporation’s registered agent:
A) must be a director of the corporation.
B) must be an officer of the corporation.
C) must be an employee, but not an officer of, the corporation.
D) is either an individual or a corporation located in the state of incorporation.
E) may be any individual or corporation located in the United States.
Which of the following is a type of damages recoverable in a breach of contract action?
A) dispensatory
B) consequential
C) non-liquidated
D) phenomenal
E) non-cumulative
Which of the following is false regarding joint wills and mutual wills?
A) If two or more testators execute the same instrument as their will, the document is
called a joint will.
B) A joint will may not be held invalid as to one testator but valid as to the other.
C) Mutual wills arise where two or more testators execute separate wills that make
testamentary disposition of their property to each other on the condition that the
survivor leave the remaining property on his or her death, as agreed by the testators.
D) Mutual wills are usually separate instruments with reciprocal terms.
E) Because of their contractual nature, mutual wills cannot be unilaterally revoked after
one of the parties has died.
The Resource Conservation and Recovery Act addresses:
A) energy-efficiency standards for specified products.
B) mandatory recycling programs for certain specified substances.
C) the transportation, storage and disposal of hazardous wastes.
D) export limitations on products that cause significant pollution in their production.
E) the cleanup of hazardous waste sites.
A principal owes a duty to ________ the agent for any losses the agent suffers because
of the principal’s conduct.
A) exemplify
B) certify
C) qualify
D) indemnify
E) ratify
Licensing of informational rights can usually best be described as:
A) a sale of the underlying intellectual property rights.
B) a lease of tangible personal property to the licensee.
C) granting limited rights to use that cannot be simultaneously granted to others.
D) granting any rights to use the information, which can differ greatly in scope and
duration.
E) the right to temporarily use the domain name of another.
Which types of partners in a limited partnership should participate in management?
A) general partners
B) limited partners
C) general partners and limited partners
D) general partners only, unless there are no general partners, in which case limited
partners may participate in management.
E) limited partners only, unless there are no general partners, in which case general
partners may participate in management.
Which of the following is false regarding federal question jurisdiction?
A) There is a dollar-amount limit of $10,000 on federal question cases that can be
brought in federal court.
B) There is a dollar-amount limit of $75,000 on federal question cases that can be
brought in federal court.
C) There is no dollar-amount limit on federal question cases that can be brought in
federal court.
D) There is a dollar-amount limit of $50,000 on federal question cases that can be
brought in federal court.
E) There is a dollar-amount limit of $100, 000 on federal question cases that can be
brought in federal court.