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Taking a service without paying for it is a common type of larceny.
a. True
b. False
Jeff was a subcontractor, bidding on a contract for ACE Corp., the general contractor.
When adding up the total of materials and labor, Jeff's secretary mistakenly moved the
decimal point one place, ending up with a bid of $3500 rather than $35,000. ACE Corp.
accepted Jeff's bid, mostly because all the other bids were over $30,000. When Jeff
learned of the mistake, he tells ACE Corp. that he cannot do the job for $3500. If ACE
Corp. sues to enforce this contract, what is the most likely result?
a. The contract is enforceable, since there was an offer, acceptance, and consideration.
b. This is a bilateral mistake, so the contract can be rescinded by either party.
c. This is a unilateral mistake, so the contract cannot be rescinded by Jeff.
d. This is a unilateral mistake, but one where ACE Corp. knew that a mistake had been
made. Jeff should be able to rescind the contract.
Employers must have permission from job applicants to request a credit report.
a. True
b. False
Orson was fired from his job behind the ticket counter at the airport. He was loudly told
to put his personal belongings into a plastic bag and was led out by security guards in
front of his co-workers and customers. His supervisor told him not to return. Orsons
employer faces potential liability for:
a. intentional infliction of emotional distress.
b. whistleblowing.
c. defamation.
d. violation of the FLSA.
If the President vetoes a bill, it can still become law if both the House and the Senate
approve it with a 51% majority.
a. True
b. False
In determining whether parties intended to reduce their agreement to writing, which of
the following factors would normally NOT be considered:
a. whether the type of agreement is one that is normally put into writing.
b. the complexity of the agreement.
c. whether or not the terms are complete.
d. the amount of money involved in the agreement.
E. I. James is a writer with a best selling novel. He wishes to create a corporation called
"James, Inc. He will be the only shareholder. Can James incorporate his business of
writing?
a. Yes, this would be the incorporation of a sole proprietorship.
b. No, the law requires at least two people to be shareholders of a corporation.
c. No, the law does not permit a person to, in effect, incorporate himself.
d. Only if he forms an S Corporation.
Raul agrees to paint Mike's house for $1,000. Before finishing, Raul states it is too hot
to finish, and Mike offers to pay $1,200 if Raul finishes. Mike's statement that he will
pay $1,200 is unenforceable.
a. True
b. False
Rudolph overhears Macy's plans to go skydiving over spring break. Not really knowing
Macy, but figuring it's worth a chance, Rudolph rushes out and buys an insurance policy
for $100,000 on Macy's life. Macy does in fact meet her demise jumping out of the
airplane. Rudolph can collect the $100,000.
a. True
b. False
The Supreme Courts approach during the period from the 1950s through the 1970s in
deciding cases on constitutional grounds is described as:
a. judicial restraint.
b. judicial activism.
c. judicial review.
d. the dormant aspect of its judicial power.
The Code's requirement of good faith in the performance and enforcement of every
contract imposes:
a. a greater duty on merchants than consumers.
b. a greater duty on consumers than merchants.
c. the same duty on both consumers and merchants.
d. a greater duty on parties to a sales contract with the purchase price over $500.
In a mixed contract involving goods and services, Article 2 of the UCC will govern if
the predominant purpose is the sale of goods.
a. True
b. False
The difference between the UCC requirement of good faith and doctrine of
unconscionability is that:
a. good faith prohibits shockingly one-sided terms in a contract.
b. good faith focuses on the parties' behavior as they perform the contract.
c. unconscionability looks at the parties' attempt to carry out the terms of the contract in
a reasonable manner.
d. unconscionability focuses on whether a party is honest in fact and exercises
reasonable commercial standards of fair dealing.
Oxtren, Inc. is a tools wholesaler. Oxtren sent M&E Tools a purchase order offering to
buy 200 Model 308 milling & drilling machines with R-8 spindles. The purchase order
stated the credit term to be 2% discount if payment was made in 10 days, with the full
amount due in 30 days. It did not include a forum selection clause. M&E responded
with an acceptance form accepting the offer. The acceptance form, however, stated that
full payment was due on delivery and that disputes under the contract would be settled
by arbitration.
(A) Do the parties have an agreement?
(B) What is the payment term?
(C) Is the arbitration clause part of the agreement?
Alan, a dentist, and his wife Martha, an attorney, can protect their personal assets with
limited liability from their business dealings by creating and operating a professional
corporation together.
a. True
b. False
Ron and several fellow workers of Vicy, Inc., a small manufacturing company, wished
to organize a union. When Vicy learned of this activity, it issued a bulletin to all
workers stating that a union will only hurt the company and that "we are a family that
can solve any problems ourselves -- we do not need union activists from outside our
company trying to tell us what to do!" Which statement is correct concerning the
bulletin issued by Vicy?
a. Vicy has committed an unfair labor practice. Vicy must remain neutral during the
organizing drive.
b. Vicy has committed an unfair labor practice. The bulletin constitutes outrageous
interference with the union organizing campaign.
c. Vicy has not committed an unfair labor practice. An employer may vigorously
present anti-union views to its employees.
d. Whether Vicy has committed an unfair labor practice depends on whether the bulletin
was approved by the NLRB.
A gun manufacturer in Helena, Montana agrees to sell guns and ammunition to the ATF
in Washington, D.C. The terms of the contract specify that the goods are to be shipped
"FOB, Chicago." When does the buyer acquire title and risk of loss?
a. When the goods reach Chicago.
b. When the goods are delivered to the carrier in Montana.
c. When the goods are tendered in Washington D.C. by the carrier.
d. When the goods reach Washington D.C.
The Fifth Amendment to the Constitution provides Robert, an employee of Mattax
Paper Co., due process protection from being fired without a hearing by a neutral fact
finder.
a. True
b. False
The 14th Amendment's Equal Protection Clause 'strict scrutiny" test will be used when
the legislation:
a. affects an economic interest.
b. affects a person's right to drive.
c. differentiates on the basis of race.
d. affects a person's right to drink alcoholic beverages.
Which of the following is NOT a stakeholder?
a. a business competitor.
b. shareholders.
c. employees.
d. the environment.
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 but knew of her contract with Trein. E-presto offered Mia a
three-year, $5 million contract. Mia left Trein and signed with E-presto. If Trein sues
E-presto for tortious interference with a contract, E-presto:
a. will be able to establish a justification since E-presto was acting to protect an existing
economic interest.
b. will be able to establish a justification because, in talking to Mia, E-presto was
exercising its First Amendment freedom of speech.
c. will be able to establish a justification because to decide otherwise would subject Mia
to involuntary servitude.
d. will not be able to establish a justification.
Ron's Furnace Repair advertised it would inspect any homeowner's furnace for free.
Janet had Ron's come to inspect her furnace. The servicewoman dismantled the entire
furnace then refused to put it back together unless Janet paid her $250. The FTC
considers such a practice to be:
a. an unfair practice.
b. a deceptive practice.
c. an act that violates public policy.
d. All the above.
Which of the following is a requirement for an involuntary Chapter 7 bankruptcy
petition?
a. The debtor must owe at least $150,000 in unsecured claims to the creditors who file.
b. The debtor must have at least three creditors join in the petition if the debtor has 12
or more creditors. If the debtor has fewer than 12 creditors, any single creditor or group
can file a petition.
c. The creditors must have tried to help the debtor overcome the financial difficulties.
d. The debtor must have a majority of the creditors file the petition.
Andy's business is not able to pay its debts, and the prospects for its finances to improve
are slim. Andy decides not to continue the business. In this case, Andy should file a
voluntary petition for which type of bankruptcy?
a. Chapter 7.
b. Chapter 11.
c. Chapter 13.
d. Chapter 12.
Discuss the effect on an instrument of: (a) contradictory amounts between the numerals
and amount written in words on a check; (b) the interest rate left blank on a promissory
note; and (c) contradictory terms that are typed onto a promissory note and terms that
are preprinted on the note form.
Although due process requires fairness at every stage of a trial, it does not require the
prosecution and defense teams to reveal information they have discovered.
a. True
b. False
In breach of the partnership agreement, Trimble, a partner in the partnership of Morris,
Newt, and Oppie, Ltd. quits the partnership and goes to work for a competitor. The
former partners may ask the court for:
a. specific performance requiring Trimble to return to work for Morris, Newt, and
Oppie, Ltd.
b. an injunction to prevent Trimble from working in competition with the former
partners.
c. special damages under the rule of Hadley v. Baxendale.
d. liquidated damages as compensation for the breach.
What is true about insider trading?
a. Fiduciaries have to be full time permanent executive employees
b. Prior plans to sell stock do not protect and insider.
c. Someone who trades on inside information is liable only if he breaches a fiduciary
duty.
d. It is acceptable to tip off someone off as long as the insider does not profit from any
transaction involving the information.
Juan has the right to walk (or drive) across his neighbor's property to reach the highway.
Juan's right is referred to an easement appurtenant which runs with the land.
a. True
b. False
Angela uses fraudulent means to induce Walter to enter a sales contract. Angela obtains
a voidable title to the goods.
a. True
b. False
Henry David Thoreau felt that war was unjust and therefore refused to pay his taxes
when the United States declared war on Mexico. Thoreau felt that there was a higher
law than the law of the land. Which theory of jurisprudence was he applying?
a. Legal Positivism.
b. Natural Law.
c. Legal Realism.
d. Common Law.
The basic distinction between a bilateral contract and a unilateral contract is that:
a. only one promise is involved in a bilateral contract.
b. only one promise is involved in a unilateral contract.
c. the Statute of Frauds applies to one and not the other.
d. one is enforceable, the other is not.
Which of the following is not required of an agency relationship?
a. Consideration.
b. Fiduciary relationship.
c. Consent of the parties to act as agent or principal.
d. Control of principal over agent's conduct.
