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Which of the following is correct with respect to the reasonable person standard?
a. It makes allowance for mental deficiency.
b. It makes allowance for physical disability.
c. It applies an individualized test to children that takes into consideration the child's
age, intelligence, and experience.
d. Two of these but not all of these.
Private tort actions have been quite successful in controlling environmental damage.
a. True
b. False
A limited partner has a right to bring an action on the behalf of a limited partnership to
recover a judgment in its favor if the general partners having authority to do so have
refused to bring the action.
a. True
b. False
All but which one of the following is a purpose of bankruptcy legislation?
a. To preserve existing business relations.
b. To punish recalcitrant debtors.
c. To bring about a quick, equitable distribution of the debtors property among
creditors.
d. To allow rehabilitation of debtors.
Foreign limited partnerships do not have to operate in another country to be identified
as "foreign."
a. True
b. False
The person who files or commences a civil lawsuit is the:
a. plaintiff.
b. defendant.
c. prosecuting attorney.
d. attorney general.
The statute of frauds requires all contracts that can be fully performed within one year
of their making to be in writing.
a. True
b. False
An accommodation party will always be primarily liable on an instrument.
a. True
b. False
The Love v. Hardees Food Systems, Inc. case dealt with the responsibility of the owner
or possessor of property to an invitee to warn of, remove, or barricade a dangerous
condition of the premises.
a. True
b. False
The due diligence defense generally requires the defendant to show that he had
reasonable grounds to believe and did believe that there were no untrue statements or
material omissions.
a. True
b. False
Revocation of acceptance requires notice to the seller, whereas rejection does not.
a. True
b. False
Which of the following is/are considered to be conduct to invalidate a will?
a. Duress.
b. Undue influence.
c. Fraud.
d. All of these.
Which warranties does a collecting bank give?
a. Warranty of no alteration only.
b. Entitlement to enforce the item, genuine signatures, no material alteration, no defense
good against it, and no knowledge of insolvency of the maker or acceptor or drawer of
an unaccepted draft.
c. Only good title and genuine signatures.
d. A collecting bank does not give any warranties.
Paul, a police officer, is working as an undercover drug agent. He enrolls in classes at
the local university where he meets several students in business administration and
invites them to come to his house for a party. No mention is made of any drugs, but he
does say he will have a keg of beer. Shortly after his guests arrive, he gets out some
marijuana and offers it to the group. All of them refuse except for Sam, who has never
tried it before. When Paul encourages Sam to try it and Sam lights up the joint, Paul
arrests Sam for possession of a controlled substance. In this case, Sam:
a. is clearly guilty as charged.
b. can raise the defense of entrapment and argue that Paul has enticed him to commit a
crime he would not have done otherwise.
c. can use the defense of duress.
d. can use the Fourth Amendment to exclude the marijuana as evidence that has been
illegally seized.
Carol took her earrings off at Marcia's beauty shop and put them on the counter. She left
the shop without remembering the earrings. Betty finds them and wants to keep them.
Can she?
a. Yes, since she is a finder.
b. Yes, she now is the true owner.
c. No, since the earrings were personal property.
d. No, Marcia would have the right to keep them as against anyone but Carol.
Scott, a minor, sells his digital camera to Megan, who then sells it to Sherry. Under
these circumstances:
a. Scott retains the power of avoidance of the contract, since he is a minor, even after
the property is sold to Sherry.
b. if Sherry is a good faith purchaser for value and she buys the camera before Scott
elects to rescind, no rescission is permitted.
c. Megan and Sherry both received a voidable title regardless of whether they
contracted in good faith.
d. if Scott wants to rescind the transaction after the sale to Sherry, a good-faith
purchaser for value, he has no remedy or recourse.
The Third Restatement specifies that an agency is automatically terminated when the
principal goes bankrupt.
a. True
b. False
The Federal Consumer Credit Protection Act:
a. Sets limits on garnishment proceedings.
b. Requires creditors to disclose finance charges.
c. Does not yet require disclosure on credit extension charges.
d. Requires creditors to disclose finance chargesbutdoes not require disclosure on credit
extension charges.
e. Sets limits on garnishment proceedings. and alsorequires creditors to disclose finance
charges.
Under the Code, a contract to sell or lease personal property is recognized whenever the
parties manifest such an intent, even if they cannot identify a precise moment the
contract was formed.
a. True
b. False
A nonpoint source is land use that causes pollution.
a. True
b. False
A corporation in the business of developing genetically engineered pharmaceutical
products has developed a new genetically engineered microorganism that it would like
to protect. The corporation may patent the microorganism.
a. True
b. False
A friendly fire is one that is contained to an intended place, such as a fireplace, stove, or
barbecue grill.
a. True
b. False
A witness to a will who is "interested" will be disinherited or disqualified.
a. True
b. False
In an attempt to limit the power of large purchasers, Congress amended Section 2 of the
Clayton Act in 1936 by adopting the:
a. Sherman Act.
b. Federal Trade Commission Act.
c. Robinson-Patman Act.
d. All of these.
The law of torts reallocates losses caused by human misconduct.
a. True
b. False
A partner has implied authority to:
a. hire and fire employees necessary for operation of the business.
b. purchase property necessary for the business.
c. receive performance of obligations due the partnership.
d. bring legal actions to enforce claims of the partnership.
e. All of these.
Most student loans cannot be discharged under Chapter 13.
a. True
b. False
Tracey offered the police chief $10,000 to ignore illegal gambling activity in her
establishment. Tracey cannot be found guilty of bribery since the police chief refused
her offer.
a. True
b. False
In a nonconsumer transaction, a holder in due course takes the instrument free from:
a. only personal claims.
b. all defenses of any party with whom he has not dealt, except for a limited number of
defenses that are available against anyone, including a holder in due course.
c. the defense of incapacity, duress, or illegality that renders the obligation void.
d. no claims.
A minor agency rule:
a. if disapproved by Congress, must be resubmitted to both houses of Congress.
b. if disapproved by Congress, must be revised according to Congressional guidelines.
c. if disapproved by Congress, has no chance of approval by the President.
d. takes effect but, if after being submitted to Congress it is disapproved, it is treated as
though it had never taken effect.
Bill owns and operates a farm and a farm machinery dealership. Under the Code, a new
tractor that Bill uses on his farm is classified as:
a. farm products.
b. inventory.
c. consumer goods.
d. equipment.
Equitable remedies are available any time the plaintiff chooses them over money
damages.
a. True
b. False
