International law regulates lease terms in the United States.
The Local Government Antitrust Act of 1984 eliminates damage actions against
municipalities and their officers, agents, and employees for antitrust violations and
makes injunctive relief the sole remedy in such cases.
At the time of interpreting the will, the judge gives preference to the statements of the
beneficiaries rather than the intention of the testator.
Generally, the UCC uses the test of impossibility to determine if a person can be
excused from performing his contractual obligations.
A new partner to a LLP is liable only to the amount of capital invested in the business.
The main difference between a certified check and a cashier’s check is that the bank is
primarily liable on a certified check, but only secondarily liable on a cashier’s check.
Under the Revised Uniform Partnership Act partners owe each other loyalty.
The most common committee created from board of directors is an executive
committee, which typically is given the power to act when the board of directors is not
in session.
With a tort the government, either the State or Federal government, prosecutes an
individual for a harm to society.
A heated disagreement is grounds for dissociation of a partner with the business.
A contract in which one party to the agreement agrees to buy all of the produced goods
of the other party is called a requirements contract.
The Uniform Commercial Code (UCC) allows the court to modify or limit the
enforcement of a provision in a contract that is found to be unconscionable.
Special duties that run from possessors of real estate to those who enter that property
are called “premises liability” cases.
The per share value of the shares of a minority shareholder of a corporation is greater
than the per share value of the shares of a majority shareholder.
Firms that acquire monopoly power in a given market comply with the antitrust laws’
objective of promoting competitive market structures.
In the United States property ownership by citizens is protected by the Constitution.
Common law is a state law and only state courts can apply it.
Government-owned corporations are created primarily to allow their owners to have
limited liability.
An instrument that is payable on the happening of some uncertain event is negotiable.
Voluntary intoxication usually serves as a complete defense to criminal liability.
The language of the Bill of Rights only refers to actions of the federal government so
the protections of the Bill of Rights do not apply to state government action.
One requirement of a joint tenancy is that the co-owners must be married.
Ordinarily, an item is not considered to be a necessary if a parent or guardian already
supplies the minor with similar items.
Generally, forum selection clauses in form agreements are unenforceable.
Though formal natural law defense is not recognized in court, judges may take natural
law oriented views while interpreting statutes.
Chapter 12 is available only for family farmers and fishermen with regular income.
A security agreement may cover after-acquired property of the debtor.
The McCarran-Ferguson Act does not exempt all actions by insurance companies from
antitrust liability.
Boston Bank receives one of their payable checks made to the order of the Same Sex
Alliance organization of Massachusetts for $1000. The check comes from a valid
account and there are funds in that account to cover the check. The CEO of Boston
Bank does not agree with the mission of the Same Sex Alliance so Boston Bank refuses
to honor the check. Boston Bank is within its power as a bank to do this.
Greater contacts are needed to subject a corporation to property taxation in a state than
are needed to subject it to state income and sales taxation.
A court will enforce a noncompetition clause even if its restraints are unduly
burdensome either on the public or on the party whose ability to compete would be
restrained.
Joe is the personnel manager for the BFG Corporation. Joe hires employees for BFG.
Joe hires Suzy as a management trainee. Suzy is BFG’s subagent.
In order to capitalize a newly formed corporation, the company will usually seek cash
in exchange for equity securities, debt securities, or both.
When determining the presence of the intent to accept, a subjective standard is used.
What are courts and administrative agencies expected to do in case they encounter
ambiguously worded statutes while deciding a case?
A. Keep the particular statute aside
B. Fill in the details on a case-to-case basis
C. Refer to a different statute
D. Initiate a debate in the legislature
The FTC focuses on _____ when it attacks unfair acts or practices.
A. free and fair trade
B. antitrust action
C. consumer harm
D. anticompetitive behavior
If a subagent contracts with a third party in an authorized transaction then who is liable
by the subagent’s actions?
A. The local district attorney
B. The agent
C. The principal
D. No one
A principal will not be liable to a third party for a tort committed by an agent:
A. unless the principal was legally nonexistent.
B. unless the tort was committed within the scope of the agency relationship.
C. if the agency agreement limits the principal’s liability for the agent’s tort.
D. if the tort is also regarded as a criminal act.
A memorandum on the sale of goods that does not indicate the _____ of goods to be
sold will not satisfy the UCC’s writing requirement.
A. quality
B. quantity
C. delivery
D. cost
Adams issues license of his land to Crowe for planting flower trees only. He makes it
clear to Crowe in the deed that he may not take undue advantage of the license by using
it for commercial purposes. However, after a few days, Adams realizes that Crowe has
made a profit by selling flowers, without his knowledge. Can Adams recover the
amount which Crowe collected from sale?
A. Yes because, Adams is the owner of the land.
B. Yes because, Adams restrictions were clear.
C. No because, Adams has already licensed Crow to use his land.
D. No because, Adams does not possess any rights until the license expires.
XYZ Bank pays a check that contains a restrictive indorsement “for collection.” This
indicates that:
A. the bank has paid the check illegally.
B. the bank has not acted in good faith.
C. the bank was negligent with the payment of the check.
D. the bank has converted the check.
The _____ underwriting is used when an issuer is not well established and the
underwriter is unwilling to risk being unable to sell the securities.
A. standby
B. sponsorship
C. best efforts
D. firm commitment
Bill leased a villa from Mark for a period of two years. Two months after he moved in,
he was regularly disturbed by the noise created by a group of young boys living in the
adjacent plot. Despite repeated requests to the neighbors and Mark, there has been no
improvement in the situation. Which of the following is an accurate statement?
A. Mark is liable to Bill under the implied warranty of quiet enjoyment.
B. Bill cannot recover damages from either Mark or his neighbors.
C. The neighbors have the right to live as they wish to.
D. Bill cannot use the remedy of constructive eviction since he has leased residential.
property.
Scrooge’s property contains a restrictive covenant that allows only residential use of the
land to his inheritors. Over the years, all the adjoining areas of land have become
industrial areas. Scrooge’s great-grandson, the present owner of his land, wants to set up
a small manufacturing unit there. Will he be able to do so?
A. Yes, since he is the present owner.
B. Yes, because the circumstances have changed completely.
C. No, the restrictive covenant is completely binding.
D. No, there cannot be a waiver because Scrooge is dead.
When the winding up partners disagree during the process:
A. majority partner approval is required for actions in the ordinary course of winding
up.
B. unanimous partner approval is required for every decision.
C. unanimous partner approval is required for actions in the ordinary course of winding
up.
D. majority partner approval is required for every decision.
Which of the following is an example of a gift inter vivos?
A. Tom is promised a watch by his uncle in case he dies during an operation.
B. Eva receives a car as a birthday gift from her father.
C. Casey inherits a huge mansion according to his late grandfather’s will.
D. A charity home receives a huge grant from its dead benefactor’s trust.
Which of the following ethical theories has been criticized for promoting moral
fanaticism and reducing innovation, entrepreneurship, and production?
A. Rights theory
B. Teleological theory
C. Utilitarian theory
D. Profit maximization theory
Abe and Hanna are husband and wife. They have filed for Chapter 7 Bankruptcy.
However, they cannot agree on which set of property exemptions they want to use. Abe
wants to use the federal set of exemptions, but Hanna wants to use the set of Michigan,
where they have lived for 10 years. Under these circumstances:
A. the federal exemptions will apply to this bankruptcy proceeding.
B. the Michigan exemptions will apply to this bankruptcy proceeding.
C. the federal exemptions will apply to Abe’s property and the Michigan exemptions
will apply to Hanna’s property.
D. the bankruptcy court will decide which set of exemptions to apply here.
Which of the following factors is most important in deciding who bears the risk of loss
between merchants when goods are destroyed during shipment?
A. The agreement of the parties.
B. Whether the goods are perishable.
C. Who has title at the time of the loss.
D. The terms of applicable insurance policies.
Most states’ statutes of frauds do not require land leases to be in writing unless they:
A. involve more than two parties.
B. are ancestral property.
C. are going to be sold permanently.
D. are for a year or more.
Which of the following is most likely to violate Section 2(a) of the Robinson-Patman
Act?
A. Refusing to sell except at a discriminatory price
B. Price discrimination for sales to different purchasers made at the same time
C. Discriminating between customers when quoting prices
D. Price discrimination in consignment transactions
Which of the following statements regarding commercial speech is true?
A. It enjoys the same First Amendment protection as political expression.
B. It is not protected if it misleads or seeks to promote an illegal activity.
C. It receives rational basis protection, if it is not misleading.
D. Movies, television programs, and magazine articles are normally classified as
commercial speech and are thus fully protected.
Robert cosigns a note for his friend Amelia, which she has given to Credit Union to
secure a loan. Suppose the note was originally for $5,000 and payable in 12 months
with interest at 10 percent a year. Credit Union and Amelia later agree that Amelia will
have 24 months to repay the note but that the interest will be 13 percent per year.
Robert is not aware of this change of terms. In the event of Amelia defaulting on the
loan, will Robert have to repay the debt?
A. Robert will have to pay the debt because he is the surety.
B. Robert will not have to pay the debt because he has not received any compensation
from Amelia for being a surety.
C. Robert will have to pay the debt because he is the guarantor.
D. Robert will not have to pay the debt because he has not accepted the changed terms
of the loan.
Which of the following professional liabilities is based on the common law concepts of
negligence?
A. Penal liability
B. Tort liability
C. Primary liability
D. Contractual liability
Ward is attempting to introduce oral evidence in an action relating to a written contract
between Ward and Weaver. Weaver has pleaded the parol evidence rule. Ward will be
prohibited from introducing parol evidence if it relates to:
A. a modification made several days after the contract was executed.
B. a change in the meaning of an unambiguous provision in the contract.
C. fraud in the inducement.
D. an obvious error in drafting.
As a general rule, members of the public are held to be _____ of contracts entered into
by their municipalities or other governmental units in the regular course of carrying on
governmental functions.
A. promisees
B. incidental beneficiaries
C. donee beneficiaries
D. creditor beneficiaries
Which of the following is true of insurance contracts?
A. Some statutes require them to be in writing.
B. Contracts for property insurance are usually within the statute of frauds.
C. Once formed, insurance contracts cannot be amended or reformed.
D. Insurance contracts are governed by federal laws.
A partner of a firm that leases residential property to college students allows his
daughter to live in a partnership-owned apartment. Based on this situation, this partner:
A. has a duty to relinquish his management rights for misusing partnership property.
B. has a duty to account for the use of partnership property.
C. has a duty to return the personal profits secured through this transaction.
D. has a right to be indemnified for payments made from his personal funds.
Contracts are typically between one party and who?
A. The federal government
B. The state government
C. Another private party
D. An international agency on commerce
Which of the following is a characteristic of the “Takings Clause”?
A. It includes issues of property as well as the sale of goods.
B. It protects the public from government intrusion into their property.
C. Private property can be taken for public use, without any reparation.
D. The property owner must receive just compensation.
On May 2, 1972, Mix, CPA, entered into an oral contract with Dell to provide certain
accounting services to Dell. The contract was fully performed by both parties in 1974.
On April 25, 1988, Dell commenced a breach of contract action against Mix claiming
that Mix had improperly performed the accounting services. Mix’s best defense to the
action would likely be:
A. Parol evidence rule
B. Statute of limitations
C. Statute of frauds
D. Lack of consideration
John is angry because Harry is now dating John’s former girlfriend. One day, as John
was driving his car, he saw Harry walking by the side of the road. John deliberately
swerved and struck Harry with the car. John may be successfully sued under:
A. criminal law only.
B. civil law only.
C. either criminal law or civil law but not both.
D. both criminal law and civil law.
A _____ is found when an arrangement is made not to establish an ongoing business
involving many transactions, but is limited to a single project.
A. corporation
B. limited liability company
C. partnership
D. joint venture
When proceeds from the sale of partnership assets are being distributed during winding
up, which of the following is settled first?
A. Payment to partners to the extent of their capital contributions
B. Payment to creditors of the partnership
C. Payment to partners to the extent of their share of profits
D. Payment to creditors after charging the partners’ shares of losses
Pedro is a corporate promoter for Nolo Corporation, a corporation yet to be formed.
Pedro spends $40,000 of his own money and devotes 400 hours to bring Nolo and its
business into existence. When Nolo is incorporated, Pedro asks the board of directors to
issue some of its common shares to Pedro as compensation for his expenses and
services. Would such an issuance be legal?
Penny draws a check for $25.00 on her Big Bank checking account payable to the order
of Carol. Carol puts a “5” in front of the 2, raising the check to $525.00, and indorses it.
She then negotiates the check to Mel. Mel then presents the check for payment to Big
Bank, which pays her $525 and charges Penny’s account that amount. Penny asks Big
Bank to recredit her account for $500.00, and Big Bank does so. What recourse does the
Bank have and against whom?
Susie Q, business manager for Pizza Uno, sends a check to Papa Bakery. On the check
the computer writes TWO DOLLARS in the description line field and has $200.00 in
the numeric field. Susie signed the check and did not notice the mistake. The bank
should honor the check for $2.00.
Average Corp. recently paid for an advertisement that appeared in newspapers across
the country. The advertisement consisted of the expression of Average’s views on what
the federal government should be doing in order to help combat the AIDS crisis. In the
expression of these views, the Average advertisement made erroneous statements about
how AIDS may be acquired. Assume that the FTC, concerned about the erroneous
statements, has begun a deceptive advertising proceeding against Average. What is the
strongest legal argument for Average to use in an attempt to have the proceeding
dismissed? Explain your reasoning.
The Coriolis Corporation is building a new widget plant near Honolulu, HI. Coriolis is
not worried much about the expenses of installing air pollution control equipment
considering Honolulu came out as the U.S. city with the best air quality according to the
“State of the Air 2011” report by the American Lung Association. Do you agree with
Coriolis’s stance? Under the Clean Air Act, what kind of air pollution control equipment
must Coriolis install in the plant? Why?
With the emergence of comparative negligence and comparative fault, some states have
eliminated assumption of risk as a defense. Does this mean that the plaintiff’s
knowledge of the risk and his voluntary acceptance of it have no role to play in
negligence law? Why or why not?
Wally invited Dorothy to his apartment. While walking down the stairs in the main
hallway of the apartment building, Dorothy tripped over a loose piece of wall-to-wall
carpeting. When she fell to the floor, two of her teeth were knocked out. Dorothy has
sued Wally and Marginal Properties, Inc. (the owner of the apartment building) for the
dental expenses she incurred. Are Wally and Marginal liable? Explain.
Bev Stratton owns 100 shares of Maxom Company, which are traded on the New York
Stock Exchange. Maxom’s board of directors has approved a merger of Maxom with
Vert Company. Bev believes the merger is economically unjustified and intends to seek
her dissenters’ right. What must Bev do to enforce her dissenters’ right?
When two or more business entities conspire to monopolize a relevant market, Section
2 of the Sherman Act may be violated.
Kallie and Lisa wish to start XYZ Limited Liability Company. What steps do they need
to take in order to establish it?
What are the general requirements to become a holder in due course?
What is an equity of redemption?
Austin LLP, a CPA firm, audits financial statements of Cooley Company. Cooley tells
Austin that the statements will be used to sell preferred shares in a registered offering
under the Securities Act of 1933. Austin is concerned about its potential liability under
Section 11 of the Securities Act of 1933 for mistakes in the audited financial statements.
Discuss Austin’s due diligence defense under Section 11.
When Petie and Geri Adams purchased a house in 1992, they insured it with
Goodfriend Insurance Co. This property insurance policy has a policy limit (face
amount) of $125,000. That figure matched the fair market value of the house as of the
time the Adams procured the policy. Generally due to the declining property values in
the small town where the house was located, the house now has a fair market value of
$101,000 as of August 1, 1997. On that date, the Adams’ house was completely
destroyed by fire, a covered peril. The Adams have filed a claim and proof of loss with
Goodfriend. If the policy at issue is a valued policy, how much are the Adams entitled
to collect from Good friend? Why that amount? If the policy at issue is an open policy,
how much are the Adams entitled to collect? Why that amount?
Toyota Automobiles launches a new model of SUV. The design of the car was such that
the vehicle had a very broad rear. This posed a problem of parking the vehicle in the
regular parking space. Adams, the owner of the SUV, had parked his car on one side of
the road. Since the vehicle’s rear was protruding onto the road, it was hit by a truck and
was damaged. Under these circumstances, can Adams sue Toyota for defective design?
Are there any remedies for him to recover?
Adams wrote a check to Jimmy for $5,000. After three days, he met with an accident
and died. Now Jimmy wants to collect money from the bank and so he deposited the
check. However, the bank is refusing to pay. Is he entitled to get his money?
Gail offers to sell Belinda 1000 boxes of nails, but forgets to state the price. All other
material terms are present, however. Belinda accepts, but later wants to back out of the
deal, arguing that the offer is indefinite. Is there a contract here? Why or why not?
Baker is leasee of Jones, because of some personal reasons Baker wants to terminate the
lease but the lease is for one year. Both are ready for termination. Can they terminate
the tenancy in between?
John, a house painter, enters into a contract with Robert under which he promises to
paint Robert’s house for which Robert promises to pay $1,000 at the completion of
work. John mistakenly paints Mary’s house next door. Mary returns from vacation,
surprised to see her house beautifully painted. John asks Mary to pay for the work.
Mary refuses. Under what theory may John attempt to recover from Mary? Will he be
successful? Explain.
Sociological jurisprudence has a tendency to say that, when interpreting and applying
the law, courts should pay attention to changing social values and let the law reflect
those new values. How is this different from the natural law approach, which also talks
about values?