Hotels are not required to provide guests with a safe.
Under the common law, the risk of loss is always on the seller.
In a limited liability partnership, there is no tax paid at the partnership level, and all
profits and losses are reported on the individual partner’s income tax return.
A lessor may reclaim goods in the possession of the lessee if the lessee is in default of
the contract.
A person cannot be forced to be a partner; however, a partner can be forced by the
partnership to accept another person as a partner.
The Environmental Protection Agency regulates thermal pollution from nuclear power
plants.
The primary legal effect of being a qualified indorser is to eliminate the indorser’s
liability to pay an instrument if the maker, drawer or other indorser does not.
With a misrepresentation of law, the innocent party cannot generally rescind the
contract, because each party to a contract is assumed to know the law that applies to the
transaction.
The board of directors has a fiduciary duty to shareholders in taking action relative to a
hostile takeover.
Only those shareholders who own stock as of the record date may vote at a
shareholders’ meeting.
Under the 2005 Act, in Chapter 13 bankruptcy, if the debtor’s monthly income
multiplied by 12 exceeds the state’s median income for the same-sized family, the plan
may not exceed three years.
Past consideration is not sufficient consideration for a new promise.
The National Environmental Policy Act and Environmental Protection Agency
regulations require that an environmental destruction proclamation (EDP) be prepared
by the federal government for any proposed legislation or major federal action that
significantly affects the quality of the natural and human environment.
The answer names the parties to the lawsuit, alleges the ultimate facts and law violated,
and contains a “prayer for relief” for a remedy to be awarded by the court.
Ethical relativism requires a person to decide what is ethical based on how their peers
view right and wrong.
When a nonconforming use began before the enactment of a zoning ordinance, the
now-illegal use must cease, because zoning ordinances are permitted to be applied
retroactively, based on the purpose of furthering public policy goals.
Same-sex discrimination and harassment violates Title VII.
If Professor Johnson agrees to give up smoking cigars for nine months in exchange for
$1,000, Johnson’s promise would not be sufficient consideration because if his health
improves he is suffering no detriment.
The written confirmation rule is a relaxation of the requirements of the mirror-image
rule.
Title VII of the Civil Rights Act of 1964 does not apply to federal government
employment.
In a unilateral contract, the offer cannot be revoked if the offeree has begun or has
substantially completed performance.
Even if replacement workers are given permanent status, they must be dismissed when
the strike is over.
A sight draft or time draft are both payable on demand.
The Consumer Product Safety Commission is part of the Food and Drug
Administration.
Personal defenses are effective against all holders, whether or not the holder is a holder
in due course.
Order paper that is indorsed in blank becomes bearer paper.
The Williams Act requires a tender offeror to disclose detailed information regarding
the term, conditions, and other information concerning the tender offer at the time the
offer is made.
Tenancy by the entirety is indistinguishable from joint tenancy in that neither spouse
may sell or transfer his or her interest in the property without the other spouse’s consent.
Copyrights owned by businesses are for the same term as copyrights owned by
individuals.
The CAN-SPAM Act requires spammers who send sexually-oriented e-mail to properly
label it as such.
The filing of a voluntary petition, but not an unchallenged involuntary petition,
constitutes an order for relief.
In order for a party to be liable for false and deceptive advertising, it must be shown
that:
A) the advertisement has deceived a majority of the persons who have seen it.
B) at least some persons have been deceived by it.
C) the plaintiff in the lawsuit was deceived by it.
D) the advertisement is likely to mislead a reasonable consumer.
E) the advertisement could possibly mislead some consumers.
In a proxy contest, what obligation does management have to the dissenting group of
shareholders?
A) Management must mail the proxy solicitation materials of the dissenting group.
B) Management must provide the dissenting group with a list of all shareholders.
C) Management must identify the leading representative(s) of the dissenting group in
management’s own proxy materials.
D) Management must either mail the proxy solicitation materials of the dissenting
group, or provide the dissenting group with a list of all shareholders.
E) Management must not provide false or misleading information about the dissenting
group or the issue in controversy in its own proxy solicitation materials, but otherwise
has no obligation to the dissenting group.
Assume that the State of Michigan passes a statute that grants all residents who
purchase a brand new automobile made in Michigan a $2,000 credit on state sales tax. It
is most likely true that:
A) an equal protection claim would be evaluated using strict scrutiny.
B) because the statute gives the tax credit only to Michigan residents who purchase a
car made in Michigan, and this is a purely intrastate issue, there is no violation of the
commerce clause.
C) there is a procedural due process violation.
D) this statute probably violates the commerce clause.
E) there is a First Amendment violation.
In which of the following situations does a party have a duty to disclose all of the
relevant facts to the other party, thereby creating the possibility of a fraud by
concealment claim?
A) Failure to disclose the facts would cause a significant financial loss to the other
party.
B) Failure to disclose the facts would cause death or bodily injury to the other party.
C) The contract involves a second-hand sale of a consumer good.
D) The party is the one who drafted the terms of the agreement.
E) The contract involves the provision of professional services.
Sam, who weighs 250 pounds, calls his 110-pound girlfriend Alice one morning while
she is at work. He says, “You are to stay in your office until midnight. If you come to
my house before midnight, I will make you sorry that you did.” Assuming that Alice
usually leaves her office at 5:00 pm but stays until midnight that night because of the
threat, if Alice files a false imprisonment case against Sam, a court most likely will find
that:
A) there was false imprisonment because Sam’s threat forced Alice to stay in the office.
B) there was no false imprisonment because Sam and Alice previously knew one
another.
C) there was no false imprisonment because Alice could have left the office and stayed
away from Sam’s house, and because the threat related to future harm.
D) there was no false imprisonment because Alice’s office was not a prison, even
though it might have felt like one to Alice.
E) there was false imprisonment only if Alice can prove she reasonably feared Sam.
Which of the following was not a consideration when deciding that the do-not-call
registry is consistent with First Amendment rights?
A) Only commercial speech may be restricted.
B) It targets speech which invades the privacy of the home, which is considered a
personal sanctuary.
C) Consumers have the right to opt out or stay in, so the option is in their hands.
D) The callers are often rude and discourteous, so such speech can be interpreted to be a
form of obscene speech.
E) The do-not-call registry materially furthers the government’s interests in combating
the danger of abusive telemarketing and preventing the invasion of consumer privacy.
In a case involving misappropriation of the right to publicity, the plaintiff can
A) recover the unauthorized profits made by the offending party.
B) obtain an injunction preventing further unauthorized use of his or her name or
identity.
C) recover palliative damages.
D) recover the unauthorized profits made by the offending party, and obtain an
injunction preventing further unauthorized use of his or her name or identity.
E) file civil and criminal charges against the defendant.
The common defense available in a “Section 11” action under the Securities Act of
1933 is:
A) the “reasonable person” defense.
B) the “due diligence” defense.
C) the “private placement” defense.
D) the “de facto compliance” defense.
E) the “lack of intent” defense.
What is the legal effect of a testator executing a second will, when the testator already
has an earlier existing valid will?
A) The second will is invalid, unless the first will has been expressly revoked.
B) The second will automatically revokes the first will.
C) The presence of two wills invalidates both of them until one is revoked.
D) The probate court will determine which of the two wills more accurately represents
the desires of the decedent.
E) The two wills are read together to the fullest extent possible, but where the wills are
inconsistent, the second will controls.
Which of the following is another term for disparagement?
A) invasion of the right to corporate privacy
B) commercial disassociation
C) trade libel
D) spurious association
E) misappropriation of corporate identity
Which of the following is not an example of a point source of water pollution?
A) mines
B) agricultural run-off
C) manufacturing plants
D) paper mills
E) municipal sewage plants
Under the Fourteenth Amendment to the U.S. Constitution:
A) prohibition was established.
B) the power to regulate interstate commerce was granted to Congress.
C) Congress was given the power to put reasonable restrictions on commercial speech.
D) the protections in the Bill of Rights were specifically made applicable to state
governments.
E) Congress was given power to put reasonable restrictions on religious freedom.
The United States Supreme Court consists of one (1.) ________ justice and eight (8.)
________ justices.
A) chief; associate
B) superior; inferior
C) chief; inferior
D) superior; associate
E) associate; inferior
Article ________ of the Uniform Commercial Code (UCC) establishes certain
warranties that apply to the sale of goods.
A) 1
B) 2
C) 3
D) 4
E) 5
When negligence cannot be conclusively proven, a valid cause of action may still exist
under the doctrine of:
A) contributory negligence.
B) assumption of the risk.
C) res ipsa loquitur.
D) negligence per se.
E) comparative negligence .
In order to obtain a domain name, one must:
A) obtain clearance from the U.S. Patent and Trademark office that the name is not
confusingly similar to another name, and pay the appropriate fee.
B) apply for the name and, if within the waiting period, there are no objections to the
applicant taking the name, pay the appropriate fee.
C) post notice at the Network Web office of the intent to use the name, directly notify
parties who might object to obtain their waiver of objection, and pay the appropriate
fee.
D) verify that the name is not already taken, complete a registration form, and pay the
appropriate fee.
E) apply for the name with the appropriate county agency, state the purpose for which
the name will be used, and if the use is approved, pay the appropriate fee.
________ intent crimes require that the perpetrator intended to achieve a specific result
from his illegal act.
A) Actual
B) Exacting
C) Specific
D) General
E) Statutory
The rule requiring franchisors to make full presale disclosures to prospective
franchisees is called the:
A) interstate franchise rule.
B) Federal Trade Commission franchise rule.
C) federal disclosure rule.
D) justice disclosure rule.
E) intrastate franchise rule.
You find a wallet on the ground in the parking lot of your apartment complex. Which is
most likely true?
A) The wallet is lost property.
B) The wallet is mislaid property.
C) The wallet is the property of the apartment complex.
D) The wallet is abandoned property.
E) The wallet is unclaimed property.
The Magnuson-Moss Warranty Act:
A) requires that all products that cost above a threshold amount contain a warranty.
B) requires that all warranties be made in writing.
C) limits the use of the word “full” to warranties that provide free repair or replacement.
D) applies to all goods sold by merchants.
E) prevents full warranties from having time limitations
Certified checks and cashier’s checks are also known as ________ checks.
A) bank
B) blank
C) traveler’s
D) non-negotiable
E) accepted
Under the objective theory of contracts, the subjective intent of a party to enter into a
contract is ________.
A) determinative
B) minimally important
C) impossible to determine
D) of equal importance when compared to the intent of a reasonable person
E) irrelevant
Usury laws are concerned with:
A) taxes paid.
B) interest charged.
C) uses of the labor force.
D) contract purposes.
E) gambling.
To be patented, an invention must meet which of the following requirements?
A) The invention must be novel.
B) The invention must be useful.
C) The invention must be non-obvious.
D) The invention must be novel and useful.
E) The invention must be novel, useful and non-obvious.
If an offeree gives a rejection to the offeror, which of the following is true at that point?
A) The offeree is still able to accept the original offer until its original expiration time.
B) The offeree has made a counteroffer.
C) The offeree cannot later enter into a contract on the terms of the rejected offer.
D) The offeree can transfer the rejected offer to a new party, who becomes the new
offeree.
E) The offeree has lost the ability to accept the original offer.
Under Article 2 of the UCC, what are the obligations of the parties with respect to good
faith?
A) There is no obligation of good faith unless the parties have agreed to one as part of
the terms of their contract.
B) Merchants always have an obligation of good faith, but nonmerchants do not.
C) Merchants and nonmerchants have the same obligation of good faith.
D) Nonmerchants are held to the subjective standard of honesty in fact.
E) Nonmerchants are held to an objective standard of honesty in fact.
On October 1, Jackie enters into an agreement with Vanessa to purchase 75 handbags.
The contract entered into between Vanessa and Jackie is a destination contract. On
October 15, Vanessa identifies the 75 handbags that will be sent to Jackie. On October
20, Vanessa ships the handbags. On October 25, Jackie receives the shipment. When
does Vanessa’s insurable interest terminate?
A) on October 1
B) on October 15
C) on October 20
D) on October 25
E) Vanessa never had an insurable interest.
When statutes are organized by topic, the resulting compilation of law is known as:
A) a code.
B) common law.
C) civil law.
D) precedent.
E) topical presentation.
James and Matt are retailers in musical instruments. They trade, sell and buy all sorts of
musical instruments. James sends an offer to Matt. James offers to sell to Matt a limited
edition baby grand piano, for $10,000. Matt sends an e-mail to James saying that he
will buy the piano, but that James must tune the piano. James delivers the piano without
it being tuned, is James under an obligation to tune the piano?
A) No, tuning the piano was an additional term that became a proposed addition.
B) No, because James did not agree to tune the piano.
C) Yes, because tuning the piano became part of the contract when Matt sent his
acceptance.
D) Yes, because James agreed to tune the piano when he delivered the piano to Matt.
E) Yes, because the delivery of the piano un-tuned is considered a non-conforming
good.
Which method of perfection will provide the best protection against all claims to the
debtor’s collateral?
A) filing a financing statement in the proper office, in the proper county, and in the
proper state where the transaction occurred, and where the collateral is located
B) filing a proof of claim in the proper office, in the proper county, in the proper state,
where the transaction occurred and the collateral is located
C) taking physical possession of the collateral
D) a purchase money security interest
E) regularly advertising the existence of the lien in a local newspaper of general
circulation.
What are the two (2) tests used to judge whether or not a satisfaction-based condition
precedent has been met?
A) the “all facts and circumstances” test and the “good faith” test
B) the “objective standard” test and the “industry custom” test
C) the “reasonable person” test and the “good faith” test
D) the “incidental beneficiary” test and the “personal satisfaction” test
E) the “personal satisfaction” test and the “reasonable person” test
Bob is camping in the mountains one cold winter night with his friend, Alfred. Bob
writes a postcard to his college roommate that says, “Dear Frank, I am giving you the
antique desk in my Denver home. Come pick it up once I am back in town. With kind
regards from your freezing cold friend, Bob.” Bob freezes to death at his campsite an
hour later. Bob has no will, but his wife is his only heir. Which of the following
statements is true?
A) Bob made an effective gift causa mortis to Frank.
B) So long as Frank wants the desk, Frank has the required donative intent.
C) Bob has made a voidable promise.
D) There has not been an effective gift made in this situation.
E) Frank will be entitled to the desk if, after Bob’s death, he learns of the unmailed
postcard.
In a finance lease, who takes title or the right to the possession of the goods?
A) lessor
B) lessee
C) supplier
D) financee
E) financier
Which of the following would not be a typical item of business at the organizational
meeting of a corporation?
A) adoption of bylaws
B) election of corporate officers
C) selection of promoters
D) authorizing the issuance of shares of stock
E) choosing an auditor
Misappropriation of the right to publicity is also called the tort of ________.
A) appropriation
B) invasion of privacy
C) allocation
D) misallocation
E) defamation
The Americans with Disabilities Act has resulted in a large number of claims filed by
persons claiming to be covered under the Act for conditions such as a weak back. Who
did the United States Congress intend to protect by way of its passage of the Americans
with Disabilities Act in 1990? Is the Act being abused? If so, how can this abuse be
reduced?
Young and Associates Public Accountants, Inc. is performing an audit for Mackey
Corporation. Mike, a member of the accounting firm assigned to conduct the audit, is
extremely busy, so he takes the “path of least resistance” in terms of using several
shortcuts in the auditing process. Despite the shortcuts, he nevertheless discovers a few
discrepancies in Mackey’s financial data; however, in his desire to retain Mackey
Corporation as a client, Mike ignores the discrepancies and issues an unqualified
opinion letter in conjunction with the audit. Had Mike not taken shortcuts, and had
Mike fully-investigated the discrepancies, he would have discovered that Alan, a
Mackey Corporation vice president, has been embezzling from the company. When the
embezzlement is later discovered, the company loses a number of clients, who are
unsure of the company’s financial stability. What is Young and Associates’ liability?
Why should shareholders of a corporation not be held liable for corporate contracts and
torts?
For an investment contract, why is one of the requirements for the contract to be
classified as a security that the arrangement be one where the profits are made through
the efforts of others?
Smith and Company, certified public accountants, performed the audit work for a large
corporation in connection with its registration statement. Smith and Company
performed the work according to all appropriate professional standards, but the
corporation had cleverly made the inventory look much greater than it actually was.
Because the company did not have as much inventory as was indicated on the financial
statements, the company was worth much less than it appeared to be. Smith and
Company has been named in a lawsuit under Section 11 of the Securities Act of 1933.
Even though Smith and Company properly performed the audit, and the fraud on the
part of the corporation was such that it would not be uncovered by an audit, Smith and
Company cannot prove any of this in court, since all of its audit working papers and
computer documentation were accidentally shredded. Discuss Smith and Company’s
legal situation, what must be proven to establish a violation of Section 11, and any
defenses available to the company and its accountants.
Bob was tired of his roommate, John, talking big but taking no action. Bob decided to
see if John would agree to buy his Mazda Miata, even though he (Bob) had no intention
to actually sell it. Bob told John that he would sell the car for $16,000 and John agreed
to buy it. Can John force Bob to sell the car to him for the $16,000?
Jim “Thorny” Johnson is a shareholder of Staid Corporation and is the informal head of
a dissident group. Thorny has engaged in three proxy contests with Staid’s Board of
Directors. In the first, Thorny sought to recall one of the board members because of
personal dislike. This effort was successful. In the second, Thorny sought to have the
company stop doing business with nations that have not signed the Montreal Protocol of
1987 dealing with phasing out of substances thought to deplete atmospheric ozone. This
effort was unsuccessful. Thorny’s third proxy contest sought having his pet poodle,
Alicia, named the official mascot of Staid Corporation. This effort was successful,
mainly because the board thought if they did this, Thorny would not bother them in
future proxy contests. The board members and Thorny incurred substantial expenses in
conducting these proxy contests. Can either side recover any of these costs, and from
whom?
Barbara purchases a Radartel cellular phone. One of the reasons she bought this was for
security because she lives alone and often travels alone. After using the phone for about
a week, she noticed that the rechargeable batteries (supplied in the phone by the maker)
lasted a shorter time than claimed by the manufacturer. One evening a few days later,
Barbara was in bed (but not yet asleep) and heard someone in her living room. She
picked up the cellular phone from beside her bed and attempted to make an emergency
call to 911, but the batteries were dead. She panicked and stayed in her bed motionless.
About five minutes later the burglar came into her bedroom, at which point she
screamed. As he then tried to climb out the bedroom window she hit him with a lamp,
but he kicked it back at her injuring her. The burglar got away and was never caught.
Barbara sues Radartel, the maker of the phone. Prior to the lawsuit she returned the
phone to the store where she bought it and learned that the batteries were defective, at
which point she was provided with new batteries which have worked properly since
then. Discuss the likely basis for Barbara’s suit, the defenses that Radartel might raise,
and the likely outcome.
Fashion Futures is an upper end-retail clothing store that specializes in clothing for
aging baby boomers who don’t want to admit that they are aging. Fashion futures
entered into a contract to purchase 100 pairs of designer pants each month for the 2001
calendar year. The pants were to be delivered by the 10th day of each month. For the
January order, Fashion Futures ordered 50 pairs of black pants and 50 pairs of navy
blue pants. When delivered, the order contained 60 pairs of black pants, 10 pairs of
navy blue pants, and 30 pairs of olive green pants. The order was delivered late in the
day on January 10. Fashion Futures is upset because the proper goods were not
delivered. On January 12, Fashion Futures sent a letter to the supplier saying that it was
keeping 20 pairs of the olive green pants and 20 pairs of the black pants, and rejecting
all the others, including all the pants for the other 11 shipments. Discuss the legal issues
likely to arise when the supplier objects to these actions. Assume that there are no
contract provisions addressing any of the legal issues that might arise. What contract
provisions might the parties have included in the contract that would have limited the
effect of the perfect tender rule?
What are the major goals the United States Congress intends to accomplish through its
passage of the Sarbanes-Oxley Act?
Bob owes an unsecured debt of $10,000 to a credit card company. Bob stops making
payments. The credit card company gets a judgment against him for $10,000. Bob owns
a personal watercraft worth $4,000, he earns $500 per week at his job, and he has a
savings account at a local bank with a balance of $2,000. Discuss the concepts of
attachment, execution, and garnishment, what steps the credit card company could take
to get its money, and any protections Bob has under the Consumer Credit Protection
Act.
Garden Solutions has invented a new kind of garden cart for hauling away branches,
limbs and other yard and garden waste. This cart is taller than other designs, and thus
has a higher capacity. In addition, it folds for compact storage. These features,
unfortunately, make this cart harder to handle and less stable than other models. Bob
purchased one of these carts and has been using it in his yard for several months. On
several occasions, when heavily loaded, the cart has tipped over. In one case it almost
fell onto Bob, but he was able to escape. In the owners’ manual there are warnings
against overloading the cart, and one warning that material placed in the cart should be
no higher than the side walls of the cart. There are no warnings on the cart itself. One
day Bob has the cart heavily loaded with materials extending approximately a foot
above the side walls. While pushing the cart, one of the wheels hits a rock and the cart
tips backwards and falls onto Bob. He suffers several injuries, including a puncture
wound from one of several protruding bolts on the exterior of the cart. Bob had
wondered why the bolts were not installed in the opposite way, with the protruding bolt
on the inside of the trailer, or made with a less-menacing design. These bolts were used
for the hinges that allowed the cart to fold for storage. Bob has filed a products liability
suit against Garden Solutions. Discuss this case, including any defenses that Garden
Solutions might raise.
Anthony and Terrell are in love. After living together, they travel to a state that
recognizes gay marriage, and get married. When they return to their home state, they
take up residence as a married couple. Is their home state required to honor and
recognize the marriage? What are the legal obstacles against the marriage, and what
legal principles support the marriage?
Under current law a minor generally can disaffirm most contracts without a need to
show that he or she was taken advantage of or that the particular contract was unfair.
Should the law allow disaffirmance only if the minor can show that there was some
kind of unfairness in the specific transaction?
Is it reasonable for certain provisions of the UCC to apply to merchants only or to apply
differently to merchants than non-merchants? Shouldn’t anyone who chooses to enter
into a commercial transaction be held to the same standard? Is it unfair to have the two
standards?