If the buyer pays by check, payment is conditional on the check being honored when it
is presented to the bank for payment.
English common law was law developed by judges issuing opinions when deciding
cases.
The “FTC franchise rule” requires that the disclosure document be registered with the
FTC prior to its publication or distribution to prospective franchisees.
A unilateral mistake can be so serious that it results in an unconscionable contract.
Consideration describes the thought and evaluation process the parties go through when
deciding to contract.
The prohibition against double jeopardy prevents a defendant from being tried for
crimes in two different jurisdictions if the crimes arise out of the same conduct.
Interrogatory answers are not signed under oath.
Regarding fraud, scienter refers to the intent to injure the innocent party.
Wilma has signed a contract to purchase a car with 48 monthly payments. If she
changes her mind she can assign the car and payment obligation to her friend Betty as
long as Betty has sufficient income to make the payments.
Fraud by proxy occurs when one party takes specific action to conceal a material fact
from another party.
A rebuttal is called to counter the opposing attorney’s use of a rejoinder.
Just compensation paid to citizens due to a seizure of land based on the exercise of
eminent domain is a substantive due process matter.
Under the UCC, the Statute of Frauds requires that certain contracts be typed on a
computer in order to be enforceable.
A sole proprietor’s liability for business debts is limited to the value and assets of the
sole proprietorship.
Unreasonably strict application of a just cause termination clause in a franchise
agreement constitutes wrongful termination.
If an unauthorized agent signs a note on behalf of a principal, then only the agent is
liable on the note.
Contract law is an example of public law.
The most prevalent age of majority is 21 years of age for both males and females.
Doctors, lawyers, architects and accountants owe a duty of ordinary care in providing
their services. This duty is known as the “reasonable professional” standard.
If the entrustment rule is satisfied, then the real owner cannot reclaim their property
from the buyer.
Under the Uniform Commercial Code, value has been given if the holder performs the
agreed-upon promise.
General-jurisdiction trial courts are commonly referred to as courts of inquisition.
The Uniform Computer Information Transaction Act is a federal statute that preempts
any state statutes that are in conflict with it.
Title to goods cannot be acquired by confusion.
Creating an employee stock ownership plan to fight a tender offer is illegal under the
Smith Act.
The preemption doctrine prevents states from regulating in any area that the federal
government regulates.
Contracts are either bilateral or unilateral, depending on what the offeree must do to
accept the offeror’s offer.
Statutes regulating the formation of limited liability companies are commonly referred
to as limited liability company codes.
The provision of services does not qualify as consideration.
A tree that is part of a forest is real property, while a tree that is cut down is a fixture.
Securities fraud falls under the definition of racketeering for the purposes of the
Racketeer Influenced and Corrupt Organizations Act.
When you write a check to pay your telephone bill, you are writing a formal contract.
Where there is no agreement as to the sharing of profits and losses in a limited
partnership, the profits and losses are shared equally among all partners, limited or
general.
For federal income tax purposes, a sole proprietor must prepare a personal income tax
Form 1040 U.S. Individual Income Tax Return and report the income or loss from the
sole proprietorship on his or her personal income tax form.
The term voir dire refers to the process used to select the jury.
A limited liability company has the same powers as an individual to do all things
necessary or convenient to carry on its business or affairs.
Which type of indorsement prevents the indorser from having liability to later holders
in the event that the instrument is not paid according to its terms?
A) blank
B) restrictive
C) special
D) nominal
E) qualified
In a discrimination case brought under Title VII of the Civil Rights Act of 1964, which
of the following is true regarding damages?
A) Compensatory damages are not available.
B) Punitive damages are not available.
C) Neither compensatory nor punitive damages are available.
D) Equitable remedies may not be awarded.
E) Equitable remedies, as well as compensatory and punitive damages, are potentially
recoverable.
A(n) ________ adoption occurs when a person adopts a child from a social service
organization of a state.
A) independent
B) dependent
C) principal
D) agency
E) welfare
A market extension merger can exist:
A) if the geographic market is extended.
B) if the product market is extended.
C) if either the product market or the geographic market is extended.
D) only if both the geographic market and the product market are extended in the
merger.
E) only if the product market is extended into a different geographic area.
Otto approaches Edie and says, “If you pick up my new suit for me at the mall
tomorrow, I’ll pay you $20.” Edie replies, “I don’t know if I’ll have time to get it, but I’ll
see if I get a chance.” As a result of this conversation:
A) Otto and Edie have formed a bilateral contract.
B) Edie has a legal obligation to use her best efforts to pick up the suit.
C) A contract will be formed only if Edie picks up the suit.
D) The contract Otto and Edie have formed is voidable because Edie did not obligate
herself.
E) The contract Otto and Edie have formed is void because Edie did not obligate
herself.
If consent is obtained by ________, there is no real consent.
A) duress
B) undue influence
C) fraud
D) negotiation
E) duress, undue influence or fraud
The ________ administers the day-to-day operations of the United Nations.
A) UN Administrative Council
B) UN Executive Council
C) Secretariat
D) commandant-general
E) attaché-general
Who is protected by the entrustment rule?
A) a good faith purchaser
B) a good faith purchaser in the ordinary course of business
C) a buyer in the ordinary course of business
D) a good faith buyer for value
E) the real owner of the goods at issue
Which of the following parties are liable only after a negotiable instrument has been
presented and dishonored, and proper notice has been given?
A) drawer, maker, acceptor and qualified indorser
B) maker, acceptor and unqualified indorser
C) acceptor and qualified indorser
D) drawer and unqualified indorser
E) maker and unqualified indorser
In order for the CISG to apply to an international sales contract:
A) both of the nations must be parties to the United Nations Convention on Contracts
for the International Sale of Goods.
B) the contract must specify that the CISG controls.
C) either both of the nations must be parties to the United Convention on Contracts for
the International Sale of Goods, or the contract must specify that the CISG controls.
D) both of the nations must be parties to the United Convention on Contracts for the
International Sale of Goods, and the contract must specify the CISG controls.
E) The CISG does not apply to international sales contracts.
Section ________ of the Uniform Securities Act makes it a criminal offense for
accountants and others to willfully falsify financial statements and other reports.
A) 101
B) 202
C) 303
D) 404
E) 505
Which of the following is true regarding the tort of assault?
A) Actual physical contact is required in order to recover.
B) Actual physical contact is unnecessary in order to recover.
C) Threats of future harm are actionable.
D) The plaintiff must be of a smaller stature than the defendant.
E) The defendant must cause some type of permanent injury in order to be held liable.
Billy decides to purchase some property in equal ownership with a co-worker. They
plan to build a vacation home on it. Billy wants to make sure that if he dies, his wife
and kids will get his share of the property. Billy and his friend should own the property
as:
A) joint tenants.
B) tenants in common.
C) tenants by the entirety.
D) tenants by the survivorship.
E) tenants for life and death.
Courtney, a minor, goes to a hospital following an accident. Because of the need to treat
her immediately, they treat her without her signing any forms. Is Courtney liable for her
medical treatment?
A) Courtney will be required to pay for the value of the treatment she received.
B) Courtney does not have to pay because the hospital never got her consent to pay in
writing.
C) Courtney does not have to pay because the hospital has an unfair bargaining
position over her and this would be an adhesion contract.
D) Courtney does not have to pay because as a minor she may disaffirm the contract
prior to reaching the legal age.
E) Courtney will be required to pay for tests, drugs and materials used but not for the
doctors services.
The test to determine whether substantive due process is met is whether a(n) ________
person could understand the law to be able to comply with it.
A) educated
B) adult
C) mature
D) reasonable
E) common person
Which of the following would not be eligible for copyright protection?
A) sermons
B) cartoons
C) maps
D) greeting cards
E) Sermons, cartoons, maps and greeting cards are all eligible for copyright protection.
Federal patent law recognizes categories of innovation that can be patented. These
include all but which of the following?
A) machines
B) processes
C) names
D) designs for an article of manufacture
E) asexually reproduced plants
Royalty fees are usually paid on a ________ basis.
A) weekly
B) monthly
C) quarterly
D) semiannual
E) yearly
ABC Company filed Chapter 11 bankruptcy, and would like relief from an existing
labor agreement with a union. The company has already met with the union, and made a
proposal that the union rejected. What are the options of the court?
A) The court may order the modification or rejection of the labor agreement if: (1.) such
rejection or modification is necessary to the reorganization; (2.) the debtor acted in
good faith; and (3) the “balance of equities” favors rejection or modification of the
collective bargaining agreement.
B) The court may order complete rejection, but not modification, of the labor agreement
if: (1.) such rejection is necessary to the reorganization; (2.) the debtor acted in good
faith; and (3.) the “balance of equities” favors rejection of the collective bargaining
agreement.
C) The court may order the modification, but not complete rejection, of the labor
agreement if: (1.) such modification is necessary to the reorganization; (2.) the debtor
acted in good faith; and (3.) the “balance of equities” favors modification of the
collective bargaining agreement.
D) The court may not modify or reject the labor agreement.
E) The court may order modification, but not rejection, only if union employee losses
would amount to no more than $100,000.
In order for a proxy to become valid, the shareholder must:
A) complete a written proxy statement, and file it with the Securities and Exchange
Commission.
B) complete a written proxy statement, file it with the Securities and Exchange
Commission, and receive the appropriate approval from the SEC.
C) complete a written proxy statement, and deliver it to the proxy holder.
D) complete a written proxy statement, and deliver it to the corporation.
E) reach agreement with the proxy holder, but no written statement is required.
Under Article 2A of the UCC, for which types of lease(s) is the risk of loss on the lessor
during the term of the lease?
A) ordinary leases
B) finance leases
C) both ordinary and finance leases
D) neither ordinary nor finance leases
E) loss-shifting leases
A court will not enforce a liquidated damages clause when:
A) the amount specified is too small and considered to be unfair.
B) the amount of actual damages is significantly greater than the amount specified as
liquidated damages.
C) the amount was agreed to by the parties prior to the existence of an actual breach.
D) the amount is so large that it is viewed as a penalty.
E) the actual damages are difficult to determine and compare to the amount specified as
liquidated damages.
Which of the following statements is correct regarding an assignment that would
materially alter the risk and/or duties of the obligor?
A) A contract cannot be assigned if the assignment would materially alter the risk or
duties of the obligor.
B) A contract can be assigned if the assignment would materially alter the risk, but not
the duties, of the obligor.
C) A contract can be assigned if the assignment would materially alter the duties, but
not the risk, of the obligor.
D) A contract can be assigned, even if the assignment would materially alter the risk or
duties of the obligor.
E) A contract can be assigned, provided that the assignment is accompanied by a
corresponding delegation of duties.
Which of the following statutes provides employees with the right to collectively
bargain?
A) the Norris-LaGuardia Act
B) the National Labor Relations Act
C) the Labor-Management Relations Act
D) the Worker Adjustment and Retraining Notification Act
E) the Labor-Management Reporting and Disclosure Act
If a dissenting shareholder who has exercised his or her appraisal right is dissatisfied
with the corporation’s determination of the fair market value of the shares, then:
A) the shareholder has no further recourse.
B) the shareholder must choose to receive the appraisal amount, or cancel the exercise
of the appraisal right and accept the terms of the merger or other transaction.
C) the shareholder must pay for a new appraisal of the shares, and seek that amount in
court.
D) the corporation must petition the court to determine the fair value of the shares.
E) the shareholder must vote, along with all other dissenting shareholders, on whether
the dissenting shareholders will accept the appraisal amount, or drop the dissent and go
along with the merger plan.
What is the significance of a defense being a real defense rather than a personal
defense?
A) A real defense applies to order instruments, whereas a personal defense applies to
bearer instruments.
B) A real defense applies where the negotiable instrument arose out of a business
transaction, whereas a personal defense applies where the negotiable instrument arose
out of a non-business transaction.
C) A real defense applies to a holder in due course, whereas a personal defense does
not.
D) A real defense can be asserted at any time, whereas a personal defense must be
asserted within 90 days of notice.
E) A real defense entitles the plaintiff to receive punitive damages, whereas a personal
defense does not.
A(n) ________ contract is a contract that requires or authorizes goods to be delivered
and accepted in separate lots.
A) divisible
B) categorical
C) compartmentalized
D) installment
E) holistic
Which of the following is true about trademark registration?
A) Trademark registration is optional, because protection is automatic.
B) Once a trademark is registered, protection cannot be lost.
C) A trademark must be registered prior to its actual use in commerce.
D) The registration of a trademark can be renewed an unlimited number of times.
E) The registration of a trademark can be renewed for 50 years.
Roger drew a check payable to Mary for $50. Mary cleverly raises the check to $500,
and negotiates it to Local Liquor Store. Local Liquor then cashes the check at the
drawee bank. Roger learns of the alteration when he receives his bank statement, and
complains to the bank within six months of learning about the alteration. Which of the
following statements best describes the liabilities of these parties?
A) Roger’s only action is against Mary.
B) The bank must re-credit Roger’s account for $500, but can collect from Local Liquor
for breach of warranty.
C) The bank must re-credit Roger’s account for $450, but can collect from Local Liquor
for breach of the presentment warranty.
D) The bank must re-credit Roger’s account for $500, but the bank’s only recourse is
against Mary.
E) The bank must re-credit Roger’s account for $450, but the bank’s only recourse is
against Mary.
Which of the following best describes the Revised Uniform Limited Partnership Act?
A) It is a federal statute governing all limited partnerships.
B) It is a standard law that is state law in the states that have enacted it, generally
applies to limited partnerships, and replaces an earlier uniform law covering limited
partnerships.
C) It is a standard law passed in every state that applies to limited partnerships, and
takes precedence over any contrary provisions in a limited partnership agreement.
D) It is a federal statute that states must choose to implement.
E) It is a standard law that applies in all states, and applies to all aspects of limited
partnerships, except for dissolution.
The Counterfeit Access Device and Computer Fraud and Abuse Act (CFAA) makes it a
federal crime to access a computer knowingly to obtain restricted federal government
information, financial records of financial institutions, or consumer reports of consumer
reporting agencies.
When the payee of a check indorses a check to another person (the indorsee), what is
true about the indorsee?
A) The indorsee must get the consent of the drawer to further transfer the check.
B) In order to collect on the check, the indorsee must present the check for payment at
the drawee bank.
C) The indorsee cannot indorse the check to another indorsee.
D) The indorsee becomes a holder, who can either demand payment, or indorse the
check to yet another indorsee.
E) The indorsee must join with the payee of the check when seeking payment.
In order for someone to avoid a contract on the grounds of intoxication, the level of
intoxication must have been:
A) at or above the legal limit to operate a motor vehicle.
B) only high enough that he or she was able to notice it.
C) at least as high as that of the other party.
D) so great that he or she did not comprehend the nature of the agreement he was
entering into.
E) so great that no reasonable person would have comprehended the nature of the
agreement entered into.
The following are examples of limited jurisdiction trial courts except:
A) small claims court.
B) appellate court.
C) family law court.
D) traffic court.
E) probate court.
Which types of names are protected under the Anti-Cybersquatting Consumer
Protection Act?
A) any name of a natural person
B) names of famous persons
C) names of famous companies, but only if the name is trademarked
D) names of famous persons or of famous companies, but only if the name is
trademarked
E) names of famous persons or of famous companies, even if the name is not
trademarked.
What is the primary purpose of affirmative action, and how does it work?
Why should a person employed by a limited liability company who negligently causes
an automobile accident while working in the scope of ordinary business be held liable
in his or her personal capacity?
Should a drug manufacturer that holds a patent on a drug that is very effective for many
AIDS patients be able to sell that drug well above its cost of production during the
period of patent protection? If so, under what circumstances? Should these companies
sell, or be required to sell, these drugs at lower prices to persons in poor nations that
have a larger problem with AIDS than the United States?
Joe is a student and when he hands in a research paper, the professor recognizes a
connection to a number of short passages from other works that Joe has not cited. He
fails Joe accusing him of plagiarism. Assume that Joe is indeed guilty of plagiarism, is
he also guilty of copyright infringement? Is all plagiarism a copyright violation and vice
versa?
Why should the rule as to risk of loss be differ between merchant-sellers and
nonmerchant-sellers in noncarrier cases in which the sales contract stipulates that the
buyer is to pick up the goods?
Assume that there are numerous Internet service providers in a large city. Because of
fierce competition, these businesses advertise heavily. One of the features that some of
them provide and advertise is streamlined access to pornography sites as well as
proprietary pornography sites that can be accessed only by those who subscribe with
that particular service provider. This city passes an ordinance that prohibits any
advertising about being able to access pornography over the Internet. One of the service
providers challenges the constitutionality of this statute. Discuss how the case would
turn out.
Sally has a note from Alice for $1,000 for the sale of a personal watercraft that Alice
did not pay when due. Alice told Sally that she did not plan to pay at all because the
watercraft has never worked right and that she has been stranded more than once in the
middle of the lake. Alice accused Sally of intentionally misrepresenting the condition of
the watercraft. Sally talks Bill into buying the note for $800. Sally tells Bill that Alice
did not pay when the note was due and about her other complaints. Sally tells Bill that,
nevertheless, he should not be concerned because Alice cannot assert any defenses
against him. Is Sally right, and why or why not?
In the United States, courts may apply equitable principles rather than law principles in
particular cases. How does this make our system fairer or more responsive to societal
needs? Provide an example.
What problems hinder any efforts to establish uniform international rules for negotiable
instruments? What additional variables are there in trying to establish a uniform
international set of rules for negotiable instruments compared to doing so solely within
the United States?
The increasing use of the Internet and computers generally has made it much easier for
businesses to gather, process and distribute information about its customers, as well
those who are not customers. To what extent should business be able to gather and sell
this information?
Discuss the doctrine of res ipsa loquitur in terms of creating or maintaining justice. Is it
fair to the defendant?
What is meant by the “battle of the forms”, and why does the UCC need to address the
issue of the “battle of the forms” rather than simply retaining the common law mirror
image rule?
Expansive Corporation made a tender offer of $65 per share to the shareholders of
Hometown Corporation to acquire seventy-five percent, but no more than that, of the
shares of Hometown. Because only sixty-eight percent of the shares had been tendered
in twenty days, Expansive offered $75 per share, and another twenty percent of the
shares were tendered in four days. Expansive terminated the higher offer on the fifth
day, paid $65 for all the shares tendered at that price, and paid $75 for some of the
shares tendered at the higher price. Discuss Expansive’s actions.
Why should prenuptial agreements be enforceable only if they are in writing? Should
they be enforced at all?
Mary is a nerdy bookworm couch potato who rarely goes out of her home except to go
to work as a deskbound lawyer. She wears a sweater almost every day including during
the summer, and is always complaining about being cold. Edmund, her wealthy boss
tells Mary that he will give her $1M if she climbs Mt. Everest. Edmund doesn’t believe
that she’d even give the offer a second thought. Mary, without saying anything to
anyone, starts an intensive training program to whip herself into shape and six months
later, during her vacation, in fact, climbs Mt. Everest. Upon returning to work, she
presents Edmund a picture of herself on the summit of Mt. Everest and demands her
$1M. Edmund tells her that they never had a contract so he owes her nothing and Mary
claims that the money is owed based on promissory estoppel.
Mona owns a home heating oil delivery business, and due to home heating costs and
customer changeovers to gas and electric heating, her business is losing money. She
conceives a plan in which she will go to people’s homes while they are not there and fill
their tanks. She will then notify the homeowner, telling them that she made a mistake,
and billing them for the oil delivered. Aside from the obvious, what is she doing with
regard to personal property, and do people actually have to pay for the oil?