For a misrepresentation to be actionable as fraud in the inducement, it must be a
misrepresentation of opinion.
a. True
b. False
Judges who serve in the U.S. Courts of Appeals receive lifetime appointments from the
President, subject to confirmation by the Senate.
a. True
b. False
Consequential damages include lost profits and injury to person or property.
a. True
b. False
Kim offered $50,000 to the vice president of operations of ChemKore Co. to induce her
to divulge a secret process. In some states Kim would be guilty of commercial bribery.
a. True
b. False
Assume you are the creditor in each of the following situations. Identify the kind of
security agreement that is involved in each transaction and explain how you would
perfect that agreement.
a. You are the creditor (Everby Bank), and you lend Brisco Gaines $5,000 for a sound
system.
b. First Bank loans Doris $10,000 to purchase inventory for her store.
c. First Bank loans Brad $5,000 to purchase a computer network for use in his store
office.
d. Kevin needs cash for gambling debts. He brings in his high-definition TV to secure a
$500 loan.
The concept of the “right to cooperation” includes that:
a. where one party’s required cooperation is not timely, the other party is excused from
any resulting delay in her own performance.
b. where one party’s required cooperation is untimely, the other party is required to
tender performance as if the first party had tendered in a timely manner.
c. where neither party is at fault and the agreed manner of delivery becomes
impracticable, both parties are required to negotiate a new price.
d. None of these.
Contract law generally places more importance on the intent of the parties to form a
contract than on the inclusion of certain terms in the contract.
a. True
b. False
Treasury stock is issued but not outstanding.
a. True
b. False
A trust for the dissemination of a particular political doctrine cannot be a charitable
trust.
a. True
b. False
The law provides no protection from harm to a person’s right of dignity.
a. True
b. False
If, after performing an environmental assessment, a federal agency concludes that an
EIS is not required, the agency must engage in ‘scoping.
a. True
b. False
When a payor bank gets an item payable from a customer’s account with insufficient
funds, the bank may:
a. pay the item and charge it to the customer’s account even though an overdraft is
created.
b. dishonor the item and return it.
c. Either may happen.
d. Neither is allowed.
The Heinrich v. Titus-Will Sales, Inc. case stands for the principle that:
a. the UCC requires proper state licensing for a company claiming to be a merchant to
actually have merchant status.
b. a buyer in the ordinary course of business acquires good title when buying from a
merchant seller who was entrusted with possession of the goods.
c. risk of loss depends on who has title to the goods at the time the goods are damaged
or destroyed.
d. a void title is no title.
Which one of the following is NOT true of a suit brought under criminal law?
a. It must be brought by the government.
b. It may be a state or a federal case.
c. Proof of guilt must be “by preponderance of the evidence.”
d. Conviction may result in imprisonment.
Consideration is the inducement to make a promise enforceable.
a. True
b. False
Mark wants to give Susan his car. How can he effectively “deliver” it?
a. By giving Susan the keys.
b. By giving her an indorsed title certificate.
c. By making her take it for a period of time.
d. By giving her a bill of sale for it.
e. By giving her an indorsed title certificate or bygiving Susan the keys.
Curtis, without authorization and after many unsuccessful attempts to access the
information, downloads a formula used by his employer to make an award-winning
product. He plans to sell the formula to a competitor and make enough money to retire.
Instead, he may face:
a. a fine of up to $500,000 or imprisonment for up to ten years.
b. a fine of up to $1 million or imprisonment for up to twenty years.
c. a fine in the amount determined to be the employer’s potential loss.
d. imprisonment for up to fifty years.
To qualify as an innocent landowner under SARA, a person must have, at the time of
acquiring the property, asked about the previous ownership and uses of the property.
a. True
b. False
In a disparate treatment case:
a. if the plaintiff meets the burden of proving a prima facie case, the burden of proof
shifts to the employer.
b. an employer will not prevail in the face of a plaintiff’s prima facie case unless it can
articulate legitimate, non-discriminatory reasons for its actions.
c. if a plaintiff can show that a defendant’s allegedly legitimate reason for not hiring
plaintiff is merely a pretext for discrimination, the plaintiff wins.
d. All of these.
The holder of a negotiable document of title to whom the document has been duly
negotiated has legal title to the goods covered by the document.
a. True
b. False
Frank provided in his will that his 50 acres were to go to the city in fee simple for a
soccer complex as long as no alcoholic beverages were sold on the premises. If alcohol
is sold, the property is to go to Franks estate. The estate created in the city is a:
a. reversion.
b. qualified fee or a fee simple defeasible.
c. possibility of reverter.
d. contingent remainder.
Sue, Barb, and Carlotta agree to put in $1,000 each to set up a shelter for lost animals.
They each work two days a week. Donations fund the day-to-day operations. Do they
have a partnership?
a. Yes, since each has control of the operation.
b. Yes, because they are all co-equals in ownership of the shelter.
c. No, because they have made no formal agreement.
d. No, because there is no business for profit.
Which of the following is NOT included within the Code definition of merchantability?
a. Reasonably fit for the ordinary purposes for which the goods are used.
b. Pass without objection in the trade under the contract description.
c. In the case of fungible goods that they be of a quality that exceeds the description and
be above average.
d. Be of fair, average quality.
A breach of contract always discharges the injured party from performance under the
contract.
a. True
b. False
The statute of frauds has to do with fraud in the inducement of a contract.
a. True
b. False
Henry was burning leaves in his backyard. One of the burning leaves was lifted by the
wind into Bob’s yard next door. It landed on the lawnmower which exploded, setting
fire to the wooden lawn furniture. Henry’s best argument against liability to Bob would
be:
a. the leaf was not a substantial factor in causing the damage.
b. the gasoline in the lawnmower is a superseding cause of the damage.
c. it was not foreseeable that the lawnmower would explode.
d. the damage was not caused by the leaf but by the gasoline.
After a plaintiff files a complaint with the clerk of the trial court, the clerk issues a
summons to be served on the defendant to notify him that a suit has been brought
against him.
a. True
b. False
An implied-in-law condition need only be substantially performed.
a. True
b. False
In which of the following areas does the board determine corporate policy?
a. Selecting and removing officers.
b. Determining the corporations capital structure.
c. Initiating fundamental changes and declaring dividends.
d. Setting management compensation.
e. All of these are determined by the board.
A security interest in consumer goods is always automatically perfected upon
attachment.
a. True
b. False
Petrol Corp. owns several drilling operations in the Gulf of Mexico, refineries, service
stations, and tanker trucks for transporting their products. Petrol Corp. hires an
environmental manager to keep the company in compliance with various environmental
laws. What laws will the environmental manager need to study and why?
Why are delivery and acceptance both necessary to have a valid gift? Explain.
Discuss what happens to a corporation after dissolution and what protection is afforded
creditors of the corporation.
Bert and Philip have decided to form a partnership to operate a lawn care service.
Discuss whether they should name the business and, if so, what considerations affect
the name they might choose.
Dryler Corporation sold unregistered securities that were required under the 1933 Act to
be registered. Howlett-Midland Corporation used an outdated prospectus in the sale of
its securities. Discuss the civil liability of the companies for these acts.
Discuss the fundamental rules of contractual liability between a principal and the third
party.
Edward’s Excursions Inc. filed for Chapter 7 bankruptcy. It has $100,000 of assets and
has the following debts outstanding:
$50,000 to Arthur secured by a boat worth $25,000.
$30,000 to Bradley secured by a truck worth $30,000.
$20,000 to Clarence unsecured.
The month before Edwards closed and filed for bankruptcy, its employees earned
$10,000 for which they did not get paid. They also should have been credited with
$3,000 for their pension plan. Edward’s owes $4,000 in back taxes. In the process of
administering the estate, the trustee paid $5,000 in attorney fees. In what order will
these claims be paid?
What are the ways in which an offer may be terminated?
Describe how a civil case is commenced and how it proceeds through the court system.
Be sure to use appropriate terminology in describing the various stages of a lawsuit.
Courts usually will require evidence for a transaction to be usurious. What factors will
the courts require as evidence of usury?
Rebecca, whose debts are primarily consumer debts, files for Chapter 7 bankruptcy.
Discuss the grounds for which the court might dismiss her case.
What activities give rise to strict liability and what defenses are available to strict
liability?
What are the two tests for mental competency?
Discuss silence as acceptance of an offer.
What is the basis of an accountant’s potential criminal liability in rendering
professional services?
Distinguish between procedural and substantive unconscionability.