Because a life estate lasts only as long as someone’s life, it cannot be sold to another.
From the 1940s through the 1970s, antitrust enforcement was quite stringent.
The board of directors has the authority to appoint the officers of the corporation only
with shareholder approval.
Earnings from services performed by an individual debtor are not part of the bankruptcy
estate in a Chapter 7 liquidation bankruptcy.
The UPA’s definition of “person” who may be a general partner does not include a
corporation.
Article 2 of the UCC contains some provisions that either apply only to merchants or
impose a greater duty or merchants.
Where an accountant has been found liable for actual or constructive fraud, the client
may bring a criminal lawsuit and recover any damages proximately caused by that
fraud.
The parol evidence rule states that if a written contract is a complete and final statement
of the parties’ agreement, any prior or contemporaneous oral or written statements that
alter, contradict, or are in addition to the terms of the written contract are inadmissible
in any court proceeding concerning the contract.
Real property includes land.
Diversity of citizenship occurs if a lawsuit involves: 1) citizens of different states; or 2)
a citizen of a state and a citizen or subject of a foreign country.
Many states require a certain waiting period from the date a divorce petition is filed to
the date the court grants a divorce. A typical waiting period is eighteen (18.) months.
State law may exempt physicians from civil and criminal liability in assisted-suicide
cases.
The word “tort” is the French word for a “wrong.”
Acceptance occurs when the buyer or lessee signifies to the seller or lessor in words or
by conduct that the goods are conforming or that the buyer or lessee will take or retain
the goods despite their nonconformity.
In a finance lease the risk of loss passes to the lessee on the receipt of goods.
The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 was
designed to increase competition in the banking system.
Article I, Section 8, Clause 3 of the United States Constitution vests the federal
judiciary with the power “to regulate commerce with foreign nations.”
A corporate chief executive officer can be imprisoned for up to twenty years, should he
or she knowingly file and certify a false annual or quarterly report.
Consistent with judicial standards of interpretation, where a preprinted form contract is
used, handwritten words prevail over both preprinted and typed words.
The surface rights and the sub-surface rights for the same parcel of real property can be
owned by two different persons.
The transfer of contractual rights is called a delegation of rights.
The WTO has been referred to as the World Congress of Trade.
Actual fraud occurs when an accountant acts with “reckless disregard” for the truth or
the consequences of his or her actions.
In an agency, the agent acts on behalf of the third party.
Some subjects, such as “closed shops,” are illegal subjects of collective bargaining.
Courts have permitted two or more small companies to merge without liability under
Section 7, if the merger allows them to compete more effectively with a large company.
When an employer breaches an employment contract, if the employer offers substitute,
non-comparable employment to the employee, the doctrine of mitigation places a duty
on the employee to accept the work so long as the employee is capable of doing the
work.
The right to replevy is the buyer’s or lessee’s right to recover goods from a seller or
lessor who is wrongfully withholding the goods.
Shareholders are agents of the corporation.
Examples of acquiring ownership in personal property include capture, accession, and
confusion.
Twenty-six (26) states recognized a form of co-ownership known as community
property.
An approval clause requires that the obligor approve any assignment of a contract.
If the buyer or lessee chooses to reject goods, he or she must identify defects that are
ascertainable by reasonable inspection.
________ of the United States Constitution provides that “The Congress shall have the
power…to establish…uniform laws on the subject of bankruptcies through the United
States.”
A) Article I, section 4, clause 2
B) Article I, section 8, clause 4
C) Article II, section 4, clause 2
D) Article II, section 8, clause 4
E) Article III, Section 4, clause 2
For which torts can a partner be held responsible?
A) only the torts committed by that particular partner
B) any tort committed by any partner (including oneself) in the partnership
C) any tort committed by any partner (including oneself) in the course and scope of the
partnership business
D) any tort committed by any partner (including oneself) with the knowledge of at least
one other partner
E) any intentional or grossly negligent tort committed by any partner (including
oneself), but for torts involving mere ordinary negligence, only the torts committed by
that particular partner
Lisa has been a dentist in Smalltown for several years. She is now ready to retire and
she sells her practice to Angie. As part of the sales agreement, Lisa agrees not to
practice dentistry within 20 miles of Smalltown for a period of two years. After one
year, Lisa is bored so she opens up a dental practice in her home. This practice is very
small and Lisa wants to keep it that way. Angie sues on the noncompete agreement.
What is the most likely result?
A) This agreement is fully enforceable.
B) This agreement is not enforceable, because agreements in restraint of trade are never
enforceable.
C) This agreement is not enforceable, because it is not ancillary to an employment
agreement.
D) This agreement is not enforceable, because it is unreasonable as to area.
E) This agreement is not enforceable, because it is unreasonable as to time.
A contract is formed only by the performance of the requested act in what kind of
contract?
A) bilateral
B) unilateral
C) formal
D) informal
E) executed
The drawer’s failure to report a forged or altered check to the bank within ________ of
receiving the bank statement and canceled checks containing it relieves the bank of any
liability for paying the instrument.
A) thirty (30) days
B) sixty (60) days
C) ninety (90) days
D) one (1) year
E) three (3) years
A penalty cannot be imposed based on a nolo contendere plea.
Bob manufacturers rope and got a great contract from the U.S. military for rope. The
Government sent precise specifications for the rope and the rope Bob manufactured
conformed to the specifications. Bob informed his government contact, however, that
the rope ordered was not very strong and that it should not be used for heavy projects.
While being used to lift a very heavy piece of equipment in Iraq, the rope broke causing
the equipment to fall and smash a government vehicle. Which of the following is true
regarding a strict liability claims against Bob?
A) Bob should win in most jurisdictions under the government contractor defense.
B) Bob should win in most jurisdictions, because negligence cannot be proven.
C) Bob would lose in most jurisdictions, because he should have known that stronger
rope was needed.
D) Bob would lose in most jurisdictions, because he should have required different
specifications.
E) Bob would win in most jurisdictions, because of contributory negligence.
A(n) ________ occurs when the owner of personal property delivers his or her property
to another person, either to be held, stored, or delivered or for some other purpose.
A) allonge
B) conveyance
C) title transfer
D) bailment
E) appropriation
A contract that is entered into because of undue influence is ________.
A) void
B) void by the innocent party
C) void by either party
D) voidable by the innocent party
E) voidable by either party
If a judge rules that a party has lost its case because of the Statute of Frauds, the judge
has essentially stated that:
A) the losing party purposely deceived the other party about a material fact.
B) the losing party is not allowed to introduce evidence to contradict a written
agreement.
C) the losing party cannot enforce an oral contract that should have been in writing.
D) the losing party was found by the court to have lied, and will therefore lose the case.
E) the winning party has proven criminally fraudulent conduct on the part of the losing
party.
Which of the following is true about the Resource Conservation and Recovery Act
(RCRA) and the Comprehensive Environmental Responses, Compensation and
Liability Act (CERCLA)?
A) cercla regulates hazardous waste of government agencies, and RCRA regulates
wastes of private entities.
B) cercla regulates liquid hazardous waste, and RCRA regulates solid hazardous waste.
C) cercla regulates hazardous waste on land, and RCRA regulates hazardous waste
located in bodies of water.
D) cercla regulates the cleanup of existing hazardous waste sites, and RCRA regulates
the handling and disposal of currently-produced hazardous materials.
E) RCRA regulates the handling and disposal of currently-produced hazardous
materials, and CERCLA regulates the cleanup of existing hazardous waste sites.
In Parker v. Arthur Murray, Inc., Parker sued for a return of prepaid contractual funds
based on impossibility of performance after a severe injury. How did the courts rule?
A) Since the words NONCANCELABLE CONTRACT were prominently displayed on
the contract, Parker was not entitled to rescind the contract.
B) Since the words NONCANCELABLE CONTRACT were hidden and obscurely
placed within the contract, Parker was entitled to rescind the contract.
C) the injuries were considered a force majeure and the contract was discharged.
D) Parker’s injury created a situation of commercial impracticability, discharging the
contract as a result.
E) the NONCANCELABLE CONTRACT terms did not create a waiver of Parker’s
rights of discharge for impossibility of performance.
In a ‘short form” merger, which approvals are needed?
A) votes by both boards of directors, but shareholders need not approve
B) vote by the board of directors of the surviving corporation, and for the corporation
that does not survive, recommendation by the board of directors and an approval vote
by the shareholders
C) an approval vote by the board of directors of the surviving corporation
D) for both corporations, a vote by the shareholders, but no action by the board of
directors is necessary
E) no approvals are needed by the surviving corporation, and for the corporation that
does not survive, recommendation by the board of directors and an approval vote by the
shareholders
An English professor puts a comment on a student’s composition that says, “Can’t you
write at all? You are writing at a third grade level and will never be able to graduate
from this university!” The student is extremely upset and sues the professor. For which
torts could the professor be held liable?
A) defamation
B) intentional infliction of emotional distress
C) invasion of the right to privacy
D) defamation and intentional infliction of emotional distress
E) no tort
Which of the following is correct about the Uniform Commercial Code?
A) Article 3 covers negotiable instruments, while Article 4 covers bank deposits and
collections.
B) Article 2 covers negotiable instruments as well as bank deposits and collections.
C) Article 4 and 4A are the only articles that affect the banking system.
D) It does not apply to the banking collection and deposit process because negotiable
instruments are not considered “goods.”
E) Article 1 is the only section that applies to banking collection and deposit processes.
Which of the following is one of the general rules of contract interpretation?
A) Technical words are given their technical meaning, even if the contracting parties
clearly intended a different meaning.
B) General terms are presumed to qualify specific terms.
C) If both parties are members of the same trade of profession, words will be given
their ordinary meaning.
D) Preprinted words prevail over typed words.
E) Handwritten words prevail over both preprinted and typed words.
In addition to not discriminating on the basis of religion in its hiring practices, an
employer is required to:
A) allow employees to take time off on their day of worship.
B) determine the strength of an employee’s religious beliefs before making
accommodations that have an impact on other employees.
C) make a reasonable accommodation for an employee’s religious practices and
observances.
D) do nothing further.
E) publish and disseminate to its employees a policy regarding the employer’s preferred
religious practices and beliefs.
In order to meet the writing requirement of a negotiable instrument, the writing must:
A) be written on paper.
B) be permanent and portable.
C) be prepared in duplicate.
D) all appear above any signature.
E) be typewritten rather than handwritten.
The landlord’s duty to allow the tenant to peacefully possess the premises is known as
the:
A) duty against interference.
B) non-interruption doctrine.
C) tenant controls the household doctrine.
D) covenant of quiet enjoyment.
E) freehold interest.
Which of the following is an example of an equitable remedy?
A) any remedy issued by a judge
B) a remedy fashioned by a chancery court fashioned to fit the particular situation
C) any remedy granted by the merchant court
D) a remedy that may not be modified from its rigid prescribed form
E) a remedy required to be approved by the law court
The local police department gives a detective test. Everyone who takes the test must
have been a police officer for at least five years. The people taking the exam are rated
from highest to lowest based on their test scores. If a detective position becomes
available, it is filled on the basis of who has the highest score. Which of the following
statements best describes this practice?
A) Tests like this are never legal in promotion decisions.
B) Tests like this are always legal in promotion decisions.
C) Tests like this are legal, as long as the subject matter tested has some legitimate
relationship to the job in question.
D) Tests like this are legal, as long as they are not the sole factor used in determining
promotion.
E) Tests like this are legal, as long as they are the sole factor used in determining
promotion.
Which of the following is true about the Food and Drug Administration’s regulation of
drugs?
A) The Food and Drug Administration has the power to regulate only prescription
drugs.
B) The Food and Drug Administration conducts hearings in connection with new drug
applications.
C) Once approved, the Food and Drug Administration does not have the power to
withdraw its approval of a drug.
D) New drugs can be marketed before Food and Drug Administration approval, if the
drugs have no dangerous side effects.
E) The processing of licensing a new drug must take under eighteen months.
Damages that are fixed in the contract for the amount to be awarded in the event of a
breach are known as:
A) punitive damages.
B) liquidated damages.
C) consequential damages.
D) conditional damages.
E) incidental damages.
________ warranties cannot be disclaimed with respect to checks, but they can be
disclaimed with respect to other instruments.
A) Express
B) Implied
C) Full
D) Limited
E) Transfer
In a case of ________ goods, the seller or lessor may choose either (1) to cease
manufacturing the goods and resell them for scrap or salvage value or (2) to complete
the manufacture of the goods and resell, release or otherwise dispose of them to another
party.
A) unfinished
B) specially-manufactured
C) durable
D) prefabricated
E) wholesale
Which of the following is true regarding the concepts of contributory negligence and
comparative negligence?
A) The defense of contributory negligence bars an injured plaintiff from recovering
from the defendant in a negligence action.
B) Under the defense of contributory negligence, a plaintiff who is contributorily
negligent for his or her injuries is responsible for a proportional share of the damages.
C) Under the doctrine of comparative negligence, a plaintiff who is contributorily
negligent for his or her injuries is responsible for a proportional share of the damages.
D) Contributory negligence is a plaintiff’s claim, not a defense.
E) Comparative negligence is a plaintiff’s claim, not a defense.
If the defendant does not answer the complaint, a(n) ________ is entered against him or
her.
A) summons
B) arrest warrant
C) search warrant
D) default judgment
E) proclamation
The fair use doctrine would allow the following types of use of a copyrighted work
without the permission of the copyright holder, except:
A) quotation in a critical review.
B) use in a parody.
C) sales of a single chapter of a book that is the only chapter of interest to most persons
in a particular locale.
D) use by a teacher to illustrate a point in a class.
E) The fair use doctrine does not allow any use of copyrighted work without the
advance, written permission of the copyright holder.
A clothing maker requires the retailers it transacts business with to sell all of its clothing
at a fixed minimum price. In examining a retailer’s challenge to this practice, a court
would:
A) examine this arrangement on a “rule of reason” basis.
B) invalidate the arrangement in its entirety.
C) apply the per se rule, and find a violation of the Sherman Act.
D) allow the arrangement, but only if neither party has monopoly power.
E) apply the per se rule, and refuse to find a violation of the Sherman Act.
The majority of the contracts entered into by individuals and businesses are ________
contracts.
A) informal
B) formal
C) executory
D) executed
E) unilateral
Fiora has a checking account at Big Bank. She writes a check on her account to Lisa,
who submits the check to Food Stuff to buy groceries. Food Stuff obtains payment on
the check from Big Bank. Which of the following is true?
A) Fiora is the drawer, Lisa is the payee, Lisa is the indorser, Food Stuff is the indorsee,
and Big Bank is the drawee.
B) Fiora is the drawer, Lisa is the drawee, Lisa is the indorser, Food Stuff is the
indorsee, and Big Bank is the payee.
C) Fiora is the drawee, Lisa is the drawer, Lisa is the indorser, Food Stuff is the
indorsee, and Big Bank is the payee.
D) Fiora is the indorsee, Lisa is the payee, Lisa is the indorser, Food Stuff is the
indorsee, and Big Bank is the drawer.
E) Fiora is the drawee, Lisa is the payee, Lisa is the indorser, Food Stuff is the indorsee,
and Big Bank is the drawer.