Which school of jurisprudence is based on the philosophy that what matters is not what
is written as law, but who enforces the law and by what process?
a. Legal positivism.
b. Natural law.
c. Legal realism.
d. Sovereign selection.
The Foreign Corrupt Practices Act:
a. applies only to corporations registered under the federal Securities Exchange Act.
b. makes it illegal to bribe U.S. and foreign officials.
c. applies to any U.S. corporations.
d. applies only to foreign corporations.
Florence borrows $1,500 from Fremont, leaving her gold necklace with Fremont as
collateral. Two weeks earlier, Florence had borrowed $1,000 from Corner Bank.
Florence signed a security agreement and a financing statement giving Corner Bank a
security interest in the same gold necklace. The financing statement is filed in the
appropriate location. If Florence defaults on both loans, which creditor has the superior
rights to the necklace?
a. Fremont, because his loan was the first to attach.
b. Fremont, because possession takes priority over filing.
c. Corner Bank, because Fremont did not perfect his interest.
d. Corner Bank, because Fremont did not have a written security agreement.
George’s Wholesaling agrees to purchase 1000 pounds of bananas from Chickadee
Exports at 39 cents per pound. George’s does not have the money for the bananas now,
but promises to pay in two months. Chickadee Exports wants George’s business but
needs the money now. Chickadee (as drawer) prepares an instrument ordering George’s
(as drawee) to pay $390 to Primary Bank (the payee). This is an example of a:
a. check.
b. trade acceptance.
c. promissory note.
d. None of the above.
If Becky promises not to drink alcohol until she becomes a legal adult in exchange for
Ben’s promise of $1,000, the agreement is:
a. enforceable because Becky is giving up the right to do something she would
otherwise be entitled to do.
b. enforceable because the agreement accomplishes Ben’s goal of keeping Becky from
drinking.
c. not enforceable because Becky does not have a legal right to drink alcohol.
d. not enforceable because Becky is a minor and could disaffirm the contract.
The UCC “perfect tender” provision provides:
a. the buyer can reject the entire shipment if any portion of the goods are
nonconforming.
b. the buyer must accept the goods if the defects are minor and correctable.
c. the buyer may not accept the conforming part of a shipment and reject the
nonconforming part.
d. a buyer must reject nonconforming goods.
A contract that requires a seller to deliver goods to the carrier is:
a. a destination contract.
b. a shipment contract.
c. a C.I.F. contract.
d. a C.O.D. contract.
In 1919, Henry Ford was sued because:
a. he used corporate profits to support humanitarian and charitable works.
b. he diverted corporate profits for personal gain.
c. the Dodge brothers wanted a bigger role in management.
d. his factory was deemed to be a sweatshop.
Wrongful discharge claims are generally based upon all EXCEPT:
a. public policy.
b. criminal law.
c. contract.
d. tort law.
Archer Co. has decided it wants to expand into international business, but it is
concerned about expropriation of its property or losses caused by political unrest.
Archer is considering purchasing insurance through the Overseas Private Investment
Corporation (OPIC). OPIC:
a. provides insurance, but the cost is relatively high.
b. provides insurance, but the list of countries in which it is willing to provide such
protection is fairly short.
c. has had remarkable success at no cost to the U.S. government.
d. insures against expropriation, but not against losses stemming from political
violence.
Myron had two children, Cheryl and Pete, who predeceased him. Cheryl had three
children and Pete had one child. Myron died testate. Which of the following is true?
a. If Myron’s will indicates that the issue are to inherit per stirpes, Pete’s child will
receive one half of Myron’s estate.
b. If Myron’s will indicates that the issue are to inherit per stirpes, Pete’s child will
receive one fourth of Myron’s estate.
c. If Myron’s will indicates that the issue are to inherit per capita, Pete’s child will
receive one half of Myron’s estate.
d. If Myron’s will indicates the issue are to inherit per capita, each of Cheryl’s children
will receive one sixth of Myron’s estate.
On impulse, you purchase a travel trailer and ask your acquaintance, Max, if you can
leave the trailer at the edge of his restaurants parking lot until you can have a concrete
pad built to store the trailer on your property. Max agrees. When you return for the
trailer the next week, it is gone and you find out that Max sold it. You can:
a. recover the trailer because Max did not have any ownership interest to pass.
b. recover, but only if Max bought insurance to cover the trailer while it was on his
property.
c. not recover because you “entrusted the trailer to Max, who then had a right to sell it.
d. not recover because Max had only a voidable title to transfer.
Melody is a recent graduate of State Law School. She lands an impressive employment
contract with the firm of Dewey, Cheathem, and Howe, Attorneys at Law, on the stated
provision that she pass the upcoming bar exam. This provision in the employment
agreement is a(n):
a. condition precedent.
b. condition subsequent.
c. implied condition.
d. concurrent condition.
Circus Pizza contracted with Art to run its birthday parties. Art’s responsibilities
included supervising the children and organizing the games. Circus did not investigate
Art’s background, which included a history of assaulting children. Art assaulted a
7-year-old girl in the restaurant’s kitchen during a birthday party. Circus Pizza:
a. cannot be liable for the damages because Art committed an unforeseeable intentional
tort.
b. cannot be held liable for the damages because Art’s conduct was not in the scope of
employment.
c. may be held liable on the basis of negligent hiring.
d. may be held liable only if Circus actually knew of Art’s background.
The Gulf States Section, PGA, Inc. v. Whitney National Bank of New Orleans case
addressed liability on a negotiable instrument:
a. based on fraud.
b. based on negligence.
c. as an accommodation party.
d. as a signer.
A refusal to deal:
a. is a right to decide with whom to do or not to do business and cannot be legally
limited.
b. is a rule of reason violation of the Sherman Act and is illegal if it harms competition.
c. is an agreement in which a buyer refuses to purchase goods from a supplier unless the
supplier also purchases items from the buyer.
d. occurs when a manager refuses to recognize that price-fixing is a problem.
In January 2008, Professor Noe entered into a contract with State University. She
agreed to teach full time during the 2008-2009 academic year. Professor Noe died on
May 31, 2008. Her estate:
a. is obligated to find another person who will agree to teach during the academic year.
b. is discharged from any further obligations under the contract.
c. will be discharged from any obligations under the contract only if it can be shown
that her death was unexpected.
d. will not be discharged. If the University has to pay more in order to hire a
comparable substitute professor at the last minute, then the estate will be responsible for
the difference in pay.
Abby dies, and her good friend, Clay is appointed to administer Abby’s estate. Abby’s
house was in poor condition, so Clay orally hired a contractor to make repairs. Clay
also orally promised that if the estate could not pay the repair bill, he would pay it even
though he does not live in the house and has no entitlement under Abby’s estate. The
estate does not pay the repair bill. Who can the contractor collect from, if anyone?
a. The contractor can collect from either the estate or Clay.
b. The contractor can collect from the estate only.
c. The contractor can collect from Clay only.
d. The contractor must collect from the estate first, and then collect any deficiency from
Clay.
Amy Hudson has been trying to purchase Glen Cappel’s antique desk for some time, but
Glen has been reluctant to sell. One evening Glen said to Amy, “Okay, I’ll sell the desk
for $550.” Amy replied, “Thank you, Glen. I accept.” The agreement was not reduced to
writing, but Glen and Amy did shake hands. Two days later, Amy sent Glen a letter
outlining the terms of the agreement, and stating that she would deliver $550 cash
according to the agreement within ten days. The letter was signed, “Best regards, Amy.”
Later, Amy had second thoughts, and refused to go through with the purchase. Nothing
had been exchanged at this point. Glen:
a. can enforce the contract against Amy because the statute of frauds is satisfied under
this situation.
b. cannot enforce the contract against Amy because her signature was inadequate
without her last name under the statute of frauds.
c. cannot enforce the contract against Amy because he did not sign the letter.
d. can enforce the contract because they shook hands on the agreement.
Bailey Co. and Spryt Bros. enter into a contract for the manufacture and sale of 400
lawn chairs. If both parties agree that a modification is necessary:
a. the surest way to modify the contract is to liquidate it.
b. they may not do so without court supervision.
c. an agreement to rescind the contract will terminate the contractual rights of Bailey
Co. and Spryt Bros. if neither of them had completed their obligations.
d. courts will generally not enforce a cancellation and modification of a contract unless
one party received inadequate consideration under the original contract.
Congress established a trust fund for the EPA to use in Superfund cleanup. This trust
fund was initially financed by a tax on what?
a. The general public through federal income taxes.
b. Waste management and landfill operators.
c. The construction industry.
d. The oil and chemical industries.
A majority of shareholders of FamLi Co. wish to expel Glenn, a minority shareholder.
In most states, the company cannot expel Glenn unless:
a. it pays a fair price for Glenn’s stock.
b. there is a legitimate business purpose for expelling him.
c. Both of the above.
d. Neither a nor b.
The Marcel Company is opening an office in Mexico. The cost to obtain electrical
service is $500, but the clerk suggests that service could be started faster if an
additional $50 is paid, which the clerk will keep. If the Marcel official pays the
additional $50:
a. he will have violated the Foreign Corrupt Practices Act.
b. he will not have violated the Foreign Corrupt Practices Act because this would be
considered a “grease or facilitating payment, which is legal.
c. he will be guilty of violating the Foreign Corrupt Practices Act only if the payment
was illegal under the written law of Mexico.
d. he will be guilty of violating both the Foreign Corrupt Practices Act and the
Convention of Combatting Bribery of Foreign Public Officials in International Business
Transactions.
Which of the following is not required to create a valid trust:
a. mental capacity of the grantor.
b. witnesses.
c. a beneficiary(ies).
d. property transferred to the trust.
Research has shown that the least important motivation for managers in behaving
ethically is:
a. they want to feel good about themselves.
b. they want to feel good about the decisions they make.
c. they value their reputation.
d. profitability.
Which of the following options are available to power plants for meeting emissions
standards?
a. Installing scrubbers.
b. Switching to alternative fuels.
c. Trading emissions allowances.
d. All of the above are options that power plants can use in meeting emissions
standards.
Charles agrees to store Tuan’s car in Charles’s garage for the winter months while Tuan
visits his grandmother in California. As a bailee, Charles is automatically entitled to use
Tuan’s car while Tuan is away.
The Computer Fraud and Abuse Act prohibits all but which of the following?
a. Computer trespass.
b. Sending spam.
c. Negligent damage to a computer attached to the Internet.
d. Trafficking in computer passwords.
Wally owns 200 acres of land. Wally offers to sell the land to Robert for $1,500 per
acre. Robert replies that he does not need 200 acres of land but would like to buy 40
acres at $1,500 per acre. Wally agrees to sell but does not identify which 40 acres.
Later, Wally refuses to sell any land to Robert. What is the result?
a. Robert wins; this is an enforceable contract with complete and definite terms.
b. Robert wins; the UCC will decide which 40 acres are to be sold.
c. Wally wins; the original offer was not intended to be an offer but merely an invitation
to negotiate.
d. Wally wins; this agreement is too indefinite since it does not identify which 40 acres
are to be sold.
If in 1900 the Minnesota Supreme Court ruled that a minor can void a contract at any
time during minority and in 2008 the courts in Minnesota still follow this ruling, this is
an example of:
a. stare decisis.
b. the bystander rule.
c. statutory law.
d. enabling legislation.
The Supreme Court of California in Wiener v. Southcoast Childcare Centers, Inc.:
a. ruled that it did not matter whether the driver of the vehicle acted negligently or with
criminal intent, the risk of harm from an unsafe fence was the same and defendants had
a duty to make the fence stronger.
b. required application of a different standard for third-party criminal acts versus acts of
ordinary negligence.
c. determined that Foreseeability was not at issue in this case.
d. placed importance on the fact that the child care facility had been the target of
violence in the past.
Congress enacted legislation in 1933 to regulate the securities industry and prohibit
various forms of fraud with securities. The Securities Exchange Act of 1934 was passed
a year later. This law created the Securities and Exchange Commission (SEC) as an
independent regulatory entity whose function is to administer the two laws. The SEC
has generated rules and regulations to administer these acts. These rules and regulations
are:
a. statutes.
b. administrative law.
c. executive orders.
d. common law.
While at the park, Tasha saw a small child fall into the lake. Tasha did not know the
child. Under the common law of most states, Tasha has a legal duty to take reasonable
steps to assist the child if Tasha is able to help and such help will not jeopardize Tasha’s
well being.
An agent is always liable for his or her own torts committed within the scope of the
agency relationship.
Generally, consumers are not adversely affected by tariffs since tariffs affect wholesale
prices, not retail prices.
In many states today a landlord must use reasonable care to maintain safe premises and
is liable for foreseeable harm.
Generally, ethical managers have happier, more satisfying lives.
Explain the Title VII requirements on affirmative action, and identify three sources of
affirmative action programs.
Discuss the factors a court will consider when deciding the issue of whether a landlord
is liable for a criminal attack against a tenant.
Spicy & Hot, Inc. is interested in expanding its Mexican food restaurant into a Mexican
food catering business. Spicy & Hot, Inc. buys a new delivery van from Van World.
Spicy & Hot, Inc. is a buyer in the ordinary course of business when purchasing the
van.
Southern Fuels Co. and Langham-Hill Petroleum, Inc. are both in the business of
buying and selling large quantities of petroleum products. In October, the parties
entered into a fixed price contract wherein Southern agreed to purchase 4.2 million
gallons of No.2 fuel oil at a specified price per gallon to be delivered in four monthly
installments. The contract included a force majeure clause. The first three monthly
shipments of oil were purchased by Southern as agreed. In January of the next year, the
price of oil in the world market collapsed as a result of Saudi Arabian attempts to regain
its share of the world oil market. Southern refused to purchase the last shipment under
the contract. Southern informed Langham-Hill that because the drop in world oil prices
was caused by Saudi Arabians who were “outside Southern’s control” that it was
invoking the force majeure clause. Langham-Hill sued for damages in the amount of
$306,07 What is a force majeure clause? Southern’s basic argument is that it can now
buy oil at a substantially lower price. Will Southern succeed on this basis?
A contract should have a descriptive title, which is generally in all capital letters,
underlined and centered at the top of the page.
In many states it is illegal to lend money to help someone gamble.
A governmental classification based on gender would be subject to strict scrutiny.
Cynthia and Brian were friends. Brian was a dare devil. Because of his antics, Cynthia
thought that Brian wasn’t long for this life. Cynthia purchased a life insurance policy on
Brian’s life. Subsequently, Brian was killed in a car accident. Since Cynthia and Brian
were friends, Cynthia had an insurable interest in his life and will be entitled to the
insurance proceeds.
When Olga asks Sven if he wishes to sell his Harley motorcycle, he replies that he
would not sell it “for less than $2,000.” Olga replies, “I accept,” and hands him $2,000.
A contract exists.
A partnership can only be held liable for the partners authorized acts.
If both parties believe they have a binding contract, this belief settles any later questions
about the validity and enforceability of the agreement.
A principal must indemnify an agent for any expenses incurred in carrying out agency
responsibilities, but the principal will not be responsible for indemnifying an agent for
any expenses not expressly authorized.
Foiler Manufacturing, a new corporation, estimates it may generate approximately 200
kilograms of hazardous waste each month. Discuss the EPA requirements it faces in
relation to this waste.
In 30-year mortgages, the finance charge typically exceeds the amount of the principal.
A draft is always a check, but a check is not always a draft.