“Business Law Rocks.” Business law teacher Penny ordered 50 T-shirts for her classes
that said “Business Law Rocks” on the front. She wanted to give them out on the last
day of class and contracted with Frank, who owned a T-shirt business, for the shirts to
arrive by that day. The shirts arrived on Thursday, just before the last day of classes on
Friday. Unfortunately, the shirts said “Business Law Yuck” on the front. Frank told
Penny that he would remedy and fix the problem and that he had the right to do so. She
told him, however, that she had to have the shirts the next day because the students
would be gone after that. Penny had also ordered some pamphlets on employment law
to be used the next fall semester. The seller had agreed to provide the pamphlets 30
days before spring semester ended. The seller, however, erred and sent pamphlets on
environmental law which arrived 28 days before spring semester ended. The seller
attempted to remedy the problem by sending the correct pamphlets on employment law,
but they did not arrive until 27 days before spring semester ended. None of the parties
had any prior dealings.
Is Frank correct in that he has a right to remedy and fix the problem?
A. No, the UCC does not provide a party with the right to fix any problem.
B. No, while the UCC provides a party with the right to fix some problems, the
problems with the T-shirts were too serious to afford Frank that right.
C. Yes, but only if he can provide correctly worded T-shirts by the next day, the last day
set for performance.
D. Yes, Frank has up to 10 days under the UCC to fix any problem.
E. Yes, Frank has up to 20 days under the UCC to fix any problem.
As discussed in the text, which of the following is true regarding electronic contracts
and agency authority in Singapore?
A. In Singapore because of the fear of fraud, agents are not allowed to engage in
electronic transactions on behalf of principals.
B. Singapore relies on a type of law similar to U.S. common law in addressing agency
authority in regard to electronic transactions.
C. Singapore passed a law providing that a principal must countersign any electronic
transaction engaged in by an agent.
D. Singapore passed a law providing that each employer must post a list electronically
of all its agents with authority to act on its behalf.
E. Singapore passed a law by which lack of awareness of a principal for an agent’s acts
is not recognized as a defense.
Which of the following is called straight bankruptcy?
A. Liquidation
B. Reorganization
C. Reformation
D. Acknowledgment
E. Avoidance
Which of the following was the result in Janet I. Benitez v. Sebastiano Restifo, the case
in the text in which the plaintiff alleged that the landlord breached the covenant of quiet
enjoyment based upon an upstairs tenant intentionally and repeatedly causing
significant water leakage into the plaintiff’s apartment?
A. The court ruled that as a matter of law the landlord had no duty to control any
actions of the other tenant and that the right to take action against the other tenant
belonged to the plaintiff.
B. The court ruled that the terms of the lease controlled and that because the lease gave
the plaintiff the affirmative right to take court action in such cases, the landlord had no
duty to do so.
C. The court ruled that by failing to act to protect the plaintiff, the landlord was liable to
the plaintiff for breach of the covenant of quiet enjoyment.
D. The court ruled that only because the lease itself placed a duty of quiet enjoyment on
the landlord, the landlord had a duty to control the actions of the upstairs tenant.
E. The court ruled that since the actions of the tenant did not constitute a physical
danger to the plaintiff, the landlord had no duty to control the actions of the tenant.
Which of the following is true regarding the status of an agent as a fiduciary?
A. Although the principal is a fiduciary, an agent is not a fiduciary.
B. An agent is a fiduciary only if the principal and agent agreed by written contract that
the agent is a fiduciary.
C. An agent is a fiduciary only if the principal and agent agreed by written or oral
contract that the agent is a fiduciary.
D. An agent is only a fiduciary to the principal only if a transaction in excess of $10,000
is involved.
E. An agent is a fiduciary to the principal.
Which of the following is a term for contracts within the statute of frauds involving
promises to pay a debt of another if the initial party fails to pay?
A. Secondary obligations
B. Primary promises
C. Primary debts
D. Third-party debts
E. Commercial promises
“Pet Police.” Millie breeds German Shepherd dogs. Bernard, who lives down the street,
took in a stray dog loosely identified as a Corgi-plus. The dog, Casanova, would
definitely be classified as a mixed breed. Bernard allowed Casanova to roam freely.
Unfortunately, Casanova went to visit Millie’s pure-bred German Shepherd. Puppies
resulted which were Shepherd and Corgi-plus puppies. Millie was incensed. She started
a campaign to round up all of the stray dogs, including Casanova, and haul them off to
the animal shelter. She picked up a few cats as well. She posted signs all over the
neighborhood saying that no animal, neither dog, cat, nor fowl, should come into her
yard and that she was going to begin shooting the next time, period. Understandably,
Bernard and some of the other neighbors took offense. Bernard comes to Millie’s house
while she is working in the yard. He walks behind her and shoves her. Millie did not see
him coming. Millie turned around and proceeded to have a heated conversation with
Bernard. Millie drew her fist back and told Bernard that she was going to punch him in
the nose. Millie raised back her arm and started to punch Bernard but he stepped back,
and all she managed to do was jab him in the shoulder, causing no actual pain. Sally,
who was going by on the street, saw Millie attempting to hit Bernard. Sally came over
and grabbed Millie’s hands, pinning Millie’s hands behind her back.
Millie’s threat to punch Bernard in the nose and her action in raising back her arm in
support constitute a[n] _______________.
A. Assault and battery
B. Battery
C. Assault
D. Justified retribution
E. Negligence
Which of the following is false regarding corporations?
A. Corporations are legal entities.
B. Corporations exist separately from their shareholders.
C. Corporations can sue or be sued by others.
D. Courts consider corporations to be “legal persons.”
E. Corporations cannot claim rights under the U.S. Constitution.
Which of the following consists of the fruits of one’s mind?
A. Theoretical property
B. Cognitive property
C. Intellectual property
D. Protected property
E. Tradable property
To be protected in ____________ use, a trademark must be registered with the U.S.
Patent and Trademark Office under the Lanham Act of 1947.
A. Interstate
B. Intrastate
C. Interstate and intrastate
D. Commercial
E. Interstate, intrastate, and commercial
How does the position of the UCC compare with the common law in regard to the
perfect tender rule?
A. The UCC and common law differ with the UCC requiring perfect tender and
common law requiring the lesser standard of substantial performance.
B. The UCC and common law differ with the UCC requiring perfect tender and
common law requiring the lesser standard of material performance.
C. The UCC and common law differ with the UCC requiring the lesser standard of
material performance and common law requiring perfect tender.
D. The UCC and common law differ with the UCC requiring the lesser standard of
substantial performance and common law requiring perfect tender.
E. They are the same.
“Inattentive Driving.” Molly, a first year law student, decided to skip class and drive off
campus to check on her new dress for the upcoming school dance. While driving, Molly
is busy talking on her cell phone with her friend Sharon to convince her to going to the
dance with Molly’s brother who has a big crush on Sharon. Unfortunately for Molly,
there is a statute in her state outlawing talking on a cell phone while operating a motor
vehicle. Molly crashes into the side of Sam’s new convertible when she looks down to
pick up a can of soda she just dropped onto her new jeans. A police officer just down
the street comes over to investigate. Molly explains to him that it was difficult to hold
the cell phone in one hand, the soda in the other, and also drive. The officer was not
impressed. Around that time Sam comes along. He is furious regarding the significant
dent in his new car. Molly says she has insurance and that she will cover the whole
incident. Sam says that is insufficient; but Molly says that under case precedent, that is
his only remedy. The officer is annoyed because it is his lunch break. He tells Molly
that she must obey duly authorized law, and proceeds to write several citations to
her.Which type of law is involved in the above situation considering Molly’s interaction
with both the officer and Sam?
A. Public law but not private law
B. Private law but not public law
C. Civil law and private law but not public law
D. Criminal law and public law but not private law
E. Public law, private law, civil law, and criminal law
Which of the following was the result on appeal in Sauls v. Crosby, the case in the text
in which the court addressed whether a life tenant had a right to cut timber for the life
tenant’s commercial gain?
A. The court ruled that the defendant, as an ordinary life tenant, had no right to cut the
timber for his or her own commercial gain.
B. The court ruled that the defendant had a right to cut the timber only if at least 30
days’ notice was given to the remaindermen.
C. The court ruled that the defendant had a right to cut the timber for commercial gain.
D. The court ruled that the defendant had a right to cut the timber for commercial gain
only if she could establish that she was economically challenged and needed the funds
in order to maintain her lifestyle.
E. The court ruled that the defendant was prohibited from cutting the timber for
commercial gain unless she established that the market for timber was expected to
decline significantly due to economic conditions.
Which of the following was the result in Eric Johnson & Lori Johnson v. St. Therese
Medical Center, the malpractice case in the text in which the plaintiffs sought to hold
individual partners liable under state law for a judgment obtained only against the
partnership?
A. That the plaintiffs could recover from all partners individually based on a judgment
against the partnership.
B. That the plaintiffs could recover from all partners individually because, while the
judgment was only against the partnership, all partners were sued individually and
served with a copy of the complaint.
C. That the plaintiffs could recover from all partners individually because, regardless of
whether all partners were served, the managing partner was sued and served with a
copy of the complaint.
D. That the plaintiffs could not recover from all partners individually because under
partnership law, partners are not individually liable for debts of the partnership.
E. That the plaintiffs could not recover from the individual partners because based on
the lack of suit and judgment against them, they lacked notice that they were to be held
individually liable.
The owner of a[n] ______ estate possesses the same interest as the owner of a fee
simple absolute, only this interest is subject to a condition.
A. Conditional
B. Life
C. Leasehold
D. Future interest
E. Absolute
Which of the following is a draft with respect to which the drawer and drawee are the
same bank or branches of the same bank?
A. Cashier’s check
B. Traveler’s check
C. Certified check
D. Check certificate
E. Approved draft
Which of the following are sent to shareholders prior to an annual meeting containing
proposals made by shareholders?
A. Meeting agenda
B. Proxy materials
C. Presidential materials
D. Officer materials
E. Meeting proposals
In the landlord-tenant relationship, the property in question is called the _____.
A. Premises
B. Leasehold estate
C. Occupied property
D. Occupied estate
E. Controlled area
If a firm offer is silent as to time, the UCC assumes ______.
A. A one-year irrevocability period
B. A six-month irrevocability period
C. A four-month irrevocability period
D. A three-month irrevocability period
E. A one-week irrevocability period
Which of the following describes goals of the Clean Water Act?
A. Technology-driven
B. Technology-forcing
C. Application-assuming
D. Invention-dependant
E. Technology-dependant
“Friends and Family.” Mindy was very close to her family and friends. She also liked to
spend and had a large amount of consumer debt for items such as jewelry, clothing, a
personal watercraft, and a new car. Mindy was having problems making her credit card
payments as they became due. She, however, wanted to make every effort to pay her
debts. She had borrowed money from her mother for some jewelry and repaid that loan
on January 1st. She repaid a loan to her business partner on May 15th of the same year.
On September 1st of that year, she also repaid a loan to Friendly Jewelry Store because
she wanted to remain on good terms with the manager. Unfortunately, Mindy was
simply unable to continue making payments and on November 1st of that year, she filed
a voluntary petition for bankruptcy relief under Chapter 7.
Assuming the business partner received more than would have been received through
bankruptcy proceedings, which of the following is the most likely result of a claim of
preferential payment based on the payment to the business partner?
A. The payment was not preferential because it was made over 90 days before the filing
of the bankruptcy petition.
B. The payment was not preferential because it was made over 120 days before the
filing of the bankruptcy petition.
C. The payment was not preferential because it was made over 180 days before the
filing of the bankruptcy petition.
D. The payment was preferential because it was made to a business partner and made
within two years of the filing of the bankruptcy petition unless Mindy can establish that
she was not insolvent when the payment was made.
E. The payment was preferential on the basis that it was made to a business partner
within two years of the filing of the bankruptcy petition only if the trustee is able to
demonstrate that Mindy was insolvent when she made the payment.
“Revenge.” Jane, a first year law student, while walking to school in inclement weather,
accidentally slipped on ice knocking down Greg, another first year law student,
breaking his glasses. He was very angry with Jane and let the air out of one of her car
tires. Greg also decided to sue Jane for negligence claiming as damages $300 for his
broken glasses. He decided that he already knew all about the law and did not need a
lawyer. Greg sued Jane in state court. Jane, in the same lawsuit, brought an action
against Greg for letting the air out of her tire. At the trial in state court, Jane told the
judge that a friend, Susie, told her that she saw Greg let the air out of Jane’s tire. The
judge disallowed Jane’s testimony on that issue. Susie, however, who was in the
courtroom also came and testified to that effect. The state court judge ruled in favor of
Jane. Greg said that he was not giving up and that he would seek double damages on
appeal in federal court. Jane and Greg live in different states when not attending school.
After the trial, Jane reported Greg’s action of letting the air out of her tire to the police
who said that they would proceed with a criminal action against Greg. Greg goes to see
Alex, a recent graduate who had just passed the bar, and asked Alex to represent him in
a federal court appeal.
Jane’s action against Greg for the tire is called a ______.
A. Counterclaim
B. Cross-Claim
C. Third-party claim
D. Discovery claim
E. Service claim
“Blow up.” Jeanie is hauling gas in the back of her pick-up truck for her personal
watercraft. She is planning a lake party and thinks she will need a lot of it. On the way
home, Jeanie stops at the automatic teller machine at her bank and exits her car. Holly
pulls behind her and negligently rear-ends Jeanie’s pick-up. The truck explodes and
results in the bank building burning to the ground. The bank sues Holly for negligence
claiming that Holly should have to pay for the entire bank building. The bank claimed
that it should be able to recover under the res ipsa loquitur doctrine.
Which of the following is most likely true regarding whether Holly is the proximate
cause of the bank burning?
A. Holly is not the proximate cause of the bank burning because it was not foreseeable
that Jeanie would have gas in the back of her pick-up truck that would result in such a
fire.
B. Holly is not the proximate case of the accident because her actions were not the
cause in fact of the accident.
C. Holly’s actions were not the proximate cause of the accident because actual causation
cannot be established since it was foreseeable that gas can result in a fire.
D. Holly’s actions were the proximate cause of the bank’s burning because actual cause
is present.
E. Holly’s actions were the proximate cause of the bank’s burning because cause in fact
can be established.
Billy, a witness to a motor vehicle accident, is gravely ill with cancer. Pat, who was
injured in the accident, would like to preserve his testimony for trial in case he dies
before the trial date. What should Pat do?
A. Send interrogatories to Billy.
B. Take Billy’s deposition.
C. Send a request to admit to Billy that the accident was the defendant’s fault.
D. Have a conference with the judge and Billy.
E. There is nothing she can do.
Which of the following is true regarding whether an agent’s signature may satisfy the
requirement of negotiability that the signature of a maker or drawer appear?
A. A duly authorized agent’s signature on behalf of his or her principal binds the
principal and satisfies the signature requirement for negotiability.
B. An agent’s signature on behalf of his or her principal cannot bind the principal and
does not satisfy the signature requirement for negotiability.
C. An agent’s signature on behalf of his or her principal binds the principal and satisfies
the signature requirement for negotiability only if specific authorization from the
principal allowing the agent to act on the specific transaction at issue is attached to the
document.
D. A duly authorized agent’s signature on behalf of his or her principal binds the
principal and satisfies the signature requirement for negotiability only if the instrument
is for an amount over $1,000.
E. A duly authorized agent’s signature on behalf of his or her principal binds the
principal and satisfies the signature requirement for negotiability only if the instrument
is in an amount of $1,000 or less.
Which of the following is a defense used by a defendant to demonstrate that his alleged
negligent behavior was reasonable, given the available scientific knowledge existing at
the time the product was sold or produced?
A. Assumption of the risk.
B. Scientific knowledge doctrine.
C. State-of-the-art defense.
D. Reasonable behavior defense.
E. Reasonable manufacturer defense.
Which of the following is false regarding types of collateral?
A. Collateral may include farm products.
B. Collateral may include goods such as equipment.
C. Collateral may include indispensable paper such as documents of title.
D. Collateral may include intangibles such as chattel paper.
E. Collateral may include proceeds.
“Death.” Barbara is president and a large shareholder in Reuse It, a corporation that
sells used cellular telephones. Although the company was not insolvent, sales had been
significantly down, and Barbara decided that it would be a good idea to discontinue the
business. The board of directors agreed with her. The board members presented the
proposal to discontinue the corporation to shareholders. Initially, Willy, a disgruntled
shareholder, opposed ending the corporation. He claimed that the problem was that
Barbara had done a poor job in management. Barbara planned to go forward with the
termination of the company because a majority of the shareholders agreed. Willy,
however, came around; and upon a second vote to discontinue the corporation, the vote
was unanimous. Quill, a vice president of the corporation, was aware of a few
outstanding debts owed by Reuse It. He suggested hurrying along quietly with ending
the corporation because any claims not made before the corporation was dissolved
could be avoided. Barbara told him that she was not sure that was a good idea.
Therefore, the company proceeded with all appropriate notifications. When the time
came to liquidate the corporation, the members of the board did not want to participate.
Barbara was concerned about what action to take at that point because she really
wanted to be finished with Reuse It.
Which of the following should occur in the face of the board not wishing to be involved
in liquidation proceedings?
A. A court should appoint a bankruptcy trustee to handle liquidation.
B. A court should appoint a receiver not affiliated with the corporation to take over
liquidation duties.
C. Barbara, as president, is required to take over liquidation duties.
D. The court should enter an injunction requiring all the directors to proceed with
liquidation regardless of whether they want to do so.
E. The court should enter an injunction requiring that at least half of the directors
proceed with liquidation regardless of whether they want to do so.
Which of the following was the result on appeal in Thelma Agnes Smith v. David
Phillip Riley, the case in the text in which the plaintiff who had lived with the defendant
out of wedlock for several years sought after they broke up to enforce two agreements
regarding the sale and assignment of property to her?
A. The court ruled in favor of the defendant on the basis that a recitation of nominal
consideration of $1 along with love and affection was insufficient consideration to
support a conveyance.
B. The court ruled in favor of the plaintiff on the basis that a recitation of nominal
consideration of $1 along with consideration of love and affection was adequate
consideration to support the agreements.
C. The court ruled in favor of the defendant on the basis that the plaintiff’s previous
deposit of funds into a joint checking account was insufficient consideration for the
later agreements.
D. The court ruled in favor of the plaintiff on the basis that the plaintiff’s previous
deposit of funds into a joint checking account was sufficient consideration for the later
agreements.
E. The court ordered the parties to divide on a 50/50 basis the assets in question based
on their domestic partnership.
In a merger situation, which of the following is a term for the remaining corporation?
A. The resulting corporation
B. The winning corporation
C. The approved corporation
D. The surviving corporation
E. The remaining corporation
“Prenuptial Agreement.” Rhonda performed accounting services for Greg’s used car
business. She had a contract with Greg to the effect that she would audit his books and
financial statements for his own use, not for the purpose of obtaining loans. In auditing
Greg’s business, she developed various notes, calculations, memorandums, and other
papers. Candace, Greg’s fiancé, approached Rhonda to inquire about Greg’s business.
Candace and Rhonda had been friends for many years. Rhonda allowed Candace to
look at the various notes, calculations, and other papers resulting from her review of
Greg’s financial statements and other records. Candace told Rhonda that she really
needed to investigate Greg because they were thinking of getting married, and she
believed he had a legal obligation to disclose the information to her because of
negotiations involving a prenuptial agreement. Rhonda agreed and proceeded to discuss
Greg’s finances with Candace revealing all the information that Greg had disclosed to
her. Candace broke up with Greg telling him that after what she discovered from
Rhonda, she was concerned that Greg could not support her in the way in which she
wanted to become accustomed. Greg was very angry with Rhonda and told her that she
was unethical and had violated the accountant-client privilege.
What is Rhonda’s contract with Greg to do audit work for him called?
A. Absolute contract
B. Engagement letter
C. Retention contract
D. Audit affirmation letter
E. Preview contract