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"Appellate Court." Jim, who is a bit eccentric, says that he is fed up with the way a
certain employer in his town treats employees and that he is going to sue on behalf of
all those employees. Jim also says that he is going to start his case at the appellate court
level, skipping over all those "lesser" judges. Jim says that those justices will surely
hear him out and that he will also seek a jury.
Regardless of what court is involved, can Jim act as plaintiff for the employees?
A. Yes, so long as he gets permission slips from all of them.
B. Yes, so long as no employee files an objection.
C. Yes, so long as he gives any money he receives to them.
D. No, because he lacks standing.
E. No, because venue is lacking.
Which of the following is a federal law that sets minimum standards for most
voluntarily established pension and health plans in private industry to provide
protection for individuals in these plans?
A. The Employee Retirement Income Security Act
B. The Benefits Protection Act
C. The Family and Medical Leave Act
D. The Fair Labor Standards Act
E. Workers' compensation laws
Which of the following are minor offenses usually punishable by a jail sentence of less
than six months or a small fine with an example being violation of a building code?
A. Insignificant offenses.
B. Felonies.
C. Petty offenses.
D. Tort offenses.
E. Any business related crime.
"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.
Was the judge correct in disallowing Jane's testimony regarding what Susie told her
about the tire?
A. No, the judge was wrong and should have considered that testimony.
B. Yes, the judge was correct to disallow the testimony because it involved a possible
criminal action.
C. Yes, the judge was correct to disallow the testimony because it was hearsay.
D. Yes, the judge was correct to disallow the testimony but only because Susie was in
the courtroom and could testify herself; otherwise, it should have been allowed.
E. Yes, the judge was correct to disallow the testimony but only because it purportedly
came from an admitted friend of the defendant, not an independent witness; otherwise,
it should have been allowed.
A buyer who has accepted goods may later revoke the acceptance if the buyer can show
that the defects _____ the value of the goods.
A. Reduced in any manner
B. Reduced by 10%
C. Reduced by 5%
D. Substantially impaired
E. Violated the perfect tender rule
Which of the following is false regarding how the Japanese tend to view contracts?
A. The Japanese tend to view contracts as ongoing relationships.
B. The Japanese tend to view contracts as relationships in which parties work with each
other to smooth out any problems that arise in performance.
C. The Japanese tend to be suspicious of long, detailed contracts.
D. The Japanese have a preference for flexible contracts.
E. The Japanese do not desire that any terms be left to be decided later.
"Horse Tracks." Martha, Greg, and Prudence decided to form a corporation called
Horse Tracks to raise horses. They all began the corporate creation process by arranging
for necessary capital and financing. They raised capital from their friends by making
deals whereby their friends would purchase stock in the new corporation. After the
corporation was formed, a problem arose with a contract for feed that Martha, Greg,
and Prudence had entered into while organizing the corporation. Belinda, the seller of
the feed claimed that she had not been fully paid and threatened to sue the corporation.
The contract Martha, Greg, and Prudence had with Belinda did not reference liability
after the new corporation came into legal existence. Martha, Greg, and Prudence asked
for a novation, but were uncertain as to whether that would occur.
Which of the following is the most likely result if Belinda sues Martha, Greg, and
Prudence for unpaid amounts without a novation in place?
A. Belinda would likely win because courts generally hold promoters liable and rule
that preincorporation contracts do not bind the new corporation.
B. Belinda would likely win unless it can be established that the new corporation is
making a profit and is able to pay her.
C. Belinda would likely win unless it can be established that the new corporation was
capitalized with at least $100,000 and is able to pay her.
D. Martha, Greg, and Prudence will win so long as they can prove that Belinda knew
that the feed was purchased for a new corporation and not for their personal farm use.
E. Martha, Greg, and Prudence will win unless they have already paid partial amounts
leading Belinda to expect that they, not the corporation, had accepted liability.
Which of the following is false regarding a nonprofit corporation?
A. Nonprofit corporations provide services to their members.
B. Nonprofit corporations do not have shareholders.
C. A nonprofit corporation may not earn profits.
D. Nonprofit corporations do not issue stock.
E. Churches and charitable organizations are examples of nonprofit corporations.
Which of the following is not an example of a restrictive endorsement?
A. The endorsement for deposit or collection only.
B. The endorsement to prohibit further endorsement.
C. The conditional endorsement.
D. The trust endorsement.
E. The endorsement specifying without recourse.
"Adult Floaters." Bruce and Jimmy are both involved in businesses that manufacture
bathing suits for ladies with small personal flotation devices implanted to assist with
swimming. They both ship the suits to different states around the country. Bruce and
Jimmy get together and decide to raise their prices. They decide that since they are the
only two manufacturers of this type of suit, if they both stick together and raise prices to
an agreed upon amount, then consumers will be forced to pay that amount. They want
to make a lot of money before anyone else jumps into the market. A disgruntled
secretary of Bruce finds out about the agreement and sends out letters to consumers
revealing it.
In attempting to establish a violation of the Sherman Act, which of the following would
be the offense the government would most likely allege?
A. Price gouging
B. Price raising
C. Charge arrangement
D. Price fixing
E. Consumer misappropriation
"The Burial Emporium." Fred operates a funeral home called Fred's Burial Emporium.
Fred likes to keep things simple. He generally has one flat price with no itemization and
requires that customers purchase a complete package from him if they want any
services whatsoever. Fred also goes door-to-door selling funeral packages. He tries to
visit neighborhoods in which there has been a recent death because residents in the
neighborhood will have final arrangements on their minds. He believes and informs
customers that once customers sign a contract for burial services, there is no backing
out. Fred also obtains a good deal of business from phone solicitation. He enjoys calling
late at night, between 10 p.m. and 11 p.m., when people are tired, but before they go to
bed. He believes that if people do not feel well, they are more likely to consider funeral
arrangements. Sometimes, Fred varies his sales tactic and tells consumers he talks to on
the phone aspects of the total cost in small increments, not mentioning the total price,
believing that if they are tired, they are less likely to ask too many questions. After
some pesky consumer complaints, the Federal Trade Commission and other federal
agencies investigate Fred. He hires a good lawyer with his profits in an attempt to stay
out of trouble.
Which of the following is true regarding Fred's tactic of offering one flat price for
funeral services with no itemization?
A. Federal law does not prohibit that practice.
B. That practice is prohibited under federal law in funeral home situations.
C. That practice is prohibited under federal law in all situations involving a mix of
goods and services.
D. That practice is prohibited under federal law in all situations involving a mix of
goods and services costing $5,000 or more.
E. That practice is prohibited by federal law unless consumers receive a 10% discount
as compared to the average price of funeral services in his state.
"Cheap Principal." Jason, who is very knowledgeable regarding computers, agrees to
purchase computers for Nick's business. Jason is retained for that purpose only, he is
paid a set rate for the job, and Nick exercised no control over the manner in which
Jason did his work. Jason purchased computers from ABC Computers without any
mention of Nick. The computers worked well and were not defective in any way.
Unfortunately, Nick did not pay ABC Computers on a timely basis. Jason, therefore,
paid ABC Computers out of his own pocket because he wanted to be able to do
business with ABC Computers in the future and also because his name was on the
invoice. Jason asked Nick for reimbursement, but Nick refused. Nick claimed that if
Jason had only waited, ABC Computers might have agreed to take less.
Which of the following is true regarding any right of reimbursement Jason is due from
Nick?
A. Jason is not due any reimbursement because he did not get permission from Nick
before paying ABC Computers.
B. Jason is only due 50% of whatever he paid because he did not get permission from
Nick before paying ABC Computers.
C. Jason is not due any reimbursement from Nick unless he can establish that Nick
signed a written contract authorizing him to personally pay debts incurred.
D. Jason is not due any reimbursement from Nick unless Jason can establish by a
preponderance of the evidence that ABC Computers would not have agreed to take a
lesser amount.
E. Jason is entitled to reimbursement from Nick.
How many states have failed to adopt any portions of the UCC?
A. 18
B. 7
C. 5
D. 4
E. 0
Which of the following is true regarding circumstances under which an employer is
required to offer an employee the option to continue medical benefits under COBRA?
A. An employee does not have the option to continue medical benefits under COBRA if
the employee is fired for gross misconduct, the employer decides to eliminate benefits
for all current employees, or the employee quits without notice.
B. The only circumstance under which an employee does not have the option to
continue medical benefits under COBRA occurs when the employer decides to
eliminate benefits for all current employees.
C. The only circumstance under which an employee does not have the option to
continue medical benefits under COBRA occurs when the employee is fired for gross
misconduct.
D. The two circumstances under which an employee does not have the option to
continue medical benefits under COBRA occur when the employee is fired for gross
misconduct and when the employer decides to eliminate benefits for all current
employees.
E. An employee does not have the option to continue medical benefits under COBRA if
the employee is fired for gross misconduct, the employer decides to eliminate benefits
for all current employees, or the employee is fired for cause.
Which of the following is true regarding the result in the case in the text Thrifty
Rent-A-Car System v. South Florida Transport, in which the plaintiffs sued the
defendant, the operator of a Thrifty franchise, for amounts owed, but the defendant
resisted payment on the basis that several hurricanes rendered the business operations
commercially impractical?
A. The court ruled that the bad weather completely excused the defendant's
performance.
B. The court ruled that the parties had to jointly bear the burden of bad weather and that
50% of what the defendant owed would be excused.
C. The court ruled that the defendant was legally entitled to additional time in which to
pay, but that the defendant would be required to pay all amounts owed.
D. The plaintiffs were entitled to recover because the defendant failed to anticipatorily
repudiate the contract.
E. The plaintiffs were entitled to recover for reasons including that the nonoccurrence
of hurricanes was not a basic assumption of the agreement.
"Past Due Rent." Christen operated a temporary help business. Planning to open a
second office, she rented office space from Dusty. Unfortunately, her business was not
doing very well, and she decided not to open a second office. Christen was able to reach
an agreement with Doug whereby she transferred her entire interest in the leased
property to him. The agreement she had with Dusty prohibited her from transferring her
interest. Dusty, however, accepted rent payments from Doug because it was the easiest
course of action. Doug started a catering business in the space. It did well during the
holiday season, but Doug was unable to maintain bookings and became unable to pay
the rent. Dusty called Christen and asked her to pay the rental payments reminding her
that she breached the lease agreement in the first place when she transferred her
interests in the lease to Doug. Christen told Dusty to forget any payments from her and
hung up. Dusty wants to sue Christen for the lease payments and also for breaching the
lease agreement, and he also wants to sue Doug. Christen talks to Doug and he says that
he has no plans to pay Dusty because Dusty is a jerk. Doug also says that he does not
believe that he has any liability to Christen if she pays Dusty. Doug says that the
premises were acceptable but that Dusty is rude and money hungry, traits he finds
untenable.
If Christen pays Dusty, does she have any rights to receive reimbursement from Doug?
A. No, because she has no legal liability and is acting as a volunteer.
B. No, because only Christen is liable on the assignment.
C. Yes, but she would only be entitled to recover one half of the amounts because she
and Doug are jointly liable to Dusty.
D. Only if Doug specifically agreed by contract when he accepted the premises to
reimburse her.
E. Yes, Christen would have a right of reimbursement from Doug.
Which of the following does the UCC define as, "honesty in fact and the observance of
reasonable commercial standards for fair dealing?"
A. Commercial standards.
B. Subjective reasonableness.
C. Objective reasonableness.
D. Good faith.
E. Reasonable investigation.
Which of the following is true regarding negligence under South African Law?
A. South Africa's legal system is a combination of selected legal traditions involving
Roman, Dutch, and French law, but not German law.
B. Under South African law, individuals can be found negligent in only one way,
through failing to exercise reasonable care.
C. South African law models the law of the U.S. and is substantially the same.
D. South African law refuses to recognize sudden emergency as a standard for
determining negligence in crisis situations.
E. South African law recognizes that one way to determine negligence is by
determining whether the defendant could have prevented the consequent damages.
Which of the following is the misappropriation of trust funds or money held in a
fiduciary capacity?
A. False entries
B. Defalcation
C. False pretenses
D. Ponzi scheme
E. Pretexting
"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.Molly's reference to precedent involves which of the following?
A. Statutory law that governs civil actions unless revoked by new common law
B. Common law that is law unless revoked by new statutory law
C. Administrative law that is law unless revoked by new common law
D. Executive decisions that are law unless revoked by new administrative law
E. Administrative law that is law unless revoked by new executive decisions
Which of the following is a type of property that can be touched?
A. Tangible
B. Manifest
C. Substantive
D. Discernible
E. Physical
A[n] ______ is a written federal court order signed by a bankruptcy judge stating that
the debtor is immune from creditor actions to collect debts.
A. Discharge
B. Release
C. Grant of immunity
D. Relinquishment
E. Abandonment
The state of New York does not grant a donee beneficiary the right to enforce a contract
unless the promisee is connected to the donee through a ______ relationship.
A. Valid
B. Recognized
C. Substantial
D. Familial
E. Marital
If the subject matter of an offer becomes illegal, what is the result?
A. The offer immediately terminates.
B. There is no effect as long as the offer was made at least one day before the subject
matter of the offer became illegal.
C. There is no effect as long as the offer was made at least ten days before the subject
matter of the offer became illegal.
D. There is no effect as long as the offer was made at least fifteen days before the
subject matter of the offer became illegal.
E. There is no effect as long as the offer was made at least thirty days before the subject
matter of the offer became illegal.
Which of the following is required by federal law regarding vacation after an employee
has worked for an employer for at least one year?
A. That an employee be given three days of vacation.
B. That an employee be given seven days of vacation.
C. That an employee be given five days of vacation.
D. That an employee be given ten days of vacation.
E. Nothing.
Which of the following was the result in Landshire Food Service Inc., v. Coghill, the
case in the text in which the defendant, Coghill, sold his Rolls Royce to Bellman in
return for a forged cashier's check and an innocent purchaser for value, Hyken,
meanwhile purchased the car from Bellman before the fraud was discovered?
A. Coghill was entitled to return of the vehicle because the contract with Bellman was
void.
B. Coghill was entitled to return of the vehicle because the contract with Bellman was
voidable by Coghill.
C. Hyken was entitled to the vehicle because a person who procures title through fraud
receives voidable title and is able to transfer good title to a bona fide purchaser.
D. Hyken was entitled to the vehicle because although a person who procures title
through fraud receives a void title, the person guilty of fraud may transfer good title to a
bona fide purchaser.
E. The car was ordered sold with Coghill and Hyken to split the proceeds.
A person who holds a lien is called a[n] ____.
A. Charger
B. Consenting agent
C. Lienholder
D. Agreement holder
E. Property acknowledgement holder
A[n] ______ beneficiary is a third party to a contract who is intended to be benefited
directly from the contract made by the contracting parties.
A. Intended
B. Incidental
C. Preferred
D. Collateral
E. Ancillary
Which of the following refers to an employer's right, if any, to recover from an
employee damages the employer paid a third party as a result of the employee's
negligence?
A. The right of recompense
B. The right of reimbursement
C. The entitlement to equity
D. The right of indemnification
E. There is no such right
What did the appellate court rule in the case in the text, Power Entertainment Inc., v.
Football League Properties Inc., involving the enforceability of an alleged oral
agreement by which the plaintiff assumed a third party's debt owed to the defendant in
return for the defendant transferring a licensing agreement to the plaintiff?
A. That the plaintiff was barred from recovery by the suretyship provision of the statute
of frauds.
B. That the plaintiff could recover because the original agreement between the third
party and the defendant was in writing.
C. That the oral agreement fell outside the statute of frauds if the plaintiff satisfied the
main purpose doctrine.
D. That the oral agreement fell outside the statute of frauds if the plaintiff satisfied the
parol evidence rule.
E. That the plaintiff could recover as a matter of law because the statute of frauds does
not apply to suretyship agreements.
