LWB 49792 | Course Paper

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Disappointed Applicant. Polly, who had a regular driver’s license to operate an

automobile, decided that she really wanted to drive a tractor-trailer truck. She thought

that it would be nice to earn money while seeing the country. Polly had all applicable

training and went to her state’s department of motor vehicle office to take the test

required in order to obtain a license to drive a tractor-trailer truck. While taking the test,

in an effort to relieve stress, Polly was stretching her neck and looking around at the

other nervous test takers. The proctor for the exam saw her and accused her of

stretching and straining to look at the exam answers of other test takers. Her application

to drive a tractor-trailer was denied. The local agency department head was also furious

with Polly and proceeded to revoke her regular automobile driver’s license as well.

Applicable statutes provide as follows: (1) “the DMV may suspend or revoke the

privilege of any person to operate a motor vehicle upon any of the grounds which

authorize the refusal to issue a license”; (2) “the DMV may refuse to issue a license to

any person who has “committed any fraud in any application.” Polly hears that you

have just finished business law and asks for advice. She says that she had decided that

she does not really want to drive a tractor-trailer truck because of her neck problems but

that she really would like to have her license to operate a regular automobile reinstated.

What should Polly do next assuming her state’s administrative scheme is the same as

the federal scheme?

A. She should appeal within the agency and later to court if she cannot receive a

favorable agency determination.

B. She should immediately appeal to court bypassing any other agency proceedings.

C. She should appeal within the agency, but no later court proceedings would be

possible.

D. She should file a writ to negate any results in connection with the first test because

by law applicants are entitled to retake a licensure test at least once.

E. At the moment, there is nothing else that Polly can do to obtain reinstatement of her

license; and she can only ask the agency for reconsideration of her position at a later

date.

Which of the following types of securities represent loans to a corporation?

A. Debt

B. Equity

C. Finance

D. Formal

E. Certified

New Furniture. Penny purchased $3,000 worth of furniture from Bob’s furniture shop.

Through an arrangement with Bob, Penny financed the purchase through a financing

company called Let Us Help You. Twenty-nine days after the goods were delivered to

her, Penny had a disagreement with Let Us Help You regarding the amount of interest

she would be required to pay. She notified Bob on that day that she was rejecting the

goods. Bob claimed that she did not properly reject the furniture and also that she acted

in bad faith. Penny says that she properly rejected and denies that she acted in bad faith.

She also says that, in any event, she cannot be charged with both wrongful rejection and

also bad faith because of double jeopardy. Which of the following is the correct analysis

of Penny’s claim that she cannot be charged with both a wrongful rejection and bad

faith because of the double jeopardy bar?

A. Penny is correct.

B. Penny is correct that she cannot be charged with both a wrongful rejection and bad

faith; but the UCC requires that conclusion, not the double jeopardy bar.

C. Penny is correct that she cannot be charged with both a wrongful rejection and bad

faith; but the common law requires that conclusion, not the double jeopardy bar.

D. Penny is correct that she cannot be charged with both a wrongful rejection and bad

faith; but federal statutory law requires that conclusion, not the double jeopardy bar.

E. Penny is incorrect. She can be charged with both a wrongful rejection and also bad

faith.

When is an arbitrator’s decision called an “award”?

A. Always

B. Only if one party completely wins and there is no split decision

C. Never

D. Only if a money award is involved

E. Only if both parties had lawyers. That terminology makes it easier for the lawyers to

be paid

Which of the following is an agreement by which the debtor agrees to pay a debt even

though it could be discharged?

A. A settlement

B. A reaffirmation agreement

C. An acknowledgement agreement

D. An accord and compromise

E. An affirmance

A(n) _________________ takes over administration of the debtor’s estate.

A. administrator

B. aligner

C. organizer

D. reformer

E. trustee

Which of the following is a federal executive agency?

A. The Federal Deposit Insurance Corporation

B. The Equal Employment Opportunity Commission

C. The Nuclear Regulatory Commission

D. The Federal Deposit Insurance Corporation, the Equal Employment Opportunity

Commission, and the Nuclear Regulatory Commission

E. The Federal Deposit Insurance Corporation and the Equal Employment Opportunity

Commission, but not the Nuclear Regulatory Commission

Hair Stylist Woes. Maryann went to see her hair stylist, Candy. Maryann, who had

black, curly hair, requested straight, blond hair. Candy told her that she could make that

change, but there would be significant upkeep involved. Candy made the change, but

Maryann did not do the upkeep required. She also falsely claimed that Candy did not do

what Maryann asked her to do, that Candy lied to her, and that Candy was

professionally incompetent. Maryann made the statements to friends of hers. She also

wrote an editorial in her college newspaper to the effect that Candy’s shop should be

avoided at all costs because Candy was incompetent. In fact, Candy was a good hair

stylist and enjoyed a good reputation up until the time that Maryann started her

criticism. Candy threatened to sue Maryann for defamation, but Maryann told Candy

that Candy could not prevail because Candy could not prove loss of income. Candy had

to admit that while her reputation had been damaged somewhat, the damage was

primarily among the college population. Her income kept increasing from other

segments of the community, and she had suffered no net loss. As far as the statements

made to her friends are concerned, which of the following is true in regards to

Maryann’s statement that Candy cannot recover because Candy has not suffered a loss

of income?

A. Maryann is correct.

B. Maryann is correct only if she can show that she did not intend to cause Candy to

loss income.

C. Maryann is incorrect because her statements constituted slander per se.

D. Maryann is incorrect because general damages will not be presumed.

E. Maryann is incorrect but only because Candy cannot establish liable per se.

Which of the following occurs when a minor’s parents or legal guardians give up their

right to exercise legal control over the minor, typically when the minor moves out of the

parents’ house and begins supporting him or herself?

A. Ratification

B. Disaffirmance

C. Emancipation

D. Legal release

E. Reaffirmance

Which of the following is false regarding contracts for necessaries entered into by

minors?

A. A minor cannot disaffirm contracts for necessaries.

B. A minor can disaffirm a contract for necessaries, but the minor will still be held

liable for the reasonable value of the necessary.

C. A contract for a necessary is a contract that supplies the minor with the basic

necessities of life.

D. The purpose of the limitation on the minor’s right to disaffirm contracts for

necessaries is to ensure that minors are able to obtain the basic necessities of life when

their parents will not provide them.

E. Whether something is considered a necessary, is related to whether the minor’s

parents are willing to provide the item in question for the minor.

Which of the following are written questions that one party sends to another to answer

under oath?

A. Interrogatories

B. Depositions

C. Inquiries

D. Subpoenas

E. Sworn assertions

Which of the following is included in the Central Hudson test for commercial speech?

A. The principle that speech that is misleading is not protected by the First Amendment.

B. The principle that the government must show that a substantial governmental interest

is served by a restriction on commercial speech.

C. The principle that any restriction on commercial speech must not be more extensive

than necessary.

D. The principle that speech that is misleading is not protected by the First Amendment;

the principle that the government must show that a substantial governmental interest is

served by a restriction on commercial speech; and the principle that any restriction on

commercial speech must not be more extensive than necessary.

E. None of these.

_____ are responsible for managing the business of a corporation.

A. Investors

B. Shareholders

C. Officers

D. Administrators

E. Members of the board of directors

Accidental Sale. ABC Motors ordinarily deals in used cars and also does some amount

of repair work. Robby entrusted his automobile to ABC Motors to have the oil changed

and get new brakes. The car was parked in the lot along with other cars, some of which

were for sale. The manager of ABC Motors accidentally sold the car to Connie because

she saw it and took it upon herself to offer a good price. The manager was attempting to

increase the shop’s profit margin. Connie had no idea that the car did not belong to ABC

Motors. When Robby went to pick up the car, he was very upset that it was gone. The

manager told Robby that he was very sorry, but that he was not negligent and only

made an honest mistake. According to the manager, Robby accepted the risk of this type

of loss; and his only recourse was against Connie. Which of the following is a proper

identifying term for Connie?

A. A good-faith purchaser

B. A valid purchaser

C. A void purchaser

D. A voidable purchaser

E. An interested purchaser for value

Dream Home. Maurice finds a dream home on the lake. He wants to buy it but is unsure

whether he can get a loan. He signs a contract with the seller that he will buy the home

if he can get a loan. Maurice also includes a contractual clause into the contract with the

seller that if the purchase goes through but he loses his job within one year, the seller

will repurchase the house for the same price Maurice paid for it. After getting a loan

and buying the home, Maurice decided that he wanted new windows put into the home.

He entered into a contract with a window contractor. The window contractor visited the

home, but Maurice was always gone. The contractor made several attempts to reach

Maurice, but Maurice would not return phone calls and made no attempt to assist the

contractor with installation. The responsibility of Maurice to make arrangements to give

the window installer access to the home is referred to as which of the following?

A. A condition subsequent

B. A condition precedent

C. An implied condition

D. An express condition

E. Both a condition precedent and an express condition

The UCC requires that sellers and lessors tender ______ goods to the buyer or lessee.

A. adequate

B. transforming

C. conforming

D. reasonable

E. superior

When a principal is classified as a(n) ______ principal, a third party is aware that an

agent is making an agreement on behalf of a principal and the third party also knows

the identity of the principal.

A. acknowledged

B. permitted

C. disclosed

D. revealed

E. uncovered

When may a court rule that parol evidence may be admissible to further the court’s

understanding of an agreement?

A. When a court determines that a written agreement represents a complete and final

version of the agreement.

B. When a court determines that a written agreement does not represent a complete and

final version of the agreement.

C. When a court determines that there is disagreement between the parties over

performance of the agreement.

D. When a court determines that the plaintiff failed to do sufficient research to

determine if signing the agreement was advisable.

E. When a court determines that either party failed to obtain counsel to determine if

signing the agreement was advisable.

In which of the following orders of ascending strength may trademarks fall?

A. Generic, suggestive, descriptive, arbitrary, or fanciful

B. Descriptive, generic, suggestive, arbitrary, or fanciful

C. Arbitrary or fanciful, generic, descriptive, suggestive

D. Generic, descriptive, suggestive, arbitrary, or fanciful

E. Suggestive, generic, descriptive, arbitrary, or fanciful

Pet Pig Farm. Marcy wanted to buy Lucy’s land and use it to breed small pigs to be kept

as pets. Marcy told Lucy that having water on the property was very important. Lucy

assured her that a spring ran through one corner of the property. Therefore, Marcy

agreed to buy the farm. Although she did not ask Lucy anything about it, Marcy, who

loved pigs, assumed that the neighbors would be pleased with the pigs being in the area.

In a separate contract, Lucy also agreed to sell Marcy a used truck for $5,000. After the

contract for the land sale was entered into, it was discovered that actually the spring did

not run through the corner of Lucy’s property. The area in which the spring ran actually

belonged to a neighbor. Additionally, when Lucy brought Marcy the used truck, Marcy

said, “That’s not the truck!” It was discovered that Lucy, who had two trucks, thought

that Marcy had bought the older truck when Marcy thought she had purchased the

newer truck. Marcy was also surprised when she received a petition signed by all

surrounding landowners objecting to the presence of the pigs and threatening to sue

Marcy for nuisance. Which of the following is the most likely result in the dispute

between Marcy and Lucy regarding which used truck was sold assuming that both

Marcy and Lucy were each innocently mistaken and did not intend to defraud the other?

A. The contract will be rescinded.

B. Marcy will be allowed to pick the truck she wants to buy because she is the buyer,

and she may also recover damages.

C. Lucy will be allowed to pick the truck she wants to sell because she is the seller.

D. Marcy will be allowed to pick the truck she wants to buy because she also had a

contract on the ancillary farm.

E. Marcy will be allowed to pick the truck she wants to buy because she is the buyer,

but she may not recover damages.

Private persons create ______ corporations for private purposes.

A. public

B. private

C. true

D. domestic

E. publicly held

What happens under the UCC, if a buyer of a consumer good subject to

purchase-money security interest later sells the good?

A. The security interest immediately terminates.

B. The security interest passes to the new buyer.

C. Regardless of whether the buyer is aware of the security interest, the security interest

terminates if the sale to the new buyer is made before the original secured party files a

financial statement.

D. As long as the buyer is not aware of the security interest, purchases the good for his

or her personal use, and purchases the good before the secured party files a financial

statement, the new buyer obtains the good free of the security interest.

E. As long as the buyer is not aware of the security interest, purchases the good for

resale, and purchases the good before the secured party files a financial statement, the

buyer obtains the good free of the security interest.

Blow-Up. Jeanie is hauling several containers of gasoline in her vehicle in preparation

for riding her personal watercraft. 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 car. The car 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 true regarding the bank’s claim that it

should be able to recover under the res ipsa loquitur doctrine?

A. The bank is correct because under that doctrine defendants are liable for any harm

caused.

B. The bank is correct only if Holly has sufficient insurance to cover the bank burning.

C. The bank is correct only if it can be established that Holly was a repeat driving

offender.

D. The bank is incorrect because the thing does not speak for itself.

E. The bank is incorrect because res ipsa loquitur is a defense.

What are the main functions of the Sarbanes-Oxley Act of 2002?

A. To issue a cease-and-desist order against violators of any federal securities law and

to seek civil money penalties against any violators.

B. To create rules to require that brokers and dealers provide information concerning

prices ad risks associated with the penny-stock market.

C. To permit the SEC to exempt persons, securities, and transactions from securities

regulations.

D. To increase corporate disclosure requirements and penalize violators more heavily.

E. To create the SEC.

The Family and Medical Leave Act guarantees all eligible employees up to ______

weeks of leave during any ______ month period.

A. 4; 24

B. 12; 24

C. 12; 12

D. 20; 12

E. 20; 24

In the case of multiple forgeries by the same wrongdoer, if a customer examines a bank

statement and does not notify the bank of the first forgery within the time required by

the UCC, what is the effect on subsequent forgeries assuming the bank is not negligent?

A. There is no effect because each forgery stands on its own.

B. The customer is barred from recovering on the subsequent forgeries.

C. The customer may recover on the subsequent forgeries if they are reported to the

bank within 5 days after the statement showing the customer receives the forgery.

D. The customer may recover on the subsequent forgeries if they are reported to the

bank within 10 days after the statement showing the customer receives the forgery.

E. The customer may recover on the subsequent forgeries if they are reported to the

bank within 15 days after the statement showing the customer receives the forgery.

Sally agrees to mow Paul’s yard for $300 for the summer. Paul wishes to assign the

contract to his grandmother. Sally objects because Paul’s yard is very small while the

grandmother’s yard is over an acre. Which of the following is the correct legal outcome

for the dispute between Sally and Paul?

A. Sally will win because Paul’s attempted assignment would increase the duties to

which she agreed.

B. Sally will win because all assignments are invalid without the obligor’s consent.

C. Sally will win unless Paul paid her the $300 in advance in which case Paul will win.

D. Paul will win because he may validly assign the contract without Sally’s consent.

E. Paul will win so long as he tells Sally about the assignment prior to the time she

begins any performance whatsoever.