Which of the following is true regarding the obligations of the parties if leased premises
are destroyed through a fire or other disaster not the fault of the landlord?
A. The lessee must continue paying rent until the premises are either rebuilt or the lease
expires; but the landlord has a duty to act with reasonable speed in rebuilding the
premises.
B. The tenant is released from paying rent and the lease is terminated; and unless the
landlord could have prevented the disaster, the landlord generally has no duty to restore
or repair.
C. The lessee must continue paying rent, and rebuilding the premises is the
responsibility of the tenant if the tenant wishes to do so.
D. The lessee is excused from further rent payments until the premises are rebuilt, and
the landlord has a duty to act with reasonable speed in rebuilding the premises.
E. The lessee must continue paying half the rent until the premises are either rebuilt or
the lease expires; but the landlord has a duty to act with reasonable speed in rebuilding
the premises.
“Saturday Auction.” Barry, an auctioneer, held an auction on a Saturday morning. At the
beginning of the auction, Barry announced that the auction was being held without
reserve. Helen, Mary, and Chris were all in attendance. Helen saw an old cash register
with a stuck drawer that she thought would look great in her den. The auctioneer put the
cash register up for sale noting that the drawer was stuck but that it could probably be
fixed with little effort. Helen bought it for $20. When she got it home, she discovered
that it actually contained $5,000. Unfortunately, Helen had a teenage son named Tad
who started bragging to his friends about the family’s good fortune. Barry heard about
what had happened and sued Helen for return of the $5,000. At the same auction, Mary
saw a great deal on a used table. She bid $20 on it. No one else bid anything. Barry
announced that $20 was clearly insufficient for the table, that it was worth much more
than that, and that he was taking it out of the auction. Chris started bidding on a
diamond ring for his girlfriend. He bid $2,000. Just as Barry was getting ready to say
“Sold,” Chris looked over at his girlfriend, decided that he was not sure about marriage,
and leaped up yelling “I revoke.” Barry, however, immediately after, yelled “Sold.”
Barry sues Chris attempting to obtain the money for the engagement ring. Barry also
sues Helen seeking to recover the $5,000 contained in the stuck drawer. Mary sues
Barry attempting to obtain possession of the table.
What is the likely result in the lawsuit brought by Mary against Barry for the table?
A. Barry will win because Mary was simply making an offer that he was free to decline.
B. Barry will win because the price was clearly insufficient for the table.
C. Barry will win because no acceptance occurred.
D. Mary will win because the auction was without reserve, and Barry had agreed to
accept the highest bid.
E. Barry will win because he did not inform attendees in writing that the auction was
without reserve.
What was the result in the Case Opener in which the prisoner was required to move to a
new cell and the guard did not lock the old cell as agreed resulting in the theft of some
items that had not yet been moved?
A. The court ruled that a prisoner has no rights in respect to a guard.
B. The court ruled that while a prisoner has some rights, a prisoner does not have the
right to expect a guard to safeguard belongings.
C. The court ruled that although no bailment existed, the guard had a duty to lock the
cell.
D. The court ruled that a bailment existed and that the guard had a duty to lock the cell
and to act with reasonable care as a bailee.
E. The court ruled that the guard had no duty to lock the cell because no witnesses
confirmed that the plaintiff prisoner informed the guard that his personal belongings
were in the cell.
Which of the following is the party ordered to pay on a draft?
A. The drawer.
B. The drawee.
C. The payee.
D. The draftor.
E. The draftee.
Which of the following is a claim to property in which the lienholder has the right to be
in possession of the property until the debt is paid?
A. Attorney’s lien
B. Common law lien
C. Consummate lien
D. Possessory lien
E. Denial lien
According to the text, which of the following are factors considered by courts in
determining whether an act committed by an employee occurred within the course and
scope of employment?
A. Whether the employer authorized the employee’s act.
B. Whether the employer provided the tools by which the act occurred.
C. Whether the employer knew that the act would involve the commission of a serious
crime.
D. Whether the employee had worked for the employer for a substantial amount of
time.
E. Whether the employee used force not expected by the employer.
Legislative acts passed by the U.S. Congress can be found in the ______.
A. United States Code
B. State codes
C. Uniform Register
D. State Reporter
E. State Reference Manual
Which of the following is the type of violation of Section 1 of the Sherman Act that is
involved when it is determined that business practices always hurt consumers?
A. Rule-of-reason
B. Per se
C. Quick-look
D. Consumer
E. Three-prong
A ______ scheme involves websites attracting users by having them click on ads that
appear to be, but are actually not, from well-known brands with the sites then installing
spyware or viruses on computers.
A. Click-and-install
B. Bait-and-switch
C. Bait-and-click
D. Deceptive-click
E. Click-to-deceit
What was the result in the Case Opener in which an employee of Hooters complaining
of sexual harassment attempted to avoid a signed arbitration agreement?
A. The court fully enforced the arbitration agreement as it was written.
B. The court required that Hooters rewrite the arbitration agreement, and it was then
enforced.
C. The court itself rewrote the arbitration agreement, and it was then enforced.
D. The court enforced the arbitration agreement in part, but required, contrary to the
agreement, that Hooters provide the employee the specifics of its defenses at least 5
days before the commencement of the arbitration.
E. The arbitration agreement was not enforced by the court.
A[n] _____________ contract is one that contains all the legal elements of a contract.
A. Voidable
B. Executed
C. Formal
D. Valid
E. Approved
Which of the following occurs when a target corporation offers to buy its shareholders’
stock?
A. A self-tender offer
B. A leveraged buyout
C. A cross-tender offer
D. A challenge-tender offer
E. An illegal tender offer
In which of the following does the franchise operate under the franchisor’s business
name and act subject to the franchisor’s standards and methods of business operation?
A. Distributorship
B. Manufacturing arrangement
C. Chain-style business operation
D. Approved business franchise
E. Acknowledged standards operation
“Scuba Diving.” Marcy invented a new type of mask that was not subject to fogging for
scuba divers and obtained a patent on it. She agrees to allow Jenny to manufacture and
sell the mask. She receives a sum of money for every mask that Jenny sells. Marcy also
entered into an agreement with Frank to allow him to sell the masks, but only if he also
purchased non-patented diving suits from Marcy. All parties proceeded to do very well
with their sales.
Which of the following describes the agreement between Marcy and Frank?
A. It is a legal tying arrangement.
B. It is a legal cross-licensing agreement.
C. It is an illegal tying arrangement.
D. It is an illegal cross-licensing agreement.
E. A legal contractual agreement.
Prudence purchased a new printer for her business from ABC Company. Three years to
the day after she purchased the printer, she started noticing problems with it. She
negotiated with ABC Company, but was unable to get a resolution to her problems. She
sued ABC Company four years and one day after she bought the printer. ABC Company
defended on the basis that it was only the seller, not the manufacturer, and also on the
basis of the statute of limitations. Assuming the printer is defective and the court
follows the reasoning of the case in the text Melissa Kahn v. Volkswagen of America
Inc., which of the following is true regarding the positions of the parties?
A. ABC Company will win because although Prudence sued within the statute of
limitations, in such situations Prudence must sue the manufacturer.
B. ABC Company will win because although Prudence correctly sued the seller,
Prudence filed suit outside the four year statute of limitations.
C. ABC Company will win because in such situations Prudence must sue the
manufacturer and also because Prudence filed suit outside the four year statute of
limitations.
D. Prudence will be allowed to proceed because she can hold ABC Company
responsible and because the statute of limitation was tolled during negotiations, she
sued on a timely basis.
E. Prudence will win because she can hold ABC Company responsible and because
there is no statute of limitations for business goods of this type.
Which of the following requires accountants to use adequate procedures so that they
can detect illegal acts committed by an audited company?
A. The Private Securities Litigation Reform Act
B. The Public Securities Auditing Reform Act
C. The Public Detection Act
D. The Accountant Crime Deterrence Act
E. The Fraud and Illegality Deterrence Act
Which of the following must the defendant prove in order to rely upon the defense of
contributory negligence?
A. Only that the plaintiff’s conduct fell below the standard of care needed to prevent
unreasonable risk of harm.
B. Only that a failure of the plaintiff was a contributing cause to the plaintiff’s injury.
C. Only that the plaintiff violated the last-clear-chance doctrine.
D. That the plaintiff’s conduct fell below the standard of care needed to prevent
unreasonable risk of harm and also that the plaintiff’s failure was a contributing cause to
the plaintiff’s injuries.
E. That the plaintiff’s conduct fell below the standard of care needed to prevent
unreasonable risk of harm; that the plaintiff’s failure was a contributing cause to the
plaintiff’s injuries; and also that the plaintiff failed to abide by the last-clear-chance
doctrine.
Which of the following treaties has attempted to find a way to limit the emissions of
greenhouse gases?
A. The Kyoto Agreement
B. The Treaty for Amazonian Cooperation
C. The Greenhouse Reduction Treaty
D. The Global Warming Agreement
E. The Global Protection Treaty
Which of the following is title that is acquired from someone who already owns the
goods free and clear?
A. True title
B. Voidable title
C. Good title
D. Examined title
E. Substantiated title
____ permits adjudication of any claims against a defendant regardless of whether the
claim has anything to do with the forum.
A. General personal jurisdiction
B. Specific person jurisdiction
C. Local personal jurisdiction
D. International personal jurisdiction
E. Domestic personal jurisdiction
Sue is three months behind on her mortgage, and her lender filed negative information
affecting her credit rating. Sue mailed one monthly payment to the lender along with a
letter providing that she was making the payment on condition that the lender removes
negative material sent to credit reporting agencies affecting her credit rating. The lender
cashed the check but did not remove the negative information. Sue sues the bank for
breach of contract. Which of the following is the most likely result?
A. The bank will win because under the preexisting duty rule, Sue was already legally
obligated to make the payment, and there was no consideration to support the contract.
B. The bank will win because under federal law, once correct negative information is
reported regarding a customer, it can be removed only if it is found to be untruthful.
C. The bank will win because under state law, once correct negative information is
reported regarding a customer, it can be removed only if it is found to be untruthful.
D. Sue will win because the bank’s cashing the check constituted acceptance of her
offer, and a valid contract existed.
E. Sue will win because the bank had an obligation to notify her that it was not
accepting her offer before cashing the check.
When parties are merchants, UCC requires ______ in addition to honesty in fact.
A. honesty in equity
B. honesty in law
C. reasonable commercial standards of fair dealing
D. honesty in equity and also reasonable commercial standards of fair dealing
E. honesty in equity and honesty in law
“Wild Things.” Image Company, a company specializing in photography of exotic and
wild animals, took out a life insurance policy through ABC Insurance on its president
Bruno and also on a company-owned jeep that he drove. Bruno got a better offer from
Wild Things Company, another company specializing in the photography of exotic
animals, and went to work for them. He parted on good terms with Image Company and
taking the jeep with him under the mistaken idea that the jeep was part of his severance
benefits. Neither of the insurance policies was cancelled by Image. Unfortunately, while
photographing a lion for Wild Things Company, Bruno was attacked and eaten. His jeep
was then stolen by an unknown bystander who apparently saw the attack and took the
opportunity to take the jeep. Image Company had been in the process of contacting
Bruno in an attempt to obtain possession of the jeep but had not reacquired it at the time
of his death. Image Company had renewed the policy on the jeep reaffirming to the
insurer that its purpose was for use by Image employees because Image planned to have
possession of the vehicle shortly. Image Company filed a claim to collect on the life
insurance policy and also on the vehicle policy. ABC Insurance denied both claims.
Which of the following is true regarding the contention of ABC Insurance that it is not
required to pay to Image Company the amount for which Bruno’s life was insured?
A. ABC Insurance Company is incorrect because Image Company held an economic
interest in Bruno’s life at the time the insurance was purchased.
B. ABC Insurance Company is correct because Image Company no longer had an
economic interest in Bruno’s life.
C. ABC Insurance Company is correct only if Bruno’s new employer had purchased life
insurance on his life.
D. ABC Insurance Company is incorrect because Image Company had an economic
interest in Bruno based on his possession of the jeep that Image Company still owned.
E. ABC Insurance Company is incorrect only if Image Company owed Bruno
retirement or some other sort of benefit.
“Chewer.” The state in which Susan lives has a statute prohibiting dogs from running at
large. All dogs are required to be on a leash whenever they are off the owner’s premises.
Susan’s dog, while not on a leash, visits the home of a neighbor down the street. While
there, the dog carries off an expensive pair of shoes belonging to Robert. The shoes are
chewed and destroyed. A neighbor informed Robert of what had happened. Robert
commented that he never should have left his $300 shoes lying on the deck in the first
place but that he expects to be repaid by Susan. Robert found out that the dog had
carried away a number of shoes and other articles in the neighborhood, chewing them to
pieces. Susan had done nothing to warn anyone. Robert thinks that she should be
punished for her activities, and perhaps that would deter her from allowing the dog to
run loose.
Which of the following theories will Susan likely use to defend herself?
A. Assumption of the risk
B. Comparative negligence
C. Res ipsa loquitur
D. Negligence per se
E. Stare decisis
“Employment law.” Clare, who has a successful pet grooming business, is planning to
expand her operations from the U.S. into Canada and perhaps Mexico. A friend of hers,
Bill, told her that she should carefully investigate the laws in those countries before she
proceeded. Clare responded, however, that she was not concerned because by
international treaty, and under NAFTA, so long as she is a U.S. citizen, she only has to
obey the U.S. laws. Laws of other countries would not apply to her business operations.
Clare also replied that any other country would have the same strict employment-at-will
standard as exists in the U.S. She tells him the strict employment-at-will standard has
not changed over the years, and that the nature of the relationship between employer
and employee remains untouched.
Is Clare correct that there has been no change in the concept of employment-at-will in
this country and that the relationship between employer and employee has remained the
same?
A. She is correct.
B. She is incorrect, but the employment relationship has changed only in respect to
minimum wage.
C. She is incorrect, but the employment relationship has changed only in respect to the
issue of workers’ compensation.
D. She is incorrect, but the employment relationship has changed only in the area of
employment discrimination.
E. She is incorrect.
Which of the following is false regarding the regulation of tobacco?
A. Congress has given the FDA authority to regulate tobacco use.
B. The Public Health Cigarette Smoking Act prohibits radio cigarette advertisements.
C. The Public Health Cigarette Smoking Act prohibits television cigarette
advertisements.
D. The Smokeless Tobacco Act prohibits radio cigarette advertisements.
E. The Smokeless Tobacco Act prohibits television cigarette advertisements.
The oldest legal means of protecting the environment is ______ law.
A. Tort
B. Contract
C. Strict liability
D. Administrative
E. Statutory
Which of the following is true regarding any affirmative defenses available under
Section 20(a) of the Securities Exchange Act?
A. There are no affirmative defenses available.
B. Comparative negligence is an affirmative defense.
C. Contributory negligence is an affirmative defense.
D. An affirmative defense exists when the controlling person acted in good faith and did
not directly or indirectly induce the act or acts constituting the underlying violation or
cause of action.
E. Comparative negligence and contributory negligence are affirmative defenses, and
also an affirmative defense exists when the controlling person acted in good faith and
did not directly or indirectly induce the act or acts constituting the underlying violation
or cause of action.
Which of the following was involved when the government, in attempting to help AIG,
agreed with AIG to lend AIG up to $85 billion in exchange for nearly 80 percent of
AIG’s stock?
A. An accord and satisfaction
B. An accord but not a satisfaction
C. A unilateral contract
D. A bilateral contract
E. An unliquidated contract
What was the ruling of the court in the Case Opener involving a lawsuit by fans seeking
a refund based upon the Tyson and Holyfield fight being stopped in the third round
because Tyson bit off a piece of Holyfield’s ear?
A. The fans were not allowed to recover because they were incidental beneficiaries.
B. The fans were not allowed to recover because they were donee beneficiaries.
C. The fans were not allowed to recover because they were assigned donees.
D. The fans were allowed to recover because they were creditor beneficiaries.
E. The fans were allowed to recover because they were intended third-party
beneficiaries.
Which of the following is true regarding illusory promises?
A. Illusory promises are not consideration.
B. Illusory promises are consideration.
C. Illusory promises qualify as consideration only when past consideration is at issue.
D. Illusory promises qualify as consideration only when promissory estoppel is at issue.
E. Illusory promises are consideration only when a sale of goods is involved.
“Irresponsible Teen.” At age 17, in a state in which the age of majority is 18, Sally
purchased a prom dress from Formal Stuff. She wore it to the prom and then attempted
to return it to the store claiming that she was a minor and that she was entitled to a
refund. The dress had clearly been worn and had a purple stain which Sally claimed was
from grape juice. Additionally, a few days before she turned 18, Sally purchased a used
car from Dings and Dents used cars. She had a deal whereby she paid $100 per month
on the car. She drove the car and made payments for six months after she turned 18.
Sally then returned the car to Dings and Dents, informed the owner that she was under
18 when she entered into the contract to purchase the car, and told the owner that she
was returning the car for a full refund. Dings and Dents claimed the car was a necessity.
Sally and her parents disagreed claiming that the parents were ready and willing to
provide a car to Sally, and that she only purchased the car from Dings and Dents
because she liked that particular style and color. When purchases of the dress and car
were made, the sellers knew that Sally was under the age of 18.
Which of the following is true regarding Sally’s attempt to return the damaged dress?
A. In all states Sally has the right to keep the dress and get a refund.
B. In all states Sally must return the dress; but she has a right to a full refund.
C. Regardless of what she does with the dress, Sally has no right to a refund in any
state.
D. In some states Sally would have an obligation of restitution to the store.
E. In all states Sally would have an obligation of restitution to the store.
Which of the following was the result in Thomas P. Lamb v. Tony Rizzo, the case in the
text in which the defending newspaper reporter claimed that he could not be held liable
to the plaintiff for making alleged defamatory statements because the plaintiff’s
reputation as a kidnapper and murderer serving three life sentences was so bad that his
reputation could not be further harmed?
A. The court allowed the lawsuit to proceed ruling that whether the plaintiff already had
a bad reputation was irrelevant in relation to a defamation lawsuit.
B. The court allowed the lawsuit to proceed ruling that whether the plaintiff already had
a bad reputation was irrelevant in relation to the lawsuit involved, an action for libel,
although the plaintiff’s reputation would likely have barred an action for slander.
C. The court allowed the lawsuit to proceed ruling that whether the plaintiff already had
a bad reputation was irrelevant in relation to the lawsuit involved, an action for slander,
although the plaintiff’s reputation would likely have barred an action for libel.
D. The court dismissed the lawsuit recognizing that the facts fit within the jurisdiction’s
description of when the libel-proof doctrine might apply based upon the plaintiff’s
already bad reputation.
E. The court dismissed the lawsuit on the basis that the statements were not false but
also recognized that the only proof justifying application of the libel-proof doctrine is
proof that a defendant has been sentenced to death.
Who is generally responsible for injuries that occur in common areas based on
negligent upkeep?
A. The lessees.
B. The landlord.
C. Each lessee and the landlord would owe an amount of damages determined by
dividing the total damages by the number of lessees plus the landlord.
D. The landlord would owe half of the damages and the lessees would split the other
half.
E. The landlord is responsible for all injuries except those occurring in any hallway for
which the lessees are liable.
Which of the following is true under the UCC regarding liability of a principal if the
agent enters into a contract that is a negotiable instrument?
A. The principal is liable to the same extent as if no negotiable instrument were
involved because the negotiable instrument has no effect on the principal’s liability.
B. The principal cannot be held liable unless the principal’s name is on the instrument.
C. The principal cannot be held liable unless the agent’s signature indicates that it was
made in a representative capacity.
D. The principal cannot be held liable unless the principal’s name is on the instrument
or the agent’s signature indicates that it was made in a representative capacity.
E. The principal cannot be held liable unless the principal’s name is on the instrument or
the agent’s signature indicates that it was made in a representative capacity, or the agent
has been ruled insolvent.