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What types of ADR techniques exist in Japan?
A. Compromise and conciliation, but not arbitration
B. Conciliation and arbitration, but not compromise
C. Arbitration, but not compromise or conciliation
D. Compromise, conciliation, and arbitration
E. ADR is outlawed in Japan
Which of the following is true regarding ways by which a party's contractual
obligations may be discharged?
A. Performance is the only way a party's contractual obligations may be discharged.
B. The failure of a condition to occur and performance are the only ways a party's
contractual obligations may be discharged.
C. Operation of law is the only way a party's contractual obligations may be discharged.
D. Discharge may occur through material breach by one or both parties.
E. Discharge may not occur through the failure of a condition to occur.
A document that outlines the principal-agent relationship that allows an agent to make
medical decisions for a principal who is unable to participate in medical decisions is
called a _____.
A. Living will
B. Health care proxy
C. Medical decision contract
D. Medical agent proxy
E. Living health proxy
Which of the following is movable property that is not attached to land?
A. Real
B. Personal
C. Valued
D. Appraised
E. Substantive
Which of the following are written contracts intended to be the complete and final
representation of the parties' agreement?
A. Complete contracts
B. Integrated contracts
C. Adhesion contracts
D. Bilateral contracts
E. Acknowledged contracts
What was the result at the federal appellate court level in Trunk v. San Diego, the case
in the text involving whether the presence of a cross on federal land near a Korean War
memorial violated the First Amendment?
A. The court ruled that the presence of the cross violated the First Amendment.
B. The court ruled that the presence of the cross did not violate the First Amendment
because the cross promoted the service of veterans, not a religion.
C. The court ruled that the presence of the cross did not violate the First Amendment
because it was initially erected by private parties and had historical significance.
D. The court ruled that the presence of the cross did not violate the First Amendment
because although it was erected by public authorities, it had historical significance
independent of its governmental ties.
E. The court ruled that the presence of the cross did not violate the First Amendment
because although it did promote a particular religion, that religion was practiced by
large numbers of the surrounding citizens.
Which of the following is another name for debt securities?
A. Stocks
B. Bonds
C. Certificates of deposit
D. Equity securities
E. Preferred debt
How many states engage in at least some regulation of gambling?
A. 50
B. 47
C. 40
D. 35
E. 10
Which of the following was the result in Double Diamond Properties v. BP Products,
the case in the text in which the plaintiff sought a declaratory judgment that a restrictive
covenant prohibiting the purchase of gasoline from any source other than the defendant
was no longer enforceable because the defendant had assigned its right to supply
gasoline to another entity?
A. The court ruled that the covenant remained enforceable because the defendant
continued to provide gasoline on an indirect basis as allowed by the covenant, and the
plaintiff failed to prove other challenges to it.
B. The court ruled that the agreement remained enforceable because the intent of the
parties when entering into the agreement was that the plaintiff receive gasoline only
from the defendant or from an entity of the defendant's choosing.
C. The court ruled that the covenant was not enforceable because the defendant no
longer supplied the plaintiff with gasoline recognizing that the reference to indirect
sales in the covenant meant merely that the plaintiff had the option to obtain defendant's
brand of gasoline either from the defendant or indirectly from another supplier.
D. The court ruled that the covenant was not enforceable because it was unreasonable
as to the parties.
E. The court ruled that the covenant was not enforceable because it was injurious to the
public by reason of its effect on gasoline trade in the area.
Which of the following is false regarding the perfect tender rule?
A. In relation to the perfect tender rule, sometimes norms for a particular trade do not
permit a buyer to reject goods with minor flaws.
B. In relation to the perfect tender rule, the UCC requires that courts consider course of
dealing.
C. In relation to the perfect tender rule, the UCC requires that courts consider course of
performance.
D. Parties may by contractual language limit the rigidity of the perfect tender rule.
E. The perfect tender rule is satisfied when material elements of a contract are satisfied
even if some nonmaterial elements may not be satisfied.
"Tutoring Concerns." Wally and Sally want to go into business together and plan on
offering a tutoring service to high school and college students. Wally proposes that they
share control of the business and split profits equally and not bother with a written
agreement. Sally, however, is concerned about being able to pay their debts since they
will have to rent tutoring space, and purchase computers and supplies. She is also
concerned about parents and students who may sue if their test scores do not improve.
She tells Wally that she just bought a new boat and car, and that she does not want her
assets to be in jeopardy. She tells Wally that they should form a corporation to shield
their personal assets. Wally, however, tells their personal assets are not in danger with
his proposal because they are a business and that, furthermore, forming a corporation
would even result in tax being imposed twice.
What type of arrangement did Wally propose with his suggestion that they share control
of the business and split profits equally, not bothering with a written agreement?
A. A joint sole proprietorship
B. A partnership
C. A corporation
D. An S corporation
E. A limited partnership
Which of the following was the result in the Case Opener, the case in which the
company was found to have generated waste with excessive concentrations of PCBs?
A. That the company had no liability because it had not intentionally generated the
waste.
B. That the company had no liability because it was the responsibility of the federal
government to clean up the waste.
C. That the company had no liability because it was the responsibility of the state
government to clean up the waste.
D. That the company was liable because it failed to monitor in a manner that would
have revealed the waste in a timely manner.
E. That the company was liable under federal law because it failed to clean up the
hazardous area in a timely manner.
"Accidental Sale." Robby entrusted his automobile to ABC Motors for repair. The
manager of ABC Motors, who did a very poor job with inventory, accidentally sold the
car to Connie. Connie, who paid cash for the car, had no idea that the car did not belong
to ABC Motors and paid fair market value for it. When Robby went to pick up the car,
he was very upset that it was gone. The manager of ABC Motors told him that he was
very sorry, but that his only recourse would be against Connie.
Which of the following is true regarding the manager's statement that Robby's only
recourse is against Connie?
A. The manager is correct.
B. The manager is incorrect only if Robby has a writing signed by a representative of
the repair shop guaranteeing the safety of the car.
C. The manager is correct only if Connie can be found.
D. The manager is correct only if Connie's deal was for less than 10% of the fair market
value of the car.
E. The manager is incorrect, and Robby can sue ABC Motors.
Which of the following is known as a substitute for cash?
A. A negotiable instrument
B. A nonnegotiable instrument
C. A payable document
D. A nonpayable document
E. An endorsed payable document
"Not So Slick Trucker." Slick had a trucking business and advertised that he would
transport "anything." One day Sleazy Corporation asked him to transport some
hazardous waste and dump it on a farm telling him that, by the way, he should be
careful about touching any of the waste. A friend of Slick's asked him if he should
check to see if Sleazy Corporation had the proper permits. Slick replied that he was
unconcerned about permits for dumping because he was a mere transporter. A few years
later, federal investigators operating on a tip from someone Slick had cheated in a poker
game, discovered the farm. The material at issue consisted of a pile of hazardous waste
dumped by Slick. The waste was removed; soil was cleaned; and the action, resulting in
a permanent solution, was complete within 6 months. The government requested that
Slick cover the clean-up costs. He refused on the basis that he was simply a trucker and
did not make the waste.
The fund, funded primarily by taxes on corporations in industries that create significant
amounts of hazardous waste, and used to handle clean-up of hazardous waste such as
that on the farm is called the ____.
A. Clean-Up fund
B. Hazardous duty fund
C. Superfund
D. Primary payment source
E. Secondary payment source
"Machine Malfunction." Bruno, the president of a health club operation called ABC
Health Club, convinced the board of directors to approve a large purchase of a type of
fitness machine called "Perfect Body." Bruno had carefully investigated the machine
and did a presentation to the board on its purported benefits. Unfortunately, after the
purchase, it was announced that "Perfect Body" was actually a very dangerous machine
that should not be used. The manufacturer of "Perfect Body" went bankrupt, and ABC
lost $200,000 on the purchase of the machines. The shareholders are furious and want
to sue Bruno and the directors. In an attempt to appease her, the board of directors
agrees to allow Frances, the ring leader of the shareholders, to purchase stock of the
company at below its fair market value. Frances purchases a considerable amount of
stock on that basis, but says that the shareholders plan to continue with an action
against Bruno and the board members.
Which of the following is true regarding liability of Frances, if any, for purchasing the
stock at below its fair market value?
A. If the board wanted to offer it to her, they had that right, and there is no consequence
to Frances.
B. She is liable for double the stated corporate value of the stock in addition to any
price she already paid.
C. She is liable for the stated corporate value of the stock in addition to any price she
already paid.
D. She is liable for paying the difference between the price she paid for the shares and
the stated corporate value of the shares.
E. She is liable for paying the difference between the price she paid for the shares and
the stated corporate value of the shares plus a $10,000 penalty.
Which of the following is true regarding the use of working papers in negligence cases
involving the accountant's work?
A. Working papers can be used as evidence in negligence cases.
B. Working papers cannot be used as evidence in negligence cases.
C. Working papers can be used as evidence in negligence cases only if a bank is the
plaintiff.
D. Working papers can be used as evidence in negligence cases only if a non-corporate
plaintiff is involved.
E. Working papers may be used as evidence in negligence cases only if the accountant
failed to provide the client with copies of them.
"Squirt Gun Mishap." Zora decided to purchase a large squirt gun for her son, Rambo,
to use while playing in the pool. The squirt gun was of the very elaborate variety and
had a number of different attachments for different sprays of water. The squirt gun came
with instructions for assembly and use, and provided warnings against various types of
misuse. The pamphlet that came with the squirt gun advised that the squirt gun should
be used only under adult supervision, that it must not be used by children under eleven,
and that nothing should be put into the squirt gun except water. Rambo had a party for
his tenth birthday at the pool. A number of children came. One of the children, Sam,
who was ten years old at that time, decided to load pebbles along with water into the
gun. He began shooting with the pebbles and hit Alice in the eye, requiring an
emergency room visit. Alice required some minor surgery, but sustained no permanent
injury. Alice's parents complained that they looked at the squirt gun when they initially
arrived at the party but did not notice any warnings whatsoever affixed directly to the
product. Alice's parents want to sue someone for something, but they do not particularly
want to sue Rambo's mother.
Which of the following is true regarding a lawsuit brought by Alice's parents against the
manufacturer for negligence?
A. Because neither Alice nor her parents were in privity of contract with the seller, no
one other than Rambo's mother may be sued for negligence.
B. Privity of contract is not necessary in order to sue for negligence so the fact that
neither Alice nor her parents were in privity of contract with the seller would not
prevent a negligence based action.
C. Although privity of contract is not an issue, Alice's parents would be unable to
prevail in a negligence action because Alice did not sustain permanent physical injury.
D. Although privity of contract is not an issue, Alice's parents would be unable to
prevail in an action against the manufacturer for negligence because they did not read
the instruction booklet.
E. Alice's parents would be prohibited from suing the manufacturer because of the
federal law prohibiting lawsuits for failure to warn in cases involving children.
What does the term CIF when used as a shipping term represent?
A. Cost, insurance, and freight
B. Collateral, insurance, and freight
C. Commerce, insurance, and freight
D. Cost, indemnity, and freight
E. Cost, insurance, and flight
Which of the following is a treaty with the purpose of prohibiting the international trade
of endangered plants and animals?
A. The Endangered Species Treaty
B. The International Endangered Plants and Animals Protocol
C. The Endangered Plants and Animals Agreement
D. The Convention on International Trade in Endangered Species
E. The Humane Protection Agreement
Tina, an experienced pool contractor, and Bruce agree on a price for Tina to build a pool
in Bruce's backyard. Tina discovers that she did not initially figure in enough of a
charge for labor. She tells Bruce that unless she receives an extra $5,000 with which to
hire workers, she cannot complete the job. Bruce agrees thinking to himself that he has
a way out. When Tina finishes the pool, Bruce refuses to pay the additional $5,000.
Which of the following is the most likely result of their dispute?
A. Bruce will be required to pay because a typical, unilateral contract is involved, and
he got the benefit of his bargain.
B. Bruce will be required to pay because a typical, bilateral contract is involved, and he
got the benefit of his bargain.
C. Bruce will be required to pay because unforeseen circumstances are an exception to
the preexisting duty rule.
D. Bruce will not be required to pay because he provided no additional consideration,
and the preexisting duty rule applies.
E. Bruce will only be required to pay ½ of the agreed upon amounts because of the
calculations involved under the preexisting duty rule.
Within the statute of frauds, "land" encompasses not only the land and soil itself but
anything ______ to the land.
A. Relating
B. Adjacent
C. Contracted
D. Attached
E. Pertinent
When a person who makes a misrepresentation has no knowledge about the falsity of
the claim, it is said that the person lacked ____.
A. Information
B. Premeditation
C. Planning
D. Plotting
E. Scienter
An employee's significant deviation from the employer's business is often referred to as
a _______.
A. Spree of his own choosing
B. Romp against instruction
C. Leisure against direction
D. Pleasure seeking spree
E. Frolic of his own
Jack went into a hardware store to purchase a saw. He told the salesclerk that he wanted
a saw that would cut through copper tubing. The salesclerk referred Jack to a wall of
saws, and Jack purchased one. What kind of warranty, if any, did the salesclerk make?
A. The salesclerk made an express warranty, a warranty of trade usage, and a warranty
of fitness for a particular purpose.
B. The salesclerk made a warranty of fitness for a particular purpose, but not an express
warranty of a warranty of trade usage.
C. The salesclerk made an express warranty and a warranty of trade usage, but not a
warranty of fitness for a particular purpose.
D. The salesclerk made an express warranty, but not a warranty of fitness for a
particular purpose or a warranty of trade usage.
E. The salesclerk made a warranty of trade usage, but not a warranty of fitness for a
particular purpose or an express warranty.
Which of the following is a type of document of title issued by a person engaged in the
business of transporting goods that verifies receipt of goods for shipment?
A. Warehouse receipt
B. Delivery order
C. Receipt order
D. Negotiable receipt
E. Bill of lading
To which of the following loans does the Truth-in Lending Act apply?
A. Loans to a natural person
B. Loans to a natural person and to a limited partnerships
C. Loans to a natural person, loans to a limited partnership, and loans to a general
partnership
D. Loans to natural person, loans to a limited partnership, loans to a general
partnership, and loans to a corporation
E. All loans
What actions does the UCC provide that a court can take if it discovers that a contract
or lease provision or the contract or lease as a whole is unconscionable?
A. The contract is void.
B. The court can only refuse to enforce the contract or lease in total.
C. The court can only refuse to enforce the parts of the contract or lease that are unfair.
D. The court either can refuse to enforce the contract or lease or can enforce the parts of
the contract or lease that are fair.
E. The court has no power to enforce the lease and must award the innocent party
punitive damages.
A person who creates a trust is knows as a _____.
A. Benefactor
B. Trustor
C. Trustee
D. Settlor
E. Settlee
Which of the following was the result on appeal in Lucy Mydlach v. DaimlerChrysler
Corp., the case in the text involving whether the plaintiff could bring a revocation of
acceptance claim against a vehicle manufacturer and the statute of limitation under the
Magnuson-Moss Act?
A. The court ruled that a revocation of acceptance claim could be brought against a
vehicle manufacturer and that the statute of limitation under the Magnuson-Moss Act
began to run when the vehicle was sold.
B. The court ruled that a revocation of acceptance claim could be brought against a
vehicle manufacturer and that the statute of limitation under the Magnuson-Moss Act
began to run when repairs under warranty were not made as they should have been
made.
C. The court ruled that a revocation of acceptance claim could not be brought against a
vehicle manufacturer and that the statute of limitation under the Magnuson-Moss Act
began to run when the vehicle was sold.
D. The court ruled that a revocation of acceptance claim could not be brought against a
vehicle manufacturer and that the statute of limitation under the Magnuson-Moss Act
began to run when repairs under warranty were not made as they should have been
made.
E. The court ruled that a revocation of acceptance claim could not be brought against a
vehicle manufacturer and that the statute of limitation under the Magnuson-Moss Act
began to run when the manufacturer was notified that a problem with the vehicle
existed.
Which of the following is true regarding liquidation?
A. Liquidation is another name for dissolution.
B. It is the process by which the board converts the corporation's assets into cash and
distributes them among the corporation's creditors and shareholders.
C. It begins immediately prior to dissolution.
D. It is the process by which the board provides notice to the secretary of state that the
corporation will no longer remain in existence.
E. Liquidation duties fall upon officers of the corporation.
When someone dies, a[n] ______ chosen by the testator collects the testator's property,
pays debts and taxes, and makes sure the remainder of the will is distributed.
A. Inheritance devisor
B. Inheritance regulator
C. Trustee
D. Personal representative
E. Personal devisee
Which of the following articles of the UCC governs lease contracts?
A. 2
B. 2(A)
C. 4
D. 4(A)
E. 6
