How may an easement be created?
a. By prescription.
b. By express reservation.
c. By necessity.
d. All of the above.
Identify the type of indorsement each of the following represents:
a. Pay to Bill, for collection.
b. Pay to the order of The American Bank for deposit only.
c. Pay to Albert, without recourse.
d. John Smith.
Regarding priority claims:
a. Each claimant in a priority class shares pro rata if the assets cannot satisfy all claims
in the class.
b. Employees have a priority for contributions to employee benefit plans but only to the
extent that a $4,500 cap for unpaid wages has not been reached.
c. Subordination agreements are enforceable.
d. Both (a) and (c).
Davis Co. and Ruby Creations enter an oral contract providing that Ruby will deliver
three dozen dresses to Davis at $20 per dress. The next day, Davis sent Ruby a letter
signed by Davis’s purchasing agent confirming the quantity and item, but not
mentioning the price. Which of the following is true?
a. Davis Co. is not bound by the terms of the letter unless Ruby responds in writing to
verify the agreement.
b. Ruby Creations and Davis Co. were bound in an enforceable contract at the time they
entered the oral agreement.
c. Davis is bound by the contract when its authorized agent sends the letter, but Ruby
Creations is bound by the oral contract ten days after receiving the letter, unless it
objects in writing within that time.
d. The parties cannot be bound by the contract because the price term was missing from
the written confirmation.
A star basketball player in the NBA:
a. is a “public figure” with respect to a defamation action against a newspaper.
b. is a “public official” with respect to a defamation action against a newspaper.
c. may win a defamation case against the media if he can prove the media acted
negligently in reporting an untruth about him.
d. is not subject to the “actual malice” test in defamation actions against the press.
Ricardo is the holder of a check that contains the indorsement “Without Recourse,
(signed) Mary Roberts.” This indorsement:
a. makes further indorsement impossible.
b. requires a special indorsement by the transferee.
c. limits the liability of Mary Roberts.
d. limits the liability of all subsequent holders, including Ricardo.
Discuss the validity and effect of each of the following:
a. Two manufacturers of the same product decide to allocate territories with one taking
the southern states.
b. A labor union encourages its members and all consumers to boycott a product
manufactured by a company that refuses to honor a union contract.
c. Bargain Betty’s Department Store sells its products for 10% under the suggested
retail price. One manufacturer tells the store it will not supply wholesale goods to it
unless it charges at least the suggested retail price.
Generally, how may a security interest be perfected in collateral?
a. By the secured party’s filing a financing statement in the designated public office.
b. Automatically, on the attachment of the security interest.
c. Temporarily, for a period specified by the Code.
d. All of the above.
Destruction of the subject matter has what effect on the offer?
a. The offer is terminated.
b. The offer is delayed until additional subject matter can be located.
c. This creates an impossibility of fact that does not terminate the offer.
d. The offer is merely delayed under the “Hardship Rule.”
A condominium differs from a cooperative in that a tenant in the latter:
a. rents his apartment from the cooperative.
b. owns his apartment in cooperation with corporate owner.
c. owns all the space except the common areas.
d. owns only the internal space.
Which arguments oppose business involvement in socially responsible activities?
a. Lack of corporate focus on profitability.
b. Unfairness to company employees and shareholders.
c. Lack of accountability.
d. All of these are correct.
Sam wants to sell his Golden Retriever to Al. Sam tells Al that the dog is three years old
and that he will point, back, and retrieve. Although the dog is three years old and will
point at birds, he will not back (honor another dog’s point). Al relies on these statements
and purchases the bird dog. The buyer has probably been a victim of:
a. duress.
b. undue influence.
c. fraud in the inducement.
d. fraud in the execution.
Arnie negligently stopped his car on the highway. Beth, who was driving along, saw
Arnie’s car in sufficient time to attempt to stop. However, Beth negligently put her foot
on the accelerator instead of the brake. If she runs into Arnie’s car as a result:
a. Arnie’s contributory negligence will prevent his recovery from Beth in all
jurisdictions.
b. Beth had the last clear chance to avoid the accident and will bear legal responsibility
for it.
c. Arnie has assumed the risk of the accident.
d. because both parties were negligent, in a state that follows the comparative
negligence doctrine, both parties will share the liability for their injuries.
Identify the constitutional protections given to a criminal defendant by each of the
following Amendments to the U.S. Constitution. How does each apply to the procedure
involved in arresting and trying a criminal defendant?
a. Fourth Amendment
b. Fifth Amendment
c. Sixth Amendment
d. Eighth Amendment
The characteristics of a totten trust include:
a. it is a joint bank account opened by the settlor of the trust.
b. it is tentative.
c. transfer of ownership is complete only on the depositor’s death.
d. All of the above.
Elmer wrote a letter to his friend Fred offering to sell Fred an 80-acre farm for
$200,000. After mailing the letter, Elmer learns that the farm is actually worth $300,000
and changes his mind about selling. Elmer:
a. has made a firm offer to Fred which cannot be revoked.
b. can revoke his offer at any time before Fred accepts it, because there is no
consideration to keep it open.
c. must keep the offer open, because this is an option contract.
d. is promissorily estopped from revoking his offer to Fred.
Courts have responded by piercing the veil when the shareholders have:
a. not followed the formalities of corporate procedures.
b. not provided an adequate financial basis for the business.
c. used the corporation to defraud.
d. All of the above.
If a landlord runs the heating system in the summer in order to force his tenant to move
and the tenant does in fact move, a court of law will probably decide that:
a. waste has occurred.
b. there has been an unreasonable abandonment of the premises.
c. a constructive eviction has taken place.
d. vacating of the premises constituted an assignment.
Zoron Company purchased a truck from Ace Motors. The sales personnel at Ace know
that Anton Green is an executive at Zoron. To pay for the truck, Anton delivered a
$25,000 note to Ace. If he signed it “Anton Green, Agent”:
a. the signature of the maker is incomplete. Neither Zoron nor Anton is liable on the
note.
b. since “Zoron Company” does not appear on the note, only Anton is liable to Ace for
payment of the note.
c. as long as Ace Motors remains holder of the note, Zoron Company is liable for
payment.
d. if ABC Bank is holder of the note and Zoron Company does not pay, the bank has no
recourse against Anton.
The combination of two or more corporations into a new corporation is known as:
a. merger.
b. consolidation.
c. compulsory share exchange.
d. short-form merger.
The concept of waste, as used in real property, includes:
a. any act that permanently injures the realty.
b. any omission that permanently injures the realty.
c. any act that unreasonably changes the value of the realty.
d. All of the above.
The __________ is the federal public records statute requiring most records in agency
files to be open to the public.
a. FOIA
b. APA
c. ALJ
d. Government in the Sunshine Act
An LLC’s limitation on liability will not affect the liability of a member who:
a. committed the wrongful act giving rise to the liability.
b. guaranteed the obligation.
c. All of these are correct.
d. None of these are correct.
Which of the following is a collateral promise?
a. A mother tells a merchant to extend $1,000 worth of credit to her son and says, “If he
doesn’t pay, I will.”
b. Andrew promises Donald that if Donald cannot pay his bills, Andrew will.
c. A father tells a merchant to deliver a computer to his daughter and says, “Send me the
bill. I’ll pay for it.”
d. All of the above.
If a person knows that an instrument is overdue or has been dishonored, he cannot
become a holder in due course.
The usual means of enforcing an agreement prohibiting an employee from competing in
a described territory for a stated period of time is by injunction.
Revised Article 3 eliminates the particular fund doctrine by providing that a promise or
order is not made conditional because payment is to be made only out of a particular
fund.
Tom’s dog has bitten three mail carriers, but Tom can’t bear to chain him up. When the
dog bites the newsboy, Tom will be strictly liable.
Consideration must be received for an assignment to be effective.
The “bubble concept” is used by the EPA to view an entire plant as one source to
evaluate emissions.
A contract to pay for lawn care services costing $1,500 would have to be in writing to
be enforceable.
The EPA may impose criminal fines and seek incarceration or imprisonment for persons
who are convicted of violations of some environmental laws.
If goods are sold and delivered to buyer with an option to return them, the risk is on the
buyer until they are returned.