LWP 27938 | Course Paper

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Capacity is the legal ability to enter into a binding contract.

The UCC assumes that the seller has the right to transfer title free and clear of

intellectual property rights of which the buyer does not have knowledge.

The term “express warranties” is found in common law.

In Germany land expropriated by the government reverts to its former owner if the

government no longer needs the property.

A contract that arises from the conduct of the parties is an implied contract.

A defendant who believes that he or she has a claim against the plaintiff would include

a counterclaim with the answer.

A preexisting duty is generally valid consideration.

The Seventh Amendment is the primary source of authority for federal regulation of

business.

According to the pure comparative negligence defense, a defendant must be more than

60 percent at fault before the plaintiff can recover.

According to the UCC, value is insufficient consideration.

If an instrument fails to qualify as a negotiable instrument, it means that the instrument

fails to be an enforceable contract.

Under federal statutory law Internet transactions cannot be the basis for a finding of in

personam jurisdiction.

Qualification is a process that allows limited liability companies to register in additional

states in which they want to operate.

Primary obligations to pay a debt fall within the types of agreements of the statute of

frauds.

The SEC is an independent agency whose function is to administer federal securities

laws.

A written agreement for the sale of an illegal subject matter is voidable under contract

law.

A person who applies for a domain name on the Internet will be granted the domain

name so long as no one else holds that name.

An anticipatory repudiation must be in writing to be enforceable.

Administrative law consists of procedural, but not substantive, rules.

Administrative agencies are created by the executive branch to carry out specific duties.

Extortion is another name for the crime of bribery.

Corporate stocks and copyrights are treated as goods for sales contracts under the UCC.

An ethical dilemma has no clear, right decision.

The UCC requires good faith in the performance and enforcement of every contract.

Copyrights protect the ideas of creative ideas.

There is a formal court process that must occur for a minor to disaffirm a contract.

The SEC may issue bounty payments to insider-trading whistle-blowers.

Mediators are selected on behalf of the parties by the courts.

A donee beneficiary is a third party who benefits from a contract in which the promisor

agrees to pay the promisee’s debt.

A bearer instrument is payable to a specific, named payee.

No market transactions occur without legal guidelines.

The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 included only

minor changes to bankruptcy law.

In contracts other than those governed by the UCC, which of the following are required

elements for a writing to be considered sufficient under the statute of frauds?

A. Identification of the parties to the contract.

B. Identification of the subject of the agreement.

C. Identification of the penalties for nonperformance.

D. Identification of the parties to the contract, identification of the subject of the

agreement, and identification of the penalties for nonperformance.

E. Identification of the parties to the contract and the subject of the agreement, but not

penalties for nonperformance.

Which of the following is involved when an agency is referred to as a “captured”

agency?

A. A belief that agency officials are unduly influenced by past ties to the industry

regulated by the agency.

B. A belief that agency officials are unduly influenced by their political party.

C. A belief that agency officials are unduly influenced by politicians in the state in

which the agency is located.

D. A belief that agency officials are unduly influenced by politicians in states most

affected by the regulations put out by the agency.

E. A belief that agency officials are unduly influenced by the desires of Congress.

Age Discrimination in Employment Act applies to private employers having ______ or

more employees.

A. 50

B. 40

C. 30

D. 20

E. 15

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 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 Susie. 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

trial, Jane reported Greg’s actions in letting the air out of her tire to the police who said

that they would proceed with a criminal action against Greg. 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 because Susie’s testimony was

better evidence and she was in the courtroom.

E. Yes, the judge was correct to disallow the testimony because it was offered by a

defendant, not an independent witness.

Cosmetic Profits. Sally is the vice president at Big Name Cosmetics Company. Through

important and material nonpublic information, she learns that the company is soon

going to purchase a smaller chain of stores. It is expected that stock in Big Name

Cosmetics will rise dramatically at that point. Sally immediately buys a number of

shares of her company’s stock. She also tells her friend Alice about the expected

purchase of stores. Alice wanted to purchase stock in the company but lacked the funds

with which to do so. Although she did not have the funds in Bank A, Alice decided to

draw a check on Bank A and deposit the check in Bank B and then proceed to write a

check on Bank B to cover the purchase of the stock. She planned to write a check on

Bank B and deposit in Bank A just before the check was presented to Bank A in an

attempt to create an artificial balance. Of what offense, if any, is Alice guilty of by her

method of payment?

A. Ponzi scheme

B. Insider-trading scheming

C. Pretexting

D. Check defalcation

E. Check kiting

Under Article 2(A) of the UCC “a transfer of the right to possession and use of goods

for a term in return for consideration” is a _____.

A. sale of goods

B. lease

C. transfer

D. rental

E. consignment

Which of the following are foreseeable damages within the contemplation of the parties

at the time the breach occurs and that result from special facts and circumstances

arising outside the contract itself?

A. Consequential

B. Punitive

C. Liquidated

D. Nominal

E. Repugnant

Under the UCC, an instrument “payable on demand” as one that ______.

A. states that it is payable on demand or at sight, or otherwise indicates that it is payable

at the will of the holder

B. does not state any time of payment

C. is payable within ten days after presentment

D. states that it is payable on demand or at sight or otherwise indicates that it is payable

at the will of the holder, or does not state any time of payment

E. states that it is payable on demand or at sight, otherwise indicates that it is payable at

the will of the holder; does not state any time of payment; or is payable within ten days

after presentment

Which of the following is an order issued by an agency to appear at a particular time

and place and bring specified documents?

A. A subpoena

B. A subpoena duces tecum

C. A summons

D. A summons duces tecum

E. A required documented appearance

When a debtor sells collateral, he or she receives ______, something that is exchanged

for collateral.

A. after-acquired property

B. subsequent-acquired property

C. proceeds

D. collateral

E. post-financed funds

The Miranda Rights provide that an individual must be informed of which of the

following rights before he is questioned?

A. The individual must answer questions or there will be a presumption of guilt at trial.

B. That statements made to law enforcement before arraignment may not be used

against him in court.

C. The individual has the right to consult an attorney before speaking to the police.

D. The individual will not have an attorney unless he can afford to pay for his own.

E. That the right to an attorney does not begin until after the defendant is arraigned.

Convertibles. Barry, a new car dealer, advertised that a new brand of convertible called

Wind would be available at his dealership for the price of $10,000 each. He had only

three Wind vehicles, however; and when those were sold, he tried to convince shoppers

to purchase a much more expensive new convertible at a price of $25,000. Kathy, a

customer who decided to purchase one of the more expensive vehicles needed financing

in order to do so. She had $10,000 to pay on the car and sought a loan from ABC Bank

for the remainder. She wanted the loan for a specific amount of time. ABC Bank offered

her the loan and she agreed. The only information she received from ABC Bank was

confirmation that she borrowed $15,000 at an 8% interest rate. After receiving several

complaints, the Federal Trade Commission disapproved of Barry’s action in regard to

the Wind vehicles. Claiming that his advertisement was misleading, the Commission

proceeded to issue a cease-and-desist order prohibiting deceptive advertising involving

Wind vehicles and also in regard to any other vehicles Barry offered for sale. What kind

of objectionable advertising, if any, was Barry engaged in when he offered convertibles

for sale for $10,000 but only had three and then tried to convince customers to purchase

a much more expensive vehicle?

A. Advertise-and-deny

B. Claim-and-refuse

C. Bait-and-switch

D. Ad trickery

E. He was not engaged in any objectionable advertising so long as he had at least one

vehicle in stock at a price of $10,000.

Which of the following is a bank receiving a transferred check during a collection

process (excluding the first bank and the last bank)?

A. Depositary.

B. Acknowledging.

C. Collecting.

D. Intermediary.

E. Transferring.

Under the UCC, how can proper presentment be made?

A. By any commercially reasonable means

B. Through a clearinghouse procedure

C. At a place designated in the instrument

D. By any commercially reasonable means, through a clearinghouse procedure, and

also at a place designated in the instrument

E. Through a clearinghouse procedure or at the place designated in the instrument, but

not by any commercially reasonable means

What does the free-exercise clause of the First Amendment provide?

A. That government cannot make a law prohibiting the free exercise of religion.

B. That government cannot make a law establishing a religion.

C. That government cannot make a law referencing religion in any manner.

D. That government cannot make a law prohibiting the free exercise of religion; that

government cannot make a law establishing a religion; and that government cannot

make a law referencing religion in any manner.

E. None of these.

Shady lawyer. Brice had a number of ethical issues come up in law school involving

alleged cheating but managed to graduate because nothing was ever proven. Upon

obtaining his law license, Brice enjoyed living “on the edge” and engaged in tactics that

were at least questionable. One of his clients was an older gentleman, Sam, with

significant assets and significant legal issues involving a messy divorce stemming from

his involvement with a local dog groomer, Susie. Brice told Sam that he felt certain that

he could arrange matters so that Sam could live happily in the Caribbean with Susie but

that, in addition to paying a hefty legal fee, Sam would need to name Brice as a

significant beneficiary in his will and give Brice power of attorney over his assets. Sam

agreed to do so and gave Brice power of attorney, and changed his will to reflect that

upon his death, Brice would receive half his estate. The other half went to Susie. Sam

also paid the hefty fee Brice demanded. At that point Brice agreed to proceed with

negotiations in the divorce. Shortly after the divorce, Sam had an unexpected heart

attack and died immediately. Susie, the executor of the will, told Brice that she was

reporting him to the state bar association and that he was not entitled to any sums from

the estate. Brice told Susie that he knew that Susie had failed to pay income tax for all

her dog grooming and that he was reporting her unless she kept her mouth shut and

consented to the terms of the contract. Brice also said that in return for keeping his

mouth shut, he wanted additional sums purportedly for his work on Sam’s divorce.

Which of the following is true regarding Brice’s threat to report Susie for tax evasion?

A. Brice is guilty of duress.

B. Brice is guilty of undue influence.

C. Brice is guilty of duress and undue influence.

D. Brice is guilty of intentional wrongful disclosure.

E. Brice is not guilty of anything so long as Susie truly cheated on her taxes.

_____ own(s) the corporation.

A. Directors

B. Officers

C. Shareholders

D. Affiliates

E. The state

Which of the following are estates that do not include the right to possess the property?

A. Easements

B. Profits

C. Licenses

D. Easements, profits, and licenses

E. Easements and profits, but not licenses

The Truth in Lending Act includes _________________.

A. open-end credit

B. closed-end credit

C. credit card applications and solicitations

D. open-end credit, closed-end credit, and credit card applications and solicitations

E. open-end credit and closed-end credit, but not credit card applications and

solicitations

The Age Discrimination in Employment Act of 1967 prohibits employers from refusing

to hire, discharge or discriminate employment for workers _______ years old or older.

A. 21

B. 35

C. 40

D. 55

E. 62

A transaction in which the payment of a debt is guaranteed by personal property owned

by the debtor is a(n) __________________________.

A. transfer transaction

B. approved transaction

C. secured transaction

D. effected transaction

E. guaranteed transaction

Book Payment. Molly and Pat signed a contract providing that “Pat will furnish the

correct used business law book for use in Molly’s business law class; and in return on

August 15, 2011, Molly promises to pay Pat $50 for the book.” Molly took the book

and planned to pay Pat. Meanwhile, Pat properly assigned the contract Molly had

signed to Jack. When Molly went to class, however, she discovered that the book was

the incorrect book. When Jack asked Molly for payment, Molly refused. Molly told

Jack that the book was useless to her and that she was not paying either him or Pat

anything for it. Jack told Molly that he had an enforceable assignment in the form of a

negotiable instrument and that he could collect regardless of whether the book was

useless. Molly did not believe him. Continuing with her attempt to save money on

books, Molly agreed to buy Tim’s U.S. history book for $40. She had an oral agreement

with Tim that he would give her the book and that she would pay him in three days.

This time Molly got the right book. Tim, in writing, properly assigned the right to the

$40 payment to Richard. Richard asked Molly for the money. Molly admitted her

agreement with Tim but told Richard that she was not going to pay him because he did

not have a negotiable instrument. Molly also purchased a communications book from

Sam promising in writing to give him in return the next day, to his order, a used DVD

player she owned. Which of the following is true regarding Jack’s claim that he had a

negotiable instrument and could collect from Molly?

A. Jack is correct.

B. The document is not negotiable because it does not contain words of negotiability or

words indicating it is a bearer instrument.

C. The document is not negotiable because the book was the wrong book.

D. The document is not negotiable because Jack was not a party to the original contract.

E. The document is not negotiable because it does not contain words of negotiability or

words indicating it is a bearer instrument, and also because Molly received the wrong

book.

Susie Smith signed a note agreeing to pay, “Annie Greene, Mary Hodge,” $1,000. The

payment was for painting her house. An issue with the note was that it spelled Annie’s

last name, “Greene,” whereas Annie spells it simply, “Green.” Annie and Mary had a

disagreement regarding how to split up the funds for painting the house. Annie

proceeded to sign the note on the back, “Annie Green,” and presented it to Bill Brown

to satisfy a debt that she owed him. Bill Brown endorsed the note on the back and took

it to the bank for payment. Mary is unhappy because she did not obtain any of the funds

and stated that Annie could not legally endorse the instrument because it misspelled her

name and also because Mary did sign it. Which of the following is true regarding the

complaint of Mary that she did not also endorse the instrument?

A. She is correct because both names are required in order to provide legal

endorsement.

B. She is correct in that her name was needed for legal endorsement, but that is only the

case because of the misspelling of Annie’s name.

C. She is correct because regardless of whether the payees are listed with no

designation as to whether they are alternate or joint, or whether the words, “or,” or

“and,” are used to designated payees, any listed payee must endorse a note in order for

it to be properly payable.

D. She is incorrect because Annie properly endorsed the note, and only her signature

was needed.

E. She is incorrect, but only if it can be established that Bill Brown lacked knowledge

that she had not given her consent to the form of the endorsement.

Which of the following type of agency exists when a third party reasonably believes, on

the basis of a principal’s actions, that an agency relationship exists between the

principal and another individual?

A. Express

B. Implied

C. Acknowledged

D. Perceived

E. Apparent

Which of the following describes conditions explicitly stated in the contract?

A. Express

B. Definite

C. Conditional

D. Concurrent

E. Both express and conditional