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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
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.
Assuming that Sam had paid all amounts validly due from the divorce proceeding,
which of the following is true regarding Brice's attempt to obtain additional fees?
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 he uses no physical force to obtain Susie's
agreement.
Which of the following is a doctrine that allows the plaintiff to recover damages despite
proof of contributory negligence as long as the defendant had a final clear opportunity
to avoid the action that injured the plaintiff?
A. Assumption of risk.
B. Last-clear-chance doctrine.
C. Modified risk doctrine.
D. Modified comparative doctrine.
E. There is no such doctrine.
Gretchen offers $100 to anyone who can return her lost dog, Sparky. Haley returns the
dog and requests the money. Gretchen says that there is no binding contract. Which of
the following is true regarding Gretchen's statement?
A. Gretchen is incorrect because there is a binding bilateral contract.
B. Gretchen is incorrect because there is a binding unilateral contract that Haley
accepted by performing.
C. Gretchen is correct because there is no binding bilateral contract.
D. Gretchen is correct because there is no binding unilateral contract.
E. Gretchen is correct because Haley acted incorrectly by her manner of attempted
acceptance.
A(n) ______ clause is a clause parties include in a written agreement within the statute
of frauds that states that the written agreement accurately reflects the final, complete
version of the agreement.
A. adhesion
B. complete
C. parol
D. merger
E. consolidation
In which of the following is the payee of a check a specific person, and the bank draws
on itself?
A. Certified.
B. Agreed.
C. Acknowledged.
D. Cashier's.
E. Promise.
Alice, a resident of Michigan, claims that Pet Food Company Inc. put out some dog
food that made her dog, Champ, sick. Champ is a prize-winning poodle. He survived
the pet food fiasco but only after traveling to a veterinarian in Florida specializing in
poodles and having two very expensive surgeries. Additionally, his ability to sire has
been impaired, and Alice will have no more breeding fees from Champ. Her damages
are $80,000. Pet Food Company Inc. is incorporated in Delaware, with its principal
place of business in Michigan. Alice asks you whether she can sue in federal court.
What would you tell her and why?
Define the terms liquidated debt and unliquidated debt, and discuss when an accord and
satisfaction is enforceable.
Set forth the eight exceptions to the parol evidence rule.
List the eight options discussed in the text that may be available to a buyer/lessee when
the seller/lessor is in breach.
Set forth the first four classes of priority claims among unsecured creditors in a Chapter
7 bankruptcy case in order of priority.
What are the three main purposes of the statute of frauds?
Bernice enjoys snooping, particularly through her neighbor's trash. She sneaks out and
grabs the neighbor's trash after they have gone to work but before the trash collector
comes. She goes through it to find out confidential information regarding the neighbors,
but never tells anyone else or uses the information for any purpose. Discuss whether
you believe it is legal for Bernice to go through the neighbor's trash and why or why
not. Also, discuss whether you believe it is ethical for Bernice to go through the
neighbor's trash, and why or why not.
Bobby, a struggling college student, was entering his favorite grocery store to buy a few
things when a shabbily dressed young woman who told him that she had no money and
needed a few food items to eat approached him. She suggested that Bobby buy some
steaks for grilling and return with her to her apartment for dinner. Bobby told her that
he did not have much money, but the young woman persisted and went into the store
with him. While in the grocery, Bobby put some steaks and other items in his backpack
and, without paying for them, carried them out of the store in preparation for dinner.
Unknown to Bobby, the young woman was actually an undercover police officer who
arrested him for shoplifting. What is Bobby's best defense?
Set forth the two key exceptions to the equal dignity rule.
Define the term "in personam" jurisdiction, discuss where corporations are generally
subject to that type of jurisdiction, and discuss long-arm jurisdiction.
What is the result of a contract being rescinded?
Define "course of dealing" and "course of performance" and how these concepts affect
the perfect tender rule.
Yolanda and Rodney agreed that Rodney would paint Yolanda's home for $800 with
Yolanda supplying the paint. Rodney went to Yolanda's home on several occasions to
do the job, but she never had the paint ready. Finally, he moves on to other jobs. Six
months later Yolanda sues Rodney for not painting the home. Who is likely to win and
why? Set forth the legal term for Rodney's offer of performance.
Jackie is hiring Ron to do clean up and maintenance as an independent contractor for
her building which has several tenants. She is aware that Ron has sued some previous
building owners. He does a good job, however, and she would like to hire him. Ron has
agreed to sign an arbitration agreement. How should Jackie structure the agreement so
that it will be enforced?
Should the perfect tender rule be rejected and replaced with a concept of substantial
performance?
Identify the items that should appear in a complaint.
