The statute of frauds imposes on parties the need to carefully consider the terms, agree
to them, write them down, and ___________.
A. meet with a lawyer to discuss the terms
B. continue to negotiate the contract
C. orally agree to the terms
D. sign the agreement
E. file the agreement with the court
Run Around. Millie issues a note to Bob. Bob endorses the note and transfers it to Anne.
Anne endorses the note and transfers it to Henry. In a timely fashion, Henry endorses
the note and presents it to Millie for payment. When Henry presents the note to Millie,
she asks him for reasonable identification. He did not have any identification with him
and told her that she had no right to dishonor the instrument. Millie, however, refused to
provide him the funds until he returned with proper identification. Nevertheless, when
he returned with proper identification, Millie refused to pay the note, claiming that she
lacked the funds with which to do so. Henry proceeded immediately to request that
Anne pay the note, but she told him that he would have to get his money from Bob,
who cannot be found. Which of the following is the likely result if Henry sues Anne,
Bob, and Millie?
A. The judge is likely to rule that Henry can recover from Anne, Bob, or Millie.
B. The judge is likely to rule that Henry’s only option of recovery is against Millie.
C. The judge is likely to rule that Henry’s only option of recovery is against Anne.
D. The judge is likely to rule that Henry can recover against Bob and that Bob may
recover against Millie, but Henry cannot recover directly from Anne.
E. The judge is likely to rule that Henry’s only option for recovery is against Bob.
Run Around. Millie issues a note to Bob. Bob endorses the note and transfers it to Anne.
Anne endorses the note and transfers it to Henry. In a timely fashion, Henry endorses
the note and presents it to Millie for payment. When Henry presents the note to Millie,
she asks him for reasonable identification. He did not have any identification with him
and told her that she had no right to dishonor the instrument. Millie, however, refused to
provide him the funds until he returned with proper identification. Nevertheless, when
he returned with proper identification, Millie refused to pay the note, claiming that she
lacked the funds with which to do so. Henry proceeded immediately to request that
Anne pay the note, but she told him that he would have to get his money from Bob,
who cannot be found. Which of the following is true regarding Anne’s statement to
Henry that he must seek recovery from Bob?
A. Anne is correct.
B. Anne is correct only if Bob is able to pay and has not filed bankruptcy.
C. Anne is correct in that Henry should seek recovery from Bob only if Millie has filed
bankruptcy because, otherwise, Henry should be seeking primary payment from Millie.
D. Anne is correct unless the notice is for over $10,000, in which case Henry can seek
recovery from her without resorting to recovery from Bob or Millie.
E. Anne is incorrect. Henry may seek recovery from her without first seeking recovery
from Bob or Millie.
Which of the following is an example of indispensable paper?
A. Fixtures.
B. Documents of title.
C. Accounts.
D. Fixtures, documents of title, and accounts.
E. Fixtures and documents of title, but not accounts.
Under the UCC, when does a person have notice of a fact?
A. When the person has actual notice of the fact.
B. When the facts and circumstances known to the person at the time in question give
the person reason to know that the facts exist.
C. When the person receives notice or notification of the facts.
D. When the person has actual notice of the fact, when the facts and circumstances
known to the person at the time in question give the person reason to know that the
facts exist, and also when the person receives notice or notification of the facts.
E. When the person has actual knowledge of the fact, or the facts and circumstances
known to the person at the time in question give the person reason to know that the fact
exists, but not that the person receives notice or notification of the fact.
Case law can be revoked by __________.
A. new statutes
B. precedent
C. stare decisis
D. standard law
E. None of these, because case law cannot be revoked.
In which of the following types of cases does a plaintiff attempt to prove that while an
employer’s policy or practice appears to apply to everyone equally, its actual effect is
that it disproportionately limits employment opportunities for a protected class?
A. Disparate-treatment cases
B. Disparate-impact cases
C. Unequal-distribution harassment cases
D. Disparate-treatment cases, disparate-impact cases, and unequal-distribution cases
E. Disparate-treatment cases and disparate-impact cases, but not unequal-distribution
cases
Which of the following occurs when a former holder of an instrument has the
instrument transferred back to him by negotiation or other means?
A. Cancellation
B. Renunciation
C. Reacquisition
D. Recourse
E. Release
A new agreement to pay less than the creditor claims is owed is called a(n) _______.
A. satisfaction
B. accord
C. both satisfaction and accord
D. written compromise
E. written acknowledgement
Article 2(A) includes leases for real property.
_______________________ regulate(s) securities transactions.
A. The Securities Act of 1933
B. The Securities Exchange Act of 1934
C. The Anti-Fraud Securities Act of 2001
D. The Securities Act of 1933, the Securities Exchange Act of 1934, and the Anti-Fraud
Securities Act of 2001
E. The Securities Act of 1933 and the Securities Exchange Act of 1934, but not the
Anti-Fraud Securities Act of 2001
Masked Bandit. Barry, who owned a small convenience store, was robbed when a
masked bandit entered his store and demanded his cash while pointing a gun at him. As
the bandit ran out of the store, Barry grabbed his own gun and shot the bandit in the leg.
When the police arrived, Barry was arrested along with the thief. Barry claimed that no
charges should be brought against him because his action in shooting the robber was
justified. After the arrest, the officers searched his store and found marijuana. When
Barry complained about the arrest and search, the officer in charge told him that since
the state police were involved, federal constitutional rights were waived. Barry is
attempting to obtain legal representation in an attempt to get out of jail, but cannot
afford a lawyer because he just spent all his funds buying the illegal drugs for resale
that have now been confiscated by the police. Sam, another inmate, asks Barry if the
officers explained his rights to him; but Barry only recalls being arrested, hustled into
the police cruiser, and whisked off to jail. Which of the following is Barry’s best
defense, if any, regarding the arrest and search?
A. That the police lacked probable cause.
B. That the police violated his Jones rights.
C. That the police violated his rights to nolo contendere.
D. That the police mistook his identity a thief.
E. That the police entrapped him.
Which of the following references a right of a corporation or its shareholder to purchase
any shares of stock offered for resale by a shareholder within a specified period of
time?
A. Right of adequate refusal
B. Right of first refusal
C. Right of first purchase
D. Right of first acknowledgement
E. Superior right of purchase
__________________ may be covered by Title VII.
A. Indian tribes
B. Private clubs
C. Unions
D. Employment agencies
E. All of these
Puppy Woes. Sam promised to sell Linda a Welsh Corgi puppy for $300 but backed out
of the deal. Linda sued Sam in state court for breach of contract. Linda asked for a jury
in her complaint. During jury selection, one juror, Ann, said that they did not think they
could be fair to Linda because Linda did not appear to be a dog lover. Linda asked that
Ann not hear the case, and the judge excused Ann. Linda also decided that another
juror, Sandy, looked at her in a grumpy manner so she asked the judge to excuse that
juror from serving. The judge did so. After the jury was chosen, Linda made a statement
to the jury, as did Sam. Linda then called to the witness stand a friend of hers, Brenda,
who heard the discussion held between Linda and Sam regarding the purchase of the
puppy. Brenda testified under questioning by Linda that she heard Linda say that she
would pay $300 for the puppy and that she also heard Sam say that he would sell the
dog for that amount. Unfortunately for Linda, Brenda also testified in response to
questioning by Sam that Sam distinctly told Linda that he would only sell the puppy to
her if Linda came with cash for the puppy within seven days. Linda did not show up
with the money for ten days and Sam had already sold the dog to someone else. The
judge ruled in favor of Sam. The statements made to the jury by Linda and Sam
immediately after the jury was chosen were ______.
A. direct statements
B. closing statements
C. jury statements
D. influential statements
E. opening statements
An instrument that reads, “Pay to the order of Jones and Green,” establishes _______
payees.
A. joint
B. concurrent
C. consecutive
D. alternative
E. alternate
If Maria says to Peter, “I bet you a million dollars that it is going to rain tomorrow,” and
Peter knows that Maria is joking, it would not be a valid offer based upon:
A. lack of definite and certain terms
B. lack of inadequate communication to the offeree
C. lack of intent
D. lack of consideration
E. it is a valid offer
Comparative law:
A. Compares and studies the laws in different countries.
B. Compares and studies state constitutions.
C. Compares and studies Executive Orders.
D. Compares and studies laws of federal administrative agencies.
E. Compares and studies laws of the European Union.
Which of the following was the first federal administrative agency created?
A. The Interstate Commerce Commission
B. The Securities and Exchange Commission
C. The Internal Revenue Service
D. The Social Security Administration
E. The Food and Drug Administration
Inattentive Driving. While cutting class and driving off campus to check on her new
dress for the upcoming formal, Molly, a busy college student, is busy talking on her cell
phone with her friend Sharon in an attempt to talk Sharon into going to the dance with
Molly’s brother, who has a big crush on Sharon. Unfortunately for Molly, there is a
statute in her state outlawing talking on a cell phone while operating a motor vehicle.
Molly crashes into the side of Sam’s new convertible when she looks down to pick up a
can of soda she just dropped onto her new jeans. A police officer just down the street
comes over to investigate. Molly explains to him that it was difficult to hold the cell
phone in one hand, the soda in the other, and also drive. The officer was not impressed.
Around that time Sam comes along. He is furious regarding the significant dent in his
new car. Molly says she has insurance and that she will cover the whole incident. Sam
says that is insufficient. The officer is annoyed because it is his lunch break. He tells
Molly that she must obey the law, and proceeds to write several citations to her. The
officer’s reference to the need for Molly to obey duly authorized law is a reference to
which of the following?
A. The historical school of law
B. Legal positivism
C. Natural law
D. Legal realism
E. Stare decisis
Which of the following is another name for apparent agency?
A. Simplified agency
B. Equitable agency
C. Agency by law
D. Agency by estoppel
E. Approved agency
A contract may be discharged by operation of law through _______________.
A. alteration of the contract
B. bankruptcy
C. objective impossibility of performance
D. alteration of the contract, bankruptcy, and objective impossibility of performance
E. alteration of the contract and bankruptcy, but not objective impossibility of
performance
Which of the following is needed in order to satisfy the UCC’s requirement for a written
document?
A. The contract or memorandum needs only to state the price of the goods.
B. The contract or memorandum needs only to state the quality of the goods.
C. The contract or memorandum needs only to state the quantity to be sold.
D. The contract or memorandum needs to state the price of the goods and the quality of
the goods, but not the quantity to be sold.
E. The contract or memorandum needs to state the price of the goods, the quality of the
goods, and also the quantity to be sold.
Which of the following is true of a joint stock company?
A. It is a mixture of a corporation and a partnership.
B. It is a mixture of a corporation and a joint venture.
C. It is a mixture of a partnership and a sole proprietorship.
D. It is a mixture of a limited liability company and a sole proprietorship.
E. It is a mixture of a limited liability company and a joint venture.
Chocolate Chips. Molly makes great chocolate chip cookies and sells them. She calls
them “Molly’s Famous Chocolate Chips.” Some of her friends are interested in selling
her cookies. They want to use her name and identify the cookies as “Molly’s Famous
Chocolate Chips.” Molly says, however, that she does not have enough time to bake any
more cookies. She agrees, for a price, to allow her friends to use her recipe and her
name. Suzette, one of Molly’s friends who was selling the cookies, was not being
sufficiently careful and negligently put a harmful ingredient into the cookie dough
resulting in a customer, Fred, becoming ill. Fred threatens to sue both Suzette and
Molly. Molly is so exasperated that she cancels all the franchise contracts on the basis
of aggravation although the franchise agreements provided that so long as requirements
were met, the franchise agreements were good for a period of two years, Molly took the
position that the cookies involved a personal service and that she could not be held
liable for discontinuation. Is Molly correct that she was entitled to cancel all franchise
agreements?
A. No, she was not entitled to cancel any franchise agreements.
B. No, while she was arguably justified in canceling Suzette’s franchise agreement, she
was not justified in canceling other franchise agreements because no breach of the other
franchise agreements had occurred.
C. No, she could only cancel all franchises after a judgment was entered against her,
and that had not yet occurred.
D. Yes, because a personal service type of franchise was involved, she could cancel all
the franchises at will.
E. Yes, she can cancel the franchises but only if she can establish that her profits were
less than had been expected.
How are the heads of the Securities and Exchange Act chosen?
A. They are appointed by the president.
B. Each state has one appointee appointed by the governor of each state.
C. They are appointed by a two-thirds vote of the Senate.
D. They are appointed by a majority vote of the Senate.
E. They are appointed by a majority vote of the House of Representatives.
Coffee shops. Bernice wants to open a chain of coffee shops and begins by asking her
friends in various states around the country to invest through the purchase of securities
in the coffee shops. Her friend Robbie says that he would like to invest but that she
should be sure that she satisfies requirements of the SEC. He tells her that she has to
provide information to the SEC involving a description of the securities, an explanation
of how proceeds will be used, information regarding the management of the company,
and other matters. He tells her that she also has to provide a document to the SEC that
will be provided as an advertising tool to potential investors who can rely on it to
decide whether they should buy securities. Bernice says that she does not want to do
that. She explains to Robbie that insofar as the coffee shop venture is concerned, she
does not want to advertise; and she wants to offer securities only to a limited number of
wealthy friends. Particularly, she has in mind Scott who has a net worth of at least $3
million and Mary, a psychiatrist. Mary recently filed bankruptcy because of some bad
decisions involving an elaborate decoration of her office. Although her income for the
past couple of years has been in the range of $80,000, business is improving based on
her recent involvement with a number of patients suffering anxiety based upon a fear of
alien invasion. Which of the following may allow Bernice to avoid registration with the
SEC?
A. The limited exemption.
B. The accredited exemption.
C. The unadvertised exemption.
D. The private placement exemption.
E. Section 4(6).
Which of the following is true regarding liability of a principal to an agent based on a
contract an agent makes with a third party that expressly excludes the principal from the
contract?
A. The principal is liable to the agent because it is unconscionable to exclude a
principal from a contract.
B. The principal is liable to the agent only if the principal is an unidentified principal.
C. The principal is liable to the agent only if the principal is a partially disclosed
principal.
D. The principal is liable to the agent unless the principal gave the agent authority in
writing to make the agreement with the third party.
E. The principal is not liable to the agent.
As a general rule, when is revocation effective?
A. When it is mailed by the offeror.
B. When it is received by the offeree.
C. One day after it is made.
D. Two days after it is made.
E. Three days after it is made.
Which of the following is true regarding the intent needed for an intentional tort?
A. The intent at issue is not intent to harm but, rather, is intent to engage in a specific
act, which ultimately results in an injury, physical or economic, to another.
B. The intent at issue is not intent to harm but, rather, is intent to engage in a specific
act, which ultimately results in a physical, not merely economic, injury to another.
C. The intent at issue is intent to harm that results in an injury, physical or economic, to
another.
D. The intent at issue is intent to harm that results in physical, not merely economic,
injury to another.
E. The intent at issue is not intent to harm and is not intent to engage in a specific act.
Instead, negligence will suffice.
By federal law, major credit reporting agencies are now required to provide consumers
with a free copy of their credit report every ______.
A. 36 months
B. 24 months
C. 12 months
D. 6 months
E. None of these because there is no such requirement.
Which of the following describes conditions that are inferred from the nature and
language of the contract?
A. Express
B. Implied
C. Conditional
D. Concurrent
E. Both express and conditional
In Hamer v. Sidway, the New York Court of Appeals found that forbearance:
A. Negates the enforceability of a contract.
B. Is not mandatory for a contract to be binding.
C. Is unconstitutional.
D. Is sufficient consideration for a valid contract.
E. Is insufficient consideration for a valid contract.
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