If a liquidated damages clause is not enforceable because it is unconscionable, the
injured party is barred from recovering actual damages.
Answer:
The elements of fraud are the same as the elements for the tort of deceit.
Answer:
The FTC does not prohibit pre-recorded telemarketing sales calls.
Answer:
Many states treat intoxicated persons like people who lack mental capacity if, at the
time they entered the agreement, they were so intoxicated that they were unable to
understand the nature of the business at hand.
Answer:
From a risk standpoint, a shareholder or limited partner is better off than a general
partner.
Answer:
Partners no longer have fiduciary duties to one another during the winding up process.
Answer:
Article 2 of the UCC applies to transactions involving real and personal property.
Answer:
A promise supported by past consideration is enforceable.
Answer:
Notice of dishonor must be made only by written means.
Answer:
Health insurance policies may require the insured to pay up to a certain amount each
year before the insurer’s payment obligation begins.
Answer:
Plaintiffs who assume the risk of injury created by another’s negligence are barred from
recovery.
Answer:
If a drawee bank mistakenly paid a check over a stop-payment order, the bank cannot
recover if it paid the check to a presenter who had taken the instrument in good faith
and for value.
Answer:
The basic idea of misrepresentation is that one of the parties to a contract created in the
mind of the other party a mistaken impression about an important fact or facts
concerning the subject of the contract.
Answer:
With the increase in federal regulation that followed the Civil war, the courts tended to
focus on the Commerce Clause as a limitation on the federal government’s power to
regulate business.
Answer:
Civil law arises when courts are called upon to resolve disputes for which there is no
statute or other sources of law to establish rules.
Answer:
An involuntary bailee does not have the right to use property that was found by
chance.
Answer:
As a general rule, a promise to discharge a liquidated debt for partial payment of the
debt at or after its due date is unenforceable due to lack of consideration.
Answer:
In a unilateral contract, the offer is accepted when:
A. the offeror verbalizes his assent.
B. the offeree attempts to perform the act.
C. the offeror puts across his promise in writing.
D. the offeree performs the requested act.
Answer:
Under Rule 10b-5 of the 1934 Act:
A. the plaintiff must prove that the accountant acted with scienter.
B. the intent to deceive is not an element of the offense.
C. an accountant may be liable to a purchaser for a misstatement of material fact in the
registration statement.
D. an accountant must prove he exercised due diligence to escape liability.
Answer:
An appliance store sells a television set to Adam for $750 on a conditional sales
contract, reserving a security interest in the set until Adam has paid for it. The store
does not file a financing statement but relies on attachment for perfection. Adam later
borrows money from a credit union and gives it a security interest in the television set.
Adam defaults on his loans and the credit union tries to claim the set. Under these
circumstances:
A. the credit union has a better claim to the set than does the appliance store.
B. the appliance cannot claim the set as they relied on attachment for perfection.
C. the appliance store has a better claim to the set than does the credit union.
D. neither the appliance store nor the credit union can claim the set.
Answer:
Under the allocational efficiency theory, the primary objective of a business
corporation is to:
A. maximize profit.
B. minimize fraudulent activities.
C. maximize corporate social responsibility.
D. minimize criticism.
Answer:
Composition agreements are:
A. made in a way that allows the promisor to decide whether or not to perform the
promise.
B. agreements between a debtor and two or more creditors who agree to accept a stated
percentage of their liquidated claims against the debtor at or after the due date.
C. agreements entered into when someone promises not to file a legal suit in exchange
for a promise to pay a certain sum of money or some other consideration.
D. agreements between a debtor and a creditor who agree to accept a stated percentage
of their liquidated claims against the debtor after the due date.
Answer:
In a contract made by a minor:
A. adult parties to the contract can disaffirm.
B. the minor has the right to disaffirm.
C. his/her siblings who are also minors can disaffirm the contract on his/her behalf.
D. the minor can disaffirm the contract anytime even after attaining majority.
Answer:
A clothing store that has opened a credit account with Judy, a college student, gets
Judy’s older sister Alice to agree to pay the amount owed on the account if Judy fails to
do so. Which of the following statements is TRUE for this scenario?
A. Judy is the obligor and only she is contractually liable to the clothing store.
B. Alice is the guarantor and she is primarily liable to make the payments.
C. Judy is the obligor and her promise to the clothing store is conditional.
D. Alice is the guarantor and Alice’s contract must be in writing to be enforceable.
Answer:
In addition to demonstrating actual emotional distress, if a third party wants to recover
for negligent infliction of emotional distress, the plaintiff must show that:
A. the emotional distress caused to the witness did not result in physical symptoms or
injuries.
B. the third party is at least distantly related to the victim.
C. the third party actually witnessed the injury when it occurred.
D. the emotional distress caused to the witness is so serious that he/she may not recover
from it.
Answer:
When Steve convinces Tom to buy a pre-owned car from him while withholding the
fact that the car has a mechanical problem, it indicates:
A. undue influence.
B. duress.
C. mutual mistake.
D. scienter.
Answer:
Many corporations initiate legislation in order to:
A. head off the risk of future unpredictable lawsuits.
B. ensure that their competitors are subject to more rigid constraints than is applicable
to them.
C. enhance the community in which the company is located.
D. maximize the risk of more costly regulations for competitors.
Answer:
A principal’s liability under respondeat superior often is called:
A. direct liability.
B. vicarious liability.
C. contributory liability.
D. enterprise liability.
Answer:
Which of the following is a useful way of preventing unwanted persons from entering a
corporation?
A. Novation
B. Consent restraint
C. Piercing the veil
D. Estoppel
Answer:
This is a common defense to the tort of malicious prosecution.
A. Improper purpose
B. Lack of capacity
C. Probable cause
D. Inducing a breach of contract
Answer:
Debts created by larceny or embezzlement by the debtor while acting in a fiduciary
capacity are:
A. dischargeable.
B. secured.
C. nondischargeable.
D. unsecured.
Answer:
Inverse condemnation occurs:
A. when one property owner acquires title to neighboring property by occupying the
property for a certain number of years.
B. when a tenant acquires ownership of fixtures by occupying the property and using
the fixtures.
C. when the government takes land from the private property owners without having
paid for it.
D. when the government institutes a formal legal action to exercise eminent domain
power.
Answer:
What are the exceptions to contracts under statute violation?
Answer:
Under the UCC, list three remedies available to a seller when a buyer breaches a
contract.
Answer:
How does the Americans with Disabilities Act of 1990 define disability? Who is
excluded from this definition?
Answer:
While fishing in the lake, George anchored his new motorboat and went ashore to
make an important phone call. He accidently left the key in the boat and Jeb stole the
boat. While driving the boat recklessly, Jeb hit Angela, who was water skiing and
severely injured her. Should George be responsible for Angela’s injuries?
Answer:
Ford owned an apartment complex and was converting the complex to a cooperative by
selling individual units. Each purchaser was required to pay Ford an extra $30 per
month for utilities, taxes, and insurance. Ford sold all his rights in the complex to
Roberts and assigned the purchasers’ contracts to him. Roberts failed to pay the
applicable property tax, and Crowe, a purchasing tenant, sued him to compel payment
of the tax. Roberts argued that in purchasing Ford’s interest, all he bought was the right
to collect the payments made by tenants and that he assumed no duties. Is Roberts liable
for the property tax?
Answer:
What is price fixing?
Answer:
Answer:
The MBCA requires that a director or officer discharge his duties with ‘such care as an
ordinarily prudent person in a like position would use under similar circumstances.”
Explain the MBCA’s “prudent person” standard.
Answer:
Define a constructive trust and the duty it imposes on the constructive trustee.
Answer: