To accomplish the basic purposes of contract remedies, which of the following
limitations have NOT been imposed upon monetary damages?
a. Foreseeability.
b. Certainty.
c. Mitigation.
d. Restitution.
Steven makes a material misrepresentation of fact regarding his motorcycle to Thelma
who agrees to buy the motorcycle based upon the misrepresentation. This contract is:
a. void.
b. voidable.
c. executed.
d. unenforceable.
Al, an accountant, has a tax service and accounting business in Redwood City. He
decides to move to Center City, which is 150 miles away and sells his accounting
practice to Able and Baker, a CPA firm. In the sale contract, he agrees that he will
refrain from practicing accounting anywhere within a 100-mile radius of Redwood City
for a period of two years. However, on weekends he returns to his house in Redwood
City, and when clients call him, he meets with them in his home. In this situation:
a. Al is in violation of the sale agreement.
b. the agreement is invalid, because it is an illegal restraint on trade.
c. the agreement is illegal, because it is a violation of public policy.
d. the two-year provision is likely to be held invalid, because it is too long a period of
time.
The __________ is composed of a distinguished group of lawyers, judges, and law
teachers who assumed the task of preparing “an orderly restatement of the general
common law of the United States.”
a. New York City Bar
b. American Law Institute
c. National Conference of Commissioners on Uniform State Laws
d. National Reporter System
Marilyn read an ad in the school newspaper offering a $1,000 swimming scholarship to
anyone who could swim 500 laps in the school pool. Marilyn called the advertiser and
began swimming. She has reached lap number 460; she feels great and is sure she can
make it all the way. The advertiser:
a. may revoke the offer since there has not yet been an acceptance.
b. may not revoke the offer since Marilyn has already accepted it.
c. must permit Marilyn the opportunity to finish her attempt to swim the 500 laps, or
pay damages if he interferes with the completion of the laps.
d. must pay Marilyn $920, because she has performed 92 percent of the offer.
Which of the following is primarily liable for a note?
a. The maker.
b. An indorser.
c. The drawer.
d. The payee.
The Securities Act of 1933 has two basic objectives, one of which is to:
a. extend protection to investors trading in outstanding, issued securities.
b. grant the SEC power to impose administrative, civil penalties up to $600,000.
c. regulate disclosure requirements on publicly held corporations.
d. prohibit misrepresentation, deceit, and other fraudulent acts and unfair practices in
the sale of securities generally, whether or not they are required to be registered.
What is another name for the main purpose doctrine?
a. The collateral promise rule.
b. The possibility test.
c. The leading object rule.
d. The suretyship provision.
X signs a negotiable instrument ordering Y to pay Z the sum of $500. Y is the:
a. drawee.
b. maker.
c. payee.
d. drawer.
Dan, an agent for Ramona, sees what he thinks is a good deal for Ramona. Without
asking whether he has authority to negotiate the deal, Dan enters into a contract on
Ramona’s behalf. Ramona says later that she isn’t interested. Is Ramona liable on the
contract? Is Dan liable on the contract? Explain.
In determining whether illegal monopolization has occurred and whether a firm has
engaged in unfair conduct:
a. a firm possessing monopoly power has the burden of proving it acquired such power
passively or that the power was thrust upon it.
b. the court will conclude that monopoly power, combined with conduct designed to
exclude competitors, violates Section 1 of the Sherman Act.
c. a court will find that monopoly power must be accompanied by some type of
predatory practice.
d. courts do not agree on what constitutes unfair conduct. Any of the above approaches
may be used.
Generally, legislative rules must be promulgated in accordance with the procedural
requirements of the APA.
Harry said to Marge, “I have a ring once owned by Marilyn Monroe. Would you like to
buy it for $500?” Marge pays for the ring, but the next day a friend tells her that Harry
had recently purchased the ring at a local store. Marge enjoys wearing the ring and
wears it constantly for twelve months. Finally, she goes to Harry and says, “Here is the
ring you lied about. Give me my $500.” Most likely Marge will:
a. get her money back since Harry’s statement was fraudulent.
b. not get her money back since she should have investigated the facts about the ring
more carefully.
c. not get her money back since she is a good faith purchaser of merchandise.
d. not get her money back since she has affirmed the contract by taking an unduly long
time to disaffirm.
Under the Credit Card Accountability, Responsibility, and Disclosure Act:
a. a customer must be more than ninety days overdue on payment before the credit card
company may impose a penalty rate increase on an existing debt.
b. if a credit card company lawfully increases its interest rate on a customer because of
overdue payments, the rate must be restored to the prior rate if the customer makes at
least the minimum payment on time for the next six months.
c. credit card companies must mail account statements 24 days prior to the payment due
date.
d. if the credit card company receives payment after 3 p.m., the payment may be
credited the following business day.
Another term for personal property is:
a. patent.
b. chattel.
c. realty.
d. fixtures.
Gail dies intestate leaving two children, Benjamin and Christopher. Her daughter, Anna,
died two years earlier. Anna had three children, Carolyn, Jeffrey and Scott. If Gail
leaves an estate of $150,000, how much will Jeffrey’s share be under the usual statutes
of descent and distribution?
a. $0.
b. $30,000.
c. $16,667.
d. $50,000.
If Stan’s land is condemned in order to build a subway system for the city, he must be
given:
a. the fair market value of the property as of the time of the taking.
b. equivalent property.
c. the option of keeping the property.
d. his price for the property.
An $80,000 fire insurance policy covers a building, which is valued at $100,000, and
there is an 80 percent co-insurance clause. If the building is totally destroyed by fire,
the policyholder will receive:
a. $80,000.
b. $100,000.
c. $20,000
d. $64,000
Liquidation of a corporation:
a. is carried out by a court-appointed receiver in any liquidation.
b. is carried out by the board of directors, serving as trustees, in a voluntary liquidation.
c. results in paying first stockholders with a liquidation preference, then outside
creditors, then expenses of liquidation.
d. is set up to protect stockholders and the board of directors, but not creditors.
An example of private law is:
a. business law.
b. administrative law.
c. criminal law.
d. All of the above.
Violation of a statute designed to protect underage, unlicensed drivers, as well as
innocent third parties, from the consequences of juvenile car theft and “joy riding,” by
prohibiting car owners from leaving the keys in their car if the car is unattended, is
likely to be characterized as:
a. negligence per se.
b. res ipsa loquitur.
c. contributory negligence.
d. assumption of risk.
If The Raintree Company has accumulated earnings each year but the directors have not
declared dividends for five years, the shareholders may:
a. petition a court of law for redress.
b. override the board by a two-thirds vote.
c. ask for an injunction requiring a dividend to be declared.
d. do nothing but sell their stock.
Shareholders normally have the right to do all but which one of the following?
a. Elect the directors.
b. Elect the officers
c. Approve the sale of a major division.
d. Meet at least once a year.
A trust will fail for lack of:
a. consideration.
b. a trustee.
c. definite and specific property forming the trust corpus.
d. All of the above.
A waiver of presentment will waive the requirement of notice of dishonor as well.
The law applies a subjective standard in determining whether there was the requisite
intent to enter into a contract.
The 1990 Clean Air Act Amendments provide that EPA must establish new NAAQS for
major pollutants every five years.
A party delegating his duty to a third party is known as a delegator.
Discuss how an owner of intellectual property protects those rights in other countries.
In the case of partial destruction of identified goods before risk of loss passes to the
buyer, the buyer has the option to avoid the contract or to accept the goods with due
allowance from the contract price for the deterioration or deficiency.
Under the 2004 amendments, individuals who violate the Sherman Antitrust Act,
Sections 1 or 2, may be imprisoned for ten years and fined up to $1 million.
Under the common law, if a landlord does not maintain, repair, or restore the property
as stated in the lease contract, the tenant has a legally enforceable right to refuse to pay
rent, even if the lease does not provide such relief.