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Administrative agencies have legislative, executive, and judicial powers.
Under the UCC, oral testimony can be used to establish the existence of a lost writing.
In pari delicto means "in equal fault."
The issue of whether a hostile work environment exists is only considered by the courts
in the area of harassment based upon gender.
The perfect tender rule, which requires that the seller deliver the goods in conformity
with the contract, is absolute and has no exceptions that reduce the rule's rigidity.
The case of Marbury v. Madison was the turning point for the Supreme Court's
interpretation of the commerce clause.
If a transfer is through an endorsement, the transfer warranties apply to any future
holder. However, if the transfer does not occur through endorsement, the warranties
apply only to the transferee.
If a violation of federal securities laws is serious enough to merit criminal prosecution,
the Fraud Section of the Securities and Exchange Commission prosecutes the action.
A person who violates the 1933 Securities Act can be fined but not sent to jail.
A shareholder can sue a director or officer if the shareholder feels that the director or
officer has caused harm to the business by violating a fiduciary duty.
The value of a security is based upon what the paper represents.
A minor cannot choose to disaffirm a part of a contract, he or she must disaffirm the
entire contract.
All warranties automatically arise under common law.
The UCC does not allow a seller to cancel a contract if the buyer is in breach although a
lessor may do so.
An agent's implied authority is derived from an agent's apparent authority and consists
of what is reasonably necessary for carrying out the agent's grant of express authority.
Prior to the passage of the Administrative Procedures Act, agencies could decide on
their own how to make rules, conduct investigations, and hold hearings and trials.
Simply offering a better deal is not enough to create liability for intentional interference
with contract when only a prospective contract exists.
Because of the law, we rely on the goodwill and dependability of one another.
Only one party may appeal from a final judgment.
Under UCC 3-302, a party may be a holder in due course of a non-negotiable
instrument.
Med-arb is a type of ADR method.
Assets that a debtor gains after filing a Chapter 7 bankruptcy petition are generally not
part of the bankruptcy estate unless they fall under an exemption.
Proceeds are something that is exchanged for a debtor's sold collateral.
Congress can use its spending power to achieve social welfare objectives.
The party who has the authority to act on behalf of and bind another party is the
principal.
Default is failure to make payments on a loan.
The court never considers the adequacy of consideration.
Congress has the power to enact legislation, but the president can veto a law that
Congress passes.
The courts generally hold that business owners have a duty to protect customers on
their property.
In a bilateral contract, the consideration for a promise is a completed act.
The two classifications of agencies are:
A. legislative, executive.
B. legislative, independent.
C. judicial, independent.
D. executive, independent.
E. judicial, executive.
Pursuant to UCC Section 2-608, a buyer may revoke the acceptance of goods if the
buyer can show that the defects of the goods caused its value to be
__________________.
A. reduced in any manner
B. reduced by 10%
C. reduced by 5%
D. substantially impaired
E. impaired
In a limited partnership, which of the following assume no liability for the partnership
beyond the capital they have invested?
A. General partners
B. Limited partners
C. Special partners
D. General partners, limited partners, and special partners
E. General and special partners, but not limited partners
Assuming there are no vacancies, how many U.S. Supreme Court justices are there?
A. 9
B. 5
C. 15
D. 8
E. 7
Which of the following involves remedies available to an individual when his or her
rights are violated?
A. Civil law
B. Resolution law
C. Procedural law
D. Civil law and procedural law, but not criminal law
E. Civil law, criminal law, and procedural law
When does title transfer to the buyer with a simple delivery contract?
A. When money is transferred
B. When the items are delivered
C. When the buyer takes possession
D. One day after goods are identified to the contract
E. When goods are identified to the contract
Overextended Debtor. Dennis purchased a big screen television from ABC Electronics
and financed the purchase through ABC Electronics based on an agreement granting
ABC Electronics a security interest in the television and requiring that Dennis make
monthly payments. Three months later, because Dennis had bought a boat, a new car,
and an expensive engagement ring for his girlfriend, and some other items, he was
unable to continue making payments on the television. The manager from ABC
Electronics called and asked Dennis to return the television. Dennis refused on the basis
that ABC Electronics never perfected its interest in the television. Which of the
following is the correct term for designating the effect of the failure of Dennis to
continue making payments?
A. He refused the loan.
B. He defaulted on the loan.
C. He unsecured the loan.
D. He deaffirmed the loan.
E. He discharged the loan.
Self-Centered President. Tina is the new president of "We Manage You," a corporation
set up to manage physician practices. Tina has never been very concerned with minority
shareholders because she does not believe that they have any influence over the
company because they cannot even elect a director. She is told, however, that the
corporation has a practice of cumulative voting. An election is coming up in which 10
directors will be elected. Minority shareholders own 2,000 shares while majority
shareholders own 8,000 shares. Tina tells her vice president, George, that she wants to
ignore minority shareholders and focus her interests on majority shareholders and the
directors. She also tells George that she wants to be particularly conscientious toward
directors because the directors appoint officers, and she does not believe that she owes
any actual duties to shareholders. She further orders George to destroy some documents
subpoenaed in a criminal investigation against the company for illegal tax evasion.
When George protests, Tina tells him not to worry because officers cannot be held
responsible for criminal actions so long as the actions are done as part of the duties of
an officer. She explains to him that only the corporation can be charged with liability in
such cases. Is Tina correct in that officers cannot be held criminally responsible for their
actions on behalf of a corporation?
A. Yes, she is correct.
B. She is correct only so long as the corporation is solvent.
C. She is correct only if the board of directors has accepted all liability for acts of
officers.
D. She is correct only if environmental or employment matters are involved.
E. She is incorrect.
In which of the following ways may an offeree accept a unilateral contract?
A. By making a counteroffer.
B. By a signed writing only.
C. By either verbal acceptance or a signed writing.
D. By performance.
E. By performance, by a verbal acceptance, or by a signed writing.
The Federal Trade Commission's "Do Not Call" registry lasts _________.
A. two years
B. three years
C. four years
D. five years
E. six years
Which of the following is most accurate regarding what may be assigned even in the
presence of an anti-assignment clause?
A. Assignments made by operation of law.
B. Assignments for the right to receive monetary payments.
C. Assignments for the right to receive damages for a breach of contract to sell goods or
services.
D. Assignments made by operation of law, and assignments for the right to receive
monetary payments, but not assignments for the right to receive damages for a breach
of contract to sell goods or services.
E. Assignments made by operation of law, assignments for the right to receive monetary
payments, and assignments for the right to receive damages for a breach of contract to
sell goods or services.
Which of the following is true regarding state and federal court jurisdiction?
A. State courts begin with exclusive jurisdiction until a federal court intervenes.
B. In all cases state courts have concurrent jurisdiction with the federal courts.
C. Federal courts begin with exclusive jurisdiction until a state court intervenes.
D. In all cases state courts have exclusive jurisdiction unless the state's supreme court
grants jurisdiction to a federal court in the state.
E. In some cases, state courts have exclusive jurisdiction; in some cases, state courts
have concurrent jurisdiction with the federal courts; and state courts also have the
power to hear all cases not within the exclusive jurisdiction of the federal court system.
Carla learns that her employer, a healthcare facility, is committing fraud against the
government by filing false Medicare claims. Under which of the following might she
obtain a portion of any recovery obtained by the government?
A. RICO.
B. The False Claims Act.
C. The Sarbanes-Oxley Act of 2002.
D. The Medicare Recovery Act.
E. The Healthcare Fraud Act.
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 dealing with Sam?
A. Brice is guilty of duress.
B. Brice is guilty of undue influence.
C. Brice is guilty of both duress and undue influence.
D. Brice is guilty of fraudulent misrepresentation and duress.
E. Brice is not guilty of anything unless it can be proven that Sam was not in good mind
during his transactions with Brice; and, in that case, Brice is guilty of duress.
Which of the following may constitute a writing under the UCC?
A. Faxes
B. E-mails
C. Formal written contracts
D. Invoices
E. All of these
Which of the following is true regarding the rights of an incidental beneficiary to a
contract to sue to recover incidental rights?
A. An incidental beneficiary may sue to enforce incidental contractual rights so long as
those rights have vested.
B. An incidental beneficiary may sue to enforce incidental contractual rights only if the
incidental beneficiary is also a creditor beneficiary.
C. An incidental beneficiary may sue to enforce incidental contractual rights only if the
incidental beneficiary is also a donee beneficiary.
D. An incidental beneficiary may sue to enforce incidental contractual rights only if the
incidental beneficiary is also a second-party beneficiary.
E. An incidental beneficiary cannot sue to enforce a contract, which provided incidental
benefits.
Which are elements of fraudulent misrepresentation?
A. A false statement and a mutual mistake
B. A false statement and intent to deceive
C. Intent to deceive and negligent representation of a material fact
D. A relationship between the parties and negligent misrepresentation of a material fact
E. A relationship between the parties and duress
Which of the following is a false document or sign of existence used to perpetrate
fraud, such as making counterfeit money?
A. False entries
B. False token
C. False pretenses
D. Ponzi scheme
E. Pretexting
Used Car Problems. Marcy purchased a used car from ABC Motors. Six months later
the police seized the car from Marcy on the basis that it was a stolen vehicle. Marcy
asked for her money back from ABC Motors. The manager there told her that the car
was not stolen; that even if it were stolen, ABC Motors acted in good faith with no
knowledge of a theft; and that, therefore, no refund was legally required. ABC Motors
had also sold a used car to Frank who wrote a bad check for the car and left town but
not before he sold the car to Betty who paid $1,100, a fair price for the car, believing
that Frank had all rights to sell it. ABC Motors asked Betty to return the car, but she
told ABC to forget it. What kind of title did Frank have?
A. Valid
B. Void
C. Voidable
D. Absolute
E. Illegal
For purposes of diversity-of-citizenship, where does a corporation reside?
A. The state of incorporation only.
B. The state in which the corporation has its principal place of business only.
C. Both the state in which the corporation has its principal place of business and the
state of incorporation.
D. Any state in which the corporation does business.
E. Any state in which the corporation has done business within the last five years.
Marcy's Mom. Marcy's mother, Sue, did not want her to date until she was older. She
also wanted Marcy to attend law school. Just before Marcy started her freshman year in
college, Sue told Marcy that if Marcy would refrain from dating until she received her
law degree, then Sue would pay off all Marcy's school loans and throw in an extra
$50,000. Marcy agrees and states, "Thanks, Mom, and by the way, when I graduate I'm
throwing you a big party for all you've done for me!" Sue smiles and hugs Marcy.
Marcy finished law school and asked for payment of her loans, the $50,000 in cash, and
for a car. Sue said, "No way - I know you went out on some dates during law school,
and I never agreed on the car." Marcy said those were just study nights and that her
mother had never objected to Marcy's frequent statements that she wanted a car upon
graduation. Sue asks about the party. Marcy tells her that she is nuts because there is no
way Marcy can afford a party since Sue has backed out of the deal. After some serious
negotiation Marcy and Sue settled their dispute with Sue agreeing to pay for half of
Marcy's school loans and for all the expenses of Marcy's upcoming wedding, and to
forget about Marcy throwing a party for her. In reaching a settlement, Marcy and Sue
entered into a(n) ______.
A. partial payment agreement
B. promissory estoppel
C. settlement and affiliation
D. agreement and payment
E. accord and satisfaction
The first bank that receives the check for payment is the _____________.
A. payor
B. payee
C. depositary
D. transfer
E. acceptor
Decisions of courts in _____ have a significant impact in issues involving matters such
as shareholder rights because more than half of U.S. public traded corporations are
incorporated there.
A. New York
B. California
C. Florida
D. Delaware
E. New Jersey
Hot Dress. Doreen writes a check for a dress to Hot Dresses, Inc., a small specialty
shop owned primarily by Betty. Betty was getting ready to go on an extended European
vacation and temporarily closed down the shop the day after the dress sale to Doreen.
When Betty returned, she had a number of other things to do and did not take Doreen's
check and some other checks to the bank for three months. Betty was independently
wealthy and only ran the shop as a hobby, so she had not been in need of funds. When
Betty finally took Doreen's check to the bank, Betty requested that her bank, ABC
Bank, deposit the check into her account. When ABC Bank, however, requested
payment from Doreen's bank, XYZ Bank, the check was dishonored because of
insufficient funds in Doreen's account. Although Betty did not particularly need the
funds, she did not like to feel as if she had been cheated; therefore, she demanded that
Doreen make the check good. Which of the following would be when presentment, as
defined in the UCC, occurred?
A. When Doreen presented the check to Hot Dresses, Inc.
B. When Betty took the check to ABC Bank
C. When ABC Bank requested payment from XYZ Bank
D. When XYZ Bank notified Betty that it would not pay based upon insufficient funds
E. When Betty requested that Doreen to make the check good
What usually happens to decisions of administrative law judges that are appealed into
the federal court system?
A. The decisions are usually upheld.
B. The decisions are usually denied.
C. The decisions are upheld approximately 50% of the time.
D. The decisions are generally upheld as a matter of law unless a jury is requested.
E. None of these since there is no right of appeal into the federal court system.
Which of the following is true regarding the Fourteenth Amendment?
A. It is part of the Bill of Rights.
B. Its safeguards only apply at the federal level.
C. It extends most constitutional rights to defendants at the state level.
D. It is a part of the Bill of Rights, its protections apply at the federal level, and its
protections also apply at the state level.
E. It is not a part of the Bill of Rights, and its protections apply only at the federal level.
The holder in due course is free from the following personal defenses:
A. lack or failure of consideration and breach of contract.
B. fraud in the inducement in the underlying contract and breach of contract.
C. lack or failure of consideration and fraud in the inducement in the underlying
contract.
D. lack or failure of consideration, breach of contract, and fraud in the inducement in
the underlying contract.
E. the holder in due course is not free from any personal defenses.
Which of the following is needed for diversity-of-citizenship?
A. Only that the plaintiff not reside in the same state as the defendant.
B. Only that the plaintiff reside in the same state as the defendant.
C. Only that the controversy concern an amount in excess of $75,000.
D. Only that the controversy concern an amount in excess of $100,000.
E. Both that the plaintiff and the defendant reside in different states and that the
controversy concerns an amount in excess of $75,000.
_______________ conducts investigations into the safety of motor vehicles.
A. The Vehicle Investigation Commission
B. The Vehicle Safety Administration
C. The National Highway Traffic Safety Administration
D. The Motorized Safety Administration
E. The Transportation Safety Commission
Under the UCC, when is an acceptance effective?
A. When dispatched
B. When received
C. When received only if acceptance by electronic means is made, otherwise on
dispatch
D. When dispatched only if the U.S. mail is used, otherwise on receipt
E. When dispatched only when the telephone is used, otherwise on receipt
Do individuals have a general duty to rescue strangers from perilous situations? Further,
discuss whether or not you believe individuals should have a duty under tort law to
rescue strangers from perilous situations and how you think the law should be written in
that area.
Define the meaning of the term "stare decisis," discuss when it occurs in the legal
system, and why this is needed in business.
Set forth the Central Hudson Test for Commercial Speech and discuss whether or not
you believe the test should be broadened to provide additional protection for
commercial speech with reasons in support.
Set forth the four major responsibilities of the SEC.
Define absolute privilege in the context of defamation and give an example of when an
absolute privilege would be applied.
What is the difference between a demand negotiable instrument and a time negotiable
instrument?
Mary is a director of a company that develops expensive residential subdivisions. The
company is considering attempting to purchase a large section of land on which to put a
development. Mary happens to own some of the land. What duty, if any, does she have
regarding disclosure and why or why not; what steps, if any should be taken by the
board when considering the matter; and may the board take action that benefits Mary
personally?
Set forth what the UCC requires in the way of good faith and the duty imposed on
nonmerchants and merchants in regard to fair dealing.
Set forth the elements for a finding of substantial performance and the effect of a
finding of substantial performance on damages.
Richard has insurance with ABC Insurer. Richard has a wreck with Susie. The adjuster
for ABC Insurer orally agrees to pay Susie $1,000 for the damage to her car. The
adjuster, however, gets in trouble with his boss for agreeing to pay too much. He tells
Susie that he is backing out of the deal because the agreement is unenforceable on the
basis that the statute of frauds requires that a contract to pay the debt of another be in
writing. Is the adjuster correct? Why or why not?
Maurice is excited because a developer plans a subdivision full of high priced homes
that will adjoin his property. Maurice is so pleased that he puts in a new swimming pool
to celebrate. Maurice believes that the subdivision will significantly increase the value
of his property. The developer, however, changes his mind and decides not to develop
the subdivision. Maurice is angry and asks if he can sue the developer, particularly
since he can establish reliance. What would you tell Maurice and why? Discuss whether
you agree with the law on this issue and why or why not.
Set forth the steps that a creditor must take to become a secured party.
Anne orally promises Judy that in return for Judy washing Anne's dog, Anne
unconditionally promises to pay Judy $50 the next Wednesday. Is a contract formed, is
it negotiable, and why or why not?
Warren was the president of a corporation whose articles of incorporation specified that
the corporation's purpose was to market dairy products. Warren, however, convinced the
board of directors to support him in opening a furniture store. Warren proceeded to
enter into contracts with furniture suppliers. When some of the shareholders discovered
that the corporation was going into the furniture business, they wanted the furniture
venture ended. Unfortunately, the corporation had already entered into a contract for
upholstery supplies that had been delivered. What is the term for acts of a corporation
beyond its express and implied powers, and what remedies does the Revised Model
Business Corporation Act provide when a corporation commits such act? What is the
most likely result if the supplier of the upholstery supplies sues for payment?
Set forth the rationale behind the doctrine of respondeat superior and discuss whether
ethically you believe is an appropriate doctrine for our society.
Set forth the ways discussed in the text in which the directors and officers of Enron
failed in their duty of care.
List and discuss two reasons why notice of assignment should be given.
