In some cases, the U.S. Supreme Court functions as a trial court.
Title VII of the Civil Rights Acts applies to all employers, no matter how many
employees they have.
The classifications of torts may be different in foreign countries.
A contract stating, “I assign all of my rights under the contract.” will generally be
construed to be an assignment of rights but not duties.
Someone who acquires a negotiable instrument in good faith is a holder in due course.
Disaffirmance by a minor must occur by their 18th birthday.
Fraud is an unintentional deception that causes harm to another.
Under the Equal Credit Opportunity Act, creditors may require that a spouse co-sign a
loan application regardless of the creditworthiness of the applicant.
Perfection of a security interest in a motor vehicle generally occurs when the secured
party files the interest with the state’s Department of Motor Vehicles.
A consent order is an FTC order requiring that a company stop its illegal behavior.
When a third party is aware that an agent who exceeds his or her authority does not
represent the principal, the law does not hold the agent liable for an agreement in cases
in which the agent exceeds his or her authority to act on behalf of the principal.
If an investor purchased securities and suffered damages as a result of an issuer’s false
or misleading statement, the investor is entitled to bring a civil suit to recover his or her
losses.
An offer may be accepted by the offeree to whom an offer is directed or the offeree’s
agent.
A durable power of attorney is legally binding after the principal becomes
incapacitated.
When a court deems a contract integrated, parol evidence is generally admissible.
Under our system of justice, courts may issue advisory opinions.
Under the Securities Exchange Act of 1934, corporate officers are not considered
insiders.
RICO is used exclusively for combating organized crime.
Penny planned to spray paint her ex-boyfriend’s new car and other vehicles in his
neighborhood, but was apprehended by a quick thinking police officer in the
neighborhood just before she started spraying. The officer, new to the job, forgot to read
Penny her Miranda rights. The prosecutor should rely on the “public safety” exception
to the requirement that Miranda rights be read.
A party who signs an instrument to provide credit for another party, who has also signed
the instrument, is an accommodation party.
There are two types of administrative agencies, executive and independent.
Under the UCC, a buyer in the ordinary course of business can take goods free of any
security interest created by the seller of the goods even if the security interest is
perfected.
Most corporations are nonprofit corporations.
Contracts for the sale or lease of goods may be formed even if some terms of the
contract or lease are left open.
An implied warranty of fitness for a particular purpose is the same as an express
warranty.
A reply is an answer to a counterclaim.
The purpose of stare decisis is to create greater predictability for businesses and
individuals.
To register a domain name on the Internet, an application must be filed with Network
Solutions Inc., which is funded by the National Science Foundation.
If the state of New York sues the state of New Jersey regarding who owns the George
Washington Bridge, the U.S. Supreme Court may serve as the trial court.
In most states, a corporation’s bylaws can negate preemptive rights.
A corporation commits ultra vires when it acts beyond its express and implied powers.
Ownership of real property includes the airspace above the land but not the mineral
rights below the land.
A donee beneficiary is a type of incidental beneficiary.
Which of the following is true regarding treaties at the federal level?
A. A treaty is generally negotiated by the executive branch and must then be approved
by two-thirds of the Senate.
B. A treaty is generally negotiated by the executive branch and must then be approved
by two-thirds of the House of Representatives.
C. A treaty is generally negotiated by the executive branch and must then be approved
by two-thirds of the Senate and also by two-thirds of the House of Representatives.
D. A treaty is generally negotiated by the executive branch and no approval by the
Senate or House of Representatives is needed.
E. A treaty is generally negotiated by the executive branch and must then be approved
by two-thirds of the Senate and also by two-thirds of the state legislatures.
Assuming res ipsa loquitur applies, what is the effect of that doctrine?
A. It requires a finding of negligence.
B. It prohibits a finding of negligence.
C. The burden of proof shifts to the plaintiff.
D. The burden of proof shifts to the defendant.
E. The burden of proof rises to proof beyond a reasonable doubt.
Which of the following is true regarding the number of creditors who must vote to
accept a reorganization plan under a Chapter 11 proceeding?
A. For the plan to be accepted, one-third of the creditors of each class of creditors must
vote to approve it.
B. For the plan to be accepted, one-half of the creditors of each class of creditors must
vote to approve it.
C. For the plan to be accepted, two-third of the creditors of each class of creditors must
vote to approve it.
D. For the plan to be accepted, three-fourth of the creditors of each class of creditors
must vote to approve it.
E. For the plan to be accepted, one-fourth of the creditors of each class of creditors
must vote to approve it.
Which of the following is false regarding the Computer Fraud and Abuse Act as
amended by the National Information Infrastructure Protection Act?
A. The law protects any computer attached to the Internet.
B. The law prohibits modification of computer data impeding medical treatment to
individuals.
C. The law prohibits unauthorized use of a computer to collect financial information
protected under federal privacy law.
D. The law prohibits alteration of data in financial computers causing a loss of $2,000
or more.
E. The law prohibits use of a computer to obtain classified foreign policy information
with the intent to harm the U.S.
An individual who acquires a negotiable instrument in good faith is called a(n) _____.
A. maker
B. holder in due course
C. acceptor
D. endorser
E. drawer
Why did equitable remedies come into being?
A. To fashion remedies when the existing laws did not provide any adequate ones.
B. To supplement compensatory damages with punitive damages.
C. To provide a way by which to award nominal damages.
D. To provide a way by which to award consequential damages.
E. To provide a way by which to award certain parties liquidated damages.
Which type of payment does an insolvent debtor that gives preferential treatment to one
creditor over another make?
A. An unfair payment
B. An unequal payment
C. A preferential payment
D. An unendorsed payment
E. An unapproved payment
Scheming Friends. Willy very much wants to rent a basement apartment in Weaver’s
home. Willy threatens to tell all Weaver’s friends that he and Weaver had been arrested
for illegally smoking marijuana unless Weaver rents the apartment to him for $100 per
month. Weaver reluctantly agrees to rent the apartment to Willy for that amount. Willy
also wants to buy Weaver’s car. Weaver runs back the odometer on the car before Willy
test-drives it. Willy is impressed by the low mileage and agrees to buy the car. Finally,
Weaver offers to sell Willy a ring for Willy’s fiancée. Weaver tells Willy that the ring is
a diamond and believes that to be true. After the deal is made, however, a jeweler friend
of Weaver’s informs him that the ring is a fake. When Willy shows up with the money,
Weaver says nothing. He just hands Willy the ring and takes the money. Later, Willy
finds out that the odometer was run backwards from another friend to whom Weaver
confided. Willy also finds out from his girlfriend that the ring is a fake. Which of the
following is true regarding Willy’s rights in regards to the ring purchase?
A. He will not be able to rescind the contract because Weaver did not make an express
false statement regarding the ring.
B. He will not be able to rescind the contract because Weaver did not make an express
false statement regarding the ring and also because Weaver did not know the ring was a
fake when the initial agreement was made.
C. He will not be able to rescind the contract unless he can prove that Weaver was at
least negligent in not realizing the ring was a fake when the initial agreement was made.
D. He will be able to rescind the agreement because Weaver was guilty of duress.
E. He will be able to rescind the agreement because Weaver was guilty of fraudulent
misrepresentation.
A minor may be given full legal capacity to enter into contracts when he or she
becomes _____.
A. emancipated
B. freed
C. released
D. employed
E. either released or employed
Which amendment protects against double jeopardy?
A. The First Amendment
B. The Second Amendment
C. The Third Amendment
D. The Fourth Amendment
E. The Fifth Amendment
Dogs and Formals. Paul owns a dog grooming business and needs patient people to
work there. He gives all applicants a test he obtained from a management firm that has
been proven to measure psychological traits such as patience. Penny alleges sex
discrimination after she fails the test miserably and Paul refuses to hire her. Paul tells
her that there is no way he is giving her a dime because he is entitled to protect his
client’s dogs. Upon learning that her state lacked a state office representing the Equal
Opportunity Commission, Penny immediately sues him in federal court alleging a
violation of Title VII. Paul, who is getting tired of the dog grooming business, also
opens a new formal wear shop and needs to hire employees there as well. He wants to
appeal to high school and college age young ladies attending proms and formals. Paul
decides that he does not want older sales clerks to assist in choosing formal dresses. He
only wants young, attractive ones. Paul runs an ad in the local paper-seeking applicants
for sales clerks and stating that a qualification for the job is computer training while in
high school. Tina, age 60, applies and tells Paul that while she sees no reason that
computer training should be required, she attended computer training in adult education
and has excellent computer as well as sales skills. Paul refuses to hire her telling her
that unless he follows the ad, he may be seen as practicing discrimination. Deciding that
formal wear is more trouble than dogs, Paul shuts down the formal wear store. Which
of the following is true involving Paul’s plan to require computer training in high school
in order to eliminate older workers?
A. He is not guilty of any violation without additional evidence of intent to
discriminate.
B. He is not guilty of any violation because common sense tells us that younger people
make better sales clerks.
C. He is not guilty of any violation unless he can establish through a survey that most
people prefer younger sales clerks.
D. He is not guilty of any violation unless he can establish through a survey that most
of the formal wear store’s customers prefer younger sales clerks.
E. He is guilty of violating the Age Discrimination in Employment Act.
Which of the following would typically be public figures for purposes of the public
figure privilege to actions for defamation?
A. Politicians only.
B. Entertainers only.
C. Business owners only.
D. Politicians and entertainers.
E. Politicians, entertainers, and business owners.
Which of the following is false regarding the employer-employee relationship?
A. The employee is subject to the control of the employer.
B. Generally, all employees are considered to be agents of the employer.
C. Employees who are not legally authorized to enter into contracts binding their
employer are considered agents.
D. Employees not legally authorized to interact with third parties are considered agents.
E. Independent contractors fall under the employer-employee relationship.
In order for a loan to come within the protection of the Truth in Lending Act,
___________.
A. the credit or loan must be subject to a finance charge
B. the credit or loan must have repayments of more than four installments
C. the credit or loan must have an interest rate of over 5%
D. the credit or loan must be subject to a finance charge, or credit or loan must have
repayments of more than four installments, and the credit or loan must have an interest
rate of over 5%
E. the credit or loan must be subject to a finance charge or have repayments of more
than four installments, but there is no requirement regarding the loan having an interest
rate of over 5%
A ______ is a judgment in favor of the plaintiff that occurs when the defendant fails to
answer the complaint and the plaintiff’s complaint alleges facts that would support such
a judgment.
A. default judgment
B. automatic judgment
C. delineated response judgment
D. dismissal
E. pleading judgment
Which of the following is true regarding whether an accepted offer to satisfy a debt by
paying only part is consideration?
A. Partial payment is consideration under all circumstances.
B. Partial payment is not consideration under any circumstances.
C. Partial payment is consideration if a liquidated debt is involved.
D. Partial payment is consideration if an unliquidated debt is involved.
E. Partial payment is consideration only if a liquidated or unliquidated debt is involved.
Which of the following is involved in a situation in which a person refuses to perform
according to a contract unless the other person either signs another contract with the
one making the threat or pays that person a higher price than was specified in the
original agreement?
A. Fraudulent duress
B. Contractual duress
C. Negligent duress
D. Economic duress
E. Specific duress
Patty, who lives in East Tennessee, developed a new type of printer that required very
little ink. As a merchant, she entered into contracts to sell the printer to a number of
merchants of office supplies in the East Tennessee area for a charge of $600 each. She
further entered into a number of contracts with merchants in other states and also in
foreign countries. For printers sold in states other than Tennessee and for printers sold
outside the U.S., she charged $1,001 each. Patty was a trusting soul who did not require
that her arrangements be in writing because she believed that a person’s word was his or
her bond. She did, however, send a confirming memo to each client to which she
received no objections. Patty manufactured a number of printers; but unfortunately, due
to a downturn in the economy, a number of her buyers refused to proceed on their
contracts, with several claiming that the contracts were unenforceable because they
were not in writing. Assuming the Contract for the International Sale of Goods is in
effect, which of the following is true regarding whether the contracts with clients
outside the U.S. were required to be in writing?
A. Because the contracts were for amounts priced at $500 or more, they were required
to be in writing and signed by the buyer.
B. Assuming credible and reasonable proof of any contract at issue, because the
Contract for the International Sale of Goods applied, no writing was required.
C. Because the contracts were for amounts priced at $1,000 or more, they were required
to be in writing and signed by the buyer.
D. Because the contracts were for amounts priced at $500 or more, they were required
to be in writing; but Patty’s memo was sufficient to satisfy the requirement.
E. Because the contracts were for amounts priced at $1,000 or more, they were required
to be in writing and signed by the buyer; but Patty’s memo was sufficient to satisfy the
requirement.
Billy, a witness to a motor vehicle accident, is gravely ill with cancer. Pat, who was
injured in the accident, would like to preserve his testimony for trial in case he dies
before the trial date. What should Pat do?
A. Send interrogatories to Billy.
B. Take Billy’s deposition.
C. Send a request to admit to Billy that the accident was the defendant’s fault.
D. Have a conference with the judge and Billy.
E. There is nothing she can do.
Which of the following is true regarding the right of a third party to reject the
performance of the principal?
A. The third party may reject the performance of the principal at any time.
B. The third party may never reject the performance of the principal.
C. The third party may reject the performance of the principal if the third party entered
into a contract with the agent such that the performance of the agent is required.
D. The third party may reject the performance of the principal if the third party entered
into a contract with the agent such that the performance of the agent is required or the
third party can establish that the third party had been involved in past litigation with the
principal.
E. The third party may reject the performance of the principal if the third party entered
into a contract with the agent such that the performance of the agent is required; the
third party can establish that the third party had been involved in past litigation with the
principal; or the principal owes money to the third party.
In order to have a claim for negligence, a plaintiff must prove:
A. Defendant owed the plaintiff a legal duty.
B. The plaintiff acted as a reasonable person under the situation.
C. The defendant breached a legal duty owed to the plaintiff.
D. The defendant owed the plaintiff a legal duty and the defendant breached the legal
duty.
E. The plaintiff sustained nominal damages.
What is the effect of a failure to comply with the statute of limitations?
A. It operates as a waiver of warranty rights under the contract.
B. There is no effect so long as the plaintiff can establish that he or she was not aware
of the statute of limitations.
C. It operates as a waiver of warranty rights only if the defendant can establish that the
plaintiff had actual knowledge of the statute of limitations.
D. It results in the plaintiff only having the right to sue for injunctive relief, not
damages.
E. It results in the plaintiff only having the right to sue for damages, not injunctive
relief.
Which of the following is required by the Magnuson-Moss Act when the seller issues a
written warranty for a consumer good?
A. The seller must indicate whether that warranty is a full warranty or a limited
warranty.
B. The seller must provide a full warranty and must indicate as such.
C. The seller must provide a warranty of merchantability and an express warranty, and
must indicate as such.
D. The seller must provide an implied warranty of trade usage and must indicate as
such.
E. The seller must provide an implied warranty of trade usage and an implied warranty
of merchantability, and must indicate as such.
Scruffy. Sam is engaged in the criminal activity of growing marijuana in his home. A
couple of police officers while randomly passing through the neighborhood saw Sam go
to the mailbox. They thought that he looked a little scruffy, and they were concerned
that they had not made a sufficient number of arrests in the past month. They decided to
“check out” Sam. Therefore, they immediately broke down Sam’s door, searched his
home, and arrested him. The police officer in charge told Sam that because marijuana
was involved, he lost his rights against self-incrimination and that he might as well
confess. Sam proceeded to confess to growing marijuana and a number of other crimes.
The judge was so angry with Sam that he threw him in jail for two months without any
kind of hearing. Sam’s lawyer, who just graduated from law school, is not sure if the
police acted legally in Sam’s case by breaking down the door. Which of the following is
true on that issue?
A. The police acted legally so long as they can show that Sam really did look scruffy.
B. The police acted legally so long as they can show that the street was truly chosen at
random for patrol.
C. The police acted legally so long as they can show that Sam had been in jail
previously on a drug offense charge.
D. The police acted legally so long as they can show that Sam had been in jail
previously for any offense.
E. The police violated Sam’s Fourth Amendment rights.
The Stolen Book. Betty tells Susan that Bob stole her business law book from her car.
The next day Susan confronts Bob and slaps him for stealing her book. Bob has Susan
arrested for slapping him. Susan sues Bob for damages in the amount of the book and
for maliciously having her arrested. Claiming that she lied, Bob sues Betty for
defamation. The lawsuit Susan has against Bob for damages for stealing her book
involves which of the following?
A. Public law
B. Private law
C. Administrative law
D. Both public and private law
E. Comprehensive law
Used Car Sales. Walter sells used cars. He is seeking a way to increase sales and profits
because he would like to take his girlfriend on a nice diving trip to the Grand Cayman
Islands. The first thing that Walter does is say that during the first week of December,
he will give a $500 rebate on used cars under two years old. To spice things up, he also
offers to sell any car on the lot that is under five years old for $1,000 to the first three
customers who can hula hoop ten hours straight on December 7th. (Hula hooping was a
practice popular some years ago in which a person, usually around the waist, would
swing around a large hoop.) Walter was not very concerned about the hula hooping
issue because he thought that no one would be able to hula-hoop for ten hours straight.
Walter put an advertisement pertaining to the rebate and hula-hoop opportunity in the
local newspaper. The promotion went over very well. Although he had several on hand,
Walter ran out of cars under two years old within one day. During the rest of the week
shoppers were told that no cars of that description were available. A customer named
Sam was very unhappy when he discovered the next day that no cars under two years
old were available. On December 7th, while Walter was watching the hula hoopers,
Sally was shopping for a car. She was in college and did not have much money. She
saw one, an older car, that she liked but she really did not know if it run or not. She was
going to talk to her parents. Walter eventually approached her and Sally asked him if he
would take $3,000 for the car. Walter said, “Yes, sold.” Sally tried to explain that she
needed to talk to her parents first, but Walter would not hear of it. While Walter was still
fuming from his encounter with Sally, Zack walked up and started to criticize the nature
of Walter’s inventory. Walter told him that he had great cars. Zack pointed at an old
jalopy that was banged up, had 200,000 miles on it, and a cracked windshield. Zack
said, “Sure, I’ll pay $10,000 for that car.” Walter said, “Sold.” Zack said, “Wait a
minute. I was only kidding.” Walter said, “No way.” Meanwhile all the hula hoopers
dropped out well prior to ten hours of hula hooping except for Barbara. One minute
before the ten hours were up, Walter yelled out “I revoke!” Barbara completed the hula
hooping anyway and asked for her car for $1,000. Walter refused saying that the offer
was revoked. Sam was very angry and sued Walter for not having a car available that
was under two years old so that he could get a good deal and a $500 rebate.
Additionally, Barbara sued Walter, and Walter sued Zack and Sally. What is the likely
result in Walter’s lawsuit against Sally in which he claims that she must pay $3,000 for
the car at issue?
A. Walter will win because Sally made an offer that he properly accepted, regardless of
whether the offer was a reasonable one.
B. Walter will win only because Sally agreed to pay a reasonable amount for the vehicle
and he properly accepted the offer.
C. Walter will lose because he did not properly accept Sally’s offer.
D. Sally will win because she merely expressed interest and did not make an offer.
E. Sally will win because no contract was in writing.
Sally goes to have her hair trimmed and agrees to pay $40 to the stylist. While there,
Sally decides that she would also like highlights. The stylist informs her that highlights
will cost an additional $30. Sally agrees to the price, gets the highlights, but refuses to
pay the extra amount. What is the likely result in a dispute between Sally and the stylist,
and why?
A. The stylist will win because she did additional work in exchange for the extra
payment and, therefore, Sally’s promise was supported by valid consideration.
B. The stylist will win because she did additional work in exchange for the extra
payment and, therefore, a valid unilateral contract existed.
C. The stylist will win unless Sally can show that she had previously received both a
trim and highlights for $40. If she can prove that she previously received both for $40,
then the past expectations rule applies.
D. Sally will win because the stylist had a preexisting duty to have her hair looking as
good as possible.
E. Sally will win because there was no valid consideration in exchange for the
highlighting.
Which of the following is a question of fact?
A. Whether a vehicle ran a traffic light?
B. Whether premeditation is necessary for a first-degree murder conviction?
C. Whether speech is protected by the First Amendment?
D. What is necessary for service of process?
E. Whether a vehicle ran a traffic light and also what is necessary for service of
process?
Which of the following is true regarding contributory negligence?
A. The defense was once available in a few states but is not available in any states
today.
B. It is available in all states today.
C. It was outlawed by a federal statute.
D. It was once available in all states but has been replaced in most states by the defense
of comparative negligence.
E. It was once available in all states but has been replaced in most states by the defense
of assumption of risk.
Skateboard Growth. Both Bernie and John were presidents of small businesses
manufacturing and selling skateboards. Bernie’s store was called “Skateboard City” and
John’s business was called “Skateboard for Health.” Because a large sports store was
coming into town, they, along with the boards of directors decided that it would be a
good idea to combine the businesses. They decided to retain the name “Skateboard for
Health” and simply amend the articles of consolidation. Bernie was concerned,
however, with the change because he was contemplating filing a lawsuit against Hank
who had purchased 10 custom skateboards and had not paid for them. He was excited,
however, about the prospect of not being liable for a lawsuit he expects to be filed by
Greg who fell when a wheel came off on a skateboard sold by Bernie’s corporation
resulting in a serious ankle sprain and medical bills. After investigation, Bernie is aware
that the wheel was negligently attached to the skateboard. Bernie told John that one
reason he wanted to retain John’s name was to prevent Greg from being able to recover
against him. Which of the following is true in most states regarding Bernie’s concern
that the surviving company might not be able to sue Hank for the price of the
skateboards?
A. The surviving company will not be able to sue Hank.
B. The surviving company will be able to sue Hank only if Hank purchased the
skateboards within 30 days of the joinder of the businesses.
C. The surviving company will be able to sue Hank only if Hank approves in writing
the joinder of the businesses.
D. The surviving company will be able to sue Hank only if Hank is notified by certified
letter of the joinder of the businesses.
E. The surviving company will retain the right to sue Hank.
What type of contract references goods that are in some kind of storage so the seller
cannot transfer physical possession of them?
A. Goods-in-transit
B. Goods-in-bailment
C. General to contract
D. Stored pending payment
E. Stored-in-transit