_________ is the return of any property given up under the contract.
A. Rescission
B. Reformation
C. Restitution
D. Injunction
E. Compensation
Which of the following is false regarding the statute of frauds provision relating to an
interest in land?
A. The statute is intended to prevent oral claims to the existence of a contract for the
sale of land.
B. The statute requires a writing as evidence of a contract to sell land.
C. Anything attached to land such as trees or buildings is considered real property under
the statute of frauds.
D. Mortgages of land are within the statute of frauds.
E. Leases of land are not within the statute of frauds.
Wedding Photos. Bobby took a number of wedding photos at Jill’s wedding. He was
paid as the photographer. On all of the photographs, he appropriately noted in the
bottom right-hand corner the necessary information showing that he was claiming
copyright protection. Jill came to see Bobby three years after the initial photographs
were taken and requested that he grant her permission to run off as many copies as she
wanted at the local photo shop from the pictures that she initially purchased. The photo
shop had refused to reproduce the photographs without his permission. When he
refused to give her permission to do so, Jill started a heated argument. She told Bobby
that photographs are not entitled to copyright protection. She also told him that even if
he was correct that there was some copyright protection, she was engaged in fair use;
and that, in any event, damages for copyright infringement are unavailable. Which of
the following is correct regarding Jill’s claim that damages for copyright infringement
are unavailable?
A. Damages are available, but a copyrighted work must be registered in order for the
creator to recover damages from infringement.
B. It is not necessary that a copyrighted work be registered in order for the creator to
obtain damages.
C. Damages for copyright infringement are only available if two businesses are
involved, not in disputes involving an individual such as Jill.
D. Some material that is subject to copyright must be registered before its creator may
recover damages for infringement, but that is not true for photographs.
E. She is correct that damages are unavailable in copyright infringement actions
because only injunctive relief is available.
Which is not an example of slander per se?
A. A written poster hanging in the school cafeteria, which states that, the principal stole
money from the school treasury.
B. Calling someone professionally incompetent.
C. Telling another person that someone has a loathsome, communicable disease.
D. Stating that another student has committed a crime for which imprisonment is
possible.
E. Informing classmates that a woman in your business law class has engaged in sexual
misconduct.
Legislative acts passed by state legislatures can be found in __________.
A. the United States Code
B. state codes
C. the Uniform Register
D. the State Reporter
E. the State Reference Manual
Which of the following was the result on appeal in Iglesia Cristiana La Casa Del
Senor, Inc., Etc. v. L.M., the case involving the issue of whether a church was liable
based on the principle of respondeat superior for a sexual assault allegedly committed
by a church pastor?
A. That the church was liable to the plaintiff based upon principles of respondeat
superior.
B. That the church was liable based on principles of respondeat superior only if it could
be proven that the pastor sexually assaulted more than one person.
C. That the church was liable based on respondeat superior only if it could be proven
that the church had knowledge of at least one sexual assault prior to the plaintiff’s but
failed to remove the pastor from church assignments.
D. That the church was not liable based upon principles of respondeat superior.
E. That the church was not liable based upon principles of respondeat superior only
because the pastor was immediately fired when his actions came to light.
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 correct regarding the statement of Dennis that the security interest was not
perfected?
A. Dennis is wrong because the security interest perfected automatically.
B. Dennis is wrong because the security interest perfected when he was still in
possession of the collateral 30 days after the purchase.
C. Dennis is wrong because the security interest perfected when he was still in
possession of the collateral 60 days after the purchase.
D. Dennis is correct because in the case of luxury goods, a financing statement must be
filed within 10 days.
E. Dennis is correct because regardless of whether or not a luxury good was involved,
the interest was never perfected.
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 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. Assuming that ABC Motors was an innocent purchaser from the thief, which
of the following is true regarding the manager’s statement that Marcy is not due a
refund?
A. The manager is correct only so long as ABC Motors can prove that it had never been
charged with dealing in stolen merchandise.
B. The manager is correct only so long as ABC Motors can prove that none of its
representatives were negligent in disregarding evidence of the theft at any time prior to
its resale to Marcy.
C. The manager is correct.
D. The manager is incorrect only if Marcy can prove that she specifically asked if there
was any problem with the car prior to her purchase and was affirmatively told that the
title was good.
E. The manager is incorrect.
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 car purchase?
A. He will not be able to rescind the contract because Weaver made no affirmative
statements.
B. He will not be able to rescind the contract unless he can prove that he expressly
asked Weaver if the mileage was run backwards on the car and Weaver failed to reveal
that it had been altered.
C. He will not be able to rescind the contract because the mileage alteration did not
affect the engine of the car.
D. He will be able to rescind the contract because of duress practiced by Weaver.
E. He will be able to rescind the contract because of the fraudulent misrepresentation of
Weaver.
In order to disaffirm a contract, a minor must _____.
A. make an application to the court
B. express in writing the intention to disaffirm
C. express an intention by words or actions
D. have his parents write a note
E. pick a portion of the contract to disaffirm but not the whole agreement
A promise to do something that you are already obligated to do is ______.
A. valid consideration because it is illusory consideration
B. valid consideration only in the employment context
C. valid consideration because it is past consideration
D. valid consideration only if a sale of goods is involved
E. not valid consideration
_________ torts occur when the defendant takes an action intending that certain
consequences will result or knowing that certain consequences are likely to result.
A. Criminal
B. Liability
C. Intentional
D. Negligent
E. Strict-liability
Which amendment prohibits cruel and unusual punishment?
A. Second
B. Fourth
C. Fifth
D. Eighth
E. Tenth
Which of the following is required by the Federal Trade Commission Cooling-Off Rule
in regard to door-to-door sales?
A. That consumers have three days in which to cancel purchases made from salespeople
who come to their homes.
B. That the salesperson notify the consumer, both verbally and in writing that the sales
transaction may be cancelled.
C. That the consumer be notified in writing in the same language in which the oral
negotiations were conducted.
D. That consumers have three days in which to cancel purchases made from salespeople
who come to their homes; that the salesperson notifies the consumer, both verbally and
in writing that the sales transaction may be cancelled; and that the consumer is notified
in writing in the same language in which the oral negotiations were conducted.
E. That consumers have three days in which to cancel purchases made from salespeople
who come to their homes and that the salesperson notify the consumer in writing in the
same language in which oral negotiations were conducted that the transaction may be
cancelled, but not that notification also be made verbally.
Stolen Purses. Sandra and Mary were having lunch at their favorite restaurant.
Unfortunately, a thief stole their purses containing their ATM cards. Mary notified her
bank the next day of the theft of the ATM card. Unfortunately, the card had already
been used to fraudulently obtain over $1,000. Sandra thought back to her business law
class and did not call her bank, however, because she believed that she would not be
liable for any charges on the ATM card because of the rules involving forgeries.
Nevertheless, a week or so later when Sandra was in the bank, she casually mentioned
to the teller that she needed a new card because hers had been lost. She was shocked
when a bank representative attempted to hold her responsible for hundreds of dollars of
goods bought with the ATM. Sandra told the bank representative that she refused to
cover the amounts, that she was moving her account, and that she wanted all
preauthorized payments and EFTs stopped immediately. For how much can the bank
hold Mary responsible based on the fraudulent use of the card?
A. Nothing
B. $50
C. $100
D. $500
E. For everything charged prior to the time she gave notice
Which of the following are referred to as an implied warranty of quality?
A. Implied warranty of fitness for a particular purpose.
B. Implied warranty of merchantability.
C. Implied warranty of trade usage.
D. Implied warranty of fitness for a particular purpose, implied warranty of
merchantability, and the implied warranty of trade usage.
E. Implied warranty of fitness for a particular purpose and the implied warranty of
merchantability, but not the implied warranty of trade usage.
What is the first step a plaintiff would establish in order to prove disparate-treatment
discrimination in an employment case under Title VII?
A. The plaintiff would demonstrate a prima facie case of discrimination.
B. The plaintiff would show that the reason given by the employer for the
discrimination was a mere pretext.
C. The plaintiff would prove beyond a reasonable doubt that discrimination occurred.
D. The plaintiff would show that the plaintiff gave the defendant the opportunity to
remedy the situation before filing suit but that the defendant refused.
E. The plaintiff would complain to the Equal Employment Opportunity Commission.
An example of forbearance is _________________.
A. selling assess to avoid payment to creditors
B. one party making a promise knowing the other party will rely on it
C. refraining from the use of liquor and tobacco
D. a promise to do something that you are already obligated to do
E. past consideration
Cosmetic Profits. Sally is the vice president at Big Name Cosmetics Company. Through
important and material nonpublic information, she learns that the company is soon
going to purchase a smaller chain of stores. It is expected that stock in Big Name
Cosmetics will rise dramatically at that point. Sally immediately buys a number of
shares of her company’s stock. She also tells her friend Alice about the expected
purchase of stores. Alice wanted to purchase stock in the company but lacked the funds
with which to do so. Although she did not have the funds in Bank A, Alice decided to
draw a check on Bank A and deposit the check in Bank B and then proceed to write a
check on Bank B to cover the purchase of the stock. She hoped that she would have
sufficient funds to deposit before the check was presented for payment. Of which of the
following offenses, if any, is Alice guilty of by buying stock?
A. She is guilty of insider trading because she tipped information.
B. She is guilty of an insider-trading violation because she traded on tipped
information.
C. She is guilty of extortion.
D. She is guilty of larceny.
E. She is not guilty of any offense.
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. What type of alleged debt was involved in
the dispute between Marcy and Sue involving the school loans, additional funds, car,
and party?
A. Liquidated
B. Unliquidated
C. Supported
D. Unsupported
E. Liquidated in relation to the school loans, additional funds, and car; and unsupported
in relation to the party.
Sexual Harassment ADR. Jenny is very angry with her supervisor, Sleaze, at the
Mexican fast-food restaurant at which she works which is owned by an international
company located in Mexico. He has been making inappropriate sexual comments to her
and other employees. Jenny decides to sue and retains a lawyer, Brice. Brice talks with
the owners of the restaurant and is informed that Jenny signed an agreement to arbitrate
any claims. Brice tells Jenny that it is completely up to her and that if she wishes, she
can disregard the arbitration agreement and proceed to court. Jenny informed Brice
about other employees who had complained about sexual harassment and entered into
mediation agreements. Brice promises her that he will get copies of all documents and
everything that was taken down by the court reporter at those mediations. He also tells
Jenny in response to her question about the possibility of mediation in her case to forget
it because mediation is pretty much the same thing as arbitration. Did Brice correctly
tell Jenny that mediation is nearly the same as arbitration?
A. No, he was incorrect. There are major differences between mediation and arbitration.
B. He was correct because the only difference between the two involves the length of
the proceeding.
C. He was correct because the only difference between the two involves cost.
D. He was correct because the only difference between the two involves whether a
court reporter is present.
E. He was correct because the only difference between the two involves the type of
evidence that may be considered.
An offer made by one party and accepted by another party is called a(n) _____.
A. legal object
B. agreement
C. coherence
D. alliance
E. concurrence
A(n) _____ corporation is a business incorporated in another country.
A. visiting
B. foreign
C. interstate
D. alien
E. approved
If corporate directors fail to sue when the corporation has been harmed by an
individual, another corporation, or a director, individual shareholders can file a(n)
_____ on behalf of the corporation.
A. investigative action
B. shareholder action suit
C. shareholder’s direct suit
D. shareholder’s derivative suit
E. active allocation suit
Which of the following is true if an agent has no actual or apparent authority to act on
behalf of a principal, but the agent still enters into a contract with a third party?
A. The principal is bound only if the principal is a disclosed principal.
B. The principal is bound only if the principal is an unidentified principal.
C. The principal is bound only if the principal is a partially disclosed principal.
D. The principal is bound only if the principal is a disclosed principal or a partially
disclosed principal.
E. The principal is not bound unless the principal ratifies the contract.
Which of the following was the result in Teresa Harris v. Forklift Systems, Inc., the case
in the text in which the U.S. Supreme Court addressed the issue of whether an
employee must suffer serious psychological damage in order to pursue damages for a
claim of sexual harassment?
A. That Title VII is limited to “economic” or “tangible” discrimination and that a
plaintiff may not recover unless psychological damages were sufficiently severe to
result in an economic impact on the plaintiff’s ability to work.
B. That under Title VII, an economic impact on the plaintiff’s ability to earn is
unnecessary, but that the plaintiff must demonstrate serious psychological damage.
C. That under Title VII, so long as the environment would reasonably be perceived, and
is perceived, as hostile or abusive, there is no need for it also to be psychologically
injurious.
D. That under Title VII, so long as the environment is subjectively perceived, as hostile
or abusive, there is no need for it also to be psychologically injurious.
E. That under Title VII, whether an environment is psychologically injurious may not
be admitted into evidence because such evidence is irrelevant.
Investment banking firms that purchase securities from the issuing corporation with the
intent of selling them to brokerage houses that then sell them to the public are known as
______________.
A. underwriters
B. offerors
C. issuers
D. accredited purchasers
E. None of these because that practice is illegal
Which of the following are general statements about directions in which an agency
intends to proceed with respect to its rule-making or enforcement activities?
A. Policy statements
B. Interpretative statements
C. Planning notices
D. Review statements
E. Warning notices
A statement made in court, under oath, or at some stage during a legal proceeding in
which a party against whom charges have been brought admits that an oral contract
existed, even though the contract was required to be in writing is called a(n)
_________.
A. admission
B. submission
C. deposition
D. interrogatory
E. confirmation
Which of the following are types of unqualified endorsements?
A. Blank and special.
B. Allonge and special.
C. Allonge and blank.
D. Qualified and blank.
E. Qualified and special.
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. In choosing the jury, Linda and Sam were engaged in
______.
A. voir dire
B. jury analysis
C. jury review
D. ven dere
E. shadowing
Which of the following is true regarding discharge by impairment of collateral?
A. Discharge cannot occur through impairment of collateral.
B. If a party posts collateral to ensure his or her performance of the negotiable
instrument and the holder of the collateral impairs the value of the collateral, the party
to the instrument is discharged from the instrument to the extent of the damage to the
collateral.
C. If a party posts collateral to ensure his or her performance of the negotiable
instrument and the holder of the collateral impairs the value of the collateral, the party
to the instrument is totally discharged from the instrument regardless of the extent of
the damage to the collateral.
D. If a party posts collateral to ensure his or her performance of the negotiable
instrument and the holder of the collateral impairs the value of the collateral, the party
to the instrument is totally discharged from the instrument only if the instrument is in an
amount less than $500; otherwise, the party to the instrument is discharged from the
instrument to the extent of the damage to the collateral.
E. If a party posts collateral to ensure his or her performance of the negotiable
instrument and the holder of the collateral impairs the value of the collateral, the party
to the instrument is totally discharged from the instrument only if the instrument is in an
amount less than $1,000; otherwise, the party to the instrument is discharged from the
instrument to the extent of the damage to the collateral.
Supreme Court. Jim, who is a bit eccentric, says that he is fed up with the way a certain
employer in his town treats employees and that he is going to sue that employer in an
effort to improve matters. Jim also says that he is going to start his case at the appellate
court level, skipping over all those “lesser” judges. Jim says that those justices will
surely hear him out and that he will also seek a jury. Although he is not a lawyer, Jim
believes that the offenses of the employer are so severe that the justices will appreciate
his attempt to make things better for the employees involved. Will an appellate court
initially hear Jim’s case deciding issues such as whether he has a claim and can act as a
plaintiff?
A. Yes, so long as a state trial court judge approves and certifies the case for the
appellate court without holding a trial first.
B. Yes, but only if Jim can prove that he would have had to wait at least a year for a
trial at the trial court level.
C. No, because Jim is required to first file the case in the appropriate trial court.
D. No, but only because Jim is not employed at the defending company.
E. No, but only because Jim did not have a lawyer.
If a contract between the original parties would be void but the goods have already been
sold to a third party, it would be considered _____ title.
A. releasable
B. voidable
C. good
D. substantiated
E. excised