Which of the following is true regarding awards of punitive damages in the U.S.?
A. It is not always easy to predict what a court will do in any given case.
B. Punitive damages may not be awarded in excess of $3 million dollars.
C. A ratio of punitive damages to compensatory damages greater than 9 to 1 violates
due process.
D. The Supreme Court ruled that the issue of punitive damages is for the jury and will
not be disturbed on appeal regardless of the ratio of punitive damages to compensatory
damages.
E. Awards of punitive damages in the U.S. are very similar to awards of punitive
damages under the Canadian judicial system.
Which of the following was the result in Welchert v. American Cyanamid Inc., the case
in the text in which the plaintiffs claimed breach of an express warranty after herbicide
manufactured by the defendant allegedly caused crop damage, and the issue was
whether the Federal Insecticide, Fungicide, and Rodenticide Act preempted claims
involving the product’s label?
A. The court ruled that the state law claim for breach of express warranty was
preempted by FIFRA.
B. The court ruled that the state law claim for breach of express warranty was not
preempted by FIFRA.
C. The court ruled that the portion of the state law claim for breach of express warranty
was preempted only to the extent that it sought money damages as opposed to equitable
relief.
D. The court ruled that the portion of the state law claim for breach of express warranty
was preempted only to the extent that it sought equitable relief as opposed to money
damages.
E. The court ruled that the state law claim for breach of express warranty was
preempted only because it was not filed in a timely manner.
_____ prohibits U.S. companies from offering or paying bribes to foreign government
officials, political parties, and candidates for office for the purpose of obtaining or
retaining business.
A. The Foreign Corrupt Practices Act
B. The Foreign Bribery Act
C. The Foreign Political Act
D. The International Fairness Objective Act
E. The International Trade Act
Which of the following is true regarding the type or types of rules that an agency may
enact?
A. The types of rules agencies may enact are procedural, interpretive, legislative, and
executive.
B. The types of rules agencies may enact are procedural, interpretive, and legislative.
C. The types of rules agencies may enact are executive and interpretive.
D. The types of rules agencies may enact are legislative and executive.
E. Agencies may enact interpretive rules only.
Which of the following is defined as the change in the relation of the partners caused by
any partner’s ceasing to be associated with the carrying on, as distinguished from the
winding up, of the business?
A. Resolution
B. Dissolution
C. Resignation
D. Suspension
E. Transformation
Which of the following articles of the UCC governs sales contracts?
A. 2
B. 2(A)
C. 4
D. 4(A)
E. 6
Which of the following describes conditions explicitly stated in the contract?
A. Express
B. Implied
C. Conditional
D. Concurrent
E. Certain
Which of the following is a party who is in possession of an instrument that is payable
to the party or to the bearer of the instrument?
A. A holder.
B. A bearer.
C. A payee.
D. An issuer.
E. A transferee.
Suzanne arranged with ABC Bank for a revolving line of credit up to $50,000 for her
antique shop. The bank also required that she provide a promissory note promising
payment of $50,000 to the bank or as much as may be outstanding in amounts owed to
the bank payable on demand. The note allowed for partial early prepayment and for
interest after default. A few months later, although Suzanne was not in default, the bank
canceled the line of credit and demanded payment of all amounts due based on the
promissory note. If the reasoning of the case in the text Reger Development, LLC v.
National City Bank is followed, which of the following is the most likely result of the
dispute between Suzanne and ABC Bank?
A. Suzanne will prevail because she was current on payments, and the bank did not
exercise good faith in calling the note.
B. Suzanne will prevail because the reference to prepayment destroyed the note’s
negotiability.
C. Suzanne will prevail because the reference to interest after default destroyed the
note’s negotiability.
D. The bank will prevail because, although the note is not a negotiable instrument, the
bank has an enforceable contract.
E. The bank will win because it had the right to call for payment of the demand
instrument.
Which of the following is false regarding the relationship between a principal and an
independent contractor?
A. An independent contractor is not an employee of the principal.
B. The principal does not control the details of the independent contractor’s
performance.
C. An individual who hires an independent contractor cannot be held liable for the
independent contractor’s tortious actions under the doctrine of respondeat superior.
D. A principal is not liable for extremely dangerous actions engaged in by the
independent contractor.
E. If an independent contractor commits a crime without the authorization of the
principal, the principal is not liable for the agent’s crime.
In which of the following types of cases does a plaintiff attempt to prove that while an
employer’s policy or practice appears to apply to everyone equally, its actual effect is
that it disproportionately limits employment opportunities for a protected class?
A. Disparate-treatment cases
B. Disparate-impact cases
C. Sexual harassment cases
D. All of these
E. Quid pro quo cases
Which of the following is true regarding a security interest in consumer goods?
A. A financing statement must be filed in order to perfect a security interest in
consumer goods.
B. Under federal consumer protection legislation, a seller may not hold a security
interest in consumer goods.
C. Under most state laws, a seller may not hold a security interest in consumer goods.
D. When a creditor sells a consumer good to a debtor on a credit basis, the security
interest perfects automatically.
E. When a creditor sells a consumer good to a debtor on a credit basis, the security
interest is perfected by the seller’s possession.
Which of the following is false regarding the Telephone Consumer Protection Act of
1991?
A. It forbids telephone solicitation using an automatic telephone dialing system.
B. It forbids telephone solicitation using a prerecorded voice.
C. It makes it illegal to transmit advertisements via fax unless the recipient agrees to the
fax transmission.
D. Only the Federal Communications Commission can take action to enforce the act.
E. If a telemarketer willfully violates the act, the court can decide to triple the amount
owed to the consumer.
In the landlord-tenant relationship, the party who assumes temporary ownership of the
property is the _____.
A. Tenant or lessor
B. Lessor or lessee
C. Holder or lessor
D. Holder or lessee
E. Tenant or lessee
Every ______ the EPA must review the scientific evidence to determine whether new
discoveries have shown that the National Ambient Air Quality Standards should be
changed.
A. 18 months
B. Two years
C. Three years
D. Five years
E. Ten years
______ is the termination of the contract, and ______ is the return of any property
given up under the contract.
A. Rescission; restitution
B. Rescission; reformation
C. Reformation; restitution
D. Reformation; rescission
E. Rescission; compensation
“Horse Tracks.” Martha, Greg, and Prudence decided to form a corporation called
Horse Tracks to raise horses. They all began the corporate creation process by arranging
for necessary capital and financing. They raised capital from their friends by making
deals whereby their friends would purchase stock in the new corporation. After the
corporation was formed, a problem arose with a contract for feed that Martha, Greg,
and Prudence had entered into while organizing the corporation. Belinda, the seller of
the feed claimed that she had not been fully paid and threatened to sue the corporation.
The contract Martha, Greg, and Prudence had with Belinda did not reference liability
after the new corporation came into legal existence. Martha, Greg, and Prudence asked
for a novation, but were uncertain as to whether that would occur.
Which of the following identifies the contracts Martha, Greg, and Prudence made with
their friends to buy stock?
A. Promotion agreements
B. Capital agreements
C. Subscription agreements
D. Novation agreements
E. Acceptor agreements
_______________ damages are a small amount of money given to recognize that a
defendant did indeed commit a tort in a case in which there were no compensable
damages suffered by the plaintiff.
A. Nominal
B. Compensatory
C. Punitive
D. Retaliatory
E. Revenge
Bill decides to install two-way mirrors in the dressing room of his ladies’ clothing store.
He has a habit of watching ladies while they try on clothing. Which of the following has
Bill committed?
A. Intrusion on an individual’s affairs or seclusion.
B. Assault.
C. Public disclosure of private facts.
D. False light invasion of property.
E. Commercial appropriation.
Which of the following was the result at the U.S. Supreme Court level in Massachusetts
v. EPA, the case in the text in which Massachusetts led several states in a lawsuit asking
that the EPA be ordered to establish vehicle emission standards for carbon dioxide and
five other greenhouse gasses?
A. The Court dismissed the lawsuit on the basis that the states had no standing to sue.
B. The Court dismissed the issue as moot on the basis that the EPA already recognized
the dangers of global warming and was taking appropriate steps.
C. The Court ordered that standards on the pollutants be set if the EPA found that the
emissions at issue contributed to climate change.
D. The Court found that the emissions at issue contributed to climate change and
ordered that the EPA set standards in regard to them.
E. The Court refused to consider the matter based on its determination that the issue of
whether the emissions affected climate change was within the discretion of the EPA.
“Not So Slick Trucker.” Slick had a trucking business and advertised that he would
transport “anything.” One day Sleazy Corporation asked him to transport some
hazardous waste and dump it on a farm telling him that, by the way, he should be
careful about touching any of the waste. A friend of Slick’s asked him if he should
check to see if Sleazy Corporation had the proper permits. Slick replied that he was
unconcerned about permits for dumping because he was a mere transporter. A few years
later, federal investigators operating on a tip from someone Slick had cheated in a poker
game, discovered the farm. The material at issue consisted of a pile of hazardous waste
dumped by Slick. The waste was removed; soil was cleaned; and the action, resulting in
a permanent solution, was complete within 6 months. The government requested that
Slick cover the clean-up costs. He refused on the basis that he was simply a trucker and
did not make the waste.
The action of the government in cleaning up the farm could best be described as a
______ action.
A. Removal
B. Remedial
C. Reclamation
D. Redemption
E. Reallocation
“Defective Windows.” Selina hired a contractor, Rex, to put new windows in her home
that she purchased herself from Good Windows. Unfortunately, Rex made a mess of the
windows. While the windows were initially in good shape, Rex cracked some,
scratched others, and did not get the windows properly fitted into their frames. Selina
received a bill for the windows from Good Windows, but she refused to pay. Selina was
told that Good Windows would file a lien, but she believed that there was no basis upon
which a lien would be granted. Rex, who refused responsibility for any problems, also
filed a lien after Selina refused to pay him.
Assuming the court follows the reasoning of Bates County Redi-Mix Inc. v. Windler
discussed in the text, which of the following is the most likely result if Good Windows
proceeds with attempting to obtain a lien?
A. Good Windows would likely prevail because it was not the fault of Good Windows
that the windows were installed improperly.
B. Good Windows would likely lose because the windows are not working properly for
Selina.
C. Good Windows would likely lose only because Rex is unwilling to cover the cost of
proper installation, and Selina should not be charged for windows when she has no
remedy against anyone.
D. Good Windows would likely lose unless Selina can establish that Good Windows
notified her by certified mail that she would have to pay for the windows even if they
were improperly installed.
E. Good Windows would likely be granted a lien for only 50% of the cost of the
windows.
In order to enforce a right to sell property that is subject to a bailment when the bailor
does not pay an agreed upon price, a bailee is given a[n] _____.
A. Bailee’s lien
B. Bailor’s lien
C. Bailment document
D. Lien document
E. Enforcement lien
Which of the following is the penalty for an employer who fails to comply with
COBRA requirements?
A. The employer may be required to pay up to 10 percent of the annual cost of the
group plan or $500,000, whichever is less.
B. The employer may be required to pay up to 20 percent of the annual cost of the
group plan or $300,000, whichever is less.
C. The employer may only be required to pay up to 10 percent of the annual cost of the
group plan.
D. The employer may only be required to pay up to 20 percent of the annual cost of the
group plan.
E. The employer may only be required to pay up to a fee of $50,000.
Which of the following is the agreement by which the debtor gives the secured interest
to the secured party?
A. Collateral agreement.
B. Secured interest.
C. Debtor agreement.
D. Secured transaction.
E. Security agreement.
Which of the following is true regarding reg-neg rule making?
A. It is the oldest and most accepted form of rule making involving negotiations among
and between all parties before regulations are issued.
B. It is more formal than formal rule making and requires a vote by all identified
interested parties prior to the issuance of a formal rule.
C. It is considered a form of legislative rule making by which interested parties may
insist that an agency take certain action.
D. It is a form of rule making by which agencies may consult with other agencies
before issuing informal rules so that rules of various agencies do not conflict.
E. It is a newer process by which interested groups and the agency attend sessions led
by a mediator in an attempt to reach consensus.
“Grooming Losses.” Wally, Beverly, and Matthew formed a partnership to groom dogs.
Because they were good friends and anticipated making a profit sufficient to
compensate all partners well, the articles of partnership did not allocate profit or losses.
Beverly was appointed managing partner. Unfortunately, the business did not go as well
as expected and the partnership incurred some losses. Matthew claimed that he should
not have to share in losses because he had groomed more dogs than anyone. Matthew
also claimed that although the partnership did not reference compensation for additional
duties, he was entitled to compensation because of his excessive work. Beverly claimed
that she should not have to share in losses because she contributed more capital than did
either of the others. Wally claimed that he should not have to cover the losses because
both Beverly and Matthew had been hiding the books from him. He demanded to
inspect the books and also to review a listing of all partnership assets and profit
statements listing distributions to partners. Beverly and Matthew denied that they had
been hiding the books and claimed complete innocence of any wrongdoing.
Which of the following is the proper reference for Wally’s request to review all
partnership assets and profit statements listing the distributions to partners?
A. He requested a “report.”
B. He requested a ‘synopsis.”
C. He requested an “accounting.”
D. He requested a “review.”
E. He requested an “overview.”
Which of the following is true if an instrument fails to qualify as a negotiable
instrument?
A. The instrument by definition fails to be a good contract.
B. Failure to qualify as a negotiable instrument does not mean the instrument fails to be
a good contract.
C. The instrument by definition is a good contract.
D. The instrument by definition is a good contract only if it is made out in an amount
less than $1,000.
E. The instrument by definition is a good contract only if it is made out in an amount
more than $1,000.
Which of the following references the requirement that a contract not be either illegal or
against public policy?
A. Consideration
B. Capacity
C. Legal object
D. Illegal prohibition
E. Ethical requirement
Which of the following is true regarding notice of termination of an agency
relationship?
A. Notice of termination of an agency relationship must be given by actual notice.
B. Depending on the circumstances, notice of termination can be actual or constructive.
C. Notice of termination of an agency must be given in writing.
D. Actual notice of termination of an agency relationship is not needed once 30 days
have passed since the termination because at that point notice is presumed.
E. Actual notice of termination of an agency relationship is not needed once 60 days
have passed since the termination because at that point notice is presumed.
As set forth in the case of Beckwith v. Dahl, which of the following is not an element to
the tort of intentional interference with the expectation of inheritance?
A. Plaintiff’s expectation of receiving an inheritance evidenced by writing.
B. An intentional interference with the expectation by a third party.
C. Proof the interference was wrongful.
D. But for the interference, the plaintiff would have received the inheritance.
E. Damages.