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Restrictive covenants are promises to use or not use land in particular ways.
The General Agreement on Tariffs and Trade became effective in 2000.
When it comes to assault, apprehension and fear are considered as the same thing.
Unless a bailment is gratuitous, the bailee has the right to be compensated in
accordance with the terms of the bailment.
State laws vary regarding the amount a surviving spouse inherits when a spouse dies
intestate.
A written stop-payment order is valid for only 30 days.
A person who has the legal right to bring an action in court has standing.
The term 'stare decisis" means "reversing the decision."
Consideration is optional in every contract.
No First Amendment protections apply to corporations.
Contract actions are created to enforce the intentions of the parties to the agreement,
while tort law is primarily designed to vindicate social policy.
One of the requirements before a collective bargaining agreement can be rejected under
Chapter 11 is that the debtor has first presented to the employee's representative the
proposed changes to the collective bargaining agreement, and the employees reject the
changes without good cause.
Corporations have implied powers.
Contractual conditions may be expressly inserted into the contract by the parties but
may not be implied by law.
The statute of limitations is the same thing as the statute of repose.
The word "jurisdiction" comes from the Latin terms juris, meaning "law," and diction,
meaning "to speak."
When perfection by possession occurs, the parties must have a written security
agreement.
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.
The fourteenth amendment is part of the Bill of Rights.
Joint and several liability means that partners must be sued jointly.
The concept of performance has no effect on the statute of frauds.
There are two basic types of power of attorney: special and allocated.
Administrative agencies are located at the federal level only.
Good faith is generally relevant in determining whether someone with a void title can
pass a good title.
No shareholder of an S corporation may be a nonresident alien.
A negotiable instrument must be a conditional order to pay.
A sample or model may constitute an express warranty.
Juries decide questions of law.
Partial payment of a debt may or may not be valid consideration, depending on whether
the debt is liquidated or unliquidated.
Under the UCC, nondelivery is not a breach of contract in circumstances in which
performance has been made impracticable because a contingency has occurred that was
not contemplated when the parties reached an agreement.
Even the mention of another document in an instrument prevents the instrument from
being negotiable.
According to the text, positive points of arbitration involve(s) which of the following?
A. Arbitrators are assigned so parties do not have to pick them.
B. Arbitration is generally less expensive than litigation.
C. Arbitrators are bound by the same rules as judges in applying precedent.
D. Arbitrations can be set aside on appeal for the same reasons as court judgments.
E. Arbitrations prohibit the use of legal counsel.
Which of the following are interpretations of consumer laws created by the Federal
Trade Commission to encourage businesses to stop unlawful behavior?
A. Consumer guides
B. Consumer recommendations
C. Industry interpretations
D. Industry guides
E. Business requirements
"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. (The information regarding the arrests is true.) Weaver reluctantly agrees to rent
the apartment to Willy for $100 per month. 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. 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 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 the odometer 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 on
the part of Weaver.
Which of the following references in some states a landlord's right to some or all of the
tenant's personal property in the event that a tenant refuses to pay rent?
A. A landlord's lien
B. A landlord's personality
C. A tenant's personality
D. A protection lien
E. An eviction lien
Which of the following was the result on appeal in Eric Lucier and Karen Haley v.
Angela and James Williams, Cambridge Associates LTD., and Al Vasys, the case in the
text in which, after finding significant problems with their roof, the plaintiffs claimed
that provisions in a home inspection contract illegally limited the liability of the
defendants?
A. The court ruled in favor of the plaintiffs on the basis that although the contract was
not unconscionable, public policy was violated.
B. The court ruled in favor of the plaintiffs on the basis that the limitation of liability
provision in the contract was unconscionable and violated the public policy of the state.
C. The court ruled in favor of the defendants on the basis that no contract of adhesion
was involved and that, therefore, by definition the contract satisfied public policy.
D. The court ruled in favor of the defendants on the basis that the plaintiffs freely
entered into the contract and should, therefore, be bound to its terms.
E. The court ruled in favor of the defendants on the basis that while the court would
intervene in appropriate cases, a presumption against a finding of unconscionability
exists in home inspection contracts; and the plaintiffs failed to rebut that presumption.
If the subject matter of an offer is destroyed, the offer _______.
A. Immediately terminates
B. Is extended for seven days
C. Is extended for fourteen days
D. Is extended for twenty-one days
E. Is extended for thirty days
Which amendment protects citizens from unreasonable searches and seizures?
A. First
B. Third
C. Fourth
D. Sixth
E. Tenth
Which of the following identifies areas such as yards, lobbies, elevators, stairs, and
hallways that are used by all tenants?
A. Accessible areas
B. Use areas
C. Lessee areas
D. Leased areas
E. Common areas
Which of the following is not required in a corporation's articles of incorporation under
the Revised Model Business Corporation Act?
A. The name of the corporation
B. The name of the registered agent
C. The names and addresses of the incorporators
D. Information regarding the purpose of the corporation
E. The address of the registered office
Which of the following is true regarding the court's opinion in Lingross v.
Heilig-Meyers Furniture, the case in the text in which the plaintiffs alleged that the
defending furniture store's agents engaged in wrongful repossession efforts?
A. The court ruled that the defendant had no right to engage in self help in regard to
repossession, regardless of whether or not it had a judgment.
B. The court ruled that because it had no judgment against the debtor, the defendant had
no right to engage in self help in regard to repossession.
C. The court ruled that because it did not physically harm any residents of the home, the
defendant rightfully exercised its self help rights in regard to repossession.
D. The court ruled that a creditor may engage in self help repossession where the
creditor can do so without a breach of the peace and also that a debtor's protest at
repossession terminates the creditor's self help rights.
E. The court ruled that a creditor may engage in self help repossession where the
creditor can do so without a breach of the peace and that a creditor retains those rights
regardless of whether or not a debtor protests.
Which of the following refers to money that is provided by a potential purchaser and
applied toward the purchase price of property if the sale goes through, but forfeited if
the buyer changes his or her mind?
A. Earnest money
B. A down payment
C. Guaranteed funds
D. Good faith money
E. Proof money
Which of the following is true under the WPH process of ethical decision making?
A. The interest of management is ranked higher than that of employees when decisions
are made.
B. The interest of owners is ranked higher than that of both employees and management
when decisions are made.
C. When decisions are made, the interest of the community as a whole is considered
last.
D. The interest of management is ranked higher than that of employees when decisions
are made, but the interest of owners is ranked higher than the interest of any group.
E. There is not a framework under WPH for ranking one stakeholder above another.
"Divorce fallout." Dr. Fred, following a messy divorce, has encountered significant
financial difficulties. Dr. Fred has a friend named Slick Slim who tells Dr. Fred that he
has been making lots of money by selling people a wristband that allegedly places
pressure on a nerve that signals hunger resulting in a lack of appetite. Slick Slim tells
Dr. Fred that, although the device does not really work, people who want to lose weight
and look good in their bathing suits will do anything. Slick says the wristband sells like
hotcakes. Slick also tells Dr. Fred that he will pay Dr. Fred five dollars for every band
that Dr. Fred can sell to his patients. Dr. Fred proceeds to mail letters to patients
suggesting the use of the band for weight loss. He also uses UPS to mail samples of the
band to some patients along with letters encouraging purchase of the bands. Dr. Fred
then proceeds to bill Medicare for office consultations he has with patients when they
come in to purchase the bands. The scheme is wildly successful. Dr. Fred is able to
entirely satisfy his alimony obligations within just a few months. Unfortunately, as
patients begin to see that they are not having any weight loss, he has been receiving
numerous complaints, and a friend of his told him that he could even be facing some
criminal prosecution.
Which of the following offenses, if any, did Dr. Fred commit when he used UPS to send
correspondence and samples of the bands to patients?
A. False pretenses
B. Fraudulent use of transit
C. Defalcation
D. Mail fraud
E. He is not guilty of any offense
Prudence, a mean business law teacher, offers $50 to any student who will mow her
lawn. Sam goes right over and begins mowing. Just before he finishes, Prudence goes
over and tells him that she revokes her offer. Which of the following is true regarding
Sam's entitlement to payment?
A. Sam is not entitled to payment because a bilateral contract was involved that could
only be accepted by full performance prior to revocation.
B. Sam is not entitled to payment because a unilateral contract was involved that could
only be accepted by full performance prior to revocation.
C. Sam is entitled to only a proportional recovery based on the amount of work he had
done prior to the revocation because Prudence always retained the right to validly
revoke.
D. Sam is entitled to recover because a unilateral contract was involved, and he was
entitled to a reasonable amount of time to complete the job.
E. Sam is entitled to recover because a bilateral contract was involved, and he was
entitled to a reasonable amount of time to complete the job.
"Presidential Profits." Linda was president of a publicly traded tractor company, Tough
Tractors. Linda became aware that stock in her company would likely increase
significantly in value because her company had a contract to purchase the assets of
Rough Tractors. The boards of both companies wanted the information kept
confidential until the purchase was complete and a news release was made. Before the
news was made public, Linda immediately purchased a significant number of shares in
Tough Tractors. Linda also told her friend Frank about the contract to purchase assets
although she told him to keep it quiet because it had not been made public yet.
Nevertheless, unable to keep a secret, Frank told his brother, George. Frank and George
purchased a number of shares of stock in Tough Tractors prior to any public
announcement of the sale. After the public announcement was made and the purchase
of assets went through, Linda, George and Frank, all sold their shares in Tough Tractors
and made a nice profit.
Which of the following would describe Frank in receiving the information from Linda
and acting upon it?
A. Tipper
B. Provider
C. Providee
D. Tippee
E. There is no descriptive term for Frank because he did nothing wrong
What is the primary ADR process used in federal district courts?
A. Mediation
B. Arbitration
C. Summary jury trials
D. Early neutral case evaluation
E. Private trials
Which of the following is an ADR method in which a referee is selected and paid by the
disputing parties to offer a legally binding judgment in a dispute?
A. Summary jury trial
B. Minitrial
C. Early neutral case evaluation
D. Private trial
E. Neutral submission
Which of the following is not considered an accredited investor?
A. Any natural person whose annual income has been at least $200,000 for the two
previous years and expects to make at least $200,000 in the current year.
B. Any corporation or partnership with total assets in excess of $5 million.
C. Insiders of the issuers, such as executive officers or directors.
D. Colleges and universities.
E. Any natural person who has a net worth of at least $500,000.
Assume Bob, who had no notice of any heart problem, is driving and suddenly has an
unexpected heart attack causing him to run over a student crossing the street breaking
the student's leg in the process. Which of the following is true?
A. The student can recover upon a showing of injury. Nothing else is required.
B. The student may recover only if the student can show that the student was in the
marked crosswalk.
C. It is unlikely that the student can recover because the accident could not have been
avoided even with reasonable care.
D. The student can recover in an action for negligence only if it can be shown that Bob
had insurance.
E. The student can recover only if the student can establish that the student did not have
any medical insurance.
Which of the following is the most likely measure of recovery when a quasi-contract is
involved?
A. The amount set forth in the contract.
B. The fair market value of the matter involved.
C. The wholesale price of any good involved.
D. The amount sought by the plaintiff in the Complaint.
E. Damages will be computed the same way as they are computed for any other
contract.
Which of the following is an executive agency?
A. The Federal Deposit Insurance Corporation
B. The Federal Trade Commission
C. The Securities and Exchange Commission
D. The Federal Communications Commission
E. The Nuclear Regulatory Commission
"Rent Increase." Conrad leased space for his hair salon from Brenda. After a few years,
Brenda decided to sell the building in which the hair salon was located to Greg. Brenda
told Conrad that the lease would be terminated and that whether he could stay or not
depended on what he could work out with Greg. Greg told Conrad that he could stay
only if he paid double the amount of rent he had been paying to Brenda and that if
Conrad complained, the rent would go even higher. Conrad told Greg that Brenda had
no right to make any changes and that he had the absolute right to continue paying the
same set amount to Brenda until the lease expired. The lease did not address transfers.
Which of the following is true regarding whether Greg has the right to raise the rent?
A. Greg had the right to double the rent, but that was the maximum amount that he
could raise it.
B. Greg could raise the rent as high as he wanted, and Conrad could either pay it or
move.
C. Greg could raise the rent by only a rate of 10% per year.
D. Although Brenda had the right to sell the property, Greg did not have the right to
raise the rent during the term of the lease.
E. Greg may not raise the rent because Brenda had no right to sell the property in the
first place.
What is the term for the third party who receives an assignment of contract rights?
A. Transferor
B. Transferee
C. Relator
D. Assignor
E. Assignee
State laws that outline how a person's property will be distributed if he or she dies
without a will are called ______ statutes.
A. Testate
B. Testacy
C. Intestacy
D. Will
E. Probate
"Green Gold." Martin owned a factory in which he manufactured furniture. Martin had
some extra space in the factory and decided to use heat lamps to grow marijuana. He
smuggled the marijuana into the hands of dealers by hollowing out the furniture and
placing the marijuana inside and by putting the marijuana in drawers, etc. Law
enforcement became suspicious and unexpectedly burst into the building without a
warrant, discovering the marijuana. Martin asked the agent in charge about the lack of a
warrant. The agent told him that Fourth Amendment protections did not extend to
businesses. Martin was charged with growing marijuana. Martin refused to testify at
trial. At his trial, however, the judge excluded any evidence obtained from the search,
and Martin was declared not guilty because there was no evidence against him. The
agent was very angry and arrested Martin immediately for the same offense as he was
walking down the courthouse steps from the first trial. The agent tells Martin that he
should be tried again because the judge was incorrect. Martin is placed in a holding cell
and immediately calls his attorney in an attempt to get out of jail free.
Upon which amendment did Martin rely in refusing to testify at trial?
A. The Second Amendment.
B. The Third Amendment.
C. The Fourth Amendment.
D. The Fifth Amendment.
E. The Sixth Amendment.
Assuming a purchase-money security interest is not involved, which of the following is
true regarding priority when there are two secured parties and neither has perfected?
A. The party who attached its interest first will prevail.
B. The party who loaned money first will prevail.
C. The parties will divide the proceeds from the sale of the collateral evenly between
them.
D. The party who loaned the most money on the collateral has priority.
E. The party who first notified the debtor of a missed payment has priority.
When a person hires a worker to make improvements on real property but is later
unable to pay the worker, the worker can create a[n] ______ lien on the person's
improved real property.
A. Mechanic's
B. Approved
C. Constructive
D. Improvement
E. Acknowledged
"DUI Charge." Monique was licensed by her state to train massage therapists. The state
licensing agency, the Aesthetic and Massage Commission, took very seriously its role
of enforcing the state statute enabling the Commission to do its work and providing that
licensed massage therapists must refrain from "any act or conduct indicating bad faith,
incompetence, dishonesty, or improper dealing." Rules were passed authorizing the
agency to revoke the license of anyone found guilty of such acts or conduct. Monique,
while driving home late one night from a party, was stopped by the police and arrested
for driving under the influence of alcohol. She pled guilty to the offense. When the
Aesthetic and Massage Commission discovered the offense, the officials of the agency
met, decided that Monique might drink on the job, and that she might pose a danger to
students. Accordingly, her license to teach massage therapy was revoked. Monique
threatened to sue to retain her license and was told by the agency head that she had no
right to appeal to court because, based on her admission of guilt, no factual dispute was
involved. The agency official went on to say that even if an appealable issue existed,
agency action may only be overturned when there is clear and convincing evidence that
the agency exceeded its discretion. The administrative system in Monique's state is
identical to the federal system.
Which of the following is true regarding the statement by the agency head that agency
action may only be overturned when there is clear and convincing evidence that the
agency exceeded its discretion?
A. The agency representative is essentially correct because agency decisions are upheld
in over 99% of the cases and may only be overturned only if no evidence whatsoever
supports the agency's interpretation of its regulation.
B. The agency representative is incorrect because agency decisions are usually struck
down unless they are supported by clear and convincing evidence.
C. The agency representative is incorrect because agency decisions are usually struck
down unless it can be established that an appeal of an agency decision is frivolous and
without reason.
D. The agency representative is incorrect because a court will review a dispute with an
agency on a de novo, meaning independent basis, giving no deference to the agency
decision.
E. The agency representative is incorrect because while agency actions are usually
upheld, they may be struck down if the agency exceeded its power or the facts are not
supported by substantial evidence.
"Powder Room Mess." For $300,000, Willis agrees to build a new home for Robert,
who is very picky. Willis builds the home to Robert's specifications with one exception.
The faucets and linoleum flooring in an upstairs powder room are not exactly what
Robert specified. That was a mistake on Willis' part, but he had not intentionally failed
to follow specifications. When Robert sees the powder room, he goes ballistic and tells
Willis that he will not pay Willis anything for the house. It will take $300 to put in
correct faucets and linoleum. Willis says that he is willing to pay $300 to put Robert in
the position he would have been in had the correct faucets and linoleum been used, but
that is all he is willing to pay.
Which of the following is true regarding the appropriate amount of damages, if any?
A. There are no damages because Willis did not breach the contract.
B. Robert will not have to pay for the house because Willis failed to perform as
required.
C. Even though Willis substantially performed, Robert will not have to pay for the
house because Willis materially breached the contract.
D. Robert is released from paying for the house because of the anticipatory breach.
E. Any damages awarded would be in the range of $300, the amount it would take to fix
the breach.
"Prenuptial Agreement." Rhonda performed accounting services for Greg's used car
business. She had a contract with Greg to the effect that she would audit his books and
financial statements for his own use, not for the purpose of obtaining loans. In auditing
Greg's business, she developed various notes, calculations, memorandums, and other
papers. Candace, Greg's fiancé, approached Rhonda to inquire about Greg's business.
Candace and Rhonda had been friends for many years. Rhonda allowed Candace to
look at the various notes, calculations, and other papers resulting from her review of
Greg's financial statements and other records. Candace told Rhonda that she really
needed to investigate Greg because they were thinking of getting married, and she
believed he had a legal obligation to disclose the information to her because of
negotiations involving a prenuptial agreement. Rhonda agreed and proceeded to discuss
Greg's finances with Candace revealing all the information that Greg had disclosed to
her. Candace broke up with Greg telling him that after what she discovered from
Rhonda, she was concerned that Greg could not support her in the way in which she
wanted to become accustomed. Greg was very angry with Rhonda and told her that she
was unethical and had violated the accountant-client privilege.
What are the various documents including, notes, calculations, and memorandums that
Rhonda developed in her review of Greg's financial statements called?
A. Working papers.
B. Consultation papers.
C. Computation papers.
D. Analysis papers.
E. Review papers.
Which of the following is the bank ultimately responsible for granting funds for a
check?
A. Depositary.
B. Payor.
C. Collecting.
D. Intermediary.
E. Transferring.
"Feuding Neighbors." Annette, who is angry because her neighbor, William, allows his
dog to chase her cat, decides to get even. She moves a number of farm animals into her
backyard and begins playing music at all hours of the night. She also steals a nice lawn
chair off of William's deck. She intends to keep the chair and not give it back. Annette
further took a rake off of William's deck that she plans to return after she finishes raking
her leaves. William did not give her permission to take the rake or the chair. William is
not happy about the farm animals and the loud music.
What action would William have against Annette for taking the rake?
A. Trespass to property.
B. Conversion.
C. Private nuisance.
D. Negligence.
E. Harassment.
Which of the following best describes the term "comparative law?"
A. It is the study of the legal systems of different states.
B. It is the study of the laws governing the conduct of states and international
organizations and their relationships with one another.
C. It is the study of the difference between public and private law in the United States.
D. It is the study of the difference between constitutions and administrative rules and
regulations within the United States.
E. It is the study of international organizations and their structure.
The Sarbanes-Oxley Act prohibits registered public accounting firms from engaging in
non-auditing acts for their auditing clients. List any six such non-auditing acts currently
prohibited.
What must be proven in order to recover damages under Section 10(b) of the Securities
Exchange Act of 1934 and the corresponding SEC Rule 10b-5?
According to the text, what are the three main purposes of the statute of frauds?
Define the term "admission" in relation to contracts under the statute of frauds. Discuss
the pros and cons of the rule on admissions, and whether you think courts should
recognize admissions.
Set forth the requirements for a check to be considered properly payable.
Should the perfect tender rule be rejected as a matter of law and replaced with the
concept of substantial performance?
Set forth the situations under which a court is likely to pierce the corporate veil.
Marcy is unhappy because a play she wrote and has a copyright on has been placed on
the Internet. She hears that you are taking business law and asks what she can do in
remedying the situation and suing Internet service providers. What would you tell her?
Reference the federal law involved and its pertinent provisions.
Set forth the steps involved in formal rule making.
List the ways in which an offer can terminate.
Everett buys a new bicycle on credit from Bicycle City. Bicycle City has a security
agreement establishing a purchase-money security interest in the bicycle. Everett,
however, discovers that he does not have enough money to pay his rent. Therefore, he
sells his bicycle to his neighbor, Helen, who is unaware of Bicycle City's security
interest in the bicycle. Everett fails to make payments on the bicycle and Bicycle City
seeks to repossess it. Discuss the rights and obligations of the parties.
Bernice enjoys snooping, particularly through her neighbor's trash. She sneaks out and
grabs the neighbor's trash after they have gone to work but before the trash collector
comes. She goes through it to find out confidential information regarding the neighbors
but never tells anyone else or uses the information for any purpose. Can Bernice
become the legal owner of this property; and, why or why not? Discuss whether you
believe it is ethical for Bernice to go through the neighbor's trash, and why or why not.
Sheila has a flower shop as does her friend Bob. Their shops are in adjoining towns
located approximately 10 miles apart. Sheila agrees that she will not sell flowers for
delivery in Bob's town in return for Bob agreeing that he will not sell flowers for
delivery in Sheila's town. Have Sheila and Bob committed any antitrust violation, if so
what and under what standard would it be reviewed?
Discuss whether or not you believe that our law should recognize holder in due course
status with its resulting rights.
Ellie is a partner in a law firm. Pursuant to the partnership agreement, however, she
does not have authority to make purchases for the firm. Ellie goes to ABC Office
Supply and makes a purchase on the firm account. She later quits the law firm and takes
the computer with her. Assuming that ABC Office Supply knew she was a partner but
did not know that she lacked authority, what remedies are available to ABC and why?
Courts using the market share theory generally require that the plaintiff prove which of
the following?
What is required by federal law in regard to mail-order sales by the 1975 Mail-Order
rule as amended by the Mail or Telephone Order Merchandise rule of 1993?
Set forth the set of procedures that must be taken in every bankruptcy case.
Assume you are hired as the president of a new company. Write a code of ethics for the
firm.
Sally is the president of AAA Components, a company that makes small parts for the
automotive industry. Customers of AAA components are primarily auto manufacturers.
Sally's cousin, Frank, works at the company as a sales representative. A promotion to
the sales manager position is open. Frank has applied and so has Susan, another sales
representative. While both Frank and Susan are good employees, they are skilled in
different areas. Susan is excellent with technology and with placing orders. She does an
excellent job in following through with order problems. Frank, on the other hand, is
better with customer relations, and customers seem to like him better. Sally would like
to promote Frank but she has two concerns. Her first concern is that she does not want
it to be perceived that she is being unfair because Frank is family. Her second concern
is that she has a suspicion that some customers are somewhat prejudiced against Susan
because she is female. Most customers with whom the sales representatives deal are
male, and Sally suspects that they may give Frank more consideration than Sally.
Define and discuss the WPH framework for business ethics, and within that framework
propose a solution. Be sure to fully address the populations, purposes, and guidelines
included within "W," "P," and "H."
