Which of the following is NOT a breach of an agent’s duty of obedience?
a. Entering into an unauthorized contract for which his or her principal is then liable.
b. Committing a tort for which the principal is now liable.
c. Improperly delegating her authority.
d. Not following a principal’s instruction to misrepresent the quality of a competitor’s
goods to a potential customer.
Only the __________ Amendment to the Constitution, which abolishes slavery or
involuntary servitude, applies to the actions of private individuals.
a. First
b. Ninth
c. Thirteenth
d. Fourteenth
The President of the United States has the authority to issue laws, which are called:
a. Restatements of law.
b. executive orders.
c. maxims.
d. codes.
Testamentary capacity refers to:
a. the age of the testator.
b. the same capacity as required to contract.
c. the ability to understand the nature and extent of one’s property, to appreciate the
natural objects of one’s bounty, and the ability to formulate an orderly plan of
disposition.
d. the influence of others over the testator.
Arthur, Betty, and Clara each inherit an undivided one-third interest in an apartment
complex. Instead of selling it, they decide to continue to operate it for the next few
years as a sideline to their other occupations just to see if they can earn some extra
money. What are they?
a. A partnership.
b. Co-owners only.
c. A corporation.
d. Creditors of the apartment complex.
A(n) __________ is a measure designed to protect the public from unqualified
practitioners.
a. exculpatory clause
b. revenue license
c. regulatory license
d. usury statute
The branch of public law that deals with the various regulatory functions and activities
of agencies of the government is:
a. criminal law.
b. administrative law.
c. Constitutional law.
d. substantive law.
The characteristics of a qualified or base fee estate include(s) that:
a. it is possible to convey or will property to a person to enjoy absolutely, subject to its
being taken away at a later date should a certain event occur.
b. a holder of a qualified fee interest may transfer the property by deed, subject to the
initial condition.
c. a qualified fee interest may pass by intestate succession.
d. All of the above.
Barbara owes Arthur $2,000. On July 1, Arthur assigns the right to the $2,000 to Maud.
Thereafter, on July 15, Arthur assigns the same right to Derek, who in good faith gives
value for it and knows nothing about the first assignee. In this case:
a. Maud has the right to the payment of $2,000.
b. Derek has the right to the $2,000.
c. neither Maud nor Derek can claim the $2,000.
d. the rule differs in different states. Depending on which rule a state follows, the
answer will vary.
Under Article 9 of the UCC, a pledge is:
a. the delivery of personal property to a creditor or to a third party acting for the
creditor as security for the payment of a debt.
b. a requirement that the secured party and the debtor agree to certain collateral.
c. an equipment transfer before a forced sale.
d. a form of indispensable paper.
The ethical theory that underlies cost-benefit analysis is:
a. libertarianism.
b. deontology.
c. utilitarianism.
d. ethical relativism.
Jason’s mother would like him to go to college, so in June he enrolls at the local
university. He also quits his job and tells his mother his plans to take classes. His
mother says, “I’m so happy that you are going to college that I want to pay for your
books.” Jason then sends her a bill for $485. Which of the following is true regarding
his mother’s promise?
a. It is enforceable, because Jason returned to college.
b. It is enforceable, because Jason is giving up the right to do something else.
c. It is unenforceable, because it is a unilateral contract.
d. It is unenforceable, because Jason had already enrolled in school when she made the
statement that she wanted to pay for his books, and there is no consideration.
The Equal Employment Opportunity Commission (EEOC) is empowered to:
a. only file legal actions in its own name.
b. investigate all charges of discrimination.
c. issue guidelines and regulations concerning enforcement policy
d. Both (b) and (c).
In the Lesher v. Strid case, the court held that:
a. a representation is material if it is likely to influence a reasonable person.
b. for a misrepresentation to be actionable, it must be one of fact rather than of opinion.
c. a mutual mistake of fact renders a contract voidable by the adversely affected party if
the mistake is so fundamental that it frustrates the purpose of the contract.
d. the contract’s ‘as is’ clause expressly excluded reliance on extrinsic representations
such as the defendant’s representation about the four-acre water rights.
For a ratification to be effective, the principal:
a. must have knowledge of all material facts concerning the transaction.
b. must communicate her intent to ratify to the third party.
c. must have been in existence when the act was done.
d. Both (a) and (c).
Southern Furniture Co. hired Chuck to drive a company truck and deliver furniture.
Chuck had a spotless driving record and did well on his driving test. Belinda ordered a
chair from Southern Furniture Co. and arranged for its delivery on her lunch hour.
Belinda was at home when Chuck delivered the chair. After delivering the chair, Chuck
brutally raped Belinda, causing severe physical and psychological injuries. Chuck was
convicted in the criminal courts. During the trial it was revealed that Chuck had been in
a mental institution for the criminally insane for two years because he had brutally
assaulted his mother and other women. He also had a lengthy criminal rap sheet
involving theft crimes. Belinda sought compensation for her physical and psychological
injuries from both Chuck and Southern Furniture Co. in civil court. Discuss the
probable outcome of this case with regard to the issues of: (a) respondeat superior, and
(b) general tort liability of principals for the unauthorized acts of their agents.
True cost-benefit analysis as a social theory:
a. only measures monetary gains and losses in making business decisions.
b. compares direct and indirect costs and benefits of program alternatives for meeting a
specific goal.
c. judges persons’ actions by what those persons believe is right for themselves.
d. emphasizes justice and a central moral authority.
The Fair Labor Standards Act would concern which of the following?
a. Working hours for children employed picking strawberries.
b. Minimum hourly wage for a factory worker.
c. Overtime pay for managers.
d. Attorney fees.
Which of the following is NOT an advantage of a partnership?
a. Partners’ income taxes may be less than the income taxes would be on a corporation.
b. Each partner has limited liability.
c. It is possible to bring together more managerial skills than in a sole proprietorship.
d. It is possible to bring together more capital than in a sole proprietorship.
Barry’s Sport Shop calls Champion Tee Shirt Company to order 200 designer tee shirts
at $2 per shirt. The next day, Barry decides he can easily sell 100 more. Before the
order is filled, he calls to change the order to 300 tee shirts. Champion sends 200. Can
Barry force Champion to send the additional 100?
a. No, because there is no consideration for the extra 100 shirts.
b. No, because Barry does not have a writing signed by Champion Tee Shirts.
c. Yes, because this is a subsequent modification of the original contract.
d. Yes, because Champion Tee Shirts is a merchant within the meaning of Article 2 of
the UCC.
The administration of the assets of the deceased and the proving of the validity of the
will are determined in:
a. probate proceedings.
b. a domicile of intent.
c. an equity proceeding.
d. a testamentary hearing.
Federal regulation prohibits a credit seller or lender from obtaining a nonpossessory
security interest in household goods if the interest is not a purchase money security
interest.
Vicarious liability is liability imposed upon one person for the acts of another.
Emma calls her bank to issue an oral stop payment order on a check on March 1st. She
then leaves town for two weeks to visit her mother. When she returns, she goes to the
bank to sign a written stop payment order, but finds the bank has already paid the
check. What recourse does she have? Explain.
Who are the parties to checks and notes?
In the Ferrell v. Mikula case, the court of appeals held that the essential elements of a
false imprisonment action are detention and its unlawfulness, but that malice and want
of probable cause need not be shown.
An accountant may not disclose the contents of his working papers under any
circumstances.
Under the informal rulemaking procedures of the APA, an agency must provide notice
of a proposed rule only if there is a good cause.
Under what circumstances has it been held that a search warrant is not necessary?