“Skateboard Growth.” Both Bernie and John were presidents of small corporations
involved with manufacturing and selling skateboards. Bernie’s store was called “ABC
Skateboard” 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 of the two
companies and all shareholders, decided that it would be a good idea to combine the
businesses. They decided to retain the name “Skateboard for Health.” Bernie was
concerned, however, with the change because, on behalf of his company, 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 regarding Bernie’s belief that Greg will be unable to
collect anything for the accident after the joining of the businesses?
A. Bernie is correct that Greg will be unable to win in litigation against him so long as
the joining is completed before Greg files the lawsuit.
B. Bernie is correct that Greg will be unable to win in litigation against him regardless
of whether the lawsuit is filed before or after the joining so long as no judgment is
entered prior to the joining.
C. Bernie is correct that Greg will be unable to sue him unless Greg files in court an
objection to the joining and prevails.
D. Bernie is correct that Greg will be unable to win in litigation against him unless Greg
can establish fraud in connection with the joining.
E. Bernie is incorrect, and the joining will have no effect on the lawsuit.
Which of the following is true regarding the Equal Employment Opportunity
Commission (EEOC) position on mediation?
A. The EEOC encourages the mediation of employment discrimination claims.
B. The EEOC discourages the mediation of employment discrimination claims.
C. The EEOC discourages the mediation of employment discrimination claims in sexual
harassment cases but not in age discrimination cases.
D. The EEOC discourages the mediation of employment discrimination claims in age
discrimination cases but not in sexual harassment cases.
E. The EEOC encourages the mediation of all employment discrimination claims except
for those arising under the Americans with Disabilities Act where the use of mediation
is discouraged.
“Run Around.” Millie issues a promissory note to Bob. Bob endorses the note and
transfers it to Anne. Anne endorses the note and transfers it to Henry. Henry presents
the note to Millie for payment. When Henry presents the note to Millie, she asks him
for reasonable identification. He did not have any identification with him and told her
that she had no right to dishonor the instrument. Millie continued to insist, so finally, on
the same day, Bob obtained clear identification and presented it to her. Nevertheless,
even with proper identification, Millie refused to pay the note, claiming that she lacked
the funds with which to do so. After properly providing notification of dishonor to both
Anne and Bob, Henry requested that Anne pay the note, but she told him that he would
have to get his money from Bob. Henry has been trying to call Bob for 35 days, but
Bob did not return his telephone calls. Henry is exasperated; and within 40 days of
when Millie refuses payment, he notifies Millie, Bob, and Anne that the promissory
note has been dishonored by Millie and that he is asserting liability on the note against
all of them. Millie calls him up and says that she never dishonored the note, she simply
lacks the funds with which to immediately pay and thinks that he should seek recovery
elsewhere.
Which of the following is true regarding Anne’s statement to Henry that he must seek
recovery from Bob?
A. Anne is correct.
B. Anne is correct only if Bob is able to pay and has not filed bankruptcy.
C. Anne is correct in stating that Henry should seek recovery from Bob only if Millie
has filed bankruptcy because, otherwise, Henry should be pursuing litigation against
Millie.
D. Anne is correct unless the note is for over $10,000, in which case Henry can seek
recovery from her without resorting to recovery from Bob or Millie.
E. Anne is incorrect. Henry may seek recovery from her without first seeking recovery
from Bob.
Which of the following is true regarding landlord liability in England?
A. For a landlord to be held liable due to negligence, he or she must have created the
disputed defect.
B. Landlords are significantly restrained by common law in terms of their liability to
the tenant at the time of letting.
C. Nuisance is not recognized as an action against landlords.
D. A landlord is strictly liable for builder created defects.
E. The law favors protection of tenants.
When a principal is classified as a[n] ______ principal, a third party is aware that an
agent is making an agreement on behalf of a principal, and the third party also knows
the identity of the principal.
A. Acknowledged
B. Permitted
C. Disclosed
D. Revealed
E. Uncovered
What does the Fifth Amendment’s takings clause reference?
A. The right of the government to take private property for public use without paying
compensation to the owner.
B. The requirement that the government pay the owner just compensation if the
government wants to take private property for public use.
C. The right of the government to put individuals in jail for up to ten days without a
hearing.
D. The right of the government to put individuals in jail for up to five days without a
hearing.
E. The requirement that the government compensate an owner for anything destroyed
during a search.
What did the court in Reilly Foam Corp. v. Rubbermaid Corp. rule in regard to whether
a quote is considered an offer under the UCC?
A. That it is well recognized under the UCC that quotes are considered offers.
B. That it is well recognized under the UCC that quotes are not considered offers.
C. That the UCC does not apply at all to disputes involving quotes because quotes are
not goods.
D. That generally quotes are not offers but that some price quotes are sufficiently
detailed to be deemed offers.
E. That generally quotes are offers but that some price quotes are sufficiently vague to
be deemed mere invitations to enter into negotiations or to submit offers.
When a party is tricked into signing a negotiable instrument without having a chance to
determine that it is, in fact, a negotiable instrument, the party can claim _______.
A. Negligence
B. Recklessness
C. Malice
D. Strict liability
E. Fraud in the factum
Which of the following is false regarding property interests in Vietnam?
A. The constitution asserts that the state owns all the land.
B. If an individual wants to use land, he or she must pay tax on it as a form of rent.
C. Transference of property can occur only with the approval of a state official.
D. A new owner can never be given a longer term of right or more extensive rights over
the land than the original owner had.
E. The transferring owner determines the price for which property will be transferred.
“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.
By mailing correspondence to patients encouraging purchase of the band, which of the
following offenses, if any, did Dr. Fred commit?
A. False pretenses
B. Fraudulent use of transit
C. Defalcation
D. Mail fraud
E. He is not guilty of any offense
Which of the following is true regarding payment on a time instrument?
A. It is payable in the same manner as a demand instrument.
B. It may be made payable at a past or future date so long as a method for computing
past-due interest is set forth in the document.
C. It must be payable at a future time, and the date must be determinable through a
separate instrument prepared in conjunction with the time instrument.
D. It may be made payable at a past or future date so long as the method of computing
interest is set forth either in the time instrument itself or in a separate document
prepared in conjunction with the time instrument.
E. It must be payable at a specific future time which is easily determinable from the
document itself.
At a minimum, the duty of care of the accountant entails compliance with which of the
following?
A. Generally acknowledged accounting principles only.
B. Generally acknowledged auditing standards only.
C. Generally accepted accounting principles only.
D. Generally accepted auditing standards and generally acknowledged accounting
principles.
E. Generally accepted accounting principles and generally accepted auditing standards.
The law of contracts is primarily _______________ law.
A. Comprehensive
B. Statutory
C. Common
D. Restated
E. Modified
Under the UCC, _____ requires that the seller/lessor have and hold conforming goods
at the disposal of the buyer/lessee and give the buyer/lessee reasonable notification to
enable him or her to take delivery.
A. Tender of delivery
B. Offer of availability
C. Tender of offer
D. Offer of delivery
E. Offer of notification
Which of the following is true if an agent has no 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 unless the principal can establish clearly and convincingly
that the agent was expressly barred from engaging in the conduct at issue.
E. It is not relevant.
Which of the following was the result on appeal in the Case Opener involving the claim
that Michael Jordan owed $5 million based on his agreement to pay the plaintiff’s
mother on the premise that he was the father although it was later determined that the
child was not his?
A. That the agreement to pay $5 million could be rescinded based on a mutual mistake
of fact.
B. That the agreement to pay $5 million could be rescinded based on the mother’s fraud.
C. That the agreement to pay $5 million could be rescinded based on either a mutual
mistake of fact or based on the mother’s fraud.
D. That the agreement to pay $5 million could not be rescinded because Jordan was
aware of a question about his parentage.
E. That the agreement to pay $5 million could not be rescinded because Jordan waited
too long in which to complain about the contract.
When a contract exists and a principal agrees to certain conditions, but fails to perform,
which of the following would an agent seek in order to attempt to force the principal to
perform the contract as stipulated?
A. Specific performance
B. Specific recoupment
C. Adequate performance
D. Reformation
E. Recognition
Which of the following is the least desirable type of deed from the grantee’s
perspective?
A. Quitclaim
B. Special warranty
C. Approved
D. General warranty
E. Specific
What does the UCC say regarding a limitation of consequential damages for injury to
the person in the case of consumer goods?
A. A limitation of consequential damages for injury to the person is acceptable so long
as both parties are represented by an attorney.
B. A limitation of consequential damages for injury to the person is acceptable so long
as any consumer was represented by an attorney.
C. A limitation of consequential damages for injury to the person is prima facie
unconscionable.
D. A limitation of consequential damages for injury to the person is analyzed in the
same way as a limitation of consequential damages where the loss is commercial.
E. A limitation of consequential damages for injury to the person is acceptable so long
as the injuries are not life threatening.
In Japan which of the following is true regarding any fiduciary duty between partners?
A. Fiduciary duties recognized between partners in Japan is very similar to the fiduciary
duties recognized in the U.S.
B. Japanese law does not recognize any fiduciary duty between partners.
C. Japanese law recognizes a fiduciary duty of obedience and loyalty between partners
only if it is expressed by contractual agreement.
D. The Japanese application of obedience and loyalty in partnerships far exceeds that of
the U.S.
E. The Japanese recognize a duty of loyalty between partners, which is strictly
construed, but not a duty of obedience.
Which of the following is true regarding whether the insureds in the “Case Opener”
were entitled to insurance coverage for imported toxic Chinese drywall used in their
home?
A. The court ruled that the insureds were entitled to coverage for both property damage
and personal injury based on their insurance company’s warranties.
B. The court ruled that the insureds were entitled to property damage coverage because
of their insurance company’s warranties, but not coverage for personal injuries.
C. The court ruled that the insureds were entitled to coverage for personal injuries
because of their insurance company’s warranties, but not coverage for property damage.
D. The court ruled that the insureds were entitled to full coverage only if they could
establish that the insurer knew of the drywall problems when it issued the policy.
E. The court ruled that the insureds were not entitled to coverage.
Which of the following is true regarding the effect of an automatic stay on claims of
secured creditors in a Chapter 7 proceeding?
A. The stay affects claims of secured creditors in the same way in which it affects
claims of unsecured creditors.
B. Secured creditors with claims of over $5,000 are not affected by the stay.
C. Secured creditors with claims of over $15,000 are not affected by the stay.
D. Secured creditors with claims of over $20,000 are not affected by the stay.
E. The court may exclude secured creditors from the stay if they petition the court to
show that they do not have adequate protection under the stay.
Which of the following is an exception to the rule requiring consideration?
A. Promissory agreement
B. Promissory estoppel
C. Quasi estoppel
D. Quasi agreement
E. Promissory performance
In an origin contract, when does title pass to the buyer?
A. When money is transferred to the seller
B. When the items are delivered to the buyer
C. At the time and place of shipment
D. One day after goods are identified to the contract
E. When goods are identified to the contract
An easement or profit is ______ when it runs with the land adjacent to the property on
which it exists.
A. Express
B. Adjoining
C. In gross
D. Appurtenant
E. Prevailing
Sam promises his uncle, Bob, that he will lose 10 pounds and exercise every day during
the spring semester in exchange for having his tuition paid for the fall semester. The
uncle agrees; but after Sam has lost 10 pounds and exercised all semester, Bob refuses
to pay saying that no contract existed. Which of the following is true?
A. Consideration was present, there was an enforceable contract, and Bob has
wrongfully refused to pay.
B. There was no consideration present, and Bob has no obligation to pay.
C. There was no consideration present, but Bob must pay under principles of
promissory estoppels.
D. There was consideration present, but Bob is not required to pay because the contract
was illusory.
E. There was consideration present, but Bob is not required to pay because Bob did not
receive a benefit personally.
Which of the following is true regarding the groups generally considered to be public
figures for purposes of the public figure privilege to actions for defamation?
A. Politicians, but not entertainers, are generally considered to be public figures.
B. Entertainers, but not politicians, are generally considered to be public figures.
C. Small business owners and politicians, but not entertainers, are generally considered
to be public figures.
D. Politicians and entertainers, but not small business owners, are generally considered
to be public figures.
E. Small business owners, but not politicians or entertainers, are generally considered to
be public figures.
While ordinary decisions made by directors require a ______ vote, more important
decisions sometimes require a _____ vote.
A. Majority; two-thirds
B. Majority; three-fourths
C. Two-thirds; three-fourths
D. One-third; majority
E. Majority; unanimous
Which of the following may occur when a third party agrees to be liable for a debtor’s
loan either primarily or secondarily?
A. A suretyship, a guaranty, or a certified agreement
B. A certified agreement or a suretyship, but not a guarantee
C. A certified agreement or a guaranty, but not a suretyship
D. A guarantee but not a certified agreement or a suretyship
E. Either a suretyship or a guaranty, but not a certified agreement
What did the U.S. Supreme Court rule in South Dakota v. Dole, the case involving the
validity of a federal statute granting federal funds for state highways to only those states
in which 21 is the legal drinking age?
A. The Court upheld the statute.
B. The Court upheld the statute only in the case of states that could not provide
matching funds; and if matching funds could be provided, the Court ruled that there was
insufficient reason for the law.
C. The Court upheld the statute only in the case of states that could provide matching
funds; and if matching funds could not be provided, the Court ruled that Congress was
overreaching in regard to partnership between state and federal government.
D. The Court struck the statute on the basis that it violated the Commerce Clause under
the U.S. Constitution.
E. The Court struck the statute on the basis that it violated the taxing and spending
powers of the federal government under the U.S. Constitution.
The ______ is a legal concept that aims to protect sales or lease contracts that the
parties intended to be the final expression of their agreement.
A. Statute of frauds
B. Final evidence regulation
C. Parol evidence rule
D. End evidence rule
E. Anti-oral evidence rule
Under a conditional privilege, a party will not be held liable for defamation unless the
false statement was made _______.
A. with actual malice
B. negligently
C. in print
D. publicly
E. to an employer
Which of the following is true regarding liability of an agent acting within his or her
authority on a contract involving an undisclosed principal?
A. The law will likely hold the agent liable for the agreement.
B. The law will hold the agent liable for the agreement unless the contract the agent had
with the principal expressly provided that the agent would not be held liable in such
cases.
C. The law will hold the agent liable for the agreement unless the contract the agent had
with the principal impliedly or expressly provided that the agent would not be held
liable in such cases.
D. The law will hold the agent liable for the agreement unless a contract for under
$1,000 is involved in which case only the principal would be held liable.
E. The law would not hold the agent liable on the agreement.
Which of the following involves overly harsh or lopsided substance in an agreement?
A. Substantive unconscionability.
B. Adhesion conscionability.
C. Procedural unconscionability.
D. Exculpatory clauses.
E. An in pari delicto agreement.