Reference no: EM131131857

QUESTION 1. Which of the following is a true statement?

A. Death of an agent or the principal terminates an agency only after notification of death is received by the living party.

B. An agency coupled with an interest usually terminates on the death of the principal.

C. An agency coupled with an interest is usually revocable by the principal.

D. Revocation of authority is done by the principal whereas renunciation of the authority is done by the agent.

QUESTION 2. An assignment of personal services is

Illegal

Generally permitted

Permitted with all the parties' consent

Is never permitted

QUESTION 3. Which is a FALSE statement about U.S. civil rights laws?

a. The Age Discrimination in Employment Act protects against age discrimination in the workplace.

b. Language discrimination in the form of "English-only" policies can be a form of national origin discrimination.

c. Even an employee at-will can sue for wrongful discharge if she was terminated because of her gender.

d. An employer is allowed to have an Affirmative Action plan that has rigid and fixed quotas for hiring based solely on race due to the history of discrimination in the United States.

QUESTION 4. Which of the following would constitute a valid acceptance?

The buyer tells the seller that the nonconforming goods which were shipped will be kept and paid for.

The buyer waits for three months before notifying the seller that the goods are nonconforming.

The buyer immediately resells the nonconforming goods.

A, B and C.

QUESTION 5. What is the significance of the term "preferred" in reference to preferred stock?

It is viewed to generally be a better investment than common stock.

Preferred stockholders usually have better voting rights than common stockholders.

Preferred stockholders receive preference over creditors of the corporation in the event of liquidation.

Preferred stockholders receive certain preferences over common stockholders with respect to dividends or with respect to assets in the event of liquidation.

QUESTION 6. A partnership typically is created:

If the managing partner files appropriate papers with the secretary of state.

If one or more persons or entities engage in an ongoing business activity for profit.

Upon the issuance of stock to the partners.

Once there is a valid written partnership agreement.

QUESTION 7. The EPA standards for toxic air pollutants:

Require that all such pollutants which have any risks to humans be eliminated.

Require that companies use the best available technology to minimize these pollutants, regardless of cost.

Allow for safe levels of these pollutants to exist.

A and B only.

QUESTION 8. In a short form merger, which approvals are needed?

Votes by both boards of directors, but shareholders need not approve.

Vote by the board of directors of the surviving corporation, and for the corporation which does not survive, recommendation by the board of directors and vote by the shareholders.

Vote by the board of directors of the surviving corporation.

For both corporations, a vote by the shareholders, but no action by the board of directors.

QUESTION 9. The best statement of the test applied in determining if a defendant was the proximate cause of the plaintiff's injuries is:

Was it foreseeable to the plaintiff that the defendant would engage in this particular conduct?

Given this particular injury to the plaintiff, was it foreseeable that the defendant was the cause?

Was it reasonably foreseeable to the defendant that the defendant's conduct could lead to this kind of injury?

Was the injury foreseeable to the plaintiff prior to the injury's occurrence?

QUESTION 10. What is a FALSE statement regarding monopolization analysis pursuant to Section 2 of the Sherman Act?

a. One generally cannot be guilty of or liable for monopolization without having a monopoly first.

b. One can have a monopoly but not have monopoly power and thus not be a monopolizing company.

c. All monopolies are illegal since they are inherently unfair to consumers.

d. Wrongful conduct by a monopoly to establish the legal wrong of monopolization includes illegal AND unethical, predatory, or abusive conduct (which is not necessarily illegal).

QUESTION 11. What is a FALSE statement regarding monopolization analysis pursuant to Section 2 of the Sherman Act?

a. One generally cannot be guilty of or liable for monopolization without having a monopoly first.

b. One can have a monopoly but not have monopoly power and thus not be a monopolizing company.

c. All monopolies are illegal since they are inherently unfair to consumers.

d. Wrongful conduct by a monopoly to establish the legal wrong of monopolization includes illegal AND unethical, predatory, or abusive conduct (which is not necessarily illegal).

QUESTION 12. Which of the following is a FALSE statement?

A. A contract should specify where disputes are to be adjudicated and which jurisdiction's law will be applied to any disputes.

B. California does not recognize the validity of covenants-not-to-compete (or non-competition clauses) in employment contracts.

C. When a person goes into bankruptcy, an automatic stay arises which means that contract claimants and other creditors are prohibited from instituting any legal proceeding to enforce a contract or to obtain any money owed pursuant to a contract.

D. "Puffing" statements, such as this is a "great car" or a "top-notch car," are typically grounds for breach of express warranty lawsuits.

QUESTION 13. Which of the following would not be a misappropriation of a trade secret?

Paying an engineer who is working at a competitor to disclose the trade secret to you.

Buying the competitor's product, then tearing it apart and analyzing it in your laboratory to reveal how the product works.

Hiring a spy to break into a competitor's offices to acquire the secret.

Asking one of your current engineers to disclose a trade secret of her former employer and she does so.

QUESTION 14. Which of the following is false under the Uniform Partnership Act?

Each partner is personally liable for all of the debts of the partnership.

Any one partner may be held liable for the partnership's entire indebtedness.

Title to land may be taken in the firm name.

The partnership must always have a written partnership agreement prepared by an attorney

QUESTION 15. A supervening illegality (that is, legality after the contract was entered into) is best described as

Voiding the contract

Resulting in a discharge of contract duties

Having no effect on the contract

Making the contract voidable

QUESTION 16. Which of the following is a false statement?

A. The law in the United States has been mainly influenced by the French Napoleonic Code.

B. One major purpose of the law is to protect persons and their property from unwanted interference from others.

C. Those precepts that must be obeyed and followed by citizens subject to sanctions or legal consequences can be thought of as law.

D. Law serves both to maintain the status quo and to facilitate orderly change.

QUESTION 17. The Statute of Frauds does not cover

Contracts in consideration of marriage

Contracts for the sale of realty

Guarantees or guaranty contracts

Contracts that can be performed within one year

QUESTION 18. "Fundamental corporate change" consists of:

a. Amending the articles of incorporation

b. Merging with another corporation

c. Dissolution and termination of the corporation

d. All of the above.

QUESTION 19. Which of the following statements is not true regarding the assignment of a partner's interest in the partnership?

The partnership interest is personal property.

The partnership interest may be assigned without the permission of the other partners.

The assignment makes the person receiving it (the assignee) a new partner.

The assignment allows the person receiving it (the assignee) to receive the partnership profits of the assignor.

QUESTION 20. Being technically able to perform a contract but with that performance now having no value or worth is best

described as

Discharge by impossibility of performance

Discharge by illness

Discharge by frustration of purpose

Discharge by agreement

QUESTION 21. Which of the following statements is a false one?

Violators of emission standards in the U.S. can be subject to civil penalties pursuant to the Clean Air Act.

Under no circumstances in the U.S. can waste be discharged into navigable rivers since that is pollution.

Companies in the United States can legally buy and sell rights to pollute in the form of so-called emission credits or pollution permits.

The common law doctrine of nuisance can be used to obtain an injunction to stop pollution.

QUESTION 22. Which of the following in not true?

A minor can still disaffirm a contract for a reasonable time after reaching majority.

An adult cannot disaffirm a contract made with a minor.

A minor must pay the agreed price on contract for necessaries.

What constitutes a necessary varies over time and can differ from state to state.

QUESTION 23. Which of the following is a true statement?

A. The doctrine of strict liability has completely eliminated the doctrine of negligence as a possible legal theory for an injured person to recover for harms caused by a product.

B. In order to recover for the tort of intentional misrepresentation (or fraud) the victimized plaintiff must have reasonably relied on the misrepresentation.

C. The doctrine of strict tort liability applies to the sale and lease of products and services.

D. Strict liability can be effectively disclaimed or excluded from the transaction by a conspicuous and clear disclaimer.

QUESTION 24. Which of the following generally does not need to be included with the articles of incorporation?

The period duration of the corporation.

The classes and preferences of stock.

Whether preemption rights are given to the stockholders.

A copy of the bylaws.

QUESTION 25. How can "intellectual property" be legally protected in the United States?

a. By patent law

b. By copyright law

c. By trade secret law

d. All of the above.

QUESTION 26. Which of the following is a true statement?

A. As a general rule, a unilateral mistake does not allow either party to a contract to rescind or cancel it.

B. Where two parties contract for the sale of an old violin and the seller does not realize that it is a rare and extremely valuable one, then the seller, the mistaken party, can cancel the contract since it would then be unfair to him or her.

C. In a fraud case the victimized plaintiff need just prove that he or she relied on the false statement.

D. Fraud typically renders a contract null and void.

QUESTION 27. Which of the following is NOT one of the aspects of the implied warranty of merchantability?

A. The goods are suitable for the ordinary purposes for which they are used.

B. The goods are adequately contained, packaged, and labeled.

C. The goods are priced justly and fairly.

D. The goods within each unit or part are of an even quality.

QUESTION 28. The person who can accept an offer is known as

The acceptor

The offeror

The assignee

The offeree

QUESTION 29. If the time, place and manner of delivery of goods is not mentioned in a contract:

The place of delivery is the buyer's place of business.

The contract is void for lack of definiteness.

The place of delivery is the seller's place of business.

The seller is obligated to pay for shipping to the buyer's place of business.

QUESTION 30. Which of the following is FALSE about the tort of trespass?

a. A person cannot be liable for trespass by intentionally throwing objects on another's land or causing third parties to come on the land since that person did not physically come on the land.

b. A trespass can occur against personal property, called "chattels" under the common law.

c. The intent required for a trespass is only the intent to do the act that constitutes the trespass.

d. Regarding a trespass to land, actual injury to the land is not required; nominal damages can be given for the mere act of the trespass itself.

QUESTION 31. The Americans with Disabilities Act (ADA) requires that:

a. Employers make an all-out effort to accommodate disabled employees regardless of cost or expense.

b. Employers make a "reasonable" accommodation to disabled employees.

c. Only large employers with over 1500 employees must make a reasonable accommodation to disabled employees due to the burdens involved.

d. None of the above.

QUESTION 32. Regarding differences under the UCC in the treatment of merchants and nonmerchants, which is true?

The UCC applies to merchants, but not to nonmerchants.

The UCC requires merchants' contracts to be in writing, but not those of nonmerchants.

The requirements for a merchant to form a contract are less stringent than those for nonmerchants, and merchants receive fewer protections than nonmerchants.

The consideration requirement has been eliminated for contracts between merchants, but is still present in contracts involving at least one nonmerchant.

QUESTION 33. Which of the following are protected classes under Title VII of the 1964 Civil Rights Act?

Race, national origin, and sex.

Race, national origin, and political affiliation.

Race, religion, and sexual orientation.

Religion, color, and prior welfare eligibility.

QUESTION 34. An agent negotiates a contract with a third party for which the agent did not have actual express authority. Which of the following is true?

The principal can never be held liable on the contract because the agent exceeded his authority.

The principal can be liable on the contract only if the agent had implied authority to enter into the contract.

The principal can be liable on the contract only if apparent authority was present.

Either implied or apparent authority might cause the principal to be liable on the contract.

QUESTION 35. In order to have an investment contract which is regulated by the SEC, which of the following is required?

An investment of money.

A common enterprise.

The expectation that profit from the enterprise will result from the efforts of others.

A, B and C.

QUESTION 36. Ann owns Beta Enterprises, a sole proprietorship. Ann's liability for the obligations of the business is

limited by state statute.

limited to the amount of her original investment.

limited to the total amount of capital Ann invests in the business.

unlimited.

QUESTION 37. In order to be enforceable, a covenant-not-to-compete must be reasonable in each of the following aspects except:

Length of time the restriction is in effect.

Scope (i.e. interests protected) by the restriction.

Amount paid to the one who gives up the right to compete.

Geographic area of the restriction.

QUESTION 38. When a promoter enters into a contract on behalf of corporation which is not yet formed, the corporation will become liable on the contract:

At the time the promoter enters into the contract.

When the corporation comes into existence.

Once the corporation has elected its initial board of directors.

Only if the corporation, once formed, agrees to be liable on the contract.

QUESTION 39. The International Trade Administration (ITA) of the U.S. Department of Commerce regulates import competition by:

a. Promotion of trade and investment

b. Strengthening industry competitiveness

c. Ensuring fair trade

d. All of the above.

QUESTION 40. Which of the following is FALSE about damages for a breach of contract?

a. Money damages can consist of compensatory and consequential damages.

b. Consequential damages must be reasonably foreseeable by the parties as likely damages stemming from a breach.

c. Liquidated damages must be a reasonable amount and not an excessive "penalty."

d. The Mitigation of Damage rule does not apply when an employer breaches a contract with an employee since the employer is usually the dominant entity, and thus the wrongfully discharged employee does not have any obligation to look for other employment.

Part 2

QUESTION 1. Assume that there is a provision in the Colorado state constitution that conflicts with a federal statute passed by the U.S. Congress and enacted into law. Which is TRUE?

a. The Colorado constitutional provision will prevail since states existed before the national government; and thus the federal law is invalid.

b. The federal statute will control due to the Supremacy Clause in the U.S. Constitution and thus will make the state constitutional law provision invalid.

c. In Colorado, the state constitutional provision will prevail; but the federal statute will apply in the other 49 states.

d. Whichever was passed first will control over the other in Colorado.

QUESTION 2. Memorial Hospital hires Large Construction Company to renovate its emergency room. Construction Company submits plans that the Hospital approves. Construction Company completes the major renovation, paints the interior, and supplies the necessary fixtures, equipment, and furnishings. The Hospital, however, rejects some of the furnishings because, due to the lack of oversight of a Construction supervisor, they do not exactly match the plans. The Hospital subsequently refuses to allow Construction Company to finish the work or to collect any payment. Whereupon, Large Construction Company sues for breach of contract. The most accurate statement regarding the resolution of this lawsuit is?

A. Hospital wins since Construction's performance was not perfect according to the Perfect Tender rule

B. Hospital wins Construction's supervisor was negligent.

C. Construction wins since Hospital acted in a deceitful manner.

D. Construction wins and recovers the contract price minus the amount necessary to correct the defects and finish the work pursuant to the Substantial Performance doctrine.

QUESTION 3. Samir, a legal resident of the U.S., applies for a job position with an employer as a word processor. The position requires that a person type into Word documents various old books, many of which have "fine" print, so that they can be converted into electronic editions. Which of the following is NOT a violation of U.S. civil rights laws?

a. Samir does not get the job because he is dark-skinned.

b. Samir does not get the job because he is from Pakistan.

c. Samir does not get the job because his eyesight is very, very poor and not sufficiently correctable.

d. Samir does not get the job because he is a Muslim.

QUESTION 4. Bob and Carol work for Delta Company. Bob is Carol's super¬visor. During work, Bob touches Carol in ways that she perceives as sexually offensive. Carol resists the advances. Bob cuts her pay. Delta is

liable, because Bob's conduct constituted sexual harassment.

liable, because Carol resisted Bob's advances.

not liable, because Bob's conduct was not job-related.

not liable, because Carol resisted Bob's advances.

QUESTION 5. Jill insures her small warehouse under a policy with Kappa Insurance Company. Jill assigns the policy to Lyle, who also owns a warehouse, a larger one. Kappa's best argument against the assignment of the policy is that

Kappa did not consent to the assignment.

Kappa was not paid for the assignment.

the assignment will materially alter Kappa's risk.

this is a personal service contract.

QUESTION 6. Assume that Blockbuster Video announced that it wants to "buy out" and merge with "Hollywood Video," one of its primary competitors. Such a proposal would be:

a. A horizontal merger subject to the merger test in the Clayton Act.

b. A vertical merger which requires the "market foreclosure" legal test to be applied.

c. An unfair restraint of trade which requires the Rule of Reason to be applied.

d. None of the above.

QUESTION 7. Owen and Pat are partners in Quality Investments, a partnership. Owen convinces Roy, a customer to invest in a nonexistent gold mine. Owen absconds with Roy's money. If Roy sues Pat, Roy will:

lose, because partners are not jointly and severally liable.

lose, because only partnership assets are available to pay the judgment

win, because partners are jointly and severally liable

win, because partnership assets are available to pay the judgment

QUESTION 8. Mickey, Frankie, and Phillip own real property together as tenants in common. A characteristic of such ownership is:

Right of survivorship since the property is owned jointly.

A presumption of a partnership since the property is owned jointly.

The transfer of an interest in the property without the consent of the other owners and without destroying the tenancy in common.

None of the above.

QUESTION 9. Perfume Company executives insist that their sales personnel be "thin, cute, and sexy." They thus discriminate against people who are not thin, cute, and sexy based on this appearance standard. This employment standard pursuant to civil rights laws is:

Illegal since it is illegal discrimination based on appearance.

Legal as long as the standard is applied equally to men and women on the sales force.

Illegal if the appearance discrimination is used as a subterfuge for race or color discrimination.

B and C.

QUESTION 10. Driving a car negligently, Adam crashes into a phone pole. The pole falls, smashing through the roof of a house, killing Beth. But for Adam's negligence, Beth would not have died. Regarding the death, the crash is the

cause in fact.

intervening cause.

unforeseeable cause.

superseding cause.

QUESTION 11. Donnie makes an offer to Marie to sell his used racing bicycle for $200. Marie responds by saying "I accept at $150." Donnie refuses and says the price is firm. Marie then says "OK, I accept at the original price." However, Donnie sells the bike to a third party; whereupon Marie sues Donnie for breach of contract. Who is likely to prevail?

a. Marie since she accepted Donnie's offer at $200.

b. Marie since her initial response was merely an "invitation to offer."

c. Donnie since his original offer was terminated by Marie's counteroffer.

d. Donnie since the court would void the entire contract since $200 for even a used racing bike does not seem like a fair price.

QUESTION 12. The directors of Global Investment Company made a "bad" business decision in 2006, by relying on the advice of financial experts and lawyers and accountants, who all thought the real estate market would continue to rise for years and years; and thus the directors invested heavily in mortgage backed securities instead of conservative gold and gold stocks and Treasury bonds. Of course, when the recession came, Global Investment Company lost a great deal of money for its shareholder investors. The shareholders then sued the directors for negligence. The directors are best protected legally by:

The comparative negligence doctrine because the shareholders likely were sophisticated investors who should have known that "what goes up, must come down."

The assumption of the risk doctrine since everyone knows that the stock market is a risky venture.

The Business Judgment Rule even though the decision turned out to be a "bad" business one.

The doctrine of strict liability for ultra-hazardous activities since it was common knowledge at the time that people were being granted mortgages with no down-payment and no verifiable evidence of income, assets, or employment.

QUESTION 13. Mohammed is a cashier at the check-out line at a big-box retail store. He is a Moslem and very religious. He is a very good employee, but he refuses to check out people who have liquor in their basket or pork products, such as frozen pepperoni pizza. He also refuses to touch them. These products violate his religious beliefs. He thus has to ask a supervisor or another cashier employee to come on over and "ring up" and bag those items. Once he even asked a customer to ring up her own products. This situation is beginning to inconvenience the employer and its customers. The employer consequently tells Mohammed that he must transfer to a junior book-keeping position, though with comparable salary and benefits, or else be discharged. Mohammed refuses, is discharged, and sues for religious discrimination. The likely result of such a lawsuit will be:

Mohammed will prevail since this is clearly religious discrimination.

Mohammed will prevail since making him a mere "clerk" is not a reasonable accommodation on the part of the employer in these circumstances.

The employer will prevail if it can convince the court that its accommodation to Mohammed was a reasonable one.

The employer will prevail regardless since it has no duty to accommodate the religious practices of its Moslem employees after the terrorist attacks of 9/11.

QUESTION 14. Tech, Inc., sells its brand-name computer equipment directly to its franchised retailers. Depending on how existing franchisees do, Tech may limit the number of franchisees in a given area to reduce intrabrand competition. Tech's restriction on the number of dealers likely is

a per se violation of the Sherman Act.

exempt from the antitrust laws.

subject to continuing review by the appropriate federal agency.

subject to the rule of reason.

QUESTION 15. Big Casino Company located on the Gulf of Mexico in Mississippi wants to advertise its "gaming packages" to Florida residents. The state of Florida passes a law prohibiting the advertising of gambling casinos in the state. Big Casino challenges the law as an infringement of its free speech rights. The likely result of such a legal challenge would be:

The Florida law will be upheld since gambling is regarded as a "vice' that the state can protect its residents from.

The Florida law will be upheld since companies involved in the gambling industry do not possess free speech rights.

The Florida law will be upheld since the motive of Big Casino Company is to make money from Florida residents.

The Florida law will be struck down as an infringement of Big Casino's commercial speech rights under the First Amendment.

QUESTION 16. Liquor company has an advertisement for its wine-coolers on television which shows several young-looking (though over 21) boys and girls having fun sailing a boat. The ad is a very sexy one, as the young people are very attractive and in bathing suits and are frolicking about the boat; but the ad does not show the young people actually drinking the product. Pursuant to the Federal Trade Commission's deceptive advertising standards, this ad is best described as:

Legal since nothing is false about it and the actors are over 21 and naturally one would expect that they be good-looking, and thus the ad meets all FTC standards for advertising.

Legal so long as the FTC first approves it and the ad is not placed on any TV shows geared for children, such as Saturday morning cartoon shows.

Illegal since it could be misleading in the sense that young people could be misled into believing that drinking and boating can be mixed safely.

Illegal because all advertising is, in essence, lies, deceptions, and half-truths.

QUESTION 17. Jill sells her business to Kyle and, as part of the agreement, promises not to engage in a business of the same kind within three miles for one year. This promise is generally

an unreasonable restraint of trade.

unreasonable in terms of geographic area and time.

unreasonable in terms of Kyle's "goodwill" and "reputation."

valid and enforceable.

QUESTION 18. Able, Baker, and Calleti form a corporation. The state laws governing the incorporation require that the articles of incorporation be signed by three incorporators. A corporate charter is issued, and the corporation begins to do business. Thelma extends credit to the corporation. Because of a national recession, the corporation becomes insolvent. At this time, Thelma learns that Able failed to sign the articles of incorporation. Thelma claims that the corporation's formation was improper, and that Able, Baker, and Calleti are personally liable. Which is the most accurate statement regarding the resolution of this lawsuit?

A. Thelma prevails since Able failed to sign the articles.

B. Thelma prevails but can only recover from Able.

C. Thelma loses due to the de facto corporation doctrine.

D. Thelma loses due to the impossibility of performance doctrine due to the recession.

QUESTION 19. Home Interiors, Inc. (HII), tells Jan, whose business is purchasing for others, to select and buy $200 worth of certain goods and ship them to HII's office. Jan buys the goods from Brand Name Products Store and ships them as di¬rected, keeping an account for the expense in HII's name. HII and Jan

do not have an agency relationship, because Jan's business is buying for others.

do not have an agency relationship, because Jan did not indicate that she was acting for Baron.

do not have an agency relationship, because their agreement is not in writing.

have an agency relationship.

QUESTION 20. Shareholders of X Investment Corporation believe their corporation was harmed when the directors followed the advice of certain financial "experts" who advised them to have the corporation invest in mortgage backed securities. The shareholders want the directors to bring suit in the corporation's name against these so-called experts; but the directors refuse to do so saying the lawsuit would be costly and a difficult one to win. Nonetheless, the shareholders want the corporation to sue. The shareholder's best approach would be to institute:

A pooling agreement.

A voting trust

A shareholder derivative lawsuit

Cumulative voting.