EXAM 1
Question 1
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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

0.5 points
Question 2
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A contract clause conditioned on the occurrence of an event
may best be an example of

An express condition

A condition precedent

An implied condition

A covenant

0.5 points
Question 3
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Which type of mistake usually will make a contract voidable
at the option of the mistaken party?

a.

A bilateral or mutual mistake

b.

A unilateral mistake

c.

A unilateral palpable mistake

d.

Both a. and c.

0.5 points
Question 4
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Which of the following is a TRUE statement?

A.

For a court to refuse to enforce a covenant not to compete
the covenant must be unreasonable in both time/duration and space/geography.

B.

Regarding covenants not to compete, it is best for the
employer to “err on the side of caution” and make the covenant as
broad as possible for area and as long as possible for time.

C.

Covenants not to compete are illegal and void in most
states since they may prevent people from working in their fields and in
their home towns.

D.

As a general rule, courts will find a time period of six
months to be a reasonable one in a covenant not to compete in an employment
contract.

0.5 points
Question 5
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Which of the following is a true statement?

A.

The Uniform Commercial Code is an example of federal
Congressional law in the United States.

B.

The Uniform Commercial Code’s implied warranty of fitness
for a particular purpose applies only to merchants.

C.

To disclaim the implied warranty of merchantability the
exact word “merchantability” must be used.

D.

A Uniform Commercial Code contract must have a definite
price term or it will be struck down for vagueness.

0.5 points
Question 6
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Which is true about corporate criminal liability?

Corporations have always been just as subject to criminal
liability as individuals.,
,
,
,
,
,
,
,
,
Because a corporation cannot be sent to prison, they
generally cannot be held criminally liable for the actions of their officers.,
,
,
,
,
,
,
,
,
If the criminal conduct can be traced to a specific person,
or persons, those persons will be liable and not the corporation.
,
,
,
,
,
,
,
,
There can be liability for both the individuals who commit,
crimes and for the corporation on whose behalf the crimes were committed. ,
,
,
,
,
0.5 points ,
Question 7,
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Which of the following is true regarding the liability of,
the partners in a limited partnership?,
,

Both the limited and general partners have unlimited
liability for the partnership debts.

Neither the limited nor the general partners have
unlimited liability for the partnership debts.

The limited partners have limited liability and the general
partners have unlimited liability for the partnership debts.

The limited partners have unlimited liability and the
general partners have limited liability for the partnership debts.

0.5 points
Question 8
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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.

0.5 points
Question 9
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Which of the following kinds of jurisdiction would be
necessary and sufficient for a court to hear a case?

Subject matter and in personam and in rem.

Subject matter or in personam or in rem.

Subject matter and either in personam or in rem.

In rem and either subject matter or in personam.

0.5 points
Question 10
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The person who can accept an offer is known as

The acceptor

The offeror

The assignee

The offeree

0.5 points
Question 11
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An oral contract in which Sally agrees to work for Jane for
the rest of Jane’s life is:

A guaranty contract.

Unenforceable under the Statue of Frauds because it cannot
possibly be performed within one year.

Enforceable under the Statute of Frauds.

A and C only.

0.5 points
Question 12
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France has a civil law legal system. Civil law systems
are principally based on

administrative rules and regulations.

case law.

detailed codified law.

executive pronouncements.

0.5 points
Question 13
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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.

0.5 points
Question 14
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Under merchant’s protections statutes:

Reasonable grounds for detainment are necessary only if
the period of detainment is long.

The length of detainment is not relevant as long as there
is a reasonable grounds for detainment.

Any investigation and the period of detainment must both
be reasonable.

Merchants do not have any ethical responsibility to
investigate possible investigations of the suspect because this is the job of
the police.

0.5 points
Question 15
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Damages which are fixed in the amount to be awarded in the
event of a breach are known as:

Punitive damages.

Liquidated damages.

Consequential damages.

Conditional damages.

0.5 points
Question 16
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A contract where agreement between the parties is inferred,
or assumed, based on their conduct is what type of contract?

Bilateral.

Unilateral.

Quasi.

Implied in fact.

0.5 points
Question 17
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Which of the following is/are true about the principal
agency relationship?

a.

In a non-disclosed principal situation, the agent is
typically initially liable to the third party.

b.

Under the ratification doctrine, a principal can ratify
and thus authorize an agent’s contract with a third party that was not
originally authorized by the principal.

c.

Under the imputed knowledge and notice doctrine, a
principal can be charged with the knowledge of facts that had been disclosed
to the principal’s agent.

d.

All of the above.

0.5 points
Question 18
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A party loses a lawsuit and files an appeal. The appellate
court is most likely to review the trial court’s

application of the law.

consideration of the creditability of the evidence.

findings of fact.

interpretation of the conduct of the witnesses.

0.5 points
Question 19
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Ron contracts with Gail under what Ron later learns to have
been misrepresented facts. Ron has not yet suffered an injury. He can

only obtain compensatory damages from Gail.

rescind the contract and receive restitution

either obtain damages or rescind the contract.

none of the above.

0.5 points
Question 20
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In determining the lawfulness of a merger, which of the
following factors need not be shown?

An actual lessening of competition.

The relevant product market.

The relevant geographic market.

The likelihood of a substantially lessening of competition
or the tendency to create a monopoly.

0.5 points
Question 21
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To be convicted of a crime under U.S. laws, the prosecution
typically must prove the case against the defendant:

a.

By a preponderance of the evidence.

b.

By clear and convincing evidence.

c.

Beyond a reasonable doubt.

d.

None of the above.

0.5 points
Question 22
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Which of the following is a false statement?

Securities include not only stocks and bonds but also
other forms of investment contracts pursuant to U.S. legal interpretation.

The common types of securities are stocks and bonds issued
by corporations.

When a security is offered to the public, the Securities
and Exchange Commission generally requires that investors be provided with a
prospectus.

“Blue sky” laws refer to federal securities laws found in
blue colored law books in the United States.

0.5 points
Question 23

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Which of the following is FALSE regarding federal
administrative agencies?

a.

Congress typically delegates to administrative agencies
the power to make laws in the form of rules and regulations.

b.

Administrative agencies, such as the Occupational Health
and Safety Administration, cannot conduct inspections since an inspection is
a “search,” which can only be conducted by the police or other law
enforcement agency pursuant to a traditional criminal law search warrant.

c.

Administrative agencies typically can impose civil fines
after a due process hearing in which a person or business is adjudicated to
be in violation of an agency rule or regulation.

d.

The decisions of administrative agencies can generally be
appealed to the traditional court system assuming that procedural
requirements for an appeal are met.

0.5 points
Question 24
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The “fair use” doctrines applies to:

a.

Patent law