Deck 2: CLEP: Business Law

Question 1

Contracts

-Common law applies to all contracts except:

A)There is no exception.
B)Contracts that fall under the UCC.
C)Contracts for the sale or lease of goods.
D)Government contracts.
E)B and C.

Answer 1

B and C.

Question 2

Contracts

-Roy offered to sell Robert his 2001 Toyota Camry for $1,000. Robert told Roy that he would let him know in a few days. After a few days, Robert still had not told Roy whether or not he would buy the car. A month later, Rick found out that Roy was selling his car and asked Roy if he could buy it. Roy agreed and sold the car to Rick for $1,000. The next day Robert told Roy he was wanted to buy the car. Roy told him that he had sold the car to Rick. Robert reminded Roy that they had a contract. Did Roy and Robert have an enforceable contract?

A)No. Roy made an offer to Robert, but the offer lapsed because Robert did not accept it within a reasonable amount of time.
B)Yes. Roy and Robert had a contract. By not performing, Roy is in breach of contract.
C)No. The contract was not in writing.
D)Yes. Because Robert never said that he would not buy the car, it was clear that he accepted Roy's offer.
E)No. Robert's silence meant that he did not accept.

Answer 2

No. Roy made an offer to Robert, but the offer lapsed because Robert did not accept it within a reasonable amount of time.

Question 3

Contracts

-Paula walked into Pete's Car Repair Shop and said to Patrick, "I will give you $5 if you rotate my tires." Patrick, Pete's employee, responded, "OK." Paula handed Patrick $5. As Patrick began to rotate Paula's tires, Pete walked in and found out about the job. Furious, he said to Paula, "We charge $25 to rotate tires. We do not have a deal!" Is there a contract?

A)No. Patrick was not authorized to make the agreement.
B)Yes. There was a valid offer and acceptance.
C)No. There was no consideration.
D)No. There was not enough consideration.
E)No. Patrick made a mistake.

Answer 3

Yes. There was a valid offer and acceptance.

Question 4

Contracts

-Ben offered to sell Bo his used laptop for $500. Bo thought that $500 was too much and told Ben that he would only pay $300. Bo's offer of $300 is called a:

A)Counter offer.
B)Firm offer.
C)Bad offer.
D)Two-tier offer.
E)Irrevocable offer.

Question 5

Contracts

-If there was a "meeting of the minds," then:

A)The contract is invalid.
B)There was no intention of forming a contract.
C)There was mutual assent and the contract is valid.
D)The parties met to discuss the terms of the contract.
E)There was a written contract.

Question 6

Contracts

-Isaiah owns Home Supply Superstore. Home Supply Superstore has an agreement with Nu Home Builders to supply all the INSU342 that Nu Home Builders would need to use for insulation in the homes it builds. In 2011, new regulations were passed that made it illegal to use INSU342 in the United States. Isaiah wants to enforce his agreement with Nu Home Builders, replacing INSU342 with a different type of insulation. Nu Home Builders no longer wants an agreement with Isaiah. Can Isaiah enforce the contract with Nu Home Builders?

A)Yes. Isaiah is willing to perform.
B)No. There was a supervening illegality.
C)Yes. There was a counteroffer.
D)No. Nu Home Builders is not willing to perform.
E)Yes. Isaiah is able to substantially perform.

Question 7

Contracts

-Which of the following will not terminate an offer?

A)Change of heart
B)Incapacity
C)Death
D)Supervening illegality
E)Revocation

Question 8

Contracts

-Which is a limitation on a party's ability to revoke an offer?

A)Detrimental reliance
B)Statute of Frauds
C)Statute of Limitations
D)Counteroffer
E)Supervening illegality

Question 9

Contracts

-Which are three ways in which a party can communicate acceptance of an offer?

A)Counter offer, silence, or promise.
B)Performance, silence, or promise.
C)Performance, counteroffer, or promise.
D)Silence, revocation, or performance.
E)Silence, counteroffer, or revocation.

Question 10

Contracts

-Candi agrees to sell Carla a purebred puppy for $2,000. Candi puts the agreement in writing. Later, Carla argues that Candi told her that she would only need to pay $1,500. Will the parol evidence rule prevent Carla from testifying to this conversation?

A)Yes, because the testimony would directly contradict the written contract's terms.
B)Yes, because a change to a written contract must be made in writing.
C)No, because contracts to sell puppies do not have to be in writing.
D)No, because it is permissible to use extrinsic evidence to show a modification to an existing agreement.
E)Yes, because extrinsic evidence only can be used to show lack of consideration.

Question 11

Contracts

-Meg agreed to get Mary a cell phone. Mary agreed to pay the bill each month for the length of the 2-year contract. Mary paid the bill on time for the first 3 months. She then missed the next 3 payments. Meg repeatedly requested the payments. Mary ignored Meg and refused to speak to her. After Mary missed 2 more payments, Meg sued Mary for the 5 missed payments, plus for the payments due for the remainder of the 2-year contract. Will Meg be able to recover the entire remaining amount due under the 2-year contract?

A)No. Meg will only be able to recover for the 5 missed payments because Mary still has time to make the remaining payments under the 2-year contract.
B)Yes. Under the theory of anticipatory breach, there is strong evidence that Mary will not perform, entitling Mary to immediately sue for the remaining about due under the 2-year contract.
C)No. Because Meg received some payments from Mary, there is evidence that Mary will perform the rest of the contract.
D)No. Meg should have made more of an effort to collect payments from Mary.
E)Yes, but only if Meg has evidence of Mary stating that she has no intention of making additional payments.

Question 12

Contracts

-"This Agreement shall be governed by the laws of the Commonwealth of Pennsylvania, without regard to its conflict of laws rules" is an example of what type of contract clause?

A)Notice
B)Choice of law
C)Arbitration
D)Jurisdiction
E)Waiver

Question 13

Contracts

-"The contract is indefinite,""The contract was required to be in writing," "I lacked capacity to contract," and "The contract is unconscionable" are all:

A)Reasons to award damages.
B)Reasons to make a counteroffer.
C)Reasons that a contract is void or voidable.
D)All of the above.
E)None of the above.

Question 14

Contracts

-Which of the following remedies is not available in a breach of contract case?

A)Jail
B)Specific performance
C)Incidental damages
D)Injunction
E)Compensatory damages

Question 15

Contracts

-Brian and Bradley are art thieves. Together they steal artwork from stores, museums, and private residences. They have an oral agreement to evenly split money they receive from selling the stolen art. Without telling Bradley, Brian sold a painting for $5,000. He did not give Bradley any of the money. Brian discovered the transaction and based on their agreement, demanded $2,500. Can Bradley successfully sue Brian?

A)Yes. Brian breached the contract.
B)No. The contract is not enforceable, as it is against public policy.
C)No. The contract is subject to the State of Frauds and should have been in writing.
D)No, because Bradley would have to admit to the crimes related to stealing the art.
E)Yes, but only if Bradley can show that there had been no changes to the terms to their agreement.

Question 16

Contracts

-Connor and Corey owned Club CoCo. Cam entered into a written agreement with Connor and Corey to rent Club Coco for a party. Cam hired a DJ and sold 500 tickets for the event. Two weeks before the date of Cam's party a fire destroyed Club Coco. Connor and Corey informed Cam about the fire. Cam immediately sued Connor and Corey, demanding that they make Club CoCo available for his party or pay damages. Will Cam win or lose?

A)Cam will lose because Connor and Corey are excused from performance of the contract based on impossibility of performance.
B)Cam will win because the fire was not his fault.
C)Cam will win because he relied on the availability of Club Coco when he hired a DJ and sold 500 tickets.
D)Cam will lose because Connor and Corey gave Cam enough time to find another venue for his party.
E)Cam will lose because there is no evidence that Connor and Corey's negligence caused the fire.

Question 17

Contracts

-Types of injunctive relief include:

A)Temporary restraining order.
B)Preliminary injunction.
C)Permanent injunction.
D)All of the above.
E)None of the above.

Question 18

Contracts

-Adam signed a 6-month agreement to work as a trainer for Allen. Allen agreed to pay Adam $575 per week. Payments would be made every 2 weeks. What type of contract does Adam have with Allen?

A)A gentleman's agreement
B)A short-term agreement
C)An installment contract
D)A payroll contract
E)None of the above

Question 19

Contracts

-The following is an example of what type of contract clause?
"This Agreement and the exhibits attached thereto contain the entire agreement of the parties and supersedes all prior negotiations, representations, agreements and understandings, whether written or oral. This agreement may not be altered except by a written documentation signed by both parties."

A)An integration clause
B)An entire understanding clause
C)A merger clause
D)A and B
E)A, B, and C

Question 20

Contracts

-What would a court do if a loan agreement included an interest rate above a state's usury cap?

A)The court will order the parties to renegotiate the loan agreement.
B)The court will not enforce the interest rate.
C)The court will enforce the interest rate since the parties agreed to it.
D)The court will change the interest to one point below the usury cap.
E)The court will declare the agreement fraudulent.

Question 21

Contracts

-Heather signed an apartment lease agreement with Heathrow for a 12-month term. After 3 months, Heather found a better apartment and decided to move. Heather had paid Heathrow rent for the 3 months that she lived in Heathrow's apartment. Heathrow, believing that Heather was responsible for the rent for the remaining 9 months, allowed the apartment to remain empty for the rest of the term of the lease agreement that he had with Heather. When Heather refused to pay for the remaining 9 months, Heathrow sued. How will the court decide this case?

A)Heather will lose and be required to pay Heathrow for the remaining 9 months because she breached the contract.
B)Heather will lose, but will be required to pay Heathrow an amount that is less than 9 months, as Heathrow had a duty to mitigate damages.
C)Heather will win because she paid for the months that she lived in the apartment and is not required to pay any more.
D)Heather will win and not have to pay for any additional amount because Heathrow should have found another tenant.
E)Heather will lose because she did not give Heathrow 30 days notice of her intent to leave.

Question 22

Contracts

-When would a court order specific performance as a remedy to a breach?

A)When monetary damages are inadequate.
B)When the breaching party cannot afford monetary damages.
C)When the contract is for the sale of goods that are not unique.
D)A and B.
E)None of the above.

Question 23

Contracts

-The Uniform Commercial Code replaced what act?

A)Uniform Sales Act
B)Uniform Negotiable Instruments Act
C)Uniform Conditional Sales Act
D)Uniform Bills of Lading Act
E)All of the above.

Question 24

Contracts

-Roger agrees to sell his boat to Remmy for $1000. A few days later, Remmy changes his mind and refuses to buy Roger's boat. Roger ends up selling his boat to Ray for $800. Under the UCC, what damages can Roger recover from Remmy for Remmy's breach?

A)Under Article 2 of the UCC, Roger can recover $200.
B)Under Article 2 of the UCC, Roger can recover $800.
C)Under Article 2 of the UCC, Roger can recover $100.
D)Under Article 2 of the UCC, Roger cannot recover any damages.
E)None of the above.

Question 25

Contracts

-Under the Uniform Commercial Code which of the following remedies is not available for a breach?

A)Compensatory damages
B)Exemplary damages
C)Incidental damages
D)Actual damages
E)None of the above.

Question 26

Contracts

-Albert found a great new job that required him to move from Southern California to Montana. Since he would no longer need it, Albert decided to sell his top-of-the-line, custom-crafted surfboard. Arnold entered into an agreement with Albert to purchase the surfboard for $500. Arnold lost his job and told Albert that he could not afford to buy the surfboard. Archie agreed to purchase it for $400, and Arthur offered Albert $500. Because Archie is a good friend to Albert, he decided to sell it to him for $400. In a breach of contract lawsuit against Arnold, how much would Albert recover under the UCC?

A)$500
B)$400
C)$100
D)$1
E)$0

Question 27

Contracts

-McManus Enterprises entered into a 2-year employment contract with McKinley to perform IT services with a salary of $300,000 per year. McKinley's duties required him to work long hours in a fast-paced, stressful environment. McKinley performed his duties well. However, after 6 months McManus Enterprises hired McCauley to perform the same IT job as McKinley for only $150,000 per year. McManus fired McKinley. McKinley, angry about being fired, sued McManus for breach. In the meantime, McKinley decided to take a break from working in IT and accepted a position at the local MacKenzie Hamburger fast food chain for $9.00 an hour. What limitation will there be on the amount that McKinley can recover from McManus?

A)The amount that McKinley earns working at MacKenzie Hamburger Joint.
B)The total amount that McKinley would have earned under the contract.
C)The amount that McKinley could have reasonably earned by obtaining an IT position.
D)The total amount that McKinley would have earned under the contract, plus punitive damages.
E)The difference between the amount that McKinley would have earned under the contract and the amount that McCauley earns from McManus.

Question 28

Contracts

-Which of the following is NOT a limitation on the damages a non-breaching party may receive under common law?

A)The non-breaching party cannot receive damages for loss that he or she could have avoided through reasonable efforts.
B)The non-breaching party cannot recover for losses that are not reasonably foreseeable.
C)The non-breaching party cannot recover for losses that cannot be established with reasonable certainty.
D)The non-breaching party cannot receive compensation for damages that would put him in a better position than he or she would have been in if there were no breach.
E)The non-breaching party can only receive compensation that puts him or her in a better position than he or she would have been if there were no breach.

Question 29

Contracts

-Charlotte made a deal with Cindy to take care of Cindy's dog while Cindy was out of town for 3 weeks. Cindy paid Charlotte $300. Charlotte fell in love with Cindy's dog. When Cindy returned, Charlotte refused to return the dog to Cindy. Charlotte sued Cindy, demanding that Cindy return the dog, return the $300, and pay $1000 for pain and suffering. What will be the outcome of the lawsuit?

A)The court will order Charlotte to return the dog and pay Cindy $1300.
B)The court will order Charlotte to return the dog and pay Cindy $1000.
C)The court will order Charlotte to return the dog and pay Cindy $300.
D)The court will order Charlotte to return the dog.
E)The court will order Charlotte to pay Cindy $1300.

Question 30

Contracts

-Under what circumstances can third parties sue for damages for breach of contract?

A)Third parties cannot sue, as they were not party to the contract.
B)If the third party is a spouse, the spouse can sue for breach of contract.
C)If the third party is an employee, the employee can sue for breach of contract.
D)If the third party is an intended beneficiary to the contract, the third party can sue for breach of contract.
E)If the third party is an unintended beneficiary to the contract, the third party can sue for breach of contract.

Question 31

Contracts

-Which of the following demonstrates the doctrine of accord and satisfaction?

A)Gina owes Georgina $300 for consulting services that Georgina provided. Gina offers Georgina artwork valued at $400 to pay for the consulting services. Georgina declines the artwork.
B)Gina owes Georgina $300 for consulting services that Georgina provided. Gina offers Georgina artwork valued at $400 to pay for the consulting services. Georgina accepts the artwork.
C)Gina owes Georgina $300 for consulting services that Georgina provided. Gina writes Georgina a check for $300.
D)Gina owes Georgina $300 for consulting services that Georgina provided. Gina gives Georgina $300 in cash.
E)Gina owes Georgina $300 for consulting services that Georgina provided. Gina does not pay Georgina.

Question 32

Contracts

-Car Fixer Guys signed a one-year agreement to provide oil change services to Taxi Cab Guys for $20 per oil change. Two months into the term of the agreement, Car Fixer Guys realized that the price was too low and raised it to $32 per car. Under common law, is the price change enforceable?

A)Only if Car Fixer Guys provides additional consideration and Taxi Cab Guys agrees to the change.
B)Yes, because an agreement to provide $20 oil changes is unconscionable.
C)No. Once executed a contract cannot be modified.
D)Yes, because there was no meeting of the minds prior to the modification.
E)Only if Car Fixer Guys agrees to guarantee to purchase 20 oil changes per month.

Question 33

Contracts

-Pamela owes Patricia $1200 for a motorcycle she purchased from Patricia. Pamela gave Patricia $200 checks for each of first 5 monthly payments. She then gave Patricia a check for $100 for the last payment. On the back of the check she wrote, " full satisfaction." Patricia wants the full final payment of $200. What is the best way for Pamela to ensure that Patricia fulfills her part of the contract by paying the balance of $200?

A)Return the check to Pamela and request payment of $200.
B)Cross out the "full satisfaction" notation, cash the check, and request payment of $100 from Pamela.
C)Cash the check and request payment of $100 from Pamela.
D)A or B.
E)A, B, or C.

Question 34

Contracts

-Under common law, what would a court do if the parties to a contract omitted a term that is essential to the meaning of the contract?

A)The court will do its best to fairly interpret the contract without the missing term.
B)The court will order that an arbiter determine the term.
C)The court will force the parties to negotiate the term.
D)The court will void the contract.
E)The court will supply a term which is reasonable.

Question 35

Contracts

-What is a course of dealing?

A)A compilation of all the terms of all of the agreements between the parties.
B)Normal business conduct between parties to a business transaction.
C)A reason a contract is void or voidable.
D)Any practice of dealing that is used so regularly in a region or industry as to justify an expectation that it will be followed in the contract at issue.
E)B or D.

Question 36

Contracts

-In interpreting the terms of an agreement under the UCC, what are three pieces of evidence that a court might consider?

A)The express terms of the contract, hearsay, and usage of trade.
B)The express terms of the contract, prior drafts of the agreement, and usage of trade.
C)The express terms of the contract, usage of trade, and course of dealing.
D)The express terms of the contract, prior drafts of the agreement, and testimony regarding the negotiations for the agreement.
E)Prior drafts of the agreement, testimony regarding the negotiations for the agreement, and common law.

Question 37

Contracts

-Jill's father, Joe, bought her a brand new blue car for her 17th birthday. Jill's father paid $30,000 for the car. Jill loved the car, but wished that it were red. She stumbled upon a cute, used red sports car that was for sale for just $10,000. Jill decided to sell her brand new blue car to her Aunt Jeanne for $11,000. When Joe found out about Jill's agreement with Aunt Jeanne, he was outraged. He demanded that Aunt Jeanne return the car to Jill and that Jill return the money to Aunt Jeanne. Aunt Jeanne refused. Will a court allow Jill to get out of the contract?

A)No. Even though Jill is a minor, it is clear that she knew what she was doing when she entered into the agreement.
B)No. Even though Jill is a minor, because Jill is the legal owner of the car she has the capacity to enter into an agreement to sell it.
C)No. Even though Jill is a minor, because she has a driver's license, the court will deem her capable of entering into an agreement to sell a car.
D)Yes. Because Jill is a minor, if she chooses to void the contract, the court will permit it.
E)Yes. Because Jill is a minor, the contract is void.

Question 38

Contracts

-If a court deems a contract unconscionable, it deems it to be:

A)Too long.
B)Against public policy.
C)Unwritten.
D)Unfair.
E)B and D.

Question 39

Contracts

-Rayna and Robin are best friends. They decided to go on vacation together to Jamaica. They agreed that Rayna would make all of the travel arrangements and pay for them, and then Robin would reimburse Rayna for her share. Rayna put the agreement in writing and included details of all of the expenses for which Robin was to reimburse Rayna. Robin, excited about the trip and trusting Rayna, signed the agreement without reading it. She was shocked when Rayna later asked for a check for $5324 for herportion of the trip. Of that amount, $3244 was for First Class airfare. Robin was upset, as she had no idea that Rayna purchased First Class airfare and would have preferred to fly coach. Robin refused to pay for the airfare. Rayna sued Robin. Who will win?

A)Robin will win, as she did not read the contract and did not know that it required her to pay for First Class airfare.
B)Robin will win, as sneaking in First Class airfare rendered the contract unconscionable.
C)Rayna will win, as Robin had a duty to read the contract before signing it.
D)Robin will win, as Rayna should have made sure that Robin understood that the contract required Robin to pay for First Class airfare.
E)None of the above.

Question 40

Contracts

-Tara agreed to housesit for Tammie while Tammie was on vacation. While Tara was gone, the toilet backed up. Tara contacted a plumber and paid to have the toilet repaired. Will Tammie have to reimburse Tara for the repair?

A)Yes. Tara and Tammie had an express contract for Tammie to reimburse Tara for the repair work.
B)No. Tara and Tammie did not have a contract for Tara to take care of repair work.
C)Yes. Tara and Tammie had an implied contract for Tammie to reimburse Tara for the repair work.
D)No. Tara's payment for the repair work was a gift to Tammie.
E)No. Tara should have asked Tammie before arranging for the repair work.

Question 41

Contracts

-Belviana agreed to rent a room for $300 from Belle for 3 days in Collegetown, MT. She planned to spend the weekend in Collegetown attending the big game, and going to the parade before the game, the pep rally, and the tailgate party. One week prior to the big game, the entire team was suspended for violating school policies. The team was forced to forfeit the game and all weekend activities were cancelled. Belviana told Belle that she would no longer need the room and requested a refund of the $300. Belle refused. Belviana sued Belle and won. On what doctrine did the court likely base its decision?

A)Frustration of purpose
B)Superseding illegality
C)Act of God
D)Impossibility
E)Impracticability

Question 42

Contracts

-The following is an example of what type of clause? "In the event of an act of God, strikes or acts of labor unions, fires, war or other occurrences beyond the control of the parties, the party affected shall not be liable for any failure to perform under this agreement."

A)Act of God clause
B)Termination clause
C)Force majeure clause
D)A or C
E)A or B

Question 43

Contracts

-"If you do not lose 10 pounds after using the new, revolutionary weight loss program, NuDietRite, we will pay you $50!" This statement is:

A)A challenge.
B)An invitation to deal.
C)An offer.
D)An advertisement.
E)A, C, and D.

Question 44

Contracts

-Which of the following offers, upon acceptance, gives rise to a binding, nonvoidable agreement?

A)An offer made in jest
B)An advertisement
C)An offer made as a mistake
D)An offer made by a minor
E)None of the above.

Question 45

Contracts

-Joe the plumber contracts with Jane the homeowner to install new sewer lines. The agreed upon price was $4,500. Halfway through the job, Joe told Jane that he had to change the price to $6,500. Jane refused to pay the additional $2,000. Joe refused to finish the work unless Jane paid. Jane reluctantly paid. Joe finished the work. Jane sued Joe for return of the $2,000. Who will win?

A)Jane will win based on the defense of fraud.
B)Jane will win because the modification of the contract terms was not supported by additional consideration from Joe.
C)Jane will lose because she agreed to the modification of the contract.
D)Jane will win based on the defense of physical duress.
E)Jane will win based on the defense of economic duress.

Question 46

Contracts

-An unclean hands defense is only available in cases that involve:

A)Consequential damages.
B)Punitive damages.
C)An equitable remedy.
D)Nominal damages.
E)None of the above.

Question 47

Contracts

-Which of the following are examples of changed circumstances?

A)Barry contracts with Brian to paint Brian's home. Brian's home is destroyed by fire.
B)Joanna contracts with Judi to design Judi's wedding dress. Judi's fiancé calls off the wedding.
C)A and B.
D)Harold agrees to pay Howard to groom his poodle. Instead of bringing Howard a poodle, Harold brings a cockapoo.
E)A, B, and D.

Question 48

Contracts

-With her parent's permission, 17-year-old Julia moved out of her parents' home and rented an apartment close to where she attended school. She signed a 12-month lease. The rent was $400 per month. After 2 months she missed her parents terribly and decided to move back to her parents' home. She informed her landlord of her intention to break the lease and moved out. Julia's landlord sued Julia for the remaining 10 months of rent payments. Who will win?

A)The landlord. It is clear that Julia entered into the lease without the intention of staying for the entire term of the lease.
B)Julia, because the landlord should have understood that Julia missed her parents.
C)Julia, because she gave the landlord sufficient notice that she planned to move.
D)Julia. Because Julia is a minor, she will be deemed as not having the capacity to enter into a contract.
E)The landlord. Even though Julia is a minor, contracts for necessities are not voidable due to lack of majority.

Question 49

Contracts

-If a conservator has been previously appointed to make financial decisions for a mentally incompetent person, then a contract that person enters into is:

A)Enforceable.
B)Void.
C)Voidable.
D)Fraudulent.
E)Libelous.

Question 50

Contracts

-Doug asks Dan if he would help him move to his new home. He offers Dan $500. Dan accepts Doug's offer. The agreement between Doug and Dan is an example of what type of contract?

A)Implied
B)Unenforceable
C)Bilateral
D)Unilateral
E)Void

Question 51

Contracts

-Julia, a 17-year-old high school senior, saved $5,000 from her part-time job working at Jack-in-the-Box. She decided to use the money to buy a car. Julia searched Craigs List and found a 1997 Toyota Camry with 190,000 miles. Julia went to Timmy's house and looked at the car. She thought it was beautiful. It was clean inside and out. And, most importantly, it was her favorite color-- powder blue! She handed Timmy a check for $5,000. Timmy gave her a receipt and the title. Three days later the car stopped working and had to be towed to a repair shop. Julia was told it would cost $7,000 to repair. Julia asked Timmy for a refund. Timmy refused. If Julia sues Timmy, the court will probably find that:

A)Under the Lemon Law, Timmy must refund Julia's money.
B)Because Julia is a minor, she can disaffirm the contract to purchase the car and get her money back from Timmy.
C)Because the transaction was an "as is" sale, Julia could not get a refund.
D)Because Julia drove the car for 3 days, it was her fault that the car needed repairs. Therefore, Julia is not entitled to a refund.

Question 52

Contracts

-Kathy and Jimmy Donald inherited a 20-acre farm in Philadelphia, Mississippi from their Grandma Annie. Kathy, who lives in New Jersey, does not want the farm. She called her daughter, Trina, and said, "I am hereby giving you my portion of Grandma Annie's farm. You can do whatever you want with it." Trina excitedly responded, "I can finally realize my dream of owning a miniature horse farm!" Trina immediately called Jimmy to let him know her miniature horse farm plans for 10acres of Grandma Annie's farm. She then started the transformation of the property. Jimmy was upset. He told Trina that she could do no such thing since she did not own any portion of the farm. Under what theory of law can Jimmy argue that Trina does not own any part of Grandma Annie's farm?

A)Lack of consideration.
B)Unjust enrichment.
C)The Statue of Frauds.
D)Parole evidence rule.

Question 53

History

-Modern civil law systems are based on codes from what system?

A)The system of the Roman Empire.
B)The system of the British Empire.
C)The system of the 13 U.S. colonies.
D)The system of Babylon.

Question 54

History

-Jake and John had a debate about whether U.S. judges make decisions based on common law or civil law. Jake argued that judges often cite previous cases as support for decisions that they make. He concluded that this meant that courts make decisions based on common law. John disagreed. His position is that although judges may cite previous cases, the United States has a legislative branch that has created a code of laws by which judges ultimately have to abide. Who is correct?

A)Jake is correct. The legal system in the United States is based on common law.
B)John is correct. The legal system in the United States is based on civil law.
C)Neither John nor Jake is correct. Judges in the United States make decisions based on federal law.
D)Both Jake and John are correct. Judges base decisions on both common law and civil law.

Question 55

History

-Which of the following illustrates a proper application of the Takings Clause?

A)Lake County takes 10 of Zeta's 20 acres to use to expand a highway. It compensates Zeta the market value of $500,000 for the property.
B)The City of San Diego is in desperate need of affordable housing. So, the city decided to compel Zion to sell his 50acre ranch at a below market price to a residential real estate developer who has agreed to build affordable housing on the property.
C)Zarro's neighbor contacted the police after looking in his window and noticing several dead birds in the house. The police found that Zarro was a bird hoarder and had over 100 birds in his small home, many of which were dead. The house was covered with bird droppings and had a horrible stench. Zarro's town found that Zarro's house was inhabitable and barred him from continuing to live in it until it was repaired.

Question 56

History

-Under Article I, Section 8 of the U.S. Constitution, which statement about the specific powers granted to Congress is NOT correct?

A)Congress has the power to levy and collect taxes, to provide an army, to call out the National Guard, and to borrow money.
B)Congress has the power to provide an army, to provide a navy, to provide an air force, and to call out the National Guard.
C)Congress has the power to issue patents and copyrights, and to govern the District of Columbia.
D)Congress has the power to establish post offices and post roads, to organize and train the National Guard, and to punish counterfeiters.
E)Congress has the power to levy and collect taxes, to punish counterfeiters, and to regulate foreign and interstatE-Commerce.

Question 57

History

-Fifteen-year-old Katie Brown of New Orleans, Louisiana wore an Indianapolis Colts t-shirt to school four days prior to when the Indianapolis Colts would meet the New Orleans Saints in the Super Bowl. School officials sent the rebellious fifteen-year-old home, warning her to never wear Colts gear to school again. Which principle of the U.S. Constitution best supports Katie's right to wear the Colts gear?

A)Freedom of speech
B)Freedom of association
C)Right to due process
D)Freedom of the press

Question 58

History

-Which of the following is an example of a uniform law?

A)Uniform Commercial Code
B)Model Business Corporations Act
C)Uniform Partnership Act
D)A and C
E)A, B, and C are all examples of uniform laws

Question 59

History

-Which is an example of commercial speech?

A)Big 'Ol Beverage Co. purchases a billboard along I-88 promoting its latest gin.
B)During an appearance on The Talk,Mompreneur Sally Jo, creator of the Safest Baby Car Seat Ever, states that her invention does not have the safety risks that all of the other car seats do.
C)Both A and B.
D)Neither A nor B.

Question 60

History

-During his administration, President Blago was investigated for various corruption charges. He was finally impeached for abuse of power and corruption. Immediately after his impeachment, President Blago resigned, went on a whirlwind media blitz proclaiming his innocence, and returned to private life. Vice President Quinn became President. Still upset about being impeached, former President Blago hoped that President Quinn would issue a pardon that would erase his impeachment. Will President Quinn pardon former president Blago for being impeached?

A)Yes, because the U.S. Constitution gives the president the power to issue pardons.
B)Yes, because the legislature has delegated to the president the power to issue pardons.
C)No, because the U.S. Constitution specifically denies presidential pardon power for impeachment cases.
D)No, because the U.S. Constitution does not give the president the power to issue pardons.
E)Yes, but only if 2/3 of Congress approves the pardon.

Question 61

History

-Arnold Schwarner was born in Austria. He immigrated to the United States in 1970, when he was 10. He became a U.S. citizen in 2012. Over the years, Arnold developed a passion for politics and public service. He plans to run for a seat in the U.S. House of Representatives in 2016. Will Arnold be permitted to run?

A)Yes, because any citizen can run for a seat in the U.S. House of Representatives.
B)Yes, because since he is now a citizen, he meets all of the eligibility requirements.
C)No, because Arnold has no political experience.
D)No, because the U.S. Constitution requires that in order to be eligible to run for the U.S. House of Representatives, a person must have been a United States citizen for 7 years.
E)No, because Arnold was not born in the United States.

Question 62

History

-Which statement is NOT true about the eligibility requirements for the House of Representatives and the Senate?

A)The eligibility requirements are enumerated in Article I of the U.S. Constitution.
B)To be eligible for the House of Representatives or the Senate, a person must have been a United States citizen for at least 7 years.
C)The eligibility requirements for the House of Representatives are different from the requirements for the Senate.
D)To be eligible for the Senate, a person must be at least 35 years old.
E)To be eligible for the House of Representatives, a person must be at least 25 years old.

Question 63

History

-Who was both president and vice president without ever having been elected to either office?

A)Warren Harding
B)Nelson Rockefeller
C)George H. W. Bush
D)Gerald Ford
E)Dick Cheney

Question 64

History

-President Harold Montgomery is in his second term as president of the United States. Some consider him the most successful president in the history of the United States. He has managed to wipe out the deficit and create an unprecedented surplus. The unemployment rate has hovered around 3% for the last 4 years and gas prices have remained below $3.00 per gallon. He also resolved several foreign policy issues. President Montgomery has an approval rating of an astonishing 86.4%. Polls show that the American people want President Montgomery to run for another term. Can President Montgomery successfully run for another term?

A)Yes. The U.S. Constitution limits a president to three terms.
B)Yes, as long as he gets permission from the Supreme Court.
C)Yes. There is no reason he cannot run for another term.
D)No. Congress has limited a president to two terms.
E)No. The U.S. Constitution limits a president to two terms.

Question 65

History

-What is a "blue law?"

A)A law that prohibits the sale of alcohol on Christmas.
B)A law that prohibits Puritans from shopping on Sundays.
C)A series of employment laws proposed by Republicans in the 1970s.
D)A law that prohibits certain commercial activity on Sundays.
E)A law that prohibits adherents of certain religions from working on the weekends.

Question 66

History

-Which federal statute establishes standards for the funding and operation of pension plans?

A)Taft-Hartley Act
B)Employee Retirement Income Security Act
C)Family and Medical Leave Act
D)Occupational Health and Safety Act
E)Norris-LaGuardia Act

Question 67

History

-Kyle was just hired by Kryton, Inc. Part of his benefit package included a pension plan to which Kryton contributed. Under the plan rules, Kyle would receive the full amount of Kryton's contributions after he worked for Kryton for 3 years. This concept is called:

A)ERISA
B)Vesting
C)Employee benefits
D)Defined contribution
E)Service

Question 68

History

-Lori and Leon are married. Lori participates in her company's pension plan and is 100% vested. Lori is 64 and plans to retire when she is 65. Upon retirement, she will receive $3,000 per month in benefits. What will happen to Lori's benefit payments upon her death?

A)The benefit payments will cease.
B)Leon will continue to receive benefit payments.
C)Lori's children will receive her benefit payments.
D)Leon will receive her benefit payments until his death. Then Leon's children will receive them and then his grandchildren.
E)The beneficiary whom Lori designated will receive her benefit payments.

Question 69

History

-What governmental agency will step in if a pension plan does not have sufficient assets to pay benefits?

A)Department of Retiree Benefits
B)Department of Justice
C)Department of Labor
D)Pension Benefit Guaranty Corporation
E)Internal Revenue Service

Question 70

History

-How is the Pension Benefit Guaranty Corporation funded?

A)Income tax revenue
B)Premiums paid by plan sponsors
C)Investment income
D)A, B, and C
E)B and C

Question 71

History

-The governmental department responsible for enforcing federal labor laws is

A)The Internal Revenue Service
B)The Bureau of Labor and Wages
C)The Pension Benefit Guaranty Corporation
D)The Wage and Hour Division
E)None of the above

Question 72

History

-What law sets standards for workplace safety?

A)Americans with Disabilities Act
B)Occupational Safety and Health Act
C)Workplace Safety Act
D)Federal Labor Relations Act
E)Fair Labor Standards Act

Question 73

History

-What part of the government is responsible for enforcing the Americans with Disabilities Act?

A)Department of Justice
B)Department of Transportation
C)Equal Employment Opportunity Commission
D)None of the above
E)All of the above

Question 74

History

-Richie, a shrewd investor, just purchased 6% of the equity of Inter-Net, Inc. Why must Richie report this transaction to the Securities and Exchange Commission (SEC)?

A)Because of concerns about insider trading issues.
B)Because of concerns that the transaction is unconscionable.
C)Because of concern that the trade is erroneous.
D)Because of concerns about a possible takeover.
E)None of the above.

Question 75

History

-Enron Corporation was an energy trading and utility company that was at the center of one of the largest accounting scandals in U.S. history. Its executives used accounting practices that inflated the company's revenues. The result was that Enron filed for bankruptcy, its employees lost millions of dollars, and several of its top executives were prosecuted and jailed. What legislation was enacted in part as a response to the Enron scandal?

A)Accounting Fraud Accountability Act
B)Sarbanes-Oxley Act
C)Securities and Exchange Act
D)Accounting Advisors Act
E)Skilling-Lay Act

Question 76

History

-Which of the following is NOT an essential element of a Rule 10b-5 offense?

A)Insider trading
B)Materiality
C)Connection to the purchase or sale of securities
D)Knowledge of wrongdoing
E)Manipulation or deception

Question 77

History

-A package that was labeled "gluten-free" when, in fact, the contents contain gluten would be considered:

A)Adulterated
B)Misbranded
C)Contaminated
D)Tainted
E)Spoiled

Question 78

History

-Under federal regulations, a product that is labeled "milk" must come from a cow. This regulation is known as a:

A)Required ingredient for food
B)Brand of food
C)Standard identity for food
D)Standard labeling for food
E)Standard branding for food

Question 79

History

-Bait-and-switch is a type of:

A)False coloring
B)Misbranding
C)False advertising
D)Mislabeling
E)Both A and C

Question 80

History

-The rules that prescribe the standards of legal ethics and professional responsibility for lawyers are known as:

A)Model Rules of Professional Conduct
B)Model Bar Association Rules of Conduct
C)Model Attorney and Paralegal Rules of Professional Conduct
D)ABA Model Rules of Attorney and Judicial Conduct
E)Model Standards of Attorney Conduct