Final Exam

An example of private law is:

business law.

Tyler is self-employed and alters some receipts so he will show more expenses and therefore have a greater total of income tax deductions. Tyler has:

committed the crime of forgery.

Arthur fired a gun in the middle of the desert. He intended to fire the gun, but had no reason to believe anyone else was in the area. The bullet hit Bob, who happened to be riding his ATV across the desert. In this case:

it is unlikely that Arthur has the necessary intent to commit a tort.

In the case of Hadley v. Baxendale, the plaintiff was seeking damages for:

lost profits.

The Lujan v. Defenders of Wildlife case involved:

the doctrine of standing.

The legal concept which deals with the location where a lawsuit should be brought is:

venue.

An express warranty within the meaning of the Code is created by which of the following?

All of these.

The "discovery" stage of a trial includes which one of the following?

All of these.

Cal sprayed pesticide on his crops in a very careful manner on a windless day. Nevertheless, some of the pesticide spray fell on his neighbor's side of the fence and contaminated the cracked corn for the chickens. The chickens died and the neighbor sues. What is the likely result?

Cal is liable because spraying pesticides is an abnormally dangerous activity.

A person who has made a financially unsound contract may be relieved from performance under the doctrine of commercial impracticability.

False

A person who owes a duty under a contract is an obligee.

False

A violation of a statute constitutes negligence per se regardless of whether the injured party is a member of the class protected by the statute.

False

Bill has had a problem with vandalism at his business, so he rigs up a spring gun at the entryway to his store, so that any after-hours intruder will be shot upon entry. Bill may legally use this deadly force to protect his business.

False

By indorsing a check, "Without recourse," Pat effectively disclaims both contractual and warranty liability.

False

Classifications based on age and sex are examples of "suspect classifications" in the context of the Equal Protection Clause of the Constitution.

False

Edward, an engineer, is working on a new design for some highly technical equipment which Martus, Inc. hopes to market within the next five years. The employment agreement between Edward and Martus states that Edward will not go to work for another company in the same business for a period of two years after termination of his employment with Martus, Inc. This agreement is void and unenforceable because, although Martus is a very specialized company, it would make it difficult for Edward to find other employment.

False

If the buyer received goods on credit while he was insolvent by misrepresenting his solvency in writing within three months prior to deliver of the goods, the seller is able to reclaim the goods only if the seller makes a demand on the buyer within ten days after the buyer has received the goods.

False

In the Arrowhead School District No. 75, Park County, Montana, v. James A. Klyap, Jr. case, the court found the liquidated damages clause was void as a penalty because it was unreasonable and unduly oppressive.

False

Indorsers of all instruments incur primary liability on the instrument.

False

Interpretative rules of administrative agencies are automatically binding on the private parties the agency regulates.

False

RICO defines a pattern of racketeering as the commission of three or more predicate acts within a five-year period.

False

The statute of frauds has to do with fraud in the inducement of a contract.

False

Where parties to a failed agreement are in pari delicto, a court will provide a remedy to the injured party.

False

Carl threw a bomb into the office of his insurance agent, intending to kill the agent because the company had disallowed his claim. The agent wasn't in the building, but the bomb seriously injured his secretary, who was working in the office.

If Carl knew the secretary was in the office, even if he didn't intend to injure her, his intent to harm the agent is transferred to the secretary who can sue Carl for her injuries with an intentional tort cause of action.

To be negotiable, the instrument must satisfy all except which one of the following requirements?

It must be payable on demand.

Joanne had a paycheck for $94 made out to her. She indorsed it with her name and gave it to Larry who, in return, agreed to paint her living and dining rooms the next Saturday. In this case:

Larry is not a holder in due course.

Which one of the following assignments would probably be prohibited by a court?

Mary is in debt. A credit card company calls and threatens to sue. Mary orally assigns her next bimonthly paycheck to her creditor.

Which of the following is required regarding indorsements?

None of these.

Ralph sold a motel to Steve by stating that he had paid $250,000 for it and that his net average annual profit from the business has been $40,000. In reality he paid $100,000 for the motel and has earned a net average annual profit of only $30,000. Steve made no attempt to verify the statements until after the transaction was completed. In this case:

Ralph has committed fraudulent misrepresentation.

A basic element of fraud is a false representation or a misrepresentation.

True

After passage of a week, the buyer of six crates of strawberries will be deemed to have accepted the goods.

True

Agencies create more legal rules and adjudicate more controversies than all the nation's legislatures and courts combined.

True

An acceptance is generally effective upon dispatch.

True

Express voluntary assumption of the risk is a defense to an action based upon strict liability.

True

Fungible goods are goods for which one unit is the equivalent of any other unit.

True

In order to induce a car dealer to sell her son a car on credit, Mary promises that she will pay for the son's car if the son defaults on his monthly payments to the dealership. Mary's promise must be in writing or have a sufficient electronic record.

True

The U.S. Constitution created a federal government of enumerated powers, and legislation enacted by Congress must be based on a specific power the Constitution grants to the federal government or be reasonably necessary for carrying out an enumerated power.

True

The business law topics of contracts, agency, property, and trusts are governed primarily by the common law.

True

The common law "mirror image" rule has been modified by the Code.

True

Undue influence is the taking of unfair advantage of a person by reason of a dominant position based upon a confidential relationship.

True

In which of the following situations has conversion NOT occurred?

When a drawee to whom a draft is delivered for acceptance properly returns it upon request.

The Code permits the seller to recover the price plus incidental damages in which of the following situation(s)?

Where the buyer has accepted the goods.

Steven has a typed copy of a contract, which he would like to have Thomas sign. Thomas, who needs glasses to read typing, doesn't want to sign until he has read the document, but Steven convinces Thomas to sign it anyway, because it is a "standard" contract for this type of situation. Is the contract which Thomas signed binding upon him?

Yes, because he was negligent in not ascertaining its contents.

Much of federal, state, and local law in this country has been established by __________, which people label as the "fourth branch of government" because they possess tremendous power.

administrative agencies

Which of the following is a collateral promise?

A mother tells a merchant to extend $1,000 worth of credit to her son and says, "If he doesn't pay, I will."

Which of the following need NOT be proved in order to establish the defense of economic duress?

That one party explicitly made the economic threat.

Which of the following is true regarding unconscionability under the Code?

The Code denies or limits enforcement of an unconscionable contract for the sale of goods.

Which of the following is NOT considered to be an alternative method of dispute resolution?

Special verdict.

John operates a small repair business and is in desperate need of a certain type of building material. He obtains the material from a large corporation, but is charged a grossly unreasonable price and is forced to buy other material he does not need. In view of the buyer's unequal bargaining power and unreasonable terms of the contract, this may be a case of:

substantive unconscionability.

Article III of the Constitution states that the judicial power of the United States shall be vested in one Supreme Court and:

such lower courts as Congress may establish.