Final Legal Exam

In 2012, Donny wanted to get a loan to buy a house but was told that his credit scores were bad. Which of the following, if distributed via his credit report, is NOT in violation of the FCRA? a. A report from 2002 claiming that Donny owed a hospital $300 for services. b. A list of potential employers who have requested Donny's credit score. c. A report from 1990, claiming that Donny was late in paying his rent. d. A note claiming that five businesses sought Donny's credit score in 2010.

d. A note claiming that five businesses sought Donny's credit score in 2010.

Fred is engaged to Angela, and has a daughter, Samantha, from a previous marriage. Fred borrows the cost of his upcoming wedding from his friend Ed, and signs a loan agreement with a payback schedule. The week before the wedding, Fred dies in a tragic skiing accident. Who may recover from a life insurance policy on Fred, assuming the policy was taken out prior to his death? a. Angela b. Samantha c. Ed d. All of these e. None of these

d. All of these

Bob and Marsha co-own a house. In which of the following situations are they tenants in common? a. They inherited the house from their Aunt Laurel, who left the house in her will "to Bob and Marsha." b. Bob and Marsha bought the house as a married couple and are now divorced. c. Marsha bought the house with Jon as joint tenants, and Jon sold his interests in the house to Bob. d. All of these answers are correct. e. None of these answers are correct.

d. All of these answers are correct.

Smalltown has two family-owned hardware stores that have been in business for years. Major Hardware opens one of its superstores in Smalltown, advertising extremely low prices, which are at below cost. Because Major owns stores nationally, it is able to keep prices extremely low until it forces both of the family-owned stores out of business. Once Major is the only hardware store in town, it raises its prices enough to make up for its former losses and to make some additional profit. Has Major violated any antitrust laws? a. Yes, Major has engaged in price fixing. b. Yes, Major has engaged in bid rigging. c. No, Major has simply competed well against the smaller stores in an open market. d. Yes, Major has engaged in predatory pricing.

Yes, Major has engaged in predatory pricing.

Cameron and Mitchell own a commercial office building as joint tenants. Mitchell transfers his interest in the building to his sister Claire. A year later, Claire dies. Who receives Claire's 50 percent interest in the office building? a. Claire's heirs receive Claire's interest. b. Cameron and Claire's heirs each receive half of Claire's interest. c. Cameron receives Claire's interest. d. Claire's interest reverts to Mitchell.

a. Claire's heirs receive Claire's interest.

Dr. Kaminsky was a gynecologist who practiced elective abortions in the state of Texas. In May 1983, the doctor signed a two-year lease for clinic office space from the building's owner, Fidelity Mutual Life Insurance Company. A clause in the lease stated "Lessee, on paying the said Rent, and any Additional Rental, shall and may peaceably and quietly have, hold and enjoy the Leased Premises for the said term." After moving into the building and beginning his practice, abortion protestors discovered the clinic location, and started organizing demonstrations in and around the building. On the days Dr. Kaminsky performed abortion procedures (usually Saturdays), singing and chanting demonstrators picketed in the building's parking lot, inner lobby, atrium area, stairwells, and even the office area waiting room. Protestors approached patients to speak to them, distributed literature, and attempted to block them from entering the building. Despite the doctor's repeated attempts to solicit help from Fidelity Mutual in controlling the demonstrators, there was little or no response. In December 1984, Dr. Kaminsky abandoned the premises, and Fidelity Mutual filed a claim against him for the unpaid rent. Will Fidelity Mutual prevail in their claim? a. No, because Dr. Kaminsky was constructively evicted. b. No, because the office was a hostile workplace. c. Yes, because Dr. Kaminsky signed a two-year contract. d. Yes, because Fidelity can't interfere with the protestors' freedom of speech and assembly.

a. No, because Dr. Kaminsky was constructively evicted.

After acquiring the RazRSleek brand name and electric shaver assets, Flyy controlled 55 percent of the electric shaver industry in the United States. Chaser, a competitor, claimed that the acquisition of such a large market share was a violation of the law because the increased competition from Flyy would decrease Chaser's profits. Does Chaser have a valid claim? a. No, unless Flyy excluded competitors and controlled prices. b. No, because a company must have 80 percent of the market share to be a monopoly. c. Yes, because Flyy engaged in predatory pricing which lowered Chaser's profits. d. Yes, because the merger is subject to the rule of reason under the Clayton Act.

a. No, unless Flyy excluded competitors and controlled prices.

Carol is a 30-year-old surgeon with a husband and two young children. Carol receives a generous pension from her employer and diligently puts a portion of every paycheck into a trust fund for her children's education. Carol's husband works part-time as a graphic designer and spends more time taking care of the children to allow Carol to work the long hours her job requires. What type of life insurance should Carol get? a. Term insurance b. Straight insurance c. Primary insurance d. Whole life insurance

a. Term insurance

Mrs. Rosenberry enters into an agreement for the sale of her mansion to Mr. Green. The house has a very large decorative gas fireplace, which Mrs. Rosenberry had specially designed. The fireplace is connected to the gas line in the house; it can be removed and replaced by a professional in a matter of hours, but that may result in damage to the wall and floor surrounding the fireplace. The agreement does not specify whether the fireplace is included in the sale of the mansion. Does Mr. Green's purchase of the mansion include the fireplace? a. Yes, because the fireplace is a fixture. b. Yes, because Mr. Green has a reversion interest in the fireplace. c. No, unless the purchase price included the price of the fireplace specifically. d. No, because the agreement does not say that the fireplace is included.

a. Yes, because the fireplace is a fixture.

Bobby applied for and received a credit card with a $5,000 limit when he graduated from college and started his new job. Bobby's roommate and Bobby agree to split the purchase of a $5,500 large flat-screen 3-D television and sound system for their apartment. Bobby purchases the items using his credit card, and the charge goes through without a problem. When Bobby's roommate does not pay him back, however, Bobby has trouble making the credit card payments. It is not until Bobby receives a loan from a family member several months later that he can pay off the credit card balance. In that time, the credit card company charged Bobby a $50 overlimit fee and $100 in late fees for the two months that Bobby did not pay on time. Must Bobby pay these charges? a. Bobby must pay the total $100 late fees, but not the overlimit fee. b. Bobby must pay only $60 of the late fees. c. Bobby must pay only the overlimit fee. d. Bobby must pay all of these charges.

b. Bobby must pay only $60 of the late fees.

Lauren has owned her frozen yogurt shop "FroYo2GoGo" for about three years. While running her business, she developed a machine and process that can freeze yogurt and maintain its high quality for up to 12 months. Current methods only maintain the frozen products for 2-3 months with the same quality shown by what Lauren has developed. Her brother Troy is an engineer, so she talks to him about both the machine and her freezing process. Troy thinks a skilled mechanic could "reverse engineer" Lauren's machine and figure out how it operates, but he is stumped regarding her freezing process, which involves a considerable number of steps and precise timing. How should Lauren protect her machine and her yogurt freezing process? a. By protecting both the machine and freezing process as trade secrets. b. By applying for a utility patent for the machine, and protecting the freezing process as a trade secret. c. By applying for a utility patent for the freezing process, and protecting the machine as a trade secret. d. By applying for utility patents on both the machine and the freezing process.

b. By applying for a utility patent for the machine, and protecting the freezing process as a trade secret.

In the movie The Hangover Part 2, Stu, the character played by actor Ed Helms, wakes up with a facial tattoo identical to that boxer Mike Tyson, who also appears in the film. Before the movie was released, the artist who designed and tattooed Mr. Tyson sued Warner Brothers in federal court for infringement. The suit delayed release of the film for several months and prevented the studio from showing the tattooed actor in trailers or clips of the film. The suit was later settled for an undisclosed amount, and the movie was then released intact. What would be the best form of protection for the intellectual property in a tattoo? a. Utility Patent b. Copyright c. Trademark d. Design Patent

b. Copyright

Pauline wants to develop a line of flatware and pottery. She is experimenting with various names and symbols to develop a trademark. Pauline's three-year-old daughter tells a neighbor that "mommy makes Fatware and Potty." Pauline laughs so hard that she decides to design a trademark of a large, obese, pink pig sitting on a toilet, with the letters FP (initials for the term Fat-Potty) written underneath the pig. What is the best argument that Pauline's trademark is valid? a. The mark is fanciful. b. The mark is arbitrary. c. The mark has a secondary meaning. d. The mark is suggestive.

b. The mark is arbitrary.

In 2009, Melissa developed a hydrogen powered engine for a car while working in her garage in her spare time. Melissa installed the engine in a small car that she has been driving around town. In 2012, engineers working for Ford Motor Co. independently developed an identical hydrogen powered engine. After completing tests on the engine for two years, Ford filed a patent for the engine on March 1, 2014. On March 2, 2014, Melissa also filed for a patent for her engine. Assuming the engine satisfies all of the requirements for a patent, who is entitled to the patent? a. Ford, if Ford is the first to sell the engine. b. Ford, because Ford was the first to file for the patent. c. Melissa, because Melissa was the first to invent the engine and put it into practice. d. Both Melissa and Ford must share in the patent rights.

b. Ford, because Ford was the first to file for the patent.

Baker George took orders for his famous Christmas Fruitcake. His ad demanded that orders must be placed two months prior to delivery. However, this year, George received three times his usual number of orders. In mid-October, George knew that he could not make on-time deliveries. Which of the following is true? a. George has to cancel all orders and return money to his customers. b. George has to notify customers and ask if they still want their fruitcake. c. George need not take any action given that delays of this kind are frequent. d. George has to call all his customers and notify them of possible delays.

b. George has to notify customers and ask if they still want their fruitcake.

Jane's Boutique would like to buy some of Holistic Health Co.'s popular nail polish for resale. Holistic Health tells Jane that if she buys less than 100 units, she must also buy a small order of their new vitamin product. Jane has no interest in selling vitamins in her boutique. If Jane wanted to challenge Holistic Health's requirement as an illegal tying arrangement, what additional facts would she have to prove? a. Holistic Health charges higher prices for the vitamins when they are tied to the nail polish. b. Holistic Health has significant power in the nail polish market and is shutting out a significant portion of the vitamin market through the tying arraignment. c. Holistic Health has a monopoly in the nail polish market and significant power in the vitamin market in Jane's geographic area. d. Both that Holistic Health charges higher prices for the vitamins when they are tied to the nail polish and Holistic Health has a monopoly in the nail polish market and significant power in the vitamin market in Jane's geographic area. e. None of these.

b. Holistic Health has significant power in the nail polish market and is shutting out a significant portion of the vitamin market through the tying arraignment.

In the registration statement filed with the SEC, DrugsUSA stated that it had three different medicines approved by the Food and Drug Administration (FDA). In reality, DrugsUSA had filed applications for approval with the FDA that were still pending. The SEC approved the sale of DrugsUSA stock, and Marilyn purchased $100,000 worth of stock. Two months later, all three of DrugsUSA's applications were denied by the FDA. The stock price plummeted, reducing the value of Marilyn's shares to a total of $2,000. What, if anything, can Marilyn recover? a. Marilyn can recover $100,000 from DrugsUSA and the signatories of the registration statement. b. Marilyn can recover $98,000 from DrugsUSA and the signatories of the registration statement. c. Marilyn can recover $98,000 from DrugsUSA. d. Marilyn can recover $2,000 from Drugs USA. e. None of these.

b. Marilyn can recover $98,000 from DrugsUSA and the signatories of the registration statement.

Marissa accidentally left her wallet on an airplane. She did not discover the mistake until she unpacked her bags the next day. Marissa called the credit card companies of the two credit cards she owns, a MasterCard and an American Express Card, and reported the loss. Marissa did not think to call her bank and report her debit card stolen for two weeks. By the time Marissa called MasterCard, $200 in charges for purchases Marissa had not made had been placed on the card. After Marissa had notified American Express, the card was used to make a $500 purchase. Marissa's debit card was used the same day she lost it to make a $25 purchase, and then again the following week to make a $1,000 purchase. What charges, if any, is Marissa liable for? a. Marissa is liable for $50 worth of charges on each credit card, and only the initial $25 debit card charge (a total of $125). b. Marissa is liable for $50 worth of charges on the MasterCard, and the first $500 of charges on the debit card (a total of $550). c. Marissa is not liable for the credit card charges, but is liable for all of the debit card charges (a total of $1,025). d. Marissa is liable for all of the charges, a total of $1,725.

b. Marissa is liable for $50 worth of charges on the MasterCard, and the first $500 of charges on the debit card (a total of $550).

Mitchell notices that his neighbor has allowed a large tree to grow close to his house, and that the tree appears to be rotted. Although the tree does not present a danger to Mitchell's house, he suspects that it could break and fall on his neighbor's house during a storm. Looking to make some easy money, Mitchell takes out an insurance policy on his neighbor's house. The following winter, Mitchell's instincts are proven correct when the tree crashes through the neighbor's roof, causing significant damage. May Mitchell recover under the insurance policy? a. Yes, unless Mitchell made a misrepresentation about the tree on the application for the insurance. b. No, because Mitchell does not have an insurable interest in his neighbor's house. c. No, because Mitchell acted in bad faith by not informing his neighbor of what he noticed about the tree. d. Yes, because Mitchell has no fiduciary duty to his neighbor.

b. No, because Mitchell does not have an insurable interest in his neighbor's house.

Roger Schlafly applied for a patent for two prime numbers. (A prime number cannot be evenly divided by any number other than itself and 1—2, 3, 5, 7, 11, 13, for example.) Schlafly's numbers are a bit longer - one is 150 digits, the other is 300. Should the Patent and Trademark Office (PTO) issue this patent? a. Yes, if Schlafly is the first to reduce these numbers to a tangible form. b. No, because numbers are not patentable subject matter. c. No, because the numbers are not useful. d. Yes, because the numbers can be put to a useful purpose.

b. No, because numbers are not patentable subject matter.

Pop-Cola is a small, not very successful, company that produces soft drinks and sells them in a small number of stores in Virginia. Heads of Pop-Cola hire a chemist from a successful national soft drink company, Refresco, whose products are known for its "one of a kind" taste. The chemist tells Pop-Cola that the key ingredient to Refresco's secret recipe is a special leaf that grows in the mountains. May Pop-Cola use the secret ingredient in its own soft-drinks? a. No, unless Pop-Cola can prove the recipe would give Pop-Cola a competitive advantage. b. No, because the recipe is a trade secret. c. Yes, because the recipe lost its trade secret status when the Refresco employee disclosed it to Pop-Cola. d. Yes, because Refresco has not patented the recipe.

b. No, because the recipe is a trade secret.

Victoria's Secret, a well-known lingerie company, found out that a man named Victor Mosley is running a small store in Kentucky named "Victor's Little Secret." Mosley's shop sells guns and a variety of other weapons. Does Victoria's Secret have a valid claim? a. No, unless the stores have overlapping sales territories. b. No, unless Victoria's Secret's reputation was tarnished by association with unwholesome goods sold by Victor. c. Yes, because Victor is making a profit using a similar trademark. d. Yes, because the names of the stores are so similar.

b. No, unless Victoria's Secret's reputation was tarnished by association with unwholesome goods sold by Victor.

Zoe rents a loft space for two years to use as her art studio. One day, Zoe accidentally clogs the sink by washing too much paint down the drain, causing the water to back up and flood into the loft. When the landlord comes to repair the water damage, she notices that there is a leak in the 20-year old windows, and that Zoe has installed extra light fixtures on the walls to better illuminate her work. Zoe assures the landlord that she can easily remove the light fixtures before the end of the lease without damaging the walls. The landlord tells Zoe that she will have to pay for the cost to repair the water damage caused by the flooding and damage to the sink and replacing the windows, and demands that Zoe remove the extra lights immediately. Which of the landlord's demands would a court uphold? a. None of the landlord's demands. b. Only the demand to pay for the cost to repair the water damage and plumbing. c. The demand for the costs of the water damage and plumbing repairs and the window replacement, but not the demand to remove the light fixtures. d. All of the landlord's demands.

b. Only the demand to pay for the cost to repair the water damage and plumbing.

Stephanie purchases an automobile insurance policy that includes collision, comprehensive, and liability coverage. Stephanie lends her car to her brother Daniel. Sally, who is uninsured, crashes into Stephanie's car while Daniel is driving. The car requires $5,000 in repairs, and Daniel pays $3,000 in medical bills to treat his injuries from the accident. How much will Stephanie's insurance cover? a. None of the costs, because Daniel was driving the car. b. The $5,000 for car repairs, but not the $3,000 in Daniel's medical bills. c. The $3,000 in Daniel's medical bills, but not the $5,000 for repairs. d. All of the costs.

b. The $5,000 for car repairs, but not the $3,000 in Daniel's medical bills.

Suzy Tomlinson, died unexpectedly at age 50. Suzy was on the board of directors of a company her long-time friend J.B. Carlson had started. Her family was stunned to find out that she had a $15 million life insurance policy, with the proceeds payable to a company J.B. controlled. J.B. said it was a key man policy and that he wanted to protect the company if she died because she had frequently introduced him to potential investors. Is the life insurance policy valid? a. No, because the policy is fraudulent. b. Yes, if J.B can show a true business relationship existed with Suzy and the company. c. No, because there is no insurable interest. d. Yes, as any person or entity can take out a life insurance policy on someone else.

b. Yes, if J.B can show a true business relationship existed with Suzy and the company.

Alice goes to her local Town Savings Bank and takes out a mortgage loan for $200,000 to purchase a new home. Town Savings Bank discloses the total payments, finance charge, and APR in the loan documents. If, after signing the loan agreement, Alice has an objection to the finance charge, could her claim be protected by the Truth in Lending Act (TILA)? a. No, because all of the required disclosures were made. b. Yes, if the information was not disclosed clearly. c. Yes, if the finance charge exceeds the maximum allowed finance charge. d. No, unless Town Savings Bank is not certified by the FTC.

b. Yes, if the information was not disclosed clearly.

Samantha buys a DVD and after watching it decides she does not like the movie. Samantha sells the DVD on the internet to Derrick, who burns a copy for his cousin. Have Samantha and Derrick violated the movie's copyright? a. Yes, both Samantha and Derrick have violated the copyright. b. Samantha has violated copyright, but not Derrick. c. Derrick has violated copyright, but not Samantha. d. Neither Samantha nor Derrick has violated the copyright.

c. Derrick has violated copyright, but not Samantha.

Roxy applies for a life insurance policy with Young Insurance Company, naming her brother Paul as the beneficiary. When completing the application form about past surgeries, Roxy forgets to disclose that twelve years ago she had corrective laser eye surgery. One year after issuing the policy, Roxy died suddenly in a car accident. Young denies payment under the policy based on misrepresentation. If Roxy's brother, Paul, sues Young, he will: a. win, because once an application has been accepted, an insurer may not use a misrepresentation on the application to avoid liability. b. win, because Roxy's misrepresentation was not a material fact and did not increase Young's risk in insuring Roxy's life. c. lose, because Roxy's application contained a misrepresentation of a material fact. d. lose, because an insurer can always use any misrepresentation on an application to avoid paying.

b. win, because Roxy's misrepresentation was not a material fact and did not increase Young's risk in insuring Roxy's life.

Victor purchased $1 million of insurance on his barn even though the barn was worth only $500,000. Victor's barn was struck by lightning and burned down. Under the insurance policy, how much will Victor be able to recover? a. $1,000,000. b. $750,000. c. $500,000. d. Victor will not recover anything.

c. $500,000.

Dannie Harvey, an architect, worked for O. R. Whitaker & Sons, an architecture firm. After she was fired, Harvey sued Whitaker for employment discrimination and Whitaker sued Harvey for slander. Discrimination and slander are intentional torts. Both Harvey and Whitaker carry professional liability insurance. Will either of them be covered by their professional liability insurance policies if they are found liable at trial? a. Harvey will be covered, but not Whitaker. b. Whitaker will be covered, but not Harvey. c. Neither Harvey nor Whitaker will be covered. d. Both Harvey and Whitaker will be covered.

c. Neither Harvey nor Whitaker will be covered

On March 1, Randy files an application with American Insurance Co. for home insurance on a house he is purchasing on March 15. On March 2, American sends Randy a binder that acknowledges receipt of the application and premium for the insurance policy. A hurricane causes substantial damage to the house on March 10, and on March 11 American denies Randy's application. Can Randy recover any money from American? a. No, because a binder does not provide coverage, just a promise to review the application in a timely manner. b. Yes, because the binder was in effect at the time of the damage. c. No, because Randy does not have an insurable interest in the house. d. Yes, if he can show that American denied the policy in bad faith.

c. No, because Randy does not have an insurable interest in the house.

Big Drug Company produces a medicine that greatly reduces the risk of a mother transmitting HIV to her child. Big Drug filed for a patent for the medicine in 1990 and was issued a patent in 1992. Big Drug sells the medicine at an extraordinarily high price. In 2011, Zachary begins purchasing the medicine from Big Drug and distributing it in developing countries for free to pregnant women who cannot afford the drug at Big Drug's price. If Big Drug sues Zachary for patent infringement, will Big Drug win? a. Yes, because there is still 1 more year left in the patent term. b. Yes, because a patent holder has the exclusive right to make, use, sell, or distribute the patented product during the patent term. c. No, because the patent term has expired. d. No, because Zachary was not receiving any money for the medicine.

c. No, because the patent term has expired.

Paul's Pen Co. manufacturers and sells an inexpensive ball-point pen. Stacy's Stationery purchases the pens for $.25 each in quantities of 1,000. Stacey's discovered that a national chain, a competitor of Stacey's, buys the pen at $.20 for 1,000. If Stacy's Stationery sues Paul's Pen Co. for price discrimination: a. Stacy's Stationery will win since price discrimination is a per se violation. b. Paul's Pen Co. will win if it can prove that it has been selling to the national chain continuously at the cheaper rate. c. Stacy's Stationery will win unless Paul's Pen Co. can justify the price differential. d. Paul's Pen Co. will win if it can prove that it did not intend to economically harm Stacy's Stationery.

c. Stacy's Stationery will win unless Paul's Pen Co. can justify the price differential.

Jasmine signs a lease for a residential apartment for 2 years. Jasmine does not renew the lease, but when the lease expires she does not want to move out. Instead, Jasmine remains in the apartment and sends the landlord that month's rent. The landlord returns the rent to Jasmine and tells her to sign a new lease or leave. What kind of tenancy does Jasmine currently have? a. Periodic tenancy, with a one-year term. b. Tenancy at will. c. Tenancy at sufferance. d. Periodic tenancy, with month-to-month term.

c. Tenancy at sufferance.

James, the CEO of a major restaurant chain, learns that he is about to be fired by the Board of Directors. Furious, he writes a press release calling all of the company's executives "greedy scoundrels," and stating that "whoever has to fill my shoes will have to answer to the shareholders for the financial mess that they have created." James had no actual knowledge of any financial mismanagement by the company. The company's stock drops substantially in the few hours of trading that occur before the markets close after James releases his statement. The next day, James issues an apology, saying (truthfully) that his press release had no factual basis, and the stock recovers over the course of the week. Is James liable for a securities law violation? a. No, because James did not say anything specifically about the company's financials or stock. b. Yes, if James bought or sold any securities prior to sending the press release. c. Yes, James is liable for making an untrue statement of material fact. d. No, James did not have the necessary scienter.

c. Yes, James is liable for making an untrue statement of material fact.

Company A completes its initial public offering (IPO) and complies with all of the 1933 Act requirements. Must Company A register with the SEC as a reporting company under the 1934 Act? a. No, because Company A complied with all of the 1933 Act requirements for the IPO. b. Yes, if Company A's stocks are traded on a national stock exchange. c. Yes, because Company A has completed a public offering under the 1933 Act. d. No, unless Company A would like to be able to make additional public offerings in the future.

c. Yes, because Company A has completed a public offering under the 1933 Act.

In 1985, Susannah Jones purchased a farm and several acres of land. An old wooden fence stood 200 yards south of the actual southern boundary of the plot of land that Jones purchased, but Jones thought that the fence ran along the southern boundary of her land. Jones installed a new, electrified fence, cleared the land on "her" side of the new fence, and began to graze cattle there. In 2000, Sam Kerry purchased the land that bordered the other side of the fence. In 2007, Kerry had the property surveyed and discovered that the true property boundary lay 200 yards north of the fence. The statutory period for adverse possession is 20 years. If Jones files suit the same year seeking a declaration that she now owns the 200 yards between the legal boundary and the fence, will Jones win? a. Yes, because Jones believed she owned the land from the time she began using it. b. No, because Kerry has owned the bordering property for less than 20 years. c. Yes, because Jones has adversely possessed the land. d. No, because Kerry never ordered Jones to vacate that land.

c. Yes, because Jones has adversely possessed the land

Joe Kraft writes a series of short stories and one of the stories is published in a magazine. Later, Kraft learns that Robert Rill has copied the story, removed Kraft's name, and is selling it on the internet as his own. Kraft registers the story with the Copyright Office and sues Rill for copyright infringement. Will Kraft win? a. No, because Kraft did not register the copyright until after Rill began selling copies. b. Yes, but only with respect to sales that Rill made after Kraft registered the copyright. c. Yes, because Kraft's story was copyrighted automatically when he wrote it, and Rill is selling the copyrighted material without Kraft's permission. d. No, if Rill purchased a copy of the magazine featuring Kraft's story.

c. Yes, because Kraft's story was copyrighted automatically when he wrote it, and Rill is selling the copyrighted material without Kraft's permission.

Mark leases a house to Julia. When Julia mentions that the bedroom door is difficult to close, Mark comes to the house and fixes the door. Unfortunately, Mark leaves a sharp edge on the door that Julia catches her foot on, making a deep cut requiring multiple stitches. Julia sends Mark her medical bills associated with the injury. Under the common law rules, must Mark pay? a. No, because the defect was obvious. b. Yes, because the injury occurred in a common area. c. Yes, because Mark negligently performed a repair. d. No, because as the tenant, Julia is responsible for repairs within the premises.

c. Yes, because Mark negligently performed a repair.

Jeremy is a doctor who would like to be able to provide low cost medical care to underprivileged families. Jeremy and two nurses form Medicine for All and file a registration statement and prospectus with the SEC. The prospectus states that Medicine for All is looking for funding for the salaries of Jeremy and the nurses and medical supplies and that the organization will earn little profits. Will the SEC allow Medicine for All to sell its securities? a. Yes, as long as Medicine for All is not seeking to raise more than $1 million. b. No, unless Medicine for All's offering qualifies as a private offering. c. Yes, provided all of the required disclosures are made clearly.

c. Yes, provided all of the required disclosures are made clearly.

Walter writes a song celebrating President Obama. Walter then applies for and receives a copyright to the song. If Stephen uses the song at concerts, on his TV show, and puts Walter's song on a CD, has Stephen violated Walter's copyright? a. Yes, if Stephen makes any money while using Walter's song. b. No, because the song is about the President. c. Yes, unless Stephen changed the words enough that it has become a parody. d. No, if Stephen used Walter's exact song without modification.

c. Yes, unless Stephen changed the words enough that it has become a parody.

Brother invites Sister to use his second home after Sister's apartment burns down and tells her to stay as long as she would like. If Sister lives in the home continuously for ten years, using it as a true owner would, and no one else uses the property in this time, can she claim adverse possession? a. Yes, if she can prove she had an agreement with Brother allowing her to stay there. b. Yes, if the applicable statutory period for adverse possession is less than ten years. c. No, unless Brother was actually aware Sister was still living there. d. No, because Brother invited Sister to stay at the house and never revoked the invitation.

d. No, because Brother invited Sister to stay at the house and never revoked the invitation.

Molly ordered a custom-made plaque online from Master Woodwork, Inc., for her niece's college graduation. Master Woodwork promised that the plaque would ship on or before April 15, which meant it would arrive in plenty of time for the graduation on May 1. On April 1, Master Woodwork notified Molly that the shipment would be delayed until April 22. Molly did not respond because she was sure the plaque would still in arrive in time for the graduation. Master Woodwork sent Molly an e-mail on April 20 stating that the plaque would be shipped on April 30. Frustrated, Molly deleted Master Woodwork's email without responding and bought her niece a gift certificate. When the plaque arrived on May 4, Molly refused to accept it and told Master Woodwork she would not pay. Can Master Woodwork make Molly pay for the plaque? a. No, because the order was cancelled when Master Woodwork missed the April 15 shipment date. b. Yes, if the plaque has been delivered in good condition. c. Yes, because Molly never responded to the notices. d. No, because the order was cancelled when Master Woodwork missed the April 22 shipment date.

d. No, because the order was cancelled when Master Woodwork missed the April 22 shipment date

Sarah owns Fine Cuts hair salon. Hairdressers each rent a chair in the salon where they can style customers' hair, and Sarah provides receptionist services, maintains the space, and sells some hair care products at the front of the salon. The hairdressers must pay 35 percent of their profits to Sarah in return for the chair space and earn a commission for each hair product that they sell. Is Sarah selling the hairdressers a security in Fine Cuts? a. Yes, the hairdressers are dependent on Sarah for receiving a return on their investment. b. Yes, the hairdressers and Sarah are shareholders of Fine Cuts because they are sharing profits. c. No, the hairdressers are not investing enough money for their interests to qualify as a security. d. No, the hairdressers are not expecting to earn money predominately from Sarah's efforts.

d. No, the hairdressers are not expecting to earn money predominately from Sarah's efforts.

In the documentary movie Expelled: No Intelligence Allowed, there was a 15-second clip of "Imagine," a song by John Lennon. The purpose of the scene was to criticize the song's message. John Lennon's wife and sons, who held the copyright to the song, sued the movie makers to prevent its use. Who won? a. The movie makers because "Imagine" is available in the public domain. b. The Lennons because the movie makers did not modify the song. c. The Lennons because the movie makers did not receive consent from the copyright holders to use the song. d. The movie makers under the fair use doctrine.

d. The movie makers under the fair use doctrine.

Tom is renting an apartment from Brady. After Tom fails to pay rent for three months, Brady sends Tom a notice that he is in breach of the lease for nonpayment of rent. The next month, Tom again fails to pay any rent. Brady places Tom's belongings in storage, changes the locks to the apartment, and leases the apartment to a new tenant. If Tom sues Brady for a wrongful eviction, who will win? a. Brady, because Tom breached his duty to pay rent. b. Tom, because Brady is required to give more than one month's notice prior to eviction. c. Brady, because he provided Tom notice that he was in breach for nonpayment of rent. d. Tom, because Brady did not follow the proper eviction procedures.

d. Tom, because Brady did not follow the proper eviction procedures.

Through her job as a paralegal at the Attorney General's office, Charlotte learns that MegaCorp has been defrauding its customers. Although the information is highly confidential, Charlotte shares it with her mother and asks her not to tell anyone. Charlotte's mother does not disclose the secret, but she does sell her stock in MegaCorp. Has Charlotte's mother committed a violation of securities law? a. No, because Charlotte's mother has no fiduciary obligation to Charlotte. b. No, because Charlotte's mother is not covered by the Attorney General's confidentiality requirements. c. Yes, Charlotte's mother is liable because she breached her fiduciary duty to the Attorney General's office. d. Yes, Charlotte's mother has committed insider trading by misappropriation.

d. Yes, Charlotte's mother has committed insider trading by misappropriation.

David Delta rents an apartment on the second story of a building. The landlord leases space on the first floor below David's apartment to a cleaning company that mixes its cleaning chemicals in the leased space. The fumes from the company's chemical mixing drift up into David's apartment, even when the windows are closed. They cause David to suffer severe nausea and headaches, and he cannot sleep in the apartment. David's girlfriend and friends also refuse to come over due to the strong odors. If David brings a claim for nuisance, is he likely to win? a. No, because David's reactions are overly sensitive to the risk. b. No, because the utility of the cleaning company's acts outweighs the harm suffered by David. c. Yes, and the court will terminate the lease. d. Yes, and the court will order an abatement.

d. Yes, and the court will order an abatement.

Bobby works as a janitor for a large office building. One night when emptying the recycling bins in the offices of Big Co., Bobby sees a memo marked "Confidential - Eyes Only" on the top. Curious, Bobby reads the memo and learns that Big Co. is closing half of its juice manufacturing plants in the U.S. and laying off 2,000 employees. At the end of his shift, Bobby tells this to his supervisor and good friend who promptly sells her stock in Big Co. the next day. Is Bobby liable for insider trading? a. No, because Bobby worked for the office building, rather than for Big Co. b. No, unless Bobby also owns stock in Big Co. c. No, because Bobby did not receive any financial benefit from revealing the information. d. Yes, as a tipper.

d. Yes, as a tipper.

Check My Work Advertisements for Clean Mouth mouthwash claimed that it was as effective as flossing in preventing tooth plaque and gum disease. This statement was true, but only if the flossing was done incorrectly. In fact, many consumers do floss incorrectly. Is this advertisement deceptive? a. No, because the claim was partially correct. b. No, because Clean Mouth was not harmful to teeth. c. Yes, because there were not sufficient studies done to support the claim. d. Yes, because Clean Mouth omitted important information from its claim.

d. Yes, because Clean Mouth omitted important information from its claim.

Aaron and his twin brother Erin lived together in an apartment near the college they were both attending. Aaron was working full-time in addition to going to school, while Erin was spending his time sleeping and playing video games between classes. One morning just before 9AM, Aaron's mobile phone rang and he answered, although he didn't recognize the incoming phone number. "Hello, is this Erin?" the caller asked. "Yeeess" Aaron replied tentatively. The caller launched immediately into disclosures about collecting a debt, told Aaron that he owed $4,500 on credit card accounts, and asked how he would like to set up payments. Aaron realized that the collection agent was really calling for his brother, so he hung up the phone. When the debt collector's number appeared again on Aaron's line, he blocked the caller. Has the debt collector violated the Fair Debt Collection Practices Act (FDCPA)? a. No, because the collector made the proper disclosures. b. No, because the collector called during the appropriate contact hours. c. Yes because the collector must send a written notice before calling a debtor. d. Yes, because the collector did not verify Aaron's identity.

d. Yes, because the collector did not verify Aaron's identity.

Gerald wants to buy a new digital camera, and he sees an ad for a PicturePerfect Model A digital camera at a 25 percent discount at Bull's Eye—a large department store. Gerald goes to Bull's Eye the following day, but the store clerk tells him that they are out of that particular camera. The clerk suggests that Gerald purchase the PicturePerfect Model B camera instead. Even though the Model B is not on sale, the clerk insists it is worth it because the camera takes much better pictures and "will not break in a year, like the flimsy Model A cameras." Has Bull's Eye committed an FTC violation? a. No, unless the Model B camera is more expensive than the Model A camera. b. Yes, unless Model B camera is in fact better quality than the Model A camera. c. No, unless the store clerk is lying. d. Yes, this is a bait-and-switch scheme.

d. Yes, this is a bait-and-switch scheme.