BUL Mid & Final

36. (p. 368) How many states have statutes requiring that people working in certain professions obtain a license before practicing their craft? A. 50 B. 49 C. 45 D. 30 E. 25

A. 50

40. (p. 371) How many states engage in at least some regulation of gambling? A. 50 B. 47 C. 40 D. 35 E. 10

A. 50

46. (p. 49) Assuming there are no vacancies, how many U.S. Supreme Court justices are there? A. 9 B. 5 C. 15 D. 8 E. 7

A. 9 Nine justices, who have lifetime appointments, make up the high court.

37. (p. 1141) Which of the following types of insurance should a business manager purchase to obtain protection against a broad range of risks? A. A commercial general liability policy B. A business tort policy C. A litigation commercial policy D. An economic protection policy E. A business approved policy

A. A commercial general liability policy

54. (p. 452) The provision that the seller will release Maurice from any obligation if he lost his job is referred to as which of the following? A. A condition subsequent B. A condition precedent C. A bona fide condition D. A condition concurrent E. An exculpatory condition

A. A condition subsequent

50. (p. 169) Which of the following is true regarding an arrest without a warrant? A. A law enforcement agent can arrest a suspect without a warrant if the officer believes there is probable cause but not enough time to obtain a warrant. B. A law enforcement officer may not arrest a suspect without a warrant even if the officer believes there is probable cause but insufficient time to obtain a warrant. C. A law enforcement agent can arrest a suspect without a warrant only if a felony is involved. D. A law enforcement officer can arrest a suspect without a warrant only if a violent crime is involved. E. A law enforcement officer can arrest a suspect without a warrant only if the suspect is a repeat offender.

A. A law enforcement agent can arrest a suspect without a warrant if the officer believes there is probable cause but not enough time to obtain a warrant. In certain circumstances, law enforcement agents can arrest a suspect without a warrant if they believe there is probable cause but not enough time to obtain the warrant.

44. (p. 355) Which of the following is true regarding the effect of a debtor offering to pay a different type of payment, for example, goods instead of money, on a debt for which there is not a dispute over the amount or existence of the debt, and the creditor agrees? A. A liquidated debt is involved, and there is an accord and satisfaction. B. A liquidated debt is involved, and there is an accord but no satisfaction. C. A liquidated debt is involved, and there is not a satisfaction or an accord. D. An unliquidated debt is involved, and there is an accord and satisfaction. E. An unliquidated debt is involved, and there is an accord but not satisfaction.

A. A liquidated debt is involved, and there is an accord and satisfaction.

27. (p. 363) Which of the following is false regarding contracts for necessaries entered into by minors? A. A minor cannot disaffirm contracts for necessaries. B. A minor can disaffirm a contract for necessaries, but the minor will still be held liable for the reasonable value of the necessary. C. A contract for a necessary is a contract that supplies the minor with the basic necessities of life. D. The purpose of holding minors liable for necessaries is to ensure that minors are able to obtain the basic necessities of life when their parents will not provide them. E. Whether something is considered a necessary is related to whether the minor's parents are willing to provide the item in question for the minor.

A. A minor cannot disaffirm contracts for necessaries.

57. (p. 60) What standard of proof would the trial judge have applied when ruling on the case? A. A preponderance of the evidence standard B. A standard of proof beyond a reasonable doubt C. A standard of proof by a margin D. A standard of certainty in proof E. A standard of proof beyond a reasonable question

A. A preponderance of the evidence standard In most civil cases, the plaintiff must prove the case by a preponderance of the evidence; in other words, the plaintiff must show that the claim is more likely to be true than the defendant's claim.

44. (p. 82) What type of dispute resolution process is med-arb? A. A process in which the parties agree to start out in mediation and, if the mediation is unsuccessful on one or more points, to move on to arbitration. B. A process in which the parties agree to start out in arbitration and, if the arbitration is unsuccessful on one or more points, move on to court-annexed ADR. C. A process in which the parties agree to start in mediation and move to litigation if the mediation is unsuccessful. D. A process in which the parties agree to start in arbitration and move to litigation if the mediation is unsuccessful. E. A special type of blended mediation and arbitration applicable only in the medical malpractice arena.

A. A process in which the parties agree to start out in mediation and, if the mediation is unsuccessful on one or more points, to move on to arbitration. Med-arb is a dispute resolution process in which the parties agree to start out in mediation and, if the mediation is unsuccessful on one or more points, also agree to move on to arbitration.

49. (p. 396) As discussed in the text, which of the following is true regarding Japanese law and consumers? A. A special Consumer Contracts Law was developed to place consumers and businesses on a more equal footing in transactions. B. The Civil Code has more lax requirements regarding fraud than the country's Consumer Contracts law. C. The goal in regard to consumers is to form the law so that in litigation businesses are at a distinct disadvantage in regard to consumers. D. In order to encourage economic advancement and international investment, the goal is to form the law so that in litigation consumers are at a distinct disadvantage in comparison to businesses. E. Japanese law does not recognize rights of consumers as the buyer must beware.

A. A special Consumer Contracts Law was developed to place consumers and businesses on a more equal footing in transactions.

28. (p. 5) The law in Molly's state regulating cell phone usage would be classified as which of the following? A. A statute B. A type of common law C. An executive order D. A uniform law E. A negative law

A. A statute The assortment of statutes, or rules and regulations put forth by legislatures, is what we call statutory law.

46. (p. 8) Which of the following is true regarding treaties at the federal level? A. A treaty is generally negotiated by the executive branch and must then be approved by two-thirds of the Senate. B. A treaty is generally negotiated by the executive branch and must then be approved by two-thirds of the House of Representatives. C. A treaty is generally negotiated by the executive branch and must then be approved by two-thirds of the Senate and also by two-thirds of the House of Representatives. D. A treaty is generally negotiated by the executive branch and no approval by the Senate or House of Representatives is needed. E. A treaty is generally negotiated by the executive branch and must then be approved by two-thirds of the Senate and also by two-thirds of the state legislatures.

A. A treaty is generally negotiated by the executive branch and must then be approved by two-thirds of the Senate. In the United States, a treaty is generally negotiated by the executive branch; and, in order to be binding, it must then be approved by two-thirds of the Senate.

41. (p. 413-414) Brandy, the president of ABC Communication., and Sam orally agreed that Sam would work as a computer programmer for ABC Co. for a three-year period. Their oral agreement also covered other matters such as his pay and the availability of one week of paid vacation. On the day he talked with Brandy, Sam signed an employee handbook including a provision that his employment was at will, meaning that at any time he could quit or the company could discharge him. A month later, Sam received a three-year contract for employment with ABC Co. in the mail incorporating the amount of his salary and other issues he had discussed with Brandy. Sam signed it and mailed it back, but he changed the vacation provision to three weeks instead of one week. Bobby, the human resources manager for ABC Co., called Sam up after Bobby received the agreement and told Sam that the contract was only a draft for discussion purposes and that he was actually firing Sam because he seemed too focused on vacation. Assuming the court follows the reasoning of the court in the dispute discussed in the text involving Michael Gallagher and Medical Research Consultants, which of the following would be the most likely result in the dispute between Sam and ABC Co. if Sam claims he had a three-year contract of employment? A. ABC Co. will win because even if a three-year oral agreement for employment was made, it would not have been enforceable because the statute of frauds requires that agreements that cannot be completed within one year be in writing. Further, the draft Sam returned was not signed by ABC Co. B. ABC Co. will win because although the three-year oral agreement for employment was initially enforceable, Sam reopened negotiations by altering the later contract to provide that he was to receive three weeks of vacation. C. ABC Co. will win because as a matter of law, no other document can alter the provisions of an employee handbook. D. A jury will decide if Brandy orally agreed to a three-year contract; and, if so, Sam gets his job back along with the extra weeks of vacation. E. As a matter of law, since the contract was sent to Sam, he received a guarantee of employment for three years; but he does not get the extra weeks of vacation he inserted.

A. ABC Co. will win because even if a three-year oral agreement for employment was made, it would not have been enforceable because the statute of frauds requires that agreements that cannot be completed within one year be in writing. Further, the draft Sam returned was not signed by ABC Co.

53. (p. 1141) Which of the following is true regarding whether ABC Insurance will be required to provide coverage on the jeep? A. ABC will likely not be required to provide coverage on the jeep because Image made material misrepresentations in the renewal of the policy that would have prevented its renewal. B. ABC will likely be required to provide coverage on the jeep because any misrepresentations made were innocently made in the belief that the jeep would be returned soon. C. ABC will not have to provide coverage because Image did not have an insurable interest in the jeep. D. ABC will have to provide coverage unless Bruno had already obtained his own insurance on the vehicle because one vehicle may only be insured under one policy. E. ABC will not likely be required to provide coverage because Bruno's new employer was liable under workers' compensation.

A. ABC will likely not be required to provide coverage on the jeep because Image made material misrepresentations in the renewal of the policy that would have prevented its renewal.

34. (p. 458) Which of the following is used when, by agreement one of the parties substitutes a different performance for his or her original duty under the contract? A. Accord and satisfaction B. Novation C. Substituted contract D. Mutual rescission E. Alteration

A. Accord and satisfaction

19. (p. 346) In a unilateral contract, the consideration for a promise is a[n] ____. A. Action B. Return promise C. Acknowledgement D. Consideration E. Agreement

A. Action

55. (p. 398) Which of the following is an appropriate term for the contract drawn up by Tony? A. Adhesion B. Valid C. Misapplied D. Misdrafted E. Misdirected

A. Adhesion

33. (p. 415) A[n] ______ is a statement made in court, under oath, or at some stage during a legal proceeding in which a party against whom charges have been brought admits that an oral contract existed, even though the contract was required to be in writing. A. Admission B. Submission C. Deposition D. Interrogatory E. Confirmation

A. Admission

32. (p. 415) In most states, which of the following are exceptions to when the statute of frauds would apply? A. Admissions, partial performance, and promissory estoppel B. Partial performance and admissions, but not promissory estoppel C. Promissory estoppel but not admissions or partial performance D. Promissory estoppel and partial performance, but not admissions E. Admissions but not partial performance or promissory estoppel

A. Admissions, partial performance, and promissory estoppel

"Exemptions." Sidney is injured in an automobile accident and cannot work. She cannot pay her bills and files for bankruptcy relief under Chapter 7. Federal exemptions apply, and she lists as exempt $25,000 in equity in her residence; interest in a vehicle of $2,000; interest in jewelry of $400; and retirement funds in her individual retirement account. Her creditors filed an objection to all claimed exemptions except for the home equity claim. 55. (p. 706) Once the petition is filed, which of the following forms Sidney's bankruptcy estate? A. All her prepetition assets. B. The exempt assets only. C. The nonexempt assets only. D. The personal goods only. E. The real estate only.

A. All her prepetition assets.

47. (p. 418) Which of the following is true regarding writings created at the same time as a written agreement? A. Although the parol evidence rule applies to writings created at the same time as the written agreement, these writings tend to be treated differently than prior or contemporaneous oral agreements in that the writings are more readily admitted as part of the written agreement than is oral evidence. B. Although the parol evidence rule applies to writings created at the same time as the written agreement, these writings tend to be treated differently than prior or contemporaneous oral agreements in that the writings are less likely to be admitted as part of the written agreement than is oral evidence. C. The parol evidence rule applies to writings created at the same time as the written agreement, and these writings are analyzed in the same way as prior or contemporaneous oral evidence. D. The parol evidence rule applies to writings created at the same time as the written agreement only if a sale of goods is involved, and in that case the writings are analyzed in the same way as prior or contemporaneous oral evidence. E. The parol evidence rule does not apply to writings created at the same time as the written agreement.

A. Although the parol evidence rule applies to writings created at the same time as the written agreement, these writings tend to be treated differently than prior or contemporaneous oral agreements in that the writings are more readily admitted as part of the written agreement than is oral evidence.

25. (p. 73) When is an arbitrator's decision called an "award"? A. Always. B. Only if one party completely wins and there is no split decision. C. Never. D. Only if a money award is involved. E. Only if both parties had lawyers because that terminology makes it easier for the lawyers to be paid.

A. Always. The arbitrator's decision is called an award, even if no monetary compensation is awarded.

45. (p. 83) What is a summary jury trial? A. An abbreviated trial that leads to a nonbinding jury verdict. B. An unabbreviated trial that leads to a binding jury verdict. C. An abbreviated trial that leads to a binding jury verdict. D. An abbreviated trial in which only a few witnesses are called to the stand leading to a binding verdict. E. A binding trial conducted by a panel of mediators after a failed mediation.

A. An abbreviated trial that leads to a nonbinding jury verdict. A summary jury trial is an abbreviated trial that leads to a nonbinding jury verdict.

61. (p. 468) What will Beverly seek in order to get Creaky and Toady returned from Betty? A. An injunction B. Compensation C. Punitive damages D. Nominal performance E. Adequate performance

A. An injunction

39. (p. 1139) Which of the following is false in regard to an insurer's right to cancel a policy of insurance? A. An insurer who rightfully cancels a policy is not required to a refund of premium payments covering future time periods. B. Typically a grace period is required before a policy may be cancelled. C. State statutes usually govern the circumstances under which an insurer may cancel a policy. D. If an insured fails to pay premiums after a certain period, the insurance company may cancel. E. Car insurance may be canceled if the insured loses her license because of a driving violation.

A. An insurer who rightfully cancels a policy is not required to a refund of premium payments covering future time periods.

34. (p. 709) Which of the following means that bankruptcy relief is ordered and that the bankruptcy proceedings can continue? A. An order of relief B. A stay enforcement order C. An approval order D. A liquidation order E. A documentation order

A. An order of relief

50. (p. 468) College president Wally contracts with Alice to teach business law. Alice does a fine job teaching but gets mad at Wally and will not turn in grades. What type of order would Wally seek to require Alice to abide by her contract? A. An order of specific performance B. A compensatory order C. A nominal order D. A consequential order E. A demand order

A. An order of specific performance

26. (p. 1139) A[n] ______ clause states that the insured has a grace period in which to make an overdue payment during which time the insurance is effective. A. Antilapse B. Incontestability C. Assurance D. Approval E. Waiver

A. Antilapse

60. (p. 81) Which of the following is true regarding areas in which arbitration is used? A. Arbitration is used in medical malpractice cases, environmental disputes, commercial contract disputes, and insurance liability claims. B. Arbitration is used in medical malpractice cases, environmental disputes, and commercial contract disputes, but not in insurance liability claim disputes because those claims are governed strictly by state regulatory law. C. Arbitration is used in environmental disputes, commercial contract disputes, and insurance liability claim disputes, but not in medical malpractice cases because those cases are governed strictly by state statutory law and also state common law on negligence. D. Arbitration is used in medical malpractice cases, environmental disputes, and insurance liability claim disputes, but not in commercial contract disputes because those disputes are governed by the UCC. E. Arbitration is used in medical malpractice cases, commercial contract disputes, and insurance liability claim disputes, but not in environmental disputes because those disputes are governed strictly by federal law.

A. Arbitration is used in medical malpractice cases, environmental disputes, commercial contract disputes, and insurance liability claims. Arbitration is used in medical malpractice cases, environmental disputes, commercial contract disputes, and insurance liability claims; but no area uses arbitration in as great a percentage of cases as does the employment area.

33. (p. 310) Which of the following is the part of the Uniform Commercial code governing contracts for the sale of goods? A. Article 2 B. Article 3 C. Article 4 D. Article 5 E. Article 7

A. Article 2

18. (p. 95) Which of the following is true regarding laws passed by the U.S. Congress under the authority of the commerce clause? A. As long as the law affects commerce among the states, or interstate commerce, in some way, the regulation is generally constitutional. B. The law will only be constitutional if it affects taxation in some way. C. As long as the law involves in some way a right guaranteed by the Bill of Rights, it is constitutional. D. As long as the law is approved by any state affected, it is constitutional. E. As long as the law is not objected to by any state affected within six months of its passage, it is constitutional.

A. As long as the law affects commerce among the states, or interstate commerce, in some way, the regulation is generally constitutional. As long as the law affects commerce among the states, or interstate commerce, in some way, the regulation is generally constitutional.

17. (p. 428) Which of the following occurs when a party to a contract transfers his or her rights to a contract to a third party? A. Assignment B. Referral C. Disgorgement D. Privity E. Transfer

A. Assignment

30. (p. 194) Which of the following would constitute the privacy tort of false light? A. Attributing characteristics or beliefs to a person that he or she does not possess. B. Disclosing private facts about a person in order to obtain some sort of personal gain. C. Defaming a person with actual malice. D. Defaming a public figure. E. Defaming a public figure for personal gain. False light is closely related to defamation and occurs when publicity about a person creates an impression about that individual that is not valid.

A. Attributing characteristics or beliefs to a person that he or she does not possess.

14. (p. 702) Congress first addressed bankruptcy relief in the ____. A. Bankruptcy Act of 1898 B. Insolvency Act of 1900 C. Protection Act of 1934 D. Bankruptcy Act of 1934 E. Securities Act of 1934

A. Bankruptcy Act of 1898

52. (p. 188) Millie's action in jabbing Bernard after she missed his nose, constitutes which of the following? A. Battery. B. Nothing because the conduct would not be deemed offensive. C. Nothing because she missed the nose, and Bernard was not actually hurt. D. Nothing because by entering Millie's yard, Bernard consented to any offensive touching. E. Nothing because Bernard deserved what he got. A battery is an intentional, unwanted, offensive bodily contact, even if harmless.

A. Battery.

24. (p. 362) When must a disaffirmance of a contract based on minority occur? A. Before or within a reasonable time of the minor's reaching the age of majority. B. Within 30 days of the minor's reaching the age of majority. C. Within 60 days of the minor's reaching the age of majority. D. Within 90 days of the minor's reaching the age of majority. E. Within one year of the minor's reaching the age of majority.

A. Before or within a reasonable time of the minor's reaching the age of majority.

41. (p. 75) A(n) ______ is a provision in a contract that mandates that all disputes arising under the contract must be settled by arbitration. A. Binding arbitration clause B. Court-annexed arbitration clause C. Approved mediation/arbitration clause D. Consolidated merger clause E. ADR neutral clause

A. Binding arbitration clause A binding arbitration clause is a provision in a contract that mandates that all disputes arising under the contract must be settled by arbitration.

44. (p. 201) Bob, who has a large trust fund, is angry at Alice because she stopped dating him. Alice ran a successful dog grooming shop but Bob decided to open a dog grooming shop next door solely to run her out of business because he was angry over the break up. Which of the following is correct? A. Bob has committed the tort of unfair competition. B. Bob has committed the tort of interference with contract. C. Bob has committed the tort of unfair competition and also the tort of interference with contract. D. Bob has committed the tort of disparagement. E. Bob has not committed any tort. When someone enters an industry with the sole intent of driving another firm out of business, the law punishes this act as unfair competition.

A. Bob has committed the tort of unfair competition.

56. (p. 711) What is the status of the exemptions she claimed in the car and jewelry? A. Both exemptions will likely be granted because their type and value are within allowable federal exemptions. B. The exemption claimed for the jewelry will likely be granted; but in order to ascertain the status of the vehicle, further information is needed in regard to whether it is used in business. C. The exemption claimed for the vehicle will likely be granted, but the exemption claimed for the jewelry will likely be disallowed because no exemption may be claimed for jewelry. D. The exemption claimed for the vehicle will likely be granted, but the exemption claimed for the jewelry will likely be disallowed because a federal exemption may only be claimed for jewelry consisting of a wedding band worth less than $400. E. The exemption claimed or the jewelry will likely be allowed, but the exemption claimed for the vehicle will likely be denied because the federal exemption for a vehicle is limited to $1,000.

A. Both exemptions will likely be granted because their type and value are within allowable federal exemptions.

31. (p. 74) Which of the following is true regarding arbitration in Brazil? A. Brazilian lawmakers have reformed several articles in the Brazilian Civil Code to increase the practice of arbitration. B. Parties must sign an "arbitration commitment" recognizing that the parties agree that any decision may be appealed to the judiciary branch of government. C. Because of a commitment by legislators to reduce arbitrations, parties may only arbitrate family law matters. D. Because of a commitment by legislators to reduce arbitrations, parties may only arbitrate corporate law matters. E. Arbitration is outlawed in Brazil.

A. Brazilian lawmakers have reformed several articles in the Brazilian Civil Code to increase the practice of arbitration. Brazilian lawmakers reformed several articles in the Brazilian Civil Code to increase the practice of arbitration.

44. (p. 7) Which of the following cases overturned prior precedent? A. Brown v. Board of Education B. Wygant v. Jackson Board of Education C. Planned parenthood of Southeastern Pennsylvania v. Casey D. Plessy v. Ferguson E. Precedent cannot be overturned

A. Brown v. Board of Education Brown v. Board of Education did not follow the precedent established by Plessy v. Ferguson on issues involving segregation.

19. (p. 20) Which of the following is true regarding business ethics? A. Business ethics refers to standards of business conduct but does not result in a set of correct decisions. B. Business ethics results in a set of correct decisions and does not simply refer to standards of business conduct. C. Business ethics produces a list of correct business decisions that all ethical businesses will make so long as the theory of deontology is followed. D. Business ethics produces a list of correct business decisions that all ethical businesses will make so long as the theory of rule utilitarianism is followed. E. Business ethics produces a list of correct business decisions that all ethical businesses will make so long as the theory of virtue ethics is followed.

A. Business ethics refers to standards of business conduct but does not result in a set of correct decisions. The definition of business ethics refers to standards of business conduct and does not result in a set of correct decisions.

50. (p. 188) Considering Bernard's shoving of Millie in the back, which of the following is true? A. By shoving her in the back, Bernard committed a battery. B. By shoving her in the back, Bernard committed a battery and an assault. C. By shoving her in the back, Bernard committed an assault. D. Bernard did not commit any torts because he did not actually physically harm Millie. E. Bernard did not commit any torts because he can rely on the self-defense theory. A battery is an intentional, unwanted, offensive bodily contact, even if harmless; and intent is irrelevant for establishing liability.

A. By shoving her in the back, Bernard committed a battery.

16. (p. 361) A person who has legal ______ to contract is one who has the mental ability to understand his or her rights and obligations under a contract and, therefore, will presumably be able to understand how to comply with the terms of the agreement. A. Capacity B. Understanding C. Ratification D. History E. Consideration

A. Capacity

32. (p. 1141) If a policy of insurance protects a person or property from accidental injury, the insurance is referred to as ______ insurance. A. Casualty B. Loss C. Economic D. Accidental E. Injury

A. Casualty

33. (p. 1141) A workers' compensation insurance policy is an example of which of the following types of insurance? A. Casualty B. Loss C. Economic D. Business E. Injury

A. Casualty

16. (p. 703) Which of the following chapters is used for a sale of a debtor's assets by a trustee and the distribution of money to creditors? A. Chapter 7 B. Chapter 9 C. Chapter 11 D. Chapter 13 E. Chapter 15

A. Chapter 7

56. (p. 368) Which of the following is true regarding Charles' claim that he had no obligation to defame Tessa? A. Charles is correct in that he could not be legally obligated to commit defamation. B. Charles is correct only if it can be proven that the defamation would cause Tessa money damages. C. Charles is correct only if it can be proven that the defamation would cause Tessa actual injury. D. Charles is correct only if it can be proven that the defamation is undeserved. E. Charles is correct only if it can be proven that he had a prior relationship with Tessa. Any agreement to commit a crime or tort is illegal and unenforceable.

A. Charles is correct in that he could not be legally obligated to commit defamation.

"Leaky Tub and Flaming Watercraft." Charles finished college, got a good job, and decided to sell some used toys and buy newer ones. A used hot tub with a leak in it and a personal watercraft were at the top of the list. Charles offered to sell to Constance the hot tub for $500. Constance was interested but not willing to pay $500. She said "I'll give you $400." Charles said that he would think about it. Later, the same day, Charles offered to sell Donna the hot tub for $500. Donna said "Would you consider $450?" Charles said he would think on it. A few minutes later, Everett who had heard that Charles wanted to sell the hot tub accepted Charles' offer to sell for $500, and they agreed that the transfer would be made the next day. A few minutes later, Constance called saying that she accepted Charles' offer to sell the hot tub for $500. A few minutes after that, Donna called and told Charles that she accepted his offer to sell the hot tub for $500. Charles told Constance and Donna that he had already sold it, and they are angry, threatening to sue. Charles offered to sell the personal watercraft to Joan for $800. She said that she would think it over and let him know the next day. Unfortunately, through no fault of anyone, there was a fire at Charles' home that night and the personal watercraft burned. Joan called the next day and accepted before Charles could tell her the watercraft burned. When she found out about the fire, Joan told Charles that he had better come up with another watercraft, or she was going to sue. 58. (p. 333) Which of the following is correct regarding the final status of the negotiations between Charles and Constance? A. Charles made an offer which was rejected by Constance when she made a counteroffer for $400. B. Charles had made an offer which was still outstanding even though Constance had made a counteroffer for $400. C. Charles had made an offer but it was revoked because Constance did not immediately accept it. D. Charles had made an offer, and it was still outstanding because he did not revoke it before ending his initial conversation with Constance in which she offered $400. E. No binding offer was ever made because an insufficient material term involving who would move the hot tub was omitted.

A. Charles made an offer which was rejected by Constance when she made a counteroffer for $400.

32. (p. 352) Which of the following is true regarding the rating the World Bank gives China in relation to the ease of doing business there? A. China is rated in the top 10. B. China is ranked near the middle. C. China is ranked in the bottom 25. D. China is ranked in the bottom 10. E. China is ranked last.

A. China is rated in the top 10.

57. (p. 332) What is the likely result in the lawsuit Barry brought against Chris? A. Chris will win because he properly revoked his bid before it was accepted. B. Chris will win because bids made at an auction may be revoked at anytime within ten days after the auction. C. Chris will win because bids made at an auction may be revoked at anytime within five days after the auction. D. Chris will win because bids made at an auction may be revoked at anytime within one day after the auction. E. Barry will win because Chris had no right to revoke the bid.

A. Chris will win because he properly revoked his bid before it was accepted.

42. (p. 11) The type of law involved in comparing laws between the U.S. and Zeno is ____. A. Comparative law B. Contributory law C. Comprehensive law D. Complete law E. Delineated law

A. Comparative law Zach should understand comparative law which studies and compares the laws in different countries.

24. (p. 454) Which of the following occurs when all aspects of the parties' duties under the contract are carried out perfectly? A. Complete performance B. Substantial performance C. Significant performance D. Absolute performance E. Approved performance

A. Complete performance

34. (p. 394) Which of the following involves the active hiding of the truth about a material fact? A. Concealment B. Nondisclosure C. Negligence D. Masking E. Veiling

A. Concealment

59. (p. 394) Which of the following is the proper legal term, if any, for Weaver's action in regard to running back the odometer? A. Concealment. B. Nondisclosure. C. Active duress. D. Conscious disregard. E. There is no legal term because although he acted illegally, Willy had no duty to disclose his action and incriminate himself.

A. Concealment.

41. (p. 465) Which of the following are foreseeable damages within the contemplation of the parties at the time the contract was made, and that result from special facts and circumstances arising outside the contract itself? A. Consequential B. Punitive C. Liquidated D. Nominal E. Repugnant

A. Consequential

15. (p. 346) Which of the following is what a person will receive in return for performing a contract obligation? A. Consideration B. Acknowledgement C. Approval D. Accord E. Accession

A. Consideration

16. (p. 349) Sam promises his uncle, Bob, that he will lose 10 pounds and exercise every day during the spring semester in exchange for having his tuition paid for the fall semester. The uncle agrees; but after Sam has lost 10 pounds and exercised all semester, Bob refuses to pay saying that no contract existed. Which of the following is true? A. Consideration was present, there was an enforceable contract, and Bob has wrongfully refused to pay. B. There was no consideration present, and Bob has no obligation to pay. C. There was no consideration present, but Bob must pay under principles of promissory estoppels. D. There was consideration present, but Bob is not required to pay because the contract was illusory. E. There was consideration present, but Bob is not required to pay because Bob did not receive a benefit personally.

A. Consideration was present, there was an enforceable contract, and Bob has wrongfully refused to pay.

16. (p. 306) A[n] ___________ is a promise or set of promises for the breach of which the law gives a remedy or the performance of which the law in some way recognizes a duty. A. Contract B. Offer C. Consideration D. Acceptance E. Legal object

A. Contract

"Useless Friend." Charles, who is very gullible, is friends with Bobby. Bobby, who cannot be trusted, decides to try to bind Charles to a contract in Bobby's favor. Bobby has Charles sign a contract promising to wash Bobby's car once a week for a month for $80 per month in payment. The contract incorporated by reference terms on the back. The terms on the back were in very small print and required Charles for one year to cook dinner for Bobby, do his laundry, and clean his apartment. Bobby is also very angry with his former girlfriend, Tessa, and decides to start rumors, that would constitute the tort of defamation, such as that she has a vile disease, cheated on tests, and stole from friends. Bobby wants to enlist the help of Charles in smearing Tessa but knows that Charles would be hesitant to assist in his endeavors. One evening, however, Charles drank too much beer and was clearly intoxicated - a fact apparent to Bobby. Bobby had him sign a contract agreeing to defame Tessa for $50. When he sobers up, Charles tells Bobby that he was drunk and that he has no intention of defaming Tessa, who also happens to be Charles' new girlfriend. He also finally takes a look at the contract involving work for Bobby and tells Bobby that the contract is outrageous. 55. (p. 366) Which of the following is true under the Restatement of Contracts, Section 16, regarding the claim of Charles that he should be able to avoid the contract involving Tessa because he was intoxicated? A. Contracts of an intoxicated person are voidable if the other party had reason to know that because of the intoxicated person's condition, that person was unable to understand the nature and consequences of the transaction or was unable to act in a reasonable manner in relation to the transaction. B. Contracts of an intoxicated person are void if the other party had reason to know that because of the intoxicated person's condition, that person was unable to understand the nature and consequences of the transaction or was unable to act in a reasonable manner in relation to the transaction. C. Contracts of an intoxicated person are enforceable because a person should be bound by his or her actions. D. Contracts of an intoxicated person are void only if it can be proven that the other party was involved in encouraging the abuse of alcohol by the intoxicated person rendering the intoxicated person unable to understand the nature and consequences of the transaction or unable to act in a reasonable manner in relation to the transaction. E. Contracts of an intoxicated person are voidable only if it can be proven that the other party was involved in encouraging the abuse of alcohol by the intoxicated person rendering the intoxicated person unable to understand the nature and consequences of the transaction or unable to act in a reasonable manner in relation to the transaction.

A. Contracts of an intoxicated person are voidable if the other party had reason to know that because of the intoxicated person's condition, that person was unable to understand the nature and consequences of the transaction or was unable to act in a reasonable manner in relation to the transaction.

19. (p. 406) Which of the following is a type of contract that falls within the scope of the statute of frauds? A. Contracts whose terms prevent possible performance within one year B. Contracts involving the provision of services C. Contracts involving the provision of any goods D. Contracts involving any debt E. Contracts involving services in relation to computer equipment

A. Contracts whose terms prevent possible performance within one year

14. (p. 3) Which of the following would be relevant areas of business law to a human resource manager? A. Contracts, employment and labor law, and employment discrimination B. Contracts only C. Contracts and labor law, but not employment discrimination D. Employment and labor law, but not contracts E. Human resource managers hold administrative positions and are not concerned with areas of business law

A. Contracts, employment and labor law, and employment discrimination Relevant areas of business law applicable to human resource management involve agency law, contracts, employment and labor law, and employment discrimination.

60. (p. 10) Which approach to jurisprudence is based on choosing alternatives that maximize benefits and minimize costs, and is tied to the pursuit of efficiency? A. Cost-benefit analysis B. Legal realism C. Historical school D. Legal positivism E. Executive positivism

A. Cost-benefit analysis Cost-benefit analysis is tied closely to the pursuit of efficiency and involves choosing alternatives that maximize benefits and minimize costs.

55. (p. 54) Jane's action against Greg for the tire is called a ______. A. Counterclaim B. Cross-Claim C. Third-party claim D. Discovery claim E. Service claim

A. Counterclaim If the defendant believes he has a claim against the plaintiff, he includes this counterclaim with the answer.

36. (p. 386) In determining whether a mistake of fact occurred, what of the following is true? A. Courts look to determine whether a mistake of fact occurred at the time the contract was concluded. B. Courts look to determine whether a mistake of fact occurred during contract negotiations. C. Courts look to determine whether a mistake of fact occurred when the initial offer was made. D. Courts look to determine whether a mistake of fact occurred when an advertisement was made. E. Courts look to determine whether a mistake of fact occurred after the contract was concluded.

A. Courts look to determine whether a mistake of fact occurred at the time the contract was concluded.

42. (p. 374) Bob is hired to do computer sales for an electronics store. He agrees that if he leaves his employment, he will not work for another computer store within 25 miles for a period of two years. That type of agreement is called a[n] ______. A. Covenant not to compete B. Employment covenant C. Working covenant D. Termination agreement E. Public policy agreement

A. Covenant not to compete

41. (p. 439) A[n] ______ beneficiary is a third party who benefits from a contract in which the promisor agrees to pay the promisee's debt. A. Creditor B. Donee C. Incidental D. Promised E. Avowed

A. Creditor

22. (p. 2) Assume the Securities and Exchange Commission prosecutes someone for insider trading. This prosecution is an example of _____ law. A. Criminal B. Procedural C. Civil and natural D. Natural E. Positive

A. Criminal Criminal law regulates incidents in which someone commits an act against the public as a whole, such as by conducting insider trading on the stock exchange.

20. (p. 2) Which type of law involves incidents in which someone commits an act against the public as a unit? A. Criminal B. Procedural C. Civil D. Natural E. Positive

A. Criminal Criminal law regulates incidents in which someone commits an act against the public as a whole.

"Garage Sale." Richard, who is cleaning out his garage, offers to sell Dawn a used computer for $200. Dawn replies that "I'll think about it and buy it if I decide to do so." Richard also calls Denise and offers to sell Denise a used business law book for $50. She asks if she can clean his apartment in return for the book instead of pay cash, and he agrees. Richard also agrees to sell a communications book for $5 to Jill who promises to pick it up the next day. Meanwhile, Sam comes to visit and offers Richard $45 for the business law book. Richard sells it to him because he decides his apartment is clean enough. Sam also offers Richard $50 for the used computer. Richard sells it to Sam because he does not expect to hear from Dawn. Sam sees the communications book and offers Richard $45 for it. Richard decides to forget about Jill and proceeds to sell the book to Sam for $45. The next day Denise shows up to clean Richard's apartment and is very angry because Richard did not save the book for her. Denise claims that Richard breached their contract because they had a deal. Richard says that they never had a deal because no consideration was present. He also said that even if cleaning house would be considered consideration, any housekeeping done would have been wholly inadequate to support receipt of the book because his house was already clean. Jill is also angry because Richard sold the communications book and informs him that he breached the contract he had with her. Richard tells her that he had no obligation to hold the book for her because they had a unilateral contract. Two days after they first talked, Dawn tells Richard that she would like the computer. She tells him that her response bound him and that he should have awaited her action. Richard tells Sam that he needs to return everything for a full refund. Sam refuses. 50. (p. 351) Which of the following is true regarding whether Richard breached a contract with Dawn? A. Dawn's statement created an illusory promise which cannot be enforced. B. Richard breached the contract because he had an obligation to wait a reasonable length of time on Dawn's response, and waiting only two days was not reasonable. C. Richard did not breach the contract with Dawn because he waited a reasonable amount of time before disposing of the computer. D. Richard did not breach the contract with Dawn because it was for the sale of goods and, therefore, a typical contract. E. Richard did not breach the contract, but Dawn can recover based on promissory estoppel.

A. Dawn's statement created an illusory promise which cannot be enforced.

"Environmental Concerns." Connie, the president of a company that makes paper, has a new interest in the environment. She recently went to a seminar on environmental dangers and has decided to take steps to clean things up. She started at home and has now felt compelled to change things at work. Connie had to face the fact that her company has been cheating and is not in compliance with applicable environmental regulations due to dumping in a nearby river. Her company has never been cited because it employs a very large number of people in the community, including the mayor's wife and the chief-of-police's brother. On her mission to clean things up, Connie has decided to go even further than the law requires and install the very latest environmental protections. When she announced her plan, the chair of the company's board of directors, Brooke, had a meeting with Connie. Brooke told Connie to analyze the situation carefully because the cost of the additional equipment would mean no dividend to shareholders and no raise for employees. Furthermore, Brooke told Connie that installing all the new equipment would result in higher prices for the company's paper product and could bankrupt the company because of foreign competition. Brooke hinted that Connie could be fired if she persisted. Brooke suggested that Connie just be concerned with a minimal standard of ethics. Connie decides to go forward with her plan to clean things up under the theory that she wants to treat others in the same manner that she wants to be treated. Under Connie's theory, if she did not understand the importance of the environmental improvements, she would want them to be thrust upon her. 27. (p. 18) Which of the following is true regarding meeting the minimal standard of business ethics suggested by Brooke? A. Decisions must be legal. B. Decisions must meet the criteria of a follower of deontology. C. Decisions must meet the criteria of a follower of utilitarianism. D. Decisions must receive a majority vote of acceptance by employees. E. Decisions must be legal and decisions must also receive a majority vote of acceptance by employees.

A. Decisions must be legal. The legality of the decision in choosing a method of production, how to compete with competing firms, and the social responsibilities of the firm is the minimal standard that must be met for the firm to be an ethical business.

61. (p. 53) A[n] ______ is a judgment in favor of the plaintiff that occurs when the defendant fails to answer the complaint, and the plaintiff's complaint alleges facts that would support such a judgment. A. Default judgment B. Automatic judgment C. Delineated response judgment D. Dismissal E. Pleading judgment

A. Default judgment A default judgment is a judgment in favor of the plaintiff that occurs when the defendant fails to answer the complaint and the plaintiff's complaint alleges facts that would support such a judgment.

32. (p. 434) A third party, who is not part of an original contract, but to whom duty to perform contained in the original contract is transferred is called a[n] _____. A. Delegatee B. Delegator C. Assignor D. Assignee E. Transferor

A. Delegatee

50. (p. 34) Which of the following theories most accurately fits the advice given by Frank? A. Deontology B. Act utilitarianism C. Rule utilitarianism D. Ethical relativism E. Virtue ethics

A. Deontology Deontology consists of acting on the basis of the recognition that certain actions are right or wrong, regardless of their consequences.

55. (p. 34) A business manager may consider it wrong to terminate a person whose spouse has terminal cancer because a firm has an absolute obligation to support its employees when they are vulnerable, period. The business manager is acting consistently with which ethical theory? A. Deontology B. Ethical relativism C. Act utilitarianism D. Ethical fundamentalism E. Rule utilitarianism

A. Deontology Deontology consists of acting on the basis of the recognition that certain actions are right or wrong, regardless of their consequences.

52. (p. 34) Kantian ethics is involved with which of the following ethical theories? A. Deontology B. Act utilitarianism C. Rule utilitarianism D. Absolutism E. Situational ethics

A. Deontology When you see references to Kantian ethics, the analysis that follows the reference will be a discussion of the most famous of the deontological approaches to business ethics.

69. (p. 55) At a[n] ______, attorneys examine a witness under oath with a court reporter present. A. Deposition B. Interrogatory C. Inquiry D. Pre-trial conference E. Pre-trial mediation

A. Deposition At a deposition, attorneys examine a witness under oath, and a court reporter (stenographer) records every word the witnesses and attorneys speak.

30. (p. 39) Which of the following is a question of fact? A. Did the vehicle run the traffic light? B. Is premeditation necessary for a first degree murder conviction? C. Is speech protected by the First Amendment? D. What is necessary for service of process? E. What elements should an answer contain?

A. Did the vehicle run the traffic light? A question of fact is a question about an event or characteristic in a case.

32. (p. 310) Which of the following is the reason the Uniform Commercial Code was drafted? A. Different states had different laws governing contracts which did not result in a smooth flow of interstate commerce. B. Some states had no law governing contracts. C. Federal law governing contracts was difficult to apply. D. The Uniform State Act on laws was not working. E. The Restatement of the Law Second, Contracts was not being evenly and fairly applied.

A. Different states had different laws governing contracts which did not result in a smooth flow of interstate commerce.

41. (p. 714) A[n] ______ is a written federal court order signed by a bankruptcy judge stating that the debtor is immune from creditor actions to collect debts. A. Discharge B. Release C. Grant of immunity D. Relinquishment E. Abandonment

A. Discharge

35. (p. 368) If a legal contract is formed and the subject of the contract then becomes illegal under a new statute, the contract is ____. A. Discharged B. Enforced C. Disregarded D. Executed E. Executory

A. Discharged

42. (p. 200) Which of the following is defamation of a business product or service? A. Disparagement. B. Interference with a contract. C. Conversion. D. Derogation. E. Abuse of title. The plaintiff in a disparagement case must prove that the defendant published a false statement of a material fact about the plaintiff's product or service that resulted in a loss of sales.

A. Disparagement.

"Scheming Friends." Willy very much wants to rent a basement apartment in Weaver's home. Willy threatens to tell all Weaver's friends that he and Weaver had been arrested for illegally smoking marijuana unless Weaver rents the apartment to him for $100 per month. (The information regarding the arrests is true.) Weaver reluctantly agrees to rent the apartment to Willy for $100 per month. Willy also wants to buy Weaver's car. Weaver runs back the odometer on the car before Willy test drives it. Willy is impressed by the low mileage and agrees to buy the car. Weaver offers to sell Willy a ring for Willy's fiancée. Weaver tells Willy that the ring is a diamond and believes that to be true. After the deal is made, however, a jeweler friend of Weaver informs him that the ring is a fake. When Willy shows up with the money, Weaver says nothing. He just hands Willy the ring and takes the money. Later, Willy finds out that the odometer was run backwards from another friend to whom Weaver confided. Willy also finds out from his girlfriend that the ring is a fake. 57. (p. 397) Of which of the following is Willy guilty in threatening to tell friends about the arrest unless Weaver rents the apartment? A. Duress B. Unconscionability C. Fraud D. Undue influence E. Consumer misbehavior

A. Duress

38. (p. 397) Which of the following is found when one party was forced into an agreement by the wrongful act of another? A. Duress B. Negligence C. Fraud D. Browbeating E. Coercion

A. Duress

41. (p. 397) Which of the following occurs when a party threatens to file a criminal lawsuit unless consent is given to the terms of a contract? A. Duress B. Undue influence C. Durable fraud D. Criminal influence E. Coercion

A. Duress

32. (p. 367) Which of the following is true if a contract is disaffirmed on the basis of intoxication? A. Each party to the contract must return the other to the condition he or she was in at the time the contract was entered into. B. The intoxicated person must be returned to the condition he or she was in at the time the contract was entered into, but that is not true for any other party. C. Any party other than the intoxicated person must be returned to the condition he or she was in at the time the contract was entered into. D. So long as the contract was objectively fair, neither party must be returned to the condition he or she was in prior to the time the contract was entered into. E. So long as the contract was subjectively fair in the opinion of the intoxicated party, neither party must be returned to the condition he or she was in prior to the time the contract was entered into.

A. Each party to the contract must return the other to the condition he or she was in at the time the contract was entered into.

18. (p. 361) In most states a person is given full legal capacity to enter into contracts when he or she becomes ______ before reaching the age of majority. A. Emancipated B. Freed C. Released D. Employed E. Acknowledged

A. Emancipated

20. (p. 361) In most cases, when a minor marries, she or he is considered ____. A. Emancipated B. Freed C. Released D. Disaffirmed E. Either freed or disaffirmed depending on the circumstances

A. Emancipated

43. (p. 166) A defendant can use the _____ defense if the idea for a crime originated not with the defendant but with a police officer or other government official who suggested it to the defendant, and the defendant would not otherwise have committed the crime. A. Entrapment B. Necessity C. Justifiable use of force D. Duress E. Inescapable action

A. Entrapment The entrapment defense applies if the idea for a crime originated with a police officer or some other government official who suggested it to the defendant, who would not otherwise have committed the crime.

62. (p. 36) The ______ holds that the right course of action is the option most consistent with the building and maintaining of human relationships. A. Ethics of care B. Principle of virtue ethics C. Deontology D. Act utilitarianism E. Rule utilitarianism

A. Ethics of care The ethics of care holds that the right course of action is the option most consistent with the building and maintaining of human relationships.

47. (p. 316) As long as some of the duties under a contract have not yet been performed, the contract is considered ________________. A. Executory B. Executed C. Anticipatory D. Ended E. Stopped

A. Executory

19. (p. 453) Which of the following describes conditions explicitly stated in the contract? A. Express B. Implied C. Conditional D. Concurrent E. Certain

A. Express

26. (p. 155) Which of the following is the making of an entry into the books of a bank or corporation that is designed to represent the existence of funds that do not exist? A. False entry B. Defalcation C. False pretenses D. Ponzi scheme E. Pretexting

A. False entry Pursuant to Exhibit 7-1, false entry is an entry in the books of a bank or corporation designed to represent funds that do not exist.

34. (p. 110) Which of the following is true regarding the protection of "fighting words" under the First Amendment? A. Fighting words are unprotected speech under the First Amendment. B. Fighting words are protected speech under the First Amendment only if they are uttered by an individual citizen, not by a corporate representative. C. Fighting words are protected speech under the First Amendment only if they involve political activity. D. Fighting words are protected speech under the First Amendment only if they are made in connection with a protest march. E. Fighting words are protected speech under the First Amendment only if they are made in conjunction with self-defense.

A. Fighting words are unprotected speech under the First Amendment. Fighting words are a class of unprotected speech.

35. (p. 110) Which amendment protects freedom of religion? A. First B. Second C. Fourth D. Sixth E. Eighth

A. First The First Amendment contains two provisions, establishment clause and free-exercise clause that protect citizens' freedom of religion.

44. (p. 398) When duress is at issue, the _____ needed for legal consent has been removed by the specifics of the threat. A. Free will B. Knowledge C. Specifics D. Consideration E. Realization

A. Free will

38. (p. 461) Which of the following doctrines arose from cases in England in which parties who had contracted for rooms along a parade route for a king's coronation, received their money back when the coronation was canceled because the king became ill? A. Frustration of purpose B. Commercial impracticability C. Alteration of the contract D. Anticipatory repudiation E. Anticipatory renunciation

A. Frustration of purpose

34. (p. 73) Which of the following is accurate regarding George's refusal to hear testimony other than that presented by Bob and Susan? A. George was wrong. He had a duty to consider other relevant testimony as well. B. George was correct. C. George was correct, but only because the dispute involved the discontinuance of a business. D. George had a duty to consider other testimony, but only up to two other witnesses per side. E. George had a duty to consider other testimony, but only up to three other witnesses per side.

A. George was wrong. He had a duty to consider other relevant testimony as well. An arbitration award may be set aside under the Federal Arbitration Act if the arbitrator refused to hear relevant evidence.

38. (p. 111) What does the free-exercise clause of the First Amendment provide? A. Government cannot make a law prohibiting choice in relation to religion. B. Government cannot make a law establishing a religion. C. Government cannot make a law referencing religion in any manner. D. Government must establish laws respecting religion in order to prevent disruptive behavior such as terrorism and to allow free-exercise by the majority. E. That only religions recognized when the First Amendment was passed are entitled to recognition and protection.

A. Government cannot make a law prohibiting choice in relation to religion. The free-exercise clause states that government cannot make a law "prohibiting the free exercise" of religion.

"Hawaiian Adventure." Beverly decides to go on a great trip to Hawaii. She needs someone, however, to take care of her two dogs, Creaky and Toady, while she is gone. She hires Frank three months in advance and they reach a contractual arrangement whereby he will be paid $200 for keeping the dogs for two weeks. Frank comes over two months before Beverly is set to leave, takes one look at Creaky and Toady, and declares that they are too creepy to be around. Beverly hires Alice who agrees to care for Creaky and Toady. Two weeks before Beverly is set to leave, however, Alice calls and tells her that she just broke both her legs in an automobile accident and has been put on bed rest for two months. Finally, Beverly hires Betty to care for the dogs and heads off to Hawaii where she has a great time. Unfortunately, when Beverly returns home, she finds that Betty has absconded with Creaky and Toady. They were later found in good health in an exclusive resort visited by Betty. Betty refuses to return Creaky and Toady to Beverly claiming that they were all enjoying the resort and that she had become quite attached to them. 59. (p. 456-457) Which of the following is true regarding Frank's refusal to keep Creaky and Toady? A. He committed an anticipatory repudiation. B. He is not guilty of any breach because he gave Beverly sufficient warning that he was not willing to perform. C. He is not guilty of any breach because the contract is not over $1,000 in amount. D. He is guilty of an immaterial breach because of the low value of the contract. E. He is guilty of a nominal breach.

A. He committed an anticipatory repudiation.

"Animal Care." Susan, a licensed veterinarian, was recently elected to the U.S. Senate. Susan is very concerned about the lack of care for homeless cats and dogs. She proposes legislation that citizens of all states be taxed sufficiently to provide for no-kill animal shelters that citizens in states with higher than average incomes be taxed at a higher rate than citizens of other states. She also proposed that federal funds for state highways be denied to any state that fails to provide assistance to low income citizens in covering pet vaccinations. Bill, another new senator, tells Susan that, apart from the mandated federal income tax, Congress lacks the authority to tax states because the U.S. Constitution expressly reserves that right to the states. Sam, another senator, tells Susan that Congress has no authority to link highway funds or any other funds with social welfare objectives. Ellen, a clerk in the Senate, tells Susan that Congress is absolutely prohibited from taxing residents of one state at a higher rate than citizens of another state. 26. (p. 102) Is Bill correct? A. He is incorrect. The U.S. Constitution contains no such reservation. B. He is incorrect because while the U.S. Constitution prohibits taxation in areas in which states also tax, most states are not taxing for pet care purposes at this time. C. He is incorrect in saying that the U.S. Constitution generally reserves the right to tax to the states but he is correct in saying that Congress lacks the authority to tax in this manner because Congress cannot lay taxes for any reason other than essential needs of the federal government. D. He is incorrect in saying that the U.S. Constitution generally reserves the right to tax to the states but he is correct in saying that Congress lacks the authority to tax in this manner because the president has issued an executive order prohibiting such taxation. E. He is incorrect because the prohibition against Congress imposing taxes apart from the federal income tax is contained in a federal statute passed by Congress, not in the U.S. Constitution.

A. He is incorrect. The U.S. Constitution contains no such reservation. Article I, Section 8, of the Constitution gives the federal government the "Power to lay and collect Taxes, Duties, Imports and Excises," and the federal government can use taxes for purposes other than the provision of essential services.

58. (p. 397) Which of the following would be the most likely result if Weaver attempts to rescind the agreement to rent the apartment? A. He will be able to rescind the agreement based upon Willy's threat of extortion. B. He will be able to rescind the agreement based upon the threat to Willy's economic interests. C. He will be able to rescind the contract because of undue influence. D. He will not be able to rescind the contract because he agreed to it. E. He will not be able to rescind the agreement unless he can show that he was not actually convicted of the crime alleged.

A. He will be able to rescind the agreement based upon Willy's threat of extortion.

31. (p. 365) Which of the following is true once a guardian has been appointed for a person who has been adjudicated insane? A. If a person has been adjudicated insane and has a guardian appointed, that person has no capacity to enter into contracts and any contract he does attempt to enter into is void. B. If a person has been adjudicated insane and has a guardian appointed, that person has no capacity to enter into contracts and any contract he does attempt to enter into is voidable. C. If a person has been adjudicated insane and has a guardian appointed, that person retains capacity to enter into contracts so long as the other party to the contract is aware of the guardian's status. D. If a person has been adjudicated insane and has a guardian appointed, that person retains capacity to enter into contracts so long as the other party to the contract is aware of the insanity issue. E. If a person has been adjudicated insane and has a guardian appointed, that person retains capacity to enter into contracts so long as the other party to the contract is aware of the guardian's status and also the insanity issue.

A. If a person has been adjudicated insane and has a guardian appointed, that person has no capacity to enter into contracts and any contract he does attempt to enter into is void.

25. (p. 351) Which of the following is true regarding illusory promises? A. Illusory promises are not consideration. B. Illusory promises are consideration. C. Illusory promises qualify as consideration only when past consideration is at issue. D. Illusory promises qualify as consideration only when promissory estoppel is at issue. E. Illusory promises are consideration only when a sale of goods is involved.

A. Illusory promises are not consideration.

28. (p. 333) If the subject matter of an offer is destroyed, the offer _______. A. Immediately terminates B. Is extended for seven days C. Is extended for fourteen days D. Is extended for twenty-one days E. Is extended for thirty days

A. Immediately terminates

38. (p. 313) In which of the following does a contract arise not from words but from the conduct of the parties? A. Implied contracts B. Express contracts C. Liquidated contracts D. Bilateral contracts E. Unilateral contracts

A. Implied contracts

29. (p. 364) A[n] ______ occurs when a former minor does not specifically state that he affirms a contract entered into as a minor but takes some action that is consistent with intent to ratify the contract. A. Implied ratification B. Express ratification C. Express novation D. Implied novation E. Continued safety

A. Implied ratification

48. (p. 378) In the law, when both parties are equally responsible for an illegal agreement, it is known as ____. A. In pari delicto B. Procedurally unconscionable C. An adhesion contract D. A res ipsa contract E. A stare decisis contract

A. In pari delicto

22. (p. 429) Which of the following is true regarding oral assignments? A. In some cases, assignments may be made orally. B. Assignments, regardless of the terms, are not covered by the statute of frauds. C. The UCC requires that assignments be in writing when the amount being assigned is greater than $1,000. D. The UCC requires that assignments be in writing when the amount being assigned in greater than $1,500. E. The UCC requires that assignments be in writing when the amount being assigned is greater than $2,000.

A. In some cases, assignments may be made orally.

47. (p. 443) A[n] ______ beneficiary is one who unintentionally gains a benefit from a contract between other parties. A. Incidental B. Creditor C. Donee D. Vested E. Accidental

A. Incidental

42. (p. 706) Which of the following is true regarding who may receive a discharge of debt under Chapter 7 of the bankruptcy code? A. Individuals, partnerships, and corporations may all receive a discharge. B. Partnerships and individuals may receive a discharge, but corporations may not. C. Corporations and individuals may receive a discharge, but partnerships may not. D. Individuals may receive a discharge, but partnerships and corporations may not. E. Corporations may receive a discharge, but individuals and partnerships may not.

A. Individuals, partnerships, and corporations may all receive a discharge.

"Cosmetic profits." Sally is the vice president at Big Name Cosmetics Company. She learns that the company is soon going to purchase a smaller chain of stores. It is expected that stock in Big Name Cosmetics will rise dramatically at that point. Sally immediately buys a number of shares of her company's stock. She also tells her friend Alice about the expected purchase of stores. Alice wanted to purchase stock in the company but lacked the funds with which to do so. Although she did not have the funds in Bank A, Alice decided to draw a check on Bank A and deposit the check in Bank B and then proceed to write a check on Bank B to cover the purchase of the stock. She hoped that she would have sufficient funds to deposit before the check was presented for payment. 63. (p. 155) Which offense is Sally guilty of, if any, in purchasing stock of her company? A. Insider trading B. Tipping C. Insider misappropriation D. Extortion E. She is guilty of no offense

A. Insider trading Insider trading is generally the buying or selling of a security, in breach of a fiduciary duty or other relationship of trust and confidence, while in possession of material, nonpublic information about the security.

"Wild Things." Image Company, a company specializing in photography of exotic and wild animals, took out a life insurance policy through ABC Insurance on its president Bruno and also on a company-owned jeep that he drove. Bruno got a better offer from Wild Things Company, another company specializing in the photography of exotic animals, and went to work for them. He parted on good terms with Image Company and taking the jeep with him under the mistaken idea that the jeep was part of his severance benefits. Neither of the insurance policies was cancelled by Image. Unfortunately, while photographing a lion for Wild Things Company, Bruno was attacked and eaten. His jeep was then stolen by an unknown bystander who apparently saw the attack and took the opportunity to take the jeep. Image Company had been in the process of contacting Bruno in an attempt to obtain possession of the jeep but had not reacquired it at the time of his death. Image Company had renewed the policy on the jeep reaffirming to the insurer that its purpose was for use by Image employees because Image planned to have possession of the vehicle shortly. Image Company filed a claim to collect on the life insurance policy and also on the vehicle policy. ABC Insurance denied both claims. 51. (p. 1133) Which of the following is a term referencing the concept that a sufficient interest must exist on the part of an insured in order to take out a policy of insurance? A. Insurable interest B. Pecuniary interest C. Financial concern D. Financial effect E. Profit impact

A. Insurable interest

37. (p. 438) A[n] ______ beneficiary is a third party to a contract who is intended to be benefited directly from the contract made by the contracting parties. A. Intended B. Incidental C. Preferred D. Collateral E. Ancillary

A. Intended

63. (p. 438-441) What type of third-party beneficiary is Sally? A. Intended and donee B. Creditor and incidental C. Intended and creditor D. Donee and incidental E. Creditor and donee

A. Intended and donee

68. (p. 55) Which of the following are written questions that one party sends to another to answer under oath? A. Interrogatories B. Depositions C. Inquiries D. Subpoenas E. Sworn assertions

A. Interrogatories Interrogatories are written questions that one party sends to the other to answer under oath.

34. (p. 195) Bill decides to install two-way mirrors in the dressing room of his ladies' clothing store. He has a habit of watching ladies while they try on clothing. Which of the following has Bill committed? A. Intrusion on an individual's affairs or seclusion. B. Assault. C. Public disclosure of private facts. D. False light invasion of property. E. Commercial appropriation. Intrusion on an individual's affairs or seclusion occurs when someone invades a person's solitude, seclusion, or personal affairs when the person has the right to expect privacy.

A. Intrusion on an individual's affairs or seclusion.

34. (p. 42) Will a plaintiff be allowed to assert jurisdiction over a defendant in the plaintiff's state for a cause of action arising out of the defendant's website? A. It depends on the nature and quality of commercial activity that an entity conducts over the Internet. B. Yes, for any type of action. C. Yes, but only if the defendant consented to jurisdiction in the plaintiff's home state. D. Yes, but only if the defendant has actually physically been in the plaintiff's home state within the 180 days prior to the filing of the complaint. E. No, not under any circumstances.

A. It depends on the nature and quality of commercial activity that an entity conducts over the Internet. The likelihood that personal jurisdiction can be constitutionally exercised is directly proportionate to the nature and quality of commercial activity that an entity conducts over the Internet.

12. (p. 185) Which of the following is true of the term "tort"? A. It is a French word meaning "wrong." B. It is a German word meaning "mistake." C. It is a Latin word meaning "misfeasance." D. It is an English word meaning "negligence." E. It is a civil law term meaning "liability." The word "tort" is from a French word meaning "wrong".

A. It is a French word meaning "wrong."

31. (p. 207) Which of the following is true regarding awards of punitive damages in the U.S.? A. It is not always easy to predict what a court will do in any given case. B. Punitive damages may not be awarded in excess of $3 million dollars. C. A ratio of punitive damages to compensatory damages greater than 9 to 1 violates due process. D. The Supreme Court ruled that the issue of punitive damages is for the jury and will not be disturbed on appeal regardless of the ratio of punitive damages to compensatory damages. E. Awards of punitive damages in the U.S. are very similar to awards of punitive damages under the Canadian judicial system. Even though we now have more guidance from the Supreme Court as to when punitive damages will be allowed, it is not always easy to predict what a court will do in any given case.

A. It is not always easy to predict what a court will do in any given case.

23. (p. 73) Which of the following is true regarding the use of legal counsel at arbitration proceedings? A. It is up to each of the parties. They may have legal counsel or they may not. B. Parties may not have legal counsel. C. Parties may have legal counsel if they had legal counsel in mediation proceedings. Otherwise, legal counsel may not be used. D. Individuals may have legal counsel, but corporations may not. E. Corporations may have legal counsel, but individuals may not.

A. It is up to each of the parties. They may have legal counsel or they may not. In arbitration both parties present their case to a neutral third party; they may represent themselves or use legal counsel.

12. (p. 68) Which of the following is accurate regarding the speed and cost of ADR? A. It is usually faster and cheaper. B. It is usually faster but more expensive. C. It is usually slower and more expensive. D. It is usually slower but cheaper. E. No studies have known, so issues regarding the speed and cost of ADR as opposed to traditional litigation is unknown.

A. It is usually faster and cheaper. ADR methods are generally faster and cheaper than litigation.

29. (p. 391) Which of the following is true regarding the effect of an innocent misrepresentation on a contract? A. It permits the party that was misled by the false statement to rescind the contract, but damages are not available. B. It permits the party who made the false statement to rescind the contract. C. It permits either the party that was misled by the false statement or the party who made the false statement to rescind the contract. D. The contract is automatically void and of no effect, and the party who was misled may recover damages. E. It permits either the party that was misled by the false statement or the party who made the false statement to rescind the contract, and it also makes the contract void and of no effect.

A. It permits the party that was misled by the false statement to rescind the contract, but damages are not available.

23. (p. 21) What is the system of "guanxi" used in China? A. It refers to a system of relationship building woven together by social ties. B. It refers to a system of strict ethical rules. C. It refers to a prohibition against criticism of government rules and regulations. D. It refers to a system by which business people attempt to avoid strict Chinese regulations. E. It refers to a system of smuggling.

A. It refers to a system of relationship building woven together by social ties. "Guanxi" refers to a sort of relationship building and is an intricate system of interpersonal networks woven together by social ties.

17. (p. 405) Which of the following is false regarding the statute of frauds? A. It relates to fraudulent contracts. B. It does not address illegal contracts. C. It does not exist at the federal level. D. It requires that only certain contracts be in writing. E. It is not a unitary government act.

A. It relates to fraudulent contracts.

52. (p. 348) Which of the following is true regarding Jill's claim that by selling the communications book for a higher price, Richard breached the contract he had with her? A. Jill is correct. B. Jill is correct only if she can establish that she had prior dealings with Richard. C. Jill is correct only if she can establish that she had provided past consideration in addition to the amount she agreed to pay for the book. D. Jill is incorrect because her acceptance was illusory. E. Jill is incorrect because the amount she agreed to pay was significantly less than the fair market value of the book and, therefore, did not amount to consideration.

A. Jill is correct.

54. (p. 9) Assume a judge writes that she is deciding to enforce a law in question but that her decision does not mean that she sees the law as the morally correct rule. The judge would have leanings in the direction of ______. A. Legal positivism B. Natural law C. Legal realism D. Conscience reaction E. Concluding law

A. Legal positivism A judge with leanings in the direction of legal positivism might write that she is deciding to enforce the law in question but that her decision does not necessarily mean she sees the law as the morally correct rule.

51. (p. 9) Alice's plan to obey all laws and regulations even if she does not agree with them is rooted in which of the following? A. Legal positivism B. The historical school C. Legal realism D. Natural law E. Cost-benefit analysis

A. Legal positivism The concept of legal positivism sees our proper role as obedience to duly authorized law.

15. (p. 93) What are the three independent branches of the federal government? A. Legislative, executive, and judicial. B. Legislative, commerce, and safety. C. Commerce, safety, and law enforcement. D. Executive, safety, and law enforcement. E. Law enforcement, judicial, and statutory.

A. Legislative, executive, and judicial. The first three articles of the Constitution establish three independent branches of the federal government: the legislative, executive, and judicial branches.

15. (p. 150) Strict liability is a term used to describe which of the following? A. Liability without fault. B. Negligence. C. Actus reus. D. Intentional wrongdoing. E. Recklessness.

A. Liability without fault. Liability without fault, or strict liability, applies to actions that, regardless of the care taken, are specifically prohibited, such as selling cigarettes or alcohol to a minor.

54. (p. 188) The defamation printed in the school newspaper would be which of the following? A. Libel but not slander. B. Slander but not libel. C. Libel and slander. D. No tort was committed because an editorial, not a formal news report, was involved. E. No tort was committed because the falsehood involved matters of appearance, not business-related matters. If the defamation is published in a permanent form, such as in a magazine or newspaper, it is known as libel.

A. Libel but not slander.

25. (p. 363) As a general rule, most states will not allow a minor to disaffirm contracts for which of the following? A. Life insurance, health insurance, and psychological counseling B. Health insurance and psychological counseling, but not life insurance C. Psychological counseling, but not health insurance or life insurance D. Health insurance, but not life insurance or psychological counseling E. Education loan contracts and psychological counseling, but not life insurance or health insurance

A. Life insurance, health insurance, and psychological counseling

44. (p. 33) Which of the following is true regarding the relationship between ethical relativism and situational ethics? A. Like ethical relativism, situational ethics requires that we evaluate the morality of an action by imagining ourselves in the position of the person facing the ethical dilemma; but unlike ethical relativism, situational ethics allows us to judge other people's actions. B. Like ethical relativism, situational ethics requires that we evaluate the morality of an action by imagining ourselves in the position of the person facing the ethical dilemma and also like ethical relativism, situational ethics allows us to judge the actions of others. C. While the two theories are similar, ethical relativism upholds the existence of objective moral standards whereas situational ethics refuses to recognize the existence of objective moral standards. D. Ethical relativism and situational ethics are the same theory. E. There is no relationship between ethical relativism and situational ethics because the theories are fundamentally opposed to each other.

A. Like ethical relativism, situational ethics requires that we evaluate the morality of an action by imagining ourselves in the position of the person facing the ethical dilemma; but unlike ethical relativism, situational ethics allows us to judge other people's actions. Like ethical relativism, situational ethics requires that we evaluate the morality of an action by imagining ourselves in the position of the person facing the ethical dilemma; but unlike ethical relativism, situational ethics allows us to judge other people's actions.

57. (p. 76) Which of the following is true in regard to precedent in relation to law in general and arbitration? A. Like the law in general, the law governing arbitration agreements is not a fixed set of rules or precedents. B. Unlike the law in general, the law governing arbitration agreements is a fixed set of rules or precedents. C. Law in general has a fixed set of rules or precedents, but the law governing arbitration is not a fixed set of rules or precedents. D. Neither the law in general nor the law of arbitration has a fixed set of precedents. E. Both the law in general and the law of arbitration have a fixed set of precedents except in the area of consumer law in which there is no fixed set of law or precedents.

A. Like the law in general, the law governing arbitration agreements is not a fixed set of rules or precedents. Like the law in general, the law governing arbitration agreements is not a fixed set of rules or precedents.

23. (p. 705) Which of the following is called straight bankruptcy? A. Liquidation B. Reorganization C. Reformation D. Acknowledgment E. Avoidance

A. Liquidation

24. (p. 705) Which of the following occurs when a debtor turns over all assets to a trustee? A. Liquidation B. Reorganization C. Reformation D. Acknowledgment E. Avoidance

A. Liquidation

39. (p. 198) Which of the following torts seek to compensate people wrongfully subjected to litigation? A. Malicious prosecution, wrongful civil proceedings, and abuse of process. B. Wrongful civil proceedings but not malicious prosecution or abuse of process. C. Abuse of process but not malicious prosecution or wrongful civil proceedings. D. Malicious prosecution and wrongful civil proceedings, but not abuse of process. E. Malicious prosecution and abuse of process but not wrongful civil proceedings. Three separate torts protect those unreasonably subjected to litigation—malicious prosecution, wrongful civil proceedings, and abuse of process.

A. Malicious prosecution, wrongful civil proceedings, and abuse of process.

50. (p. 1138) Which of the following is false regarding insurance and the international sale of goods? A. Manufacturers typically have insurance only in their home country because, under international law, the home country's law would be applied in the event of disputes. B. Product liability awards may vary in amount from country to country. C. Complications may arise from having insurance companies in several different countries. D. A manufacturers in Germany, for example, could seek insurance through a German insurance company regardless of where its products are shipped. E. Today, manufacturers are likely to have an insurance company in every country to which they ship goods.

A. Manufacturers typically have insurance only in their home country because, under international law, the home country's law would be applied in the event of disputes.

46. (p. 1139) Property of Mary is damaged in a fire. She claims the property damage amounted to $10,000, and the insurer claims it only amounted to $5,000. Which of the following is true in this situation? A. Mary should demand an appraisal under her policy's appraisal clause. B. Mary has no alternative because she must accept the insurer's valuation. C. The insurer is required to accept the insured's valuation unless the insurer can establish that the insured failed to act in good faith. D. Mary should call the state inspector who investigates and makes rulings in such cases. E. Mary should file for a field evaluation.

A. Mary should demand an appraisal under her policy's appraisal clause.

54. (p. 85) What is the primary ADR process used in federal district courts? A. Mediation B. Arbitration C. Summary jury trials D. Early neutral case evaluation E. Private trials

A. Mediation Mediation is the primary ADR process used in federal district courts.

14. (p. 150) Which of the following is a term describing the wrongful state of mind needed for a criminal action? A. Mens rea. B. Actus reus. C. Res judicta. D. Stare decisis. E. Carpe diem.

A. Mens rea. Crime generally requires a wrongful state of mind, also known as mens rea or a guilty mind.

18. (p. 151) Which of the following are less serious crimes punishable by fines or imprisonment of less than one year? A. Misdemeanor. B. Felony. C. Petty offenses. D. Tort offenses. E. Any business related crime.

A. Misdemeanor. Misdemeanors are less serious crimes punishable by fines or imprisonment for less than one year.

13. (p. 1132) Which of the following suggests that people who are insulated from risk sometimes behave differently? A. Moral hazard B. Negligence C. Strict liability D. Coverage insulation E. Coverage protection

A. Moral hazard

55. (p. 85) Mediation programs are underway in _____ of state courts. A. More than one-third B. More than one-half C. More than 75% D. Less than one-half E. Less than 10%

A. More than one-third Mediation programs are under way in more than one-third of the state courts.

38. (p. 335) What have most states done with regard to unsolicited merchandise received from a seller? A. Most states have passed laws providing that unsolicited merchandise does not have to be returned and the recipient may keep it as a gift, with no contract being formed. B. Most states have passed laws providing that unsolicited merchandise must be returned to the seller within 7 days. C. Most states have passed laws providing that unsolicited merchandise must be returned to the seller within 10 days. D. Most states have passed laws providing that unsolicited merchandise must be returned to the seller within 30 days. E. Most states have passed laws providing that unsolicited merchandise must be returned to the seller within 60 days.

A. Most states have passed laws providing that unsolicited merchandise does not have to be returned and the recipient may keep it as a gift, with no contract being formed.

65. (p. 56) The court may grant a ______ if after reviewing the pleadings, the judge determines that the only reasonable decision is in favor of the moving party. A. Motion for judgment on the pleadings B. Motion for summary judgment C. Motion for sanctions D. Motion for discovery E. Motion for production

A. Motion for judgment on the pleadings A motion for judgment on the pleadings is a request for the court to consider that all the facts in the pleadings are true and to apply the law to those facts. The court grants the motion if, after this process, it finds that the only reasonable decision is in favor of the moving party.

27. (p. 309) If a[n] _____________ misunderstanding between the parties exists, and as a result of that misunderstanding the parties do not really come to a meeting of the minds, there is no contract. A. Mutual B. Unilateral C. Comprehensive D. Subjective E. Reasonable

A. Mutual

53. (p. 317) Which of the following are written documents signed by a party that makes an unconditional promise to pay a specific sum of money on demand or at a certain time to the holder of the instrument? A. Negotiable instruments B. Informal contracts C. Simple contracts D. Recognizances E. Formal contracts

A. Negotiable instruments

37. (p. 5) Case law can be revoked by ______. A. New statutes B. Precedent C. Stare decisis D. Critical law E. Case law cannot be revoked

A. New statutes Case law, or common law, is law unless revoked later by a new statutory law.

38. (p. 28) Which of the following is true regarding steps taken by news corporations to protect confidential records? A. News corporations are putting numerous security barriers and encryptions around their records so that nobody can gain access to them. B. News corporations are attempting to protect information written by their own employees, but efforts are not made to protect confidential sources because constitutional protection does not extend to confidential sources. C. News corporations are not bothering with security barriers to the extent as in previous decades because government regulation requires that information be turned over, and there is no point in taking drastic measures to protect such information. D. New regulations make significant privacy barriers illegal in regard to news corporations, so many barriers have been or are being removed. E. Because of the respect given to confidential records by the U.S. government and its enforcement agencies, news corporations see little need to enhance protection of confidential records.

A. News corporations are putting numerous security barriers and encryptions around their records so that nobody can gain access to them. Now news corporations are putting numerous security barriers and encryptions around their records so that nobody can gain access to them.

14. (p. 328) Constance asks Kathy if Kathy would consider selling her car for $2,000. What is the status of the negotiation? A. No offer has been made. B. An offer has been made, but it may be revoked prior to acceptance. C. An offer has been made that may not be revoked prior to acceptance. D. A contract has been entered into. E. A contract has been entered into, but it may be set aside at the option of either party.

A. No offer has been made.

17. (p. 70) Assuming the Uniform Mediation Act provisions apply, did Brice correctly tell Jenny that mediation is nearly the same as arbitration? A. No, he was incorrect. There are major differences between mediation and arbitration. B. He was correct because the only difference between the two involves the length of the proceeding. C. He was correct because the only difference between the two involves cost. D. He was correct because the only difference between the two involves whether a court reporter is present. E. He was correct because the only difference between the two involves the type of evidence that may be considered.

A. No, he was incorrect. There are major differences between mediation and arbitration. The distinguishing feature of mediation is that the parties voluntarily select a neutral third party to help them work together to resolve the dispute whereas in arbitration, the resolution of a dispute is by a neutral third party outside the judicial setting.

51. (p. 61) Assuming Jim ends up initially, or at some later point, at the appellate level, is he entitled to a jury at the appellate level? A. No, jurors are not used at the appellate court level. B. Yes, but only if he had a jury first at the trial court level. C. Yes, if he satisfies the requirements to initially bring the case in appellate court, he is entitled to a jury. D. Yes, but only if the employer agrees to a jury. E. Yes, because appellate courts decide questions of fact while questions of law are decided at the trial court level.

A. No, jurors are not used at the appellate court level. Appellate courts do not have juries; rather, the judges decide the case by majority vote.

48. (p. 203) _______________ damages are a small amount of money given to recognize that a defendant did indeed commit a tort in a case in which there were no compensable damages suffered by the plaintiff. A. Nominal B. Compensatory C. Punitive D. Retaliatory E. Revenge Nominal damages are a small amount of money given to recognize that a defendant did indeed commit a tort in a case where the plaintiff suffered no compensable damages.

A. Nominal

15. (p. 428) Which of the following is a contractual party who agrees to do something for the other party? A. Obligor B. Obligee C. Assignor D. Assignee E. Boundee

A. Obligor

19. (p. 306) The person who agrees to the terms of an offer made by the other party is called the _________. A. Offeree B. Offeror C. Agreeor D. Agree E. Inquirer

A. Offeree

57. (p. 35) Which of the following helps explain why the principle of deontology may be difficult to apply? A. People disagree about what duties we owe to one another and which duties are more important. B. People disagree about whether consequences are positive or negative. C. People disagree about the ethics of care. D. People disagree about what duties we owe to one another and also whether consequences are positive or negative. E. People disagree about what duties we owe to one another, whether consequences are positive or negative, and about the ethics of care.

A. People disagree about what duties we owe to one another and which duties are more important. Deontology is difficult to apply because people disagree about what duties we owe to one another and which duties are more important than others when they conflict.

73. (p. 58) The challenge to the juror who seemed grumpy is referred to as a[n] _______. A. Peremptory challenge B. Challenge for cause C. Stipulated challenge D. Fairness challenge E. Approved challenge

A. Peremptory challenge In most states, each party has a certain number of peremptory challenges allowing a party to challenge a certain number of potential jurors without giving a reason.

29. (p. 1141) If an insurance policy covers an individual's life or health, the insurance is ______ insurance. A. Personal B. Unitary C. Individual D. Family E. Protection

A. Personal

16. (p. 452) A condition ______ is a particular event that must occur in order for a party's duty to arise. A. Precedent B. Subsequent C. Concurrent D. At large E. Certain

A. Precedent

30. (p. 155) Which of the following is using fraudulent means to obtain information about someone's phone use? A. Pretexting B. Ponzi scheme C. False pretenses D. False token E. Defalcation

A. Pretexting According to Exhibit 7-1, pretexting involves using fraudulent means to obtain information about someone's phone use.

39. (p. 439) The ______ in a third-party beneficiary contract is the party to the contract who owes something to the promisor in exchange for the promise made to the third-party beneficiary. A. Promisee B. Promisor C. Obligor D. Obligee E. Assignee The promisee is the

A. Promisee

36. (p. 417) Which of the following involves the legal enforcement of an otherwise unenforceable contract due to a party's detrimental reliance on the contract? A. Promissory estoppel B. Substantial estoppel C. Promissory rule D. Reliance rule E. Promissory reliance

A. Promissory estoppel

49. (p. 332) Which doctrine may courts use to estop, or prevent, an offeror from revoking an offer based on a party's taking steps in reasonable reliance on an offer? A. Promissory estoppel B. Consideration reliance C. Contract enforcement D. Ethical reasoning E. True to form

A. Promissory estoppel

"Prudence's Imprudence." Unfortunately, Prudence failed to act prudently. She had a bad day after failing a business law test and breaking up with her boyfriend. While drinking a mocha and talking on the cell phone with her best friend, she slammed into the back of George's car. Shortly thereafter she received notice of a lawsuit setting forth George's claims for personal injury and property damage. Prudence was very busy studying for her next business law test and hanging out with her boyfriend with whom she had reconciled. Also, she just did not feel like dealing with a pesky lawsuit. Several months later, Alice, a new agent with the insurer called Prudence and told Prudence that she had just heard something about a lawsuit from the plaintiff's lawyer. Alice told Prudence that although investigation would be difficult after so many months, she would like to talk with Prudence because the trial was scheduled for the next week. Prudence told Alice that she had no time to meet at the moment and that just before court, she would meet with the lawyer the company appointed to represent her. Alice told Prudence that the insurance company was going to deny coverage. Alice also told Prudence that vehicle insurance did not typically provide for legal representation and that, in any event, no lawyer would be provided. Finally, Alice told Prudence that her insurance was cancelled immediately because she was a real jerk and failed to help, that insurance would not pay for accidents that were the fault of Prudence anyway, and that the insurer wanted nothing more to do with her. 57. (p. 1140) Which of the following is true regarding Alice's complaint that Prudence failed to help? A. Prudence had a duty to cooperate with the insurer. B. Prudence's only duty was to show up for court; otherwise she had no duty to assist the insurer. C. Prudence's only duty was to show up for a court and for any depositions for which she received a subpoena; otherwise, she had no duty to cooperate with the insurer. D. Prudence had a duty to assist the insurer and to provide a share of funds to help the insurer in defending her claim. E. Prudence had a duty to cooperate with the insurer only because it appears that the accident was her fault.

A. Prudence had a duty to cooperate with the insurer.

18. (p. 2) If a computer store dumps waste behind its building in violation of local, state, or federal environmental regulations, the resulting dispute focuses on _____ law. A. Public B. Preferential C. Consensual D. Private E. Black letter

A. Public Public law controls disputes between private individuals or between groups and their government.

24. (p. 2) The prosecution against Susan for slapping Bob involves which of the following? A. Public law and criminal law B. Private law and criminal law C. Private law and civil law D. Public law and civil law E. Civil law and criminal law

A. Public law and criminal law Public law controls disputes between private individuals or groups and their government; and criminal law cases are prosecuted not by individuals but by the state, federal, or local government.

39. (p. 314) Which of the following is sometimes referred to as an implied-in-law contract? A. Quasi-contracts B. Express contracts C. Implied-in-fact contracts D. Express contracts and implied-in-fact contracts E. Express contracts and quasi-contracts

A. Quasi-contracts

29. (p. 39) Which of the following do appellate courts primarily handle? A. Questions of law B. Questions of fact C. Questions of law and fact D. Cases when they initially enter the legal system E. Questions of law and fact, and also cases when they initially enter the legal system

A. Questions of law Appellate courts primarily handle questions of law, not questions of fact.

25. (p. 333) Which of the following is true regarding the termination of an offer based on a rejection? A. Regardless of how long an offeror states that an offer will be held open, once the offeree rejects it, the offer is terminated. B. Even on rejection, an offer is not terminated until the expiration of the time period for which it was originally to remain open. C. An offer must remain open for at least two days before it is terminated following a rejection by an offeree. D. An offer must remain open for at least three days before it is terminated following a rejection by an offeree. E. An offer must remain open for at least one day before it is terminated following a rejection by an offer.

A. Regardless of how long an offeror states that an offer will be held open, once the offeree rejects it, the offer is terminated.

48. (p. 468) ______ is the termination of the contract, and ______ is the return of any property given up under the contract. A. Rescission; restitution B. Rescission; reformation C. Reformation; restitution D. Reformation; rescission E. Rescission; compensation

A. Rescission; restitution

20. (p. 1132) Which of the following refers to the potential for loss in an insurance agreement? A. Risk B. Loss C. Premium D. Distribution E. Outlay

A. Risk

20. (p. 151) Which of the following is the forceful and unlawful taking of personal property? A. Robbery B. Burglary C. Larceny D. Arson E. Criminal fraud

A. Robbery Most states define robbery as the forceful and unlawful taking of personal property.

"International Expansion." Zach wants to expand his coffee business internationally - into Zeno, a small remote country. He moves there temporarily in order to oversee operations. His best friend Zora asks him if he plans to hire legal counsel for the expansion. Zach replies, "Of course not. The U.S. has the strictest laws regarding contracts, employment, and business practices in the world. So long as I'm legal in the U.S., I'm legal anywhere. Besides, I studied up on Zeno law ten years ago, and I know it all." Zach proceeds and lands in jail in Zeno for violating recently passed laws protecting employees and mandating certain benefits. Authorities there claim that he sexually harassed an employee, failed to pay sufficient wages, and failed to give employees Zeno's mandated 12 weeks of paid vacation per year. 41. (p. 6) Which of the following is true regarding Zach's defense that he thought he knew the law of Zeno because he had studied it some years before and that the laws under which he was arrested were new? (Assume the law of Zeno is the same as the U.S. on this issue.) A. Rules change and Zach had a duty to stay current. It is not a defense that he studied the law at one time and that the laws at issue were new. B. Zach is entitled to rely as a defense on the fact that he had studied the law at one time. Officials in Zeno were charged with publicizing any changes. C. If Zach can prove that the laws at issue were passed within the last twelve months before he was arrested, he will get out of jail because there is a twelve month grace period for new laws. D. If Zach can prove that the laws at issue were passed within the last six months before he was arrested, he will get out of jail because there is a six month grace period for new laws. E. Zach cannot be prosecuted so long as he was not aware he was violating the law. He did not have the requisite intent to perform a criminal act regardless of whether the laws were new.

A. Rules change and Zach had a duty to stay current. It is not a defense that he studied the law at one time and that the laws at issue were new. Business managers must pay attention to changes in the law and cases in which new precedents are set and take them into account when making business decisions.

24. (p. 432) Sally agrees to mow Paul's yard for $300 for the summer. Paul wishes to assign the contract to his grandmother. Sally objects because Paul's yard is very small while his grandmother's yard is over an acre. Which of the following is the correct legal outcome for the dispute between Sally and Paul? A. Sally will win because Paul's attempted assignment would increase the duties to which she agreed. B. Sally will win because all assignments are invalid without the obligor's consent. C. Sally will win unless Paul paid her the $300 in advance in which case Paul will win. D. Paul will win because he may validly assign the contract without Sally's consent. E. Paul will win so long as he tells Sally about the assignment prior to the time she begins any performance whatsoever.

A. Sally will win because Paul's attempted assignment would increase the duties to which she agreed.

"Third-Party Woes." Trudy owed Sam $40 for a book she purchased from him. Trudy mowed Betty's yard for $40 and agreed with Betty that Betty would pay Sam for the book. Sam is not aware of the assignment. Betty pays no one. Trudy also mowed Bob's yard for $40. She agreed with Bob that Bob would give the payment to Sally representing Trudy's birthday present to Sally. Bob later refuses to do so saying that promises to give gifts are not enforceable. He then moves out of town. Trudy tells both Sam and Sally that she is broke and that they will have to get any amounts due from Betty and Bob respectively. Sally is very unhappy because she wanted to buy a new pair of sandals with the money. 59. (p. 435) Which of the following would be the likely result if Sam sues Trudy for the $40 she owes him for the book? A. Sam will win because Trudy cannot avoid her obligations through a delegation. B. Sam will win but only because he was not aware of the assignment. C. Sam will win but only because the contract was for an amount under $1,000. D. Sam will win only if Betty cannot be found for service of process. E. Trudy will win because she delegated the duty of payment to Betty.

A. Sam will win because Trudy cannot avoid her obligations through a delegation.

38. (p. 354) When an accord and satisfaction is at issue, the ______ is the payment, by the debtor, of the reduced amount. A. Satisfaction B. Accord C. Seal D. Written compromise E. Written acknowledgement

A. Satisfaction

39. (p. 112) A ______ is a court order that authorizes law enforcement agents to search for or seize items specifically described in the warrant. A. Search warrant B. Subpoena warrant C. Search authorization form D. Seek warrant E. Review authorization

A. Search warrant A search warrant is a court order that authorizes law enforcement agents to search for or seize items specifically described in the warrant.

24. (p. 408) Which of the following is a term for contracts within the statute of frauds involving promises to pay a debt of another if the initial party fails to pay? A. Secondary obligations B. Primary promises C. Primary debts D. Third-party debts E. Commercial promises

A. Secondary obligations

64. (p. 155) Of which of the following, if any, is Sally guilty of by providing information to Alice regarding the purchase? A. She is guilty of an insider-trading violation by tipping the information. B. She is guilty of an insider-trading violation by being tipped. C. She is guilty of an insider-trading violation by both tipping and being tipped. D. She is guilty of criminal extortion. E. She is not guilty of any offense.

A. She is guilty of an insider-trading violation by tipping the information. Insider-trading violations may also include "tipping" such information and trading on it by the person "tipped."

60. (p. 1140) Which of the following is true regarding the assertion of Alice that vehicle insurance policies do not generally provide coverage for legal representation? A. She is incorrect. B. She is correct only in situations in which a student with a student policy is involved in an accident. C. She is correct only in situations in which an insured has had at least two previous accidents. D. She is correct only in situations in which a student is carried on a parent's insurance policy. E. She is correct because insureds are expected to shoulder some of the burden of accidents.

A. She is incorrect.

"Book Sale." Beverly offered to sell Rick a used business law book for $50. She told him that he could use it in his upcoming business law class the next semester. In fact, there was a problem with the book; it was several editions old. Rick was not aware of that fact, and neither was Beverly. When Rick took the book to class and realized the problem, he went back to Beverly requesting a refund. Beverly refused to return his money. She claimed that subjectively she thought that the book was correct, that she did not commit fraud, and that a binding contract existed. The book, however, is outdated and cannot be appropriately used in the class. 56. (p. 306) Which of the following would describe Beverly's role in the transaction? A. She was the offeror. B. She was the offeree. C. She was the assentor. D. She was the assentee. E. She was the offeree and the assent.

A. She was the offeror.

42. (p. 33) The ethical theory that requires that we evaluate the morality of an action by imagining ourselves in the position of the person facing the ethical dilemma is called ______. A. Situational ethics B. Ethical relativism C. Absolutism D. Consequentialism E. Relativity ethics

A. Situational ethics Situational ethics requires that we evaluate the morality of an action by imagining ourselves in the position of the person facing the ethical dilemma.

34. (p. 158) In which of the following involves tricking consumers into changing their phone service to another carrier without their consent? A. Slamming B. Cramming C. Stuffing D. Fraudulent adding E. Fraudulent transfer

A. Slamming Slamming is a scheme in which consumers are tricked into changing their phone service to another carrier.

54. (p. 364) In the dispute between Sally and the owner of Dings and Dents, which of the following is true regarding the effect of Sally turning 18 before she attempts to disaffirm the contract? A. So long as, after reaching the age of majority, Sally did not state orally or in writing that she intended to be bound by the contract, then she did not commit an express ratification. B. Sally was required to expressly ratify the contract before she could be bound to it. C. An implied ratification occurs when parents agree to accept the debt entered into by a minor. D. If Sally caused any damage whatsoever to the car, she was said to have impliedly ratified the contract. E. Sally was required to expressly ratify the contract before she could be bound to it so long as no damage was done; but if she did any damage to the car, as a matter of law, she is said to have impliedly ratified it.

A. So long as, after reaching the age of majority, Sally did not state orally or in writing that she intended to be bound by the contract, then she did not commit an express ratification.

33. (p. 104) Today, when the First Amendment is concerned, what does the term "political speech" reference? A. Speech that occurs when corporations support political candidates. B. Speech by any citizen in connection with an election campaign. C. Speech by elected officials regarding other elected officials. D. Speech by private citizens involving advertising that is regulated by state government. E. While the term "political speech" has historical connections, the First Amendment is not referenced in relation to "political speech" today because today all speech is considered at the same level.

A. Speech that occurs when corporations support political candidates. Corporations engage in political speech when they support political candidates or referenda.

57. (p. 9) Which of the following is reported in the United States Code? A. Statutes B. Executive orders C. Common law D. Administrative law E. Local ordinances

A. Statutes Exhibit 1-5 "Where to Locate the Law," shows that statutes are reported in the United States Code.

38. (p. 42) Which of the following is a court's power to hear certain kinds of cases? A. Subject-matter jurisdiction B. In kind jurisdiction C. In personam jurisdiction D. In loco jurisdiction E. In area jurisdiction

A. Subject-matter jurisdiction Subject-matter jurisdiction is a court's power to hear certain kinds of cases.

58. (p. 376) Which of the following would be a possible defense to Bobby's contract involving the harsh and lopsided terms in the contract involving chores? A. Substantive unconscionability B. Unclear drafting C. Procedural unconscionability D. Outrageous wording E. Adhesion conscionability

A. Substantive unconscionability

45. (p. 376) Which of the following involves overly harsh or lopsided substance in an agreement? A. Substantive unconscionability. B. Adhesion conscionability. C. Procedural unconscionability. D. Exculpatory clauses. E. An in pari delicto agreement.

A. Substantive unconscionability.

36. (p. 27) The "public disclosure" test for ethical behavior is sometimes referred to as the ______ test. A. Television B. Powell C. Self-conscious D. Golden E. Primary

A. Television The "public disclosure" test for ethical behavior is sometimes referred to as the television test because it requires us to imagine that our actions are being broadcast on national television.

60. (p. 98) Which of the following was the result at the U.S. Supreme Court level in Christy Brzonkala v. Antonio Morrison, the case in the text involving the constitutionality of the section of the Violence Against Women Act providing for a civil remedy? A. That Congress lacked authority under the Commerce Clause to pass the section at issue. B. That because of its police powers, Congress had authority under the Commerce Clause to pass the section at issue. C. That because gender-motivated crimes were at issue, Congress had authority under the Commerce Clause to pass the section at issue. D. That because violent crime was involved, Congress had authority under the Commerce Clause to pass the section at issue. E. That because the petitioner established a link between the cost of crime against women and national productivity, Congress had authority under the Commerce Clause to pass the section at issue.commerce.

A. That Congress lacked authority under the Commerce Clause to pass the section at issue. The court refused to find the section constitutional rejecting the argument that Congress may regulate noneconomic, violent criminal conduct based solely on that conduct's aggregate effect on interstate

40. (p. 388) Mary and Jason discuss the fact that a new teacher is being hired for business law at their school. Jason mentions that he does not yet have a book, and Mary agreed to sell Jason a used business law book for $30 for the upcoming semester. When the new semester begins, the new business law teacher announces that a new custom business law text will be used that is only available in the campus bookstore. Jason wants a refund. Which of the following is Mary's best defense? A. That Jason knew of the change of change of teacher and bore the risk of mistake. B. That only a unilateral mistake was involved on Jason's behalf because Mary was aware of the change and that, therefore, Jason is not entitled to a discharge. C. That a mutual mistake was involved and that Jason is, therefore, not entitled to a refund. D. That transactions involving goods are not subject to the defense of mistake. E. That she did not commit fraud and that, therefore, Jason is not entitled to rescission.

A. That Jason knew of the change of change of teacher and bore the risk of mistake.

13. (p. 16) Which of the following was the result in regard to the statute of limitations in the Case Opener in which the plaintiff claimed that the drug Accutane caused her to develop ulcerative colitis and irritable bowel syndrome? A. That because the plaintiff was not warned by her doctor of specific risks caused by the medication, the statute of limitations did not begin to run until she became aware of an advertisement discussing the risk. B. That because the plaintiff was warned by her doctor of specific risks caused by the medication, the statute of limitations began to run prior to the time she became aware of an advertisement discussing the risk; and the statute of limitations barred her claim. C. That the statute of limitations began to run on the plaintiff's claim when the risk of the drug was discovered by the manufacturer, not on the date on which the plaintiff became aware of the risk and that the statute of limitations, therefore, barred her claim. D. That in lawsuits involving this type of drug, there is no statute of limitations because each day the plaintiff suffers from pain results in the beginning of a new cause of action. E. That the defendant committed fraud preventing it from relying on the statute of limitations.

A. That because the plaintiff was not warned by her doctor of specific risks caused by the medication, the statute of limitations did not begin to run until she became aware of an advertisement discussing the risk. The court found that given that Kendall's dermatologist was unaware of, and therefore did not warn her of, the risk of her condition resulting from Accutane, a reasonable person in the plaintiff's situation would not have been aware of the potential for the medication to cause her illness. Therefore, given that the plaintiff was not made aware of the connection between her illness and the medication until the later lawyer's advertisement, her lawsuit was timely.

58. (p. 347) What is Penny's best argument in attempting to avoid obligations to Credit Card Company A? A. That she reasonably relied to her detriment and that she should be able to enforce the company's promise under a theory of promissory estoppel. B. That her promise did indeed constitute consideration because of the theory of moral consideration, and Credit Card Company A clearly expressed its concern with student debt. C. That her promise did indeed constitute consideration because it allowed Credit Card Company A to report forgiveness of debt rather than default on its financial reports. D. That because of unforeseen circumstances, she should be able to avoid the debt. E. That the debt became illusory based on the promise made by Credit Card Company A.

A. That she reasonably relied to her detriment and that she should be able to enforce the company's promise under a theory of promissory estoppel.

42. (p. 79) What did the U.S. Supreme Court rule in the case of Robert Gilmer v. Interstate/Johnson Lane Corporation involving whether a claim under the federal Age Discrimination in Employment Act was subject to arbitration? A. That the agreement by which the plaintiff agreed to arbitrate all employment disputes as a condition of his employment was valid. B. That the text of the federal Age Discrimination in Employment Act prohibited arbitration. C. That the EEOC would be bound by the employee's agreement to arbitrate all employment disputes and that, therefore, requiring arbitration would be improper. D. That compulsory arbitration improperly deprived the plaintiff of a public forum through which to prove his claims. E. That arbitration was an inadequate remedy because arbitrators may not fashion equitable remedies.

A. That the agreement by which the plaintiff agreed to arbitrate all employment disputes as a condition of his employment was valid. The Supreme Court, in Robert Gilmer v. Interstate/Johnson Lane Corp., recognized that arbitration will not undermine the role of the EEOC in enforcing the Age Discrimination in Employment Act, that arbitration is not precluded by the Act, and that arbitrators have the power to fashion equitable relief in such cases.

19. (p. 197) What did the court rule in regard to the plaintiff's claim of intentional infliction of emotional distress in Olson v. CenturyLink, the case in the text in which the plaintiff alleged that representatives of the defendant, a provider of telephone services, wrongly failed to process his application, disconnected his telephone service, and hung up on him during telephone conversations? A. That the conduct complained of by the plaintiff failed to meet the level of conduct required for a finding of the intentional infliction of emotional distress. B. That the plaintiff's complaint regarding the disconnection of his telephone service was sufficient to support a claim of intentional infliction of emotional distress but that the plaintiff's other allegations were insufficient to support an award based on the tort of the intentional infliction of emotional distress. C. That the plaintiff's complaint regarding the refusal to process his application was sufficient to support a claim of intentional infliction of emotional distress but that the plaintiff's other allegations were insufficient to support an award based on the tort of the intentional infliction of emotional distress. D. That the plaintiff's complaint regarding representatives hanging up on him were sufficient to support a claim of intentional infliction of emotional distress but that the plaintiff's other allegations were insufficient to support an award based on the tort of the intentional infliction of emotional distress. E. That the plaintiff would be allowed to proceed as to all allegations because they were all adequate to support a verdict based on the intentional infliction of emotional distress. According to the court, the conduct alleged in the amended complaint did not approach the standard required for a finding of the intentional infliction of emotional distress.

A. That the conduct complained of by the plaintiff failed to meet the level of conduct required for a finding of the intentional infliction of emotional distress.

15. (p. 1143) Which of the following was the result in Life Partners Inc., v. Miller, the case in the text involving the validity of a state law in Virginia requiring that viatical insurance companies pay certain amounts to terminally-ill policyholders who sell their policies? A. That the law constituted a valid exercise of the state's police powers and was therefore constitutional. B. That the law discriminated against interstate commerce and was therefore unconstitutional. C. That the law violated the commerce clause and was therefore unconstitutional. D. That the law violated the equal protection clause and was therefore unconstitutional. E. That the law violated the due process clause and was therefore unconstitutional.

A. That the law constituted a valid exercise of the state's police powers and was therefore constitutional.

22. (p. 101) Which of the following was the result in Family Winemakers of California v. Jenkins, the case brought by winemakers from California challenging a Massachusetts law distinguishing between how large and small winemakers could distribute their wines in Massachusetts? A. That the law impermissibly discriminated against out-of-state winemakers in violation of the Commerce Clause. B. That the law permissibly discriminated against out-of-state winemakers and did not violate the commerce clause. C. That the law impermissibly discriminated against out-of-state winemakers in violation of the Twenty-first Amendment to the U.S. Constitution. D. That the law impermissibly discriminated against out-of-state winemakers in violation of the Webb-Kenyon Acts. E. That the law did not discriminate against out-of-state winemakers and that, therefore, no violation occurred.

A. That the law impermissibly discriminated against out-of-state winemakers in violation of the Commerce Clause. We court held that the law violated the Commerce Clause "because the effect of its particular gallonage cap is to change the competitive balance between in-state and out-of-state wineries in a way that benefits Massachusetts's wineries and significantly burdens out-of-state competitors."

22. (p. 35) Which of the following is asserted by the principle of rights? A. That whether a business decision is ethical depends on how the decision affects the rights of all involved. B. That whether a business decision is ethical depends on how the decision affects the rights of stockholders without consideration of other stakeholders. C. That whether a business decision is ethical depends on how the decision affects the rights of employees without consideration of other stakeholders. D. That whether a business decision is ethical depends on how the decision affects the overall economy. E. That whether a business decision is ethical depends on how the decision affects the rights of organized labor without consideration of other stakeholders.

A. That whether a business decision is ethical depends on how the decision affects the rights of all involved. The principle of rights asserts that whether a business decision is ethical depends on how the decision affects the rights of all involved, a principle that is foundational to Western culture.

20. (p. 87) Which of the following was the result at the Supreme Court level in Mitsubishi Motors Corp. v. Soler, the case in the text involving whether an American court may enforce an agreement to resolve antitrust claims by arbitration when that agreement arises from an international transaction? A. The Court recognized that the arbitration agreement should be enforced. B. The Court refused to enforce the agreement because international parties were involved. C. The Court refused to enforce the agreement because antitrust claims were involved. D. The Court refused to enforce the agreement because there is a lack of federal substantive law supporting the enforcement of agreements to arbitrate. E. The Court ruled that the arbitration agreement would be upheld but only if the parties conducted the arbitration in Japan, the home of Mitsubishi.

A. The Court recognized that the arbitration agreement should be enforced. The Supreme Court concluded that "concerns of international comity, respect for the capacities of foreign and transnational tribunals, and sensitivity to the need of the international commercial system for predictability in the resolution of dispute" required that the Court enforce the parties' agreement.

19. (p. 80) Which of the following was the result at the U.S. Supreme Court level in Circuit City v. Saint Clair Adams, the case in the text involving whether arbitration applies in employment contracts? A. The Court ruled that the Federal Arbitration Act applies in employment contracts. B. The Court ruled that neither the Federal Arbitration Act nor the common law of arbitration applies in employment contracts. C. The court ruled that the Federal Arbitration Act does not apply in employment contracts but that state statutes involving arbitration would apply to employment contracts. D. The Court ruled that the Federal Arbitration Act does not apply in employment contracts but that the common law of arbitration applies in employment contracts. E. The Court ruled that whether the Federal Arbitration Act applies in employment disputes depends on the type of employment dispute involved, and that if the dispute involves claims of age discrimination, the Federal Arbitration Act does not apply.

A. The Court ruled that the Federal Arbitration Act applies in employment contracts. In Circuit City v. Saint Clair Adams, the U.S. Supreme Court ruled that the Federal Arbitration Act applies in employment contracts.

58. (p. 103) What did the U.S. Supreme Court rule in South Dakota v. Dole, the case involving the validity of a federal statute granting federal funds for state highways to only those states in which 21 is the legal drinking age? A. The Court upheld the statute. B. The Court upheld the statute only in the case of states that could not provide matching funds; and if matching funds could be provided, the Court ruled that there was insufficient reason for the law. C. The Court upheld the statute only in the case of states that could provide matching funds; and if matching funds could not be provided, the Court ruled that Congress was overreaching in regard to partnership between state and federal government. D. The Court struck the statute on the basis that it violated the Commerce Clause under the U.S. Constitution. E. The Court struck the statute on the basis that it violated the taxing and spending powers of the federal government under the U.S. Constitution.

A. The Court upheld the statute. In the 1987 case South Dakota v. Dole, the Supreme Court upheld a federal statute that grants federal funds for state highways to only those states in which 21 is the legal drinking age.

22. (p. 71) Which of the following is true regarding the Equal Employment Opportunity Commission (EEOC) position on mediation? A. The EEOC encourages the mediation of employment discrimination claims. B. The EEOC discourages the mediation of employment discrimination claims. C. The EEOC discourages the mediation of employment discrimination claims in sexual harassment cases but not in age discrimination cases. D. The EEOC discourages the mediation of employment discrimination claims in age discrimination cases but not in sexual harassment cases. E. The EEOC encourages the mediation of all employment discrimination claims except for those arising under the Americans with Disabilities Act where the use of mediation is discouraged.

A. The EEOC encourages the mediation of employment discrimination claims. The EEOC encourages the mediation of employment discrimination claims.

49. (p. 8) Which of the following is an executive agency? A. The Federal Deposit Insurance Corporation B. The Federal Trade Commission C. The Securities and Exchange Commission D. The Federal Communications Commission E. The Nuclear Regulatory Commission

A. The Federal Deposit Insurance Corporation Exhibit 1-4 "Major Federal Administrative Agencies" reflects that the Federal Deposit Insurance Corporation is an executive agency.

29. (p. 26) Connie's idea is best referred to as ______. A. The Golden Rule B. The Disclosure Principle C. The Help Peers Test D. The Sarbanes-Oxley Rule E. The Greenhouse Rule

A. The Golden Rule The Golden Rule is referenced as the idea that we should interact with other people in a manner consistent with the way we would like them to interact with us.

55. (p. 176) Which of the following requires a "pattern"? A. The Racketeer Influenced and Corrupt Organizations Act. B. The False Claims Act. C. The Sarbanes-Oxley Act of 2002. D. The crime of false pretenses. E. The crime of false token.

A. The Racketeer Influenced and Corrupt Organizations Act. Demonstrating a claim under RICO requires proof of a pattern of racketeering—that is, more than one action.

31. (p. 310) Which of the following was propounded by prominent legal scholars, recruited by the American Law Institute? A. The Restatement of the Law Second, Contracts. B. The Convention on Contracts for the National Sales of Goods. C. Common law. D. Common law and the Convention on Contracts for International Sales of Goods. E. The Convention on Contracts for the National Sales of Goods and the Restatement of the Law Second, Contracts.

A. The Restatement of the Law Second, Contracts.

33. (p. 28) What is the name of the law signed by President Bush in the wake of several corporate accounting scandals? A. The Sarbanes-Oxley Act B. The Public Accounting Act C. The Certified Public Accounting Act D. The Whaley-Mallicoat Act E. The Corporate Scandal Act

A. The Sarbanes-Oxley Act The Corporate and Criminal Fraud Accountability Act, also known as the Sarbanes-Oxley Act, was signed by President Bush in 2002 in the wake of several corporate accounting scandals.

57. (p. 175) Which of the following was created specifically to combat white-collar crime? A. The Sarbanes-Oxley Act. B. RICO. C. The False Claims Act. D. Section 1983. E. Section 1984.

A. The Sarbanes-Oxley Act. Sarbanes-Oxley was created specifically to combat white-collar crime.

59. (p. 118) What was the result at the U.S. Supreme Court level in the Case Opener involving the constitutionality of the "individual mandate" contained within the Affordable Care Act requiring that most Americans obtain minimum essential health insurance contained within the Affordable Care Act? A. The Supreme Court upheld the "individual mandate" of the Affordable Care Act on the basis that it was a valid exercise of congressional power under the taxing clause. B. The Supreme Court upheld the "individual mandate of the Affordable Care Act on the basis that it was a valid exercise of congressional power" under the commerce clause. C. The Supreme Court upheld the "individual mandate" of the Affordable Care Act on the basis that it was a valid exercise of congressional power under the taxing clause and also under the Commerce Clause. D. The Supreme Court struck the "individual mandate" from the Affordable Care Act as a violation of the Commerce Clause but allowed the remainder of the law to remain. E. The Supreme Court struck the "individual mandate" from the Affordable Care Act as a violation of the taxing clause but allowed the remainder of the law to remain.

A. The Supreme Court upheld the "individual mandate" of the Affordable Care Act on the basis that it was a valid exercise of congressional power under the taxing clause. The United States Supreme Court upheld the individual mandate of the Affordable Care Act (ACA) on the ground that it was a valid exercise of congressional power under the taxing clause.

24. (p. 44-45) Mike, a resident of Georgia, sues Company A in state court in Georgia for negligence alleging personal injury and property damage of $100,000 after a truck driven by an employee of Company A strikes his pick-up truck in the rear. Company A is incorporated in Delaware, has its headquarters in New York, but does a substantial amount of business in Georgia. Company A seeks removal to federal district court, but Mike opposes the motion. Which of the following is true regarding whether the case may be properly removed to federal district court? A. The amount in controversy satisfies diversity requirements; and if Company A's nerve center is in a state other than Georgia, then the case may be properly removed to federal court. B. The amount in controversy satisfies diversity requirements; and because Company A is incorporated and has its headquarters in a state other than Georgia, the case may be properly removed to federal court. C. Because the amount in controversy satisfies diversity requirements and Company A is incorporated in a state other than Georgia, the case may be properly removed to federal court regardless of where Company A's headquarters, nerve center, or principal place of business is located. D. Because the amount in controversy satisfies diversity requirements and Company A is headquartered in a state other than Georgia, the case may be properly removed to federal court regardless of where Company A is incorporated and regardless of the location of its nerve center. E. Because the amount in controversy fails to satisfy jurisdictional requirements, regardless of the location of Company A, the case may not be removed to federal court.

A. The amount in controversy satisfies diversity requirements; and if Company A's nerve center is in a state other than Georgia, then the case may be properly removed to federal court. In determining the location of a corporation's principal place of business, the Supreme Court in Hertz Corp. v. Friend ruled that the nerve center test is relatively easy to apply and does not require courts to weigh corporate functions, assets or revenues.

14. (p. 356) Sue is three months behind on her mortgage, and her lender filed negative information affecting her credit rating. Sue mailed one monthly payment to the lender along with a letter providing that she was making the payment on condition that the lender removes negative material sent to credit reporting agencies affecting her credit rating. The lender cashed the check but did not remove the negative information. Sue sues the bank for breach of contract. Which of the following is the most likely result? A. The bank will win because under the preexisting duty rule, Sue was already legally obligated to make the payment, and there was no consideration to support the contract. B. The bank will win because under federal law, once correct negative information is reported regarding a customer, it can be removed only if it is found to be untruthful. C. The bank will win because under state law, once correct negative information is reported regarding a customer, it can be removed only if it is found to be untruthful. D. Sue will win because the bank's cashing the check constituted acceptance of her offer, and a valid contract existed. E. Sue will win because the bank had an obligation to notify her that it was not accepting her offer before cashing the check.

A. The bank will win because under the preexisting duty rule, Sue was already legally obligated to make the payment, and there was no consideration to support the contract.

"The Stolen Book." Susan is told by Betty that Bob stole her business law book out of her car. The next day Susan confronts Bob and slaps him for stealing her book. Bob had Susan arrested for slapping him, and the local district attorney is prepared to prosecute that matter on behalf of the state. Susan sues Bob for damages to the book and for maliciously having her arrested. Claiming that she lied, Bob sues Betty for defamation. 23. (p. 2) Which of the following is true regarding Susan's claim against Bob for damages involving the book and her claim that Bob maliciously had her arrested? A. The claim for damages involving the book and also the claim that Bob maliciously had her arrested are civil claims involving private law. B. The claim for damages involving the book is a civil claim involving private law, but the claim that Bob maliciously had her arrested is a civil claim involving public law. C. The claim for damages involving the book is a civil claim involving private law, but the claim that Bob maliciously had her arrested is a criminal claim involving public law. D. The claim for damages involving the book is a civil claim involving private law, but the claim that Bob maliciously had her arrested is a criminal claim involving private law. E. The claim for damages involving the book and also the claim that Bob maliciously had her arrested are criminal claims involving private law.

A. The claim for damages involving the book and also the claim that Bob maliciously had her arrested are civil claims involving private law. Private law regulates disputes between private individuals or groups, and civil law delineates the rights and responsibilities implied in relationships between persons.

"Wrong Deck." Penny hires Jackson to paint her back deck. She agrees to pay him $200 for the job, and he accepts sight unseen. They enter into the agreement on Tuesday, and he is to paint the deck on Saturday. When Jackson arrives, neither Penny nor her neighbor is at home. He mistakenly paints the neighbor's deck. Penny calls him the next day and asks him why he did not paint her deck. He informs her that he did paint the deck. It is then discovered that he mistakenly painted the neighbor's deck. Penny tells him not to worry because the neighbor will be required to pay him. Jackson says that if the neighbor does not pay, then he expects all of his funds from Penny, because the contract is executed. 64. (p. 316) What was the status of the agreement between Jackson and Penny as of Tuesday when they agreed upon the price for the job? A. The contract was executory. B. The contract was executed. C. The contract was novated. D. The contract was formal. E. The contract was a recognizance contract.

A. The contract was executory.

53. (p. 387) Which of the following is the most likely result in the dispute between Marcy and Lucy regarding which used truck was sold assuming that both Marcy and Lucy were innocently mistaken and did not intend to defraud the other? A. The contract will be rescinded. B. Marcy will be allowed to pick the truck she wants to buy because she is the buyer, and she may also recover damages. C. Lucy will be allowed to pick the truck she wants to sell because she is the seller. D. Marcy will be allowed to pick the truck she wants to buy because she also had a contract on the ancillary farm. E. Marcy will be allowed to pick the truck she wants to buy because she is the buyer, but she may not recover damages.

A. The contract will be rescinded.

52. (p. 707) If Mona convinces the judge that the creditors have filed the involuntary bankruptcy frivolously, which of the following is true regarding what amounts, if any, the court may force the creditors to pay? A. The court may award attorney costs, fees of the debtor, and punitive damages. B. The court may award attorney costs and fees of the debtor, but not punitive damages. C. The court may award fees of the debtor, but not attorney costs or punitive damages. D. The court may award punitive damages, but not attorney costs or fees of the debtor. E. The judge may dismiss the involuntary bankruptcy petition, but no other relief is available.

A. The court may award attorney costs, fees of the debtor, and punitive damages.

31. (p. 388) Which of the following is true on appeal regarding the case of Mary W. Scott v. Mid-Carolina Homes Inc., discussed in the "Case Nugget" in which the plaintiff sued to recover damages after a salesperson allegedly mistakenly agreed to sell a mobile home to her for a price that was too low, later told her the mobile home could not be sold because of a bent frame, and then proceeded to sell it for a higher price to other buyers? A. The court refused to find that the defendant had the right to rescind the contract based on the alleged unilateral mistake. B. The court refused to find that the defendant had the right to rescind the contract because a mutual mistake was involved. C. The court found that the defendant had the right to rescind the contract because, even though the salesperson acted questionably, the plaintiff had not made a down payment. D. The court ruled that the defendant had the right to rescind the contract because a unilateral mistake was involved. E. The court ruled that the defendant had the right to rescind the contract because a mutual mistake was involved.

A. The court refused to find that the defendant had the right to rescind the contract based on the alleged unilateral mistake.

26. (p. 387) What was the result in the Peerless case discussed in the text in which there were two ships named Peerless and the parties disagreed over which ship was the subject of the contract? A. The court rescinded the contract. B. The court ruled that the older ship would be identified to the contract. C. The court ruled that the newer ship would be identified to the contract. D. The court ruled that the defendant would be allowed to choose which ship would be identified to the contract. E. The court ruled that the plaintiff would be allowed to choose which ship would be identified to the contract.

A. The court rescinded the contract.

55. (p. 312) Which of the following was the result in In Re Zappos.com Inc., v. Customer Data Security Breach Litigation, the case in the text in which customers of Zappos claimed that they were not bound to an arbitration agreement contained in a contract with Zappos? A. The court ruled for the plaintiffs for the following two reasons: (1) there was no contract because plaintiffs did not assent to it, and (2) even if a contract existed, the contract was illusory and unenforceable because Zappos could avoid promises at any time. B. The court ruled for the plaintiffs only because of its finding that no contract existed based on the plaintiffs lack of assent. C. The court ruled for the plaintiffs only because of its finding that the contract was illusory and unenforceable because Zappos could avoid promises at any time. D. The court ruled in favor of Zappos on the basis that even though some provisions of the contract were unenforceable, because of the federal policy favoring arbitration agreements, the arbitration clause itself was enforceable. E. The court ruled in favor of Zappos on the basis that the contract was properly entered into and was fully enforceable.

A. The court ruled for the plaintiffs for the following two reasons: (1) there was no contract because plaintiffs did not assent to it, and (2) even if a contract existed, the contract was illusory and unenforceable because Zappos could avoid promises at any time.

12. (p. 370) Which of the following was the result on appeal in King v. Riedl, the case in the text in which the plaintiffs claimed that the defendant lacked the right to proceed against them for sums allegedly owed because the contractor was not licensed as a residential home builder as required by state law? A. The court ruled in favor of the plaintiffs on the basis that the contractor was statutorily barred from bringing an action to enforce payment because he lacked a residential home builder license and the amount of the contract satisfied statutory requirements. B. Although recognizing that the contractor's failure to be properly licensed would not in and of itself bar recovery, the court ruled in favor of the plaintiffs because the facts at trial showed that the contractor performed inadequate work. C. The court ruled that because the contractor lacked the required state license and the amount of the contract satisfied statutory requirements, under common law he could only recover for expenses for materials and labor costs, not the full contract price. D. The court ruled that the defendant could maintain an action against the plaintiffs and prevail because the proof showed that he was eligible for the required license although he had not yet obtained it. E. The court ruled that the defendant could maintain an action against the plaintiffs and prevail because the state statute only applied when the cost of a contractual undertaking exceeded $10,000, and because the contractor billed periodically, the plaintiffs were never presented with a bill exceeding $10,000.

A. The court ruled in favor of the plaintiffs on the basis that the contractor was statutorily barred from bringing an action to enforce payment because he lacked a residential home builder license and the amount of the contract satisfied statutory requirements.

30. (p. 412) Which of the following was the result in the case in the text Shelby's Inc., v. Sierra Bravo Inc., involving the issue of whether an agreement to deposit debris and soil on land and an alleged agreement to build a building pad and waterway came within the statute of frauds? A. The court ruled that the agreement did not involve an interest in land and did not come within the statute of frauds. B. The court ruled that the agreement did involve an interest in land and, therefore came within the statute of frauds. C. The court ruled that the agreement did not involve an interest in land but placed it within the statute of frauds in order to prevent injustice. D. The court ruled that the agreement fell within the statute of frauds but that an oral agreement was sufficient. E. The court ruled that the agreement to deposit debris and soil on land did not fall within the statute of frauds and that no writing was needed, but that the agreement to build a building pad and waterway did fall within the statute of frauds requiring a writing.

A. The court ruled that the agreement did not involve an interest in land and did not come within the statute of frauds.

61. (p. 111) What was the result at the federal appellate court level in Trunk v. San Diego, the case in the text involving whether the presence of a cross on federal land near a Korean War memorial violated the First Amendment? A. The court ruled that the presence of the cross violated the First Amendment. B. The court ruled that the presence of the cross did not violate the First Amendment because the cross promoted the service of veterans, not a religion. C. The court ruled that the presence of the cross did not violate the First Amendment because it was initially erected by private parties and had historical significance. D. The court ruled that the presence of the cross did not violate the First Amendment because although it was erected by public authorities, it had historical significance independent of its governmental ties. E. The court ruled that the presence of the cross did not violate the First Amendment because although it did promote a particular religion, that religion was practiced by large numbers of the surrounding citizens.

A. The court ruled that the presence of the cross violated the First Amendment. According to the Ninth Circuit, "the prominence of the Cross in the Memorial, leads us to conclude that a reasonable observer would perceive the Memorial as projecting a message of religious endorsement, not simply secular memorialization," and the memorial was therefore found to violate the establishment clause.

39. (p. 77) Several merchants signed a binding arbitration agreement with American Express Co. The arbitration agreement included a clause prohibiting class action arbitration. Later, after a serious dispute arose involving a federal statute, the merchants wanted to pursue class action arbitration against American Express arguing that it would be too expensive to pursue the claims individually. Assuming the Federal Arbitration Act applies, how should a court rule on the issue? A. The court should uphold the agreement prohibiting class action arbitration. B. The court should strike the whole arbitration agreement because a claim under federal law is involved, and the parties should be required to go to court for any relief. C. The court should uphold the arbitration agreement itself but strike the provision prohibiting class action arbitration. D. The court should uphold the arbitration agreement itself and uphold the class action provision but limit any class action proceeding to no more than 20 plaintiffs. E. The court should uphold the arbitration agreement itself and uphold the class action provision but limit any class action proceeding to no more than 10 plaintiffs.

A. The court should uphold the agreement prohibiting class action arbitration. In American Express Co. v. Italian Colors Restaurant, under the Federal Arbitration Act, the Court recognized that an agreement not to enter into class action arbitration will be upheld even if it involves a federal law claim.

49. (p. 444) Which of the following is a consideration of courts in determining whether a person is an incidental or intended beneficiary? A. The courts ask if a reasonable person in the position of the party in question would believe the contracting parties intended to benefit the party in question. B. The courts ask if it is substantially certain that the contracting parties intended to benefit the party in question. C. The courts ask if it can be proven beyond a reasonable doubt that the contracting parties intended to benefit the party in question. D. The courts ask if the party in question paid something for the rights. E. The courts ask if the party in question paid at least $500 for the rights.

A. The courts ask if a reasonable person in the position of the party in question would believe the contracting parties intended to benefit the party in question.

41. (p. 44) Assume a plaintiff files a case in state court that could also have been filed in federal court. Does the defendant have any choice in the matter? A. The defendant has a right to move the case to federal court. B. The defendant can have the case moved to federal court only if federal jurisdiction question is involved. C. The defendant can have the case moved to federal court only if the state trial court judge grants permission in his or her discretion. D. The defendant can have the case moved to federal court only if the plaintiff's filing expenses in state court are paid by the defendant. E. The defendant has no choice, and the case will stay in state court.

A. The defendant has a right to move the case to federal court. When a case falls under concurrent jurisdiction, the defendant can transfer the case to federal court by exercising her right of removal if the case is initially filed in state court.

71. (p. 167) Upon which of the following defenses would Martin's lawyer rely upon in regards to the second charge after Martin was found not guilty? A. The defense of double jeopardy B. The Fifth defense C. The Single Trial defense D. The Eighth Amendment E. The Sixth Amendment

A. The defense of double jeopardy Double jeopardy occurs when a person is retried for the same criminal offense after being declared not guilty.

21. (p. 100) Restrictions on states' authority to pass laws that substantially affect interstate commerce are referenced by which of the following? A. The dormant commerce clause B. The superior commerce clause C. The interstate trafficking commerce clause D. The tracking clause E. The state authority clause

A. The dormant commerce clause The restriction on states' authority to pass laws that substantially affect interstate commerce is called the dormant commerce clause.

48. (p. 168) At trial a defense lawyer states that evidence should not be admitted because it is "fruit of the poisonous tree." Upon which of the following is the attorney relying? A. The exclusionary rule. B. The Fourth Amendment Rule. C. The Eden Rule. D. The Adam Rule. E. The Eve Rule.

A. The exclusionary rule. The exclusionary rule, not stated in any specific amendment, holds that all evidence obtained in violation of the constitutional rights spelled out in the Fourth, Fifth, and Sixth amendments is normally not admissible at trial because it is considered "fruit of the poisonous tree," meaning that it is the result of an illegal procedure.

51. (p. 446) What was the ruling of the court in the Case Opener involving a lawsuit by fans seeking a refund based upon the Tyson and Holyfield fight being stopped in the third round because Tyson bit off a piece of Holyfield's ear? A. The fans were not allowed to recover because they were incidental beneficiaries. B. The fans were not allowed to recover because they were donee beneficiaries. C. The fans were not allowed to recover because they were assigned donees. D. The fans were allowed to recover because they were creditor beneficiaries. E. The fans were allowed to recover because they were intended third-party beneficiaries.

A. The fans were not allowed to recover because they were incidental beneficiaries.

28. (p. 434) Which of the following states that in the case of multiple assignments of the same right, the first party granted the assignment is the party correctly entitled to the contractual right? A. The first-assignment-in-time rule B. The last-assignment-in-time rule C. The English rule D. The French rule E. The American rule

A. The first-assignment-in-time rule

25. (p. 103) Which of the following requires that courts in all states uphold contracts and public acts of every state thereby protecting wills, divorce decrees, and judgments in civil courts? A. The full faith and credit clause B. The privileges and immunities clause C. The commerce clause D. The contract clause E. The Bill of Rights clause

A. The full faith and credit clause The full faith and credit clause provision requires that courts in all states uphold contracts and public acts established in other states.

50. (p. 114) What does protection against "double jeopardy" mean? A. The government cannot try a person more than once for the same crime. B. The government cannot try a person more than twice for the same crime. C. The government must have double proof to prosecute a person twice for the same crime. D. The government must show that at least two people were injured by the defendant in order to justify trying the defendant twice for the same crime. E. The government may impose a double sentence on a repeat offender in order to protect the public.

A. The government cannot try a person more than once for the same crime. The Fifth Amendment protects against double jeopardy meaning that the government cannot try a person more than once for the same crime.

55. (p. 10) In which school of jurisprudence is the concept of stare decisis rooted? A. The historical school B. Legal realism C. The cost-benefit analysis school D. Positivism E. Cultural reenactment

A. The historical school One of the guidelines most often used for shaping the law is tradition, or custom; and stare decisis is rooted in this historical school.

11. (p. 456) Bob's house was damaged by fire. He got three independent appraisals regarding the damage and submitted those to his insurer informing the insurer that he was willing to use the lowest appraisal as a basis for his insurance reimbursement. The adjuster for the insurance company asked Bob to submit to an oral examination under oath regarding the fire, but Bob refused. The insurance company denied reimbursement based on Bob's refusal to provide the examination under oath. Which of the following is true regarding whether Bob should be allowed to recover under the policy if the court follows the case in the text Hamilton v. State Farm Fire & Casualty Insurance Company? A. The insurer will prevail if it can establish actual prejudice based on Bob's refusal to provide an examination under oath. B. The insurer will prevail based on Bob's refusal to provide an examination under oath regardless of whether or not it can establish actual prejudice. C. Bob will prevail even if he refuses to provide an examination under oath, but he will not be allowed to recover penalties or attorney fees. D. Bob will prevail only if he is able to establish that the insurer was not prejudiced by his refusal to provide an examination under oath; and, assuming he is able to do so, he will be allowed to recover penalties and attorney fees. E. Bob will prevail without any obligation to establish that the insurer was not prejudiced by his refusal to provide an examination under oath, and he will also be allowed to recover penalties and attorney fees.

A. The insurer will prevail if it can establish actual prejudice based on Bob's refusal to provide an examination under oath.

18. (p. 186) Which of the following is true regarding the intent needed for an intentional tort? A. The intent at issue is not intent to harm but, rather, is intent to engage in a specific act, which ultimately results in an injury, physical or economic, to another. B. The intent at issue is not intent to harm but, rather, is intent to engage in a specific act, which ultimately results in a physical injury to another. Economic injury is insufficient. C. The intent at issue is intent to harm that results in an injury, physical or economic, to another. D. The intent at issue is intent to harm that results in physical injury to another. Economic injury is insufficient. E. The intent at issue is not intent to harm and is not intent to engage in a specific act. Instead, negligence will suffice. In regard to intentional torts, the element of required intent is not intent to harm but, rather, to engage in a specific act, which ultimately results in an injury, physical or economic, to another.

A. The intent at issue is not intent to harm but, rather, is intent to engage in a specific act, which ultimately results in an injury, physical or economic, to another.

41. (p. 165) Which of the following holds that a person may be deemed not guilty by reason of insanity, even if he or she knew that a criminal act was wrong, as long as the defendant was driven to commit the crime from some urge resulting from a mental deficiency the defendant could not resist? A. The irresistible impulse test. B. The involuntary act. C. The substantial capacity test. D. The duress defense. E. The necessity defense.

A. The irresistible impulse test. The irresistible-impulse test allows a verdict of not guilty by reason of insanity even if the accused knew a criminal act was wrong, as long as some "irresistible impulse" resulting from a mental deficiency drove the person to commit the crime.

28. (p. 55) Doctor Sally was sued for malpractice based on allegedly removing the wrong body part. Following discovery, it becomes clear that the plaintiff has no credible evidence against Doctor Sally and that no reasonable jury could rule in the plaintiff's favor. How should Sally's lawyer proceed? A. The lawyer should make a motion for summary judgment. B. The lawyer should make a motion for additional discovery. C. The lawyer should make a motion to amend the answer in order to make a motion to dismiss. D. The lawyer should file a motion for judgment on the pleadings. E. The lawyer should proceed to trial.

A. The lawyer should make a motion for summary judgment. A motion for summary judgment is filed after the discovery process asserting that no factual disputes exist and that if the judge applied the law to the undisputed facts, her only reasonable decision would be in favor of the moving party.

30. (p. 707-708) Under which of the following may a court presume that an individual is abusing the bankruptcy provisions of Chapter 7 when an individual's debt is primarily consumer debt and the individual's income is above the median income in his or her state? A. The means test B. The assets test C. The median test D. The liquidation test E. The bankruptcy test

A. The means test

29. (p. 333) If the subject matter of an offer becomes illegal, what is the result? A. The offer immediately terminates. B. There is no effect as long as the offer was made at least one day before the subject matter of the offer became illegal. C. There is no effect as long as the offer was made at least ten days before the subject matter of the offer became illegal. D. There is no effect as long as the offer was made at least fifteen days before the subject matter of the offer became illegal. E. There is no effect as long as the offer was made at least thirty days before the subject matter of the offer became illegal.

A. The offer immediately terminates.

46. (p. 114) Which of the following is true on the issue of whether Sam had a right to remain silent? A. The officer was incorrect, and Sam had the right to remain silent based on his constitutional protection against self-incrimination. B. The officer was correct that Sam had no right to remain silent, and there has never been a constitutional right entitling a defendant to remain silent. C. The officer was correct that Sam had no right to remain silent because while at one time there was a constitutional right entitling a defendant to remain silent, that right was repealed by constitutional amendment. D. The officer was correct, and Sam had no right to remain silent because the right against self-incrimination only protects against crimes involving physical harm to another. E. The officer was partially correct because while Sam had a right to remain silent about other crimes, he did not have the right to remain silent about the drugs found in the initial search.

A. The officer was incorrect, and Sam had the right to remain silent based on his constitutional protection against self-incrimination. The Fifth Amendment protects against self-incrimination, meaning that in a criminal case, the defendant does not have to testify in court as a witness against herself or himself.

40. (p. 413) Which of the following parties must sign a document coming within the statute of frauds? A. The party against whom action is sought B. The offeror only C. The offeree only D. Only a person who has agreed to pay the debt of another E. Any party to the contract

A. The party against whom action is sought

53. (p. 407) Which of the following is true regarding Bruce's promises to Sally of a Mercedes and a trip? A. The promises fall within the statute of frauds. B. The promises do not fall within the statute of frauds because they involve material matters, not matters involving home and children. C. The promises do not fall within the statute of frauds unless Sally can prove that she would not have married Bruce without the assurance of the Mercedes and the trip. D. The promises fall within the statute of frauds unless Bruce can prove that Sally would have married him without the assurance of the Mercedes and the trip. E. The promises would have fallen within the statute of frauds in earlier times in history, but would not fall within the statute of frauds in this day and time.

A. The promises fall within the statute of frauds.

19. (p. 100) What does the term "police power" reference? A. The residual powers retained by each state to safeguard the health and welfare of its citizenry. B. The residual powers retained by the federal government to enforce valid laws and regulations. C. The powers granted to local government to enter residences without a search warrant. D. The powers granted to state governments to tax for the purposes of having law enforcement. E. The powers granted to state government to imprison citizens of other states who commit crimes within a state.

A. The residual powers retained by each state to safeguard the health and welfare of its citizenry. Police power consists of the residual powers retained by each state to safeguard the health and welfare of its citizenry.

31. (p. 354) Sally goes to have her hair trimmed and agrees to pay $40 to the stylist. While there, Sally decides that she would also like highlights. The stylist informs her that highlights will cost an additional $30. Sally agrees to the price, gets the highlights, but refuses to pay the extra amount. What is the likely result in a dispute between Sally and the stylist and why? A. The stylist will win because she did additional work in exchange for the extra payment; and, therefore, Sally's promise was supported by valid consideration. B. The stylist will win because she did additional work in exchange for the extra payment; and, therefore, a valid unilateral contract existed. C. The stylist will win unless Sally can show that she had previously received both a trim and highlights for $40. If she can prove that she previously received both for $40, then the past expectations rule applies. D. Sally will win because the stylist had a preexisting duty to have Sally's hair look as good as possible. E. Sally will win because there was no valid consideration in exchange for the highlighting.

A. The stylist will win because she did additional work in exchange for the extra payment; and, therefore, Sally's promise was supported by valid consideration.

39. (p. 335) Inez, wishing to sell a used business law book, calls Janice and tells her that if she does not hear from her within twenty-four hours, she will assume that Janice wishes to purchase the book for $50. Which of the following is correct regarding the status of the proposed book sale? A. There is no contract because in this situation silence cannot be used to form a contract. B. There can be no contract because the offer was not made in person. C. There can be no contract because the offer was not made in writing. D. Janice can avoid there being a contract only if she can prove by preponderance of the evidence that she did not hear about the offer before the stated expiration time. E. Janice can avoid there being a contract only if she can prove beyond a reasonable doubt that she did not hear about the offer before the stated expiration time.

A. There is no contract because in this situation silence cannot be used to form a contract.

52. (p. 85) Which of the following is true regarding private trials? A. They may allow defendants to hide wrongdoing from the public. B. Those who lack funds must use a slower public system, but information from private trials is open to the public, similar to trials in state or federal court. C. They are generally slower than regular litigation. D. They are a form of state or federal litigation closed to the public to protect the identity of litigants in certain sensitive situations. E. They unfairly discriminate against corporations because by law in some cases corporations must pay the costs involved for indigent plaintiffs.

A. They may allow defendants to hide wrongdoing from the public. Private trials, like arbitration, have been criticized because they allow disputing parties to "hide" the dispute from the public.

36. (p. 438) A[n] ______ is created when two parties enter into a contract with the intended end purpose of benefiting a third party. A. Third-party beneficiary B. Second-party beneficiary C. First-party beneficiary D. Assignment E. Creditor Beneficiary

A. Third-party beneficiary

36. (p. 195) Which of the following would constitute false imprisonment? A. Threatening to use immediate physical force to detain someone; refusing to release property; and physical restraint, such as tying someone to a chair; but not moral pressure. B. Threatening to use immediate physical force to detain someone; physical restraint, such as tying someone to a chair; and moral pressure; but not refusing to release property. C. Physical restraint, such as tying someone to a chair, but not threatening to use immediate physical force to detain someone, refusing to release property, or moral pressure. D. Threatening to use immediate physical force to detain someone; refusing to release property; physical restraint, such as tying someone to a chair; and moral pressure. E. Physical restraint and threatening to use immediate physical force, but not refusing to release property or moral pressure. The imprisonment may occur by (1) physical restraint, such as tying someone to a chair, (2) physical force, such as forcibly pinning someone against a wall, (3) a threat to use immediate physical force, or (4) refusal to release the plaintiff's property.

A. Threatening to use immediate physical force to detain someone; refusing to release property; and physical restraint, such as tying someone to a chair; but not moral pressure.

47. (p. 467) Why did equitable remedies come into being? A. To fashion remedies when the existing laws did not provide any adequate ones. B. To supplement compensatory damages with punitive damages. C. To provide a way to award nominal damages. D. To provide a way to award consequential damages. E. To provide a way to award certain parties liquidated damages.

A. To fashion remedies when the existing laws did not provide any adequate ones.

13. (p. 185) Which of the following is true regarding tort litigation? A. Tort litigation has been declining gradually since 1990. B. Tort litigation has increased steadily since 1990. C. Tort litigation has remained constant with no real change in numbers since 1990. D. Tort litigation increased significantly in the 1990s but has declined in the last two years. E. Tort litigation decreased in the 1990's but has increased steadily since the year 2000. Despite the public impression of a litigation explosion, tort litigation has been declining gradually since 1990.

A. Tort litigation has been declining gradually since 1990.

46. (p. 203) A person who commits a tort is often referred to as a ___________. A. Tortfeasor B. Guiltfeasor C. Criminal D. Runaway defendant E. Nominal defendant A person who committed a tort is often called a tortfeasor.

A. Tortfeasor

60. (p. 199) What action would William have against Annette for taking the rake? A. Trespass to property. B. Conversion. C. Private nuisance. D. Negligence. E. Harassment. A person commits trespass to personal property, also called trespass to personalty, by temporarily exerting control over another's personal property or interfering with the owner's right to use it.

A. Trespass to property.

31. (p. 5) The _______ is the supreme law of the land. A. U.S. Constitution B. Declaration of Independence C. U.S. Code D. Model Law E. Uniform Code

A. U.S. Constitution The U.S. Constitution is the supreme law of the land, the foundation for all laws in the United States.

44. (p. 47) What are the trial courts in the federal court system called? A. U.S. district courts B. U.S. circuit courts C. Federal circuit courts D. Federal jurisdictional courts E. Preemptory courts

A. U.S. district courts In the federal court system, the trial courts, or courts of original jurisdiction, are U.S. district courts.

40. (p. 77) A[n] ______ clause has been defined as one in which the terms are "manifestly unfair or oppressive and are dictated by a dominant party." A. Unconscionable B. Unreasonable C. Outrageous D. Prohibitive E. Unsupportable

A. Unconscionable An unconscionable contract provision has been defined as one in which the terms are "manifestly unfair or oppressive and are dictated by a dominant party."

34. (p. 5) Legislative acts passed by the U.S. Congress can be found in the ______. A. United States Code B. State codes C. Uniform Register D. State Reporter E. State Reference Manual

A. United States Code Legislative acts are written into the United States Code when they are passed by Congress.

44. (p. 316) A contract is ______________ if one or both of the parties, without breaching the contract, have the ability to either withdraw from the contract or enforce it. A. Voidable B. Executory C. Implied D. Executed E. Void

A. Voidable

"Puppy Woes." Sam promised to sell Linda a Welsh Corgi puppy for $700 but backed out of the deal. Linda sued Sam in state court for breach of contract and asked for a jury to hear the case. During jury selection, one juror, Ann, said that she did not think she could be fair to Linda because Linda did not appear to be a dog lover. Linda's lawyer asked that Ann not hear the case on the basis that she could not be fair, and the judge excused Ann. Linda also decided that another juror, Sandy, looked at her in a grumpy manner so, without a reason given, Linda's lawyer asked the judge to excuse that juror from serving. The judge did so. After the jury was chosen, Linda's lawyer made a statement to the jury as did Sam's lawyer. Linda's lawyer then called to the witness stand Brenda, a friend of Linda, who heard the discussion held between Linda and Sam regarding the purchase of the puppy. Brenda testified under questioning by Linda's lawyer that she heard Linda say that she would pay $700 for the puppy and that she also heard Sam say that he would sell the dog for that amount. Unfortunately for Linda, Brenda also testified in response to questioning by Sam's lawyer that Sam distinctly told Linda that he would only sell the puppy to her if Linda came with cash for the puppy within seven days. Linda did not show up with the money for ten days and Sam had already sold the dog to someone else. The judge ruled in favor of Sam. 71. (p. 57) In choosing the jury, the lawyers were engaged in ______. A. Voir dire B. Jury analysis C. Jury review D. Ven dere E. Shadowing

A. Voir dire Once the potential jurors have reported for jury duty, the voir dire, or jury selection, process begins.

41. (p. 199) Under which of the following situations does the tort of trespass to realty occur? A. When a person intentionally enters the land of another without permission; causes an object to be placed on the land of another without the landowner's permission; stays on the land of another when the owner tells him to depart; or refuses to remove something he placed on the property that the owner of the property asked him remove. B. When a person intentionally causes an object to be placed on the land of another without the landowner's permission; refuses to remove something he placed on the property that the owner of the property asked him remove; or intentionally enters the land of another without permission; but not when a person stays on the land of another when the owner tells him to depart. C. When a person intentionally enters the land of another without permission; causes an object to be placed on the land of another without the landowner's permission; or stays on the land of another when the owner tells him to depart; but not when a person refuses to remove something he placed on the property that the owner of the property asked him remove. D. When a person intentionally enters the land of another without permission; or stays on the land of another when the owner tells him to depart; but not when a person causes an object to be placed on the land of another without the landowner's permission or when a person refuses to remove something he placed on the property that the owner of the property asked him remove. E. A person does not commit trespass to realty unless it can be established that the person himself or herself initially entered the land of another without permission. The tort of trespass to realty, also called trespass to real property, occurs when a person intentionally (1) enters the land of another without permission; (2) causes an object to be placed on the land of another without the landowner's permission; (3) stays on the land of another when the owner tells him to depart; or (4) refuses to remove something he placed on the property that the landowner asked him to remove.

A. When a person intentionally enters the land of another without permission; causes an object to be placed on the land of another without the landowner's permission; stays on the land of another when the owner tells him to depart; or refuses to remove something he placed on the property that the owner of the property asked him remove.

39. (p. 354) Which of the following is true regarding an accord and satisfaction? A. When amounts agreed upon are paid, the debt is fully discharged. B. When amounts agreed upon are paid, the debt is fully discharged except for any late charges due on the initial indebtedness. C. When amounts agreed upon are paid, the debt is fully discharged except for any interest due on the initial indebtedness. D. When amounts agreed upon are paid, the debt is fully discharged except for any late charges and for any interest due on the initial indebtedness. E. When amounts agreed upon are paid, the debt is fully discharged except for any late charges or interest due on the initial indebtedness, or attorney fees of the creditor that are due.

A. When amounts agreed upon are paid, the debt is fully discharged.

42. (p. 112) When may government agents search without a search warrant? A. When law enforcement officials believe it is likely that the items sought will be removed before they can obtain a warrant. B. Outside of normal working hours for a judge. C. When they can show that the suspect who lives in the residence at issue has been in jail previously. D. When they can show that a felony is involved. E. When they can show that they have heightened probable cause.

A. When law enforcement officials believe it is likely that the items sought will be removed before they can obtain a warrant. An example of when government officials do not need a search warrant is when law enforcement officials believe it is likely that the items sought will be removed before they can obtain a warrant.

36. (p. 311) Harry and Frank are in agreement that Harry will pay Frank $2,000 for a used car. At what point is there a binding contract? A. When the agreement is made. B. When the money is paid. C. When the car is delivered. D. Ten days after the car is delivered and approved. E. Twenty days after the car is delivered and approved.

A. When the agreement is made.

23. (p. 431) Which of the following is an exception to the general rule that rights to a contract cannot be assigned when a contract is personal in nature? A. When the only part of a contract left to be fulfilled is the payment. B. When nothing has been done on the contract at all. C. When no more than half the contractual duties have been performed. D. When no more than three-fourths of the contractual duties have been performed. E. There is no exception because rights to a contract that is personal in nature may generally be assigned.

A. When the only part of a contract left to be fulfilled is the payment.

24. (p. 22) What do the letters "WPH" mean in reference to the "WPH Framework for Business Ethics" discussed in the text? A. Who, Purpose, and How B. When, Plan, and How C. Why, Procedure, and Hope D. Where, Plan, and Hope E. Where, Procedure, and How

A. Who, Purpose, and How The WPH framework addresses whom a decision would affect, the purpose of the decision, and the guidelines on how to make ethical decisions.

48. (p. 1142) Which of the following types of life insurance provides protection for the entire life of the insured and has a cash-surrender value? A. Whole-life B. Term-life C. Surrender-life D. Useful-life E. Entire-life

A. Whole-life

28. (p. 193) Under a conditional privilege, a party will not be held liable for defamation unless the false statement was made _______. A. with actual malice B. negligently C. in print D. publicly E. to an employer Under conditional privilege, a party will not be held liable for defamation unless the false statement was made with actual malice, that is, with either knowledge of its falsity or reckless disregard for its truth.

A. with actual malice

26. (p. 351) Sam offers Betty his bicycle for $75. Which of the following is an example of an illusory promise on the part of Betty? A. "I'll take it." B. "I'll take it if I decide to do so." C. "I won't pay $75, but I will pay $50." D. "I'll take it if you will let me try it out first and the brakes work well." E. "I'll take it if you will buy new tires."

B. "I'll take it if I decide to do so."

16. (p. 405) In ______ the English Parliament passed the Act for the Prevention of Frauds and Perjuries. A. 1555 B. 1677 C. 1770 D. 1776 E. 1865

B. 1677

41. (p. 28) Contrary to Brad's statement, does the Sarbanes-Oxley Act create a board of oversight; and, if so, what is its name? A. Brad is correct. No oversight board was created. B. A board called the Public Company Accounting Oversight Board was created by the Act. C. A board called the Public Accountability Commission was created by the Act. D. A board called the CPA Oversight Commission was created by the Act. E. A board called the Federal Accountability Commission was created by the Act.

B. A board called the Public Company Accounting Oversight Board was created by the Act. As set forth in Exhibit 2-7, the Sarbanes-Oxley Act created the Public Company Accounting Oversight Board.

"Dream Home." Maurice finds a dream home on the lake. He wants to buy it but is unsure whether he can get a loan. He signs a contract with the seller that he will buy the home provided that he can get a loan. Maurice also includes a contractual clause in the contract with the seller that if he loses his job before the date the purchase contract is signed, the seller will release him from any obligation. After getting a loan and buying the home, Maurice decided that he wanted new windows. He entered into a contract with a window contractor. The window contractor visited the home, but Maurice was always gone. The contractor made several attempts to reach Maurice, but Maurice would not return phone calls and made no attempt to assist the contractor with installation. 53. (p. 452) The provision that Maurice did not have to buy the house unless he was able to get a loan is referred to as which of the following? A. A condition subsequent B. A condition precedent C. A bona fide condition D. A condition concurrent E. An exculpatory condition

B. A condition precedent

52. (p. 172) Which of the following occurs when a defendant makes a first appearance? A. A magistrate determines whether there was proof beyond a reasonable doubt for the arrest. B. A magistrate determines whether there was probable cause for the arrest. C. A magistrate determines whether the defendant was properly booked but not whether the defendant was properly arraigned. D. A magistrate determines whether the defendant was properly arraigned but not whether the defendant was properly booked. E. A magistrate determines whether the defendant was properly booked and also whether the defendant was properly arraigned.

B. A magistrate determines whether there was probable cause for the arrest. After the prosecutor files the complaint, the defendant makes the first appearance before a magistrate, who determines whether there was probable cause for the arrest. If not, the individual is freed.

21. (p. 187) Which of the following is true regarding the apprehension necessary for the tort of assault? A. Apprehension and fear are the same thing. B. A person may be in apprehension of physical harm, even if the same person is too courageous to be afraid of that physical harm. C. Actual injury is necessary for valid apprehension to be proven. D. The test for assault involves subjective apprehension, not reasonable apprehension. E. There is no requirement that the apprehension be of immediate physical contact. An assault occurs if apprehension exists, regardless of fear.

B. A person may be in apprehension of physical harm, even if the same person is too courageous to be afraid of that physical harm.

45. (p. 718) Which of the following is an agreement by which the debtor agrees to pay a debt even though it could be discharged? A. A settlement B. A reaffirmation agreement C. An acknowledgement agreement D. An accord and compromise E. An affirmance

B. A reaffirmation agreement

58. (p. 60) What standard of proof would the judge apply in a criminal action against Greg? A. A preponderance of the evidence standard B. A standard of proof beyond a reasonable doubt C. A standard of proof by a margin D. A standard of certainty in proof E. A standard of proof beyond a reasonable question

B. A standard of proof beyond a reasonable doubt Criminal cases have a higher burden of proof than civil cases: The prosecution must prove its case beyond a reasonable doubt.

52. (p. 1133) Which of the following is true regarding the contention of ABC Insurance that it is not required to pay to Image Company the amount for which Bruno's life was insured? A. ABC Insurance Company is incorrect because Image Company held an economic interest in Bruno's life at the time the insurance was purchased. B. ABC Insurance Company is correct because Image Company no longer had an economic interest in Bruno's life. C. ABC Insurance Company is correct only if Bruno's new employer had purchased life insurance on his life. D. ABC Insurance Company is incorrect because Image Company had an economic interest in Bruno based on his possession of the jeep that Image Company still owned. E. ABC Insurance Company is incorrect only if Image Company owed Bruno retirement or some other sort of benefit.

B. ABC Insurance Company is correct because Image Company no longer had an economic interest in Bruno's life.

46. (p. 33) Which of the following is also referred to as ethical fundamentalism? A. Ethical relativism B. Absolutism C. Social responsibility D. Ethical absolutism E. Absolute theory

B. Absolutism Absolutism, or ethical fundamentalism, requires that individuals defer to a set of rules to guide them in the ethical decision-making process.

37. (p. 354) When an accord and satisfaction is at issue, the ______ is the new agreement to pay less than the creditor claims is owed. A. Satisfaction B. Accord C. Seal D. Compromise E. Acknowledgement

B. Accord

48. (p. 34) Which of the following theories most accurately fits the advice given by Sally? A. Deontology B. Act utilitarianism C. Rule utilitarianism D. Ethical relativism E. Virtue ethics

B. Act utilitarianism Act utilitarianism advises examining all the potential actions in each situation and choosing the action that yields the greatest amount of pleasure over pain for all involved.

13. (p. 150) Which of the following is the term that describes wrongful behavior in a criminal action? A. Mens rea. B. Actus reus. C. Res judicta. D. Stare decisis. E. Carpe diem.

B. Actus reus. Crime requires wrongful behavior, that is, actus reus or a guilty act.

46. (p. 375) A[n] ______ contract is a contract created by a party to an agreement that is presented to the other party on a take-it-or-leave-it basis. A. Substantively unconscionable B. Adhesion C. Outrageous D. Procedurally unreasonable E. Unreasonable

B. Adhesion

17. (p. 306) Which of the following consists of an offer by one party and an acceptance of the terms by another party? A. Legal object B. Agreement C. Coherence D. Alliance E. Concurrence

B. Agreement

31. (p. 709) Which of the following, if any, is a moratorium for almost all creditor litigation against a debtor in a Chapter 7 bankruptcy? A. A stop order B. An automatic stay C. A semi-automatic dismissal D. A semi-discharge E. There is no such moratorium in a Chapter 7 proceeding

B. An automatic stay

25. (p. 432) When parties include a[n] ______ clause in their contract, the parties are attempting to limit their ability to assign their rights under the contract. A. Antiobligation B. Antiassignment C. Anticontract D. Severability E. Integration

B. Antiassignment

31. (p. 456) Which of the following occurs when a contracting party refuses to complete the contract before the actual time of performance? A. Preemptive repudiation B. Anticipatory repudiation C. Advance refusal D. Advance repudiation E. Preparatory refusal

B. Anticipatory repudiation

32. (p. 74) According to the text, positive points of arbitration involve(s) which of the following? A. Arbitrators are assigned so parties do not have to pick them. B. Arbitration is generally less expensive than litigation. C. Arbitrators are bound by the same rules as judges in applying precedent. D. Arbitrations can be set aside on appeal for the same reasons as court judgments. E. Arbitrations prohibit the use of legal counsel.

B. Arbitration is generally less expensive than litigation. Arbitration is more efficient and less expensive than litigation.

20. (p. 187) A(n) _________ occurs when one person places another in fear or apprehension of an immediate, offensive bodily contact. A. Battery B. Assault C. Assault and battery D. Negligence E. Strict responsibility An assault occurs when one person places another in fear or apprehension of an immediate, offensive bodily contact.

B. Assault

21. (p. 387) Why is it important to distinguish between unilateral and mutual mistakes? A. Because it determines which contracts are considered fraudulent. B. Because it determines which contracts are voidable. C. Because it determines which contracts lack consideration. D. Because it determines how much may be awarded in damages under a contract. E. Because it determines whether punitive damages may be awarded.

B. Because it determines which contracts are voidable.

13. (p. 93) Why must federal legislation that affects business be based on an expressed constitutional grant of authority? A. Because the U.S. Congress passed a law to that effect. B. Because the federal government has only those powers granted to it by the Constitution. C. Because President Lincoln issued an executive order to that effect. D. Because President Washington issued an executive order to that effect. E. Because it is a custom.

B. Because the federal government has only those powers granted to it by the Constitution. Because the federal government has only those powers granted to it by the Constitution, federal legislation that affects business must be based on an expressed constitutional grant of authority.

"Refusal to Pay." Business law teacher Debby needed some yard work done. She told her class that she would give $50 to the first person who mowed her yard. She also entered into an agreement with Betty who agreed to trim some shrubbery for $40. Max went to mow Debby's yard. Unfortunately, just as he finished mowing, a neighborhood dog bit him, and he had to go to the emergency room for a couple of stitches. Debby refused to pay Max because she said that he had angered the neighbors and their dog, and that he was more trouble than he was worth. Secretly, Debby was glad about the dog bite because she felt it gave her an excuse not to pay. Max refused to pay the emergency room because he said that they did not have a binding, bilateral contract. Betty refused to trim the shrubbery because she got a better offer and claimed that she was not bound on the contract until she started to perform. 61. (p. 311-313) Which of the following is correct regarding Betty's statement that there was no contract? A. Betty is correct. There was no contract because she had not started working. B. Betty is incorrect because there was a bilateral, express agreement. C. Betty is incorrect because there was a bilateral, implied agreement. D. Betty is incorrect because there was a unilateral, express agreement. E. Betty is incorrect because there was a unilateral, implied agreement.

B. Betty is incorrect because there was a bilateral, express agreement.

23. (p. 1135) A[n] ______ is an agreement between an applicant and an insurance company that gives temporary insurance until the company decides to accept or reject the insurance application. A. Application B. Binder C. Notarization D. Approval E. Anticipatory agreement

B. Binder

41. (p. 372) Which of the following is a term for laws that limit the types of business activities in which parties may legally engage on Sundays? A. Red laws B. Blue laws C. True laws D. Colonial laws E. Christian laws

B. Blue laws

21. (p. 151) Which of the following occurs when someone unlawfully enters a building with the intent to commit a felony? A. Robbery B. Burglary C. Larceny D. Arson E. Criminal fraud

B. Burglary A burglary occurs when someone unlawfully enters a building with the intent to commit a felony.

28. (p. 309) In the U.S., which of the following are the two most important sources of contract law? A. Case law and the Restatement of Law, Contracts. B. Case law and the Uniform Commercial Code. C. The Uniform Commercial Code and the Convention on Contracts for International Sales of Goods. D. Case law and the Convention on Contracts for International Sales of Goods. E. The Convention on Contracts for International Sales of Goods and the Restatement of the Law, Contracts.

B. Case law and the Uniform Commercial Code.

72. (p. 57) The challenge to the juror who said that they could not be fair is referred to as a[n] ________. A. Peremptory challenge B. Challenge for cause C. Stipulated challenge D. Fairness challenge E. Approved challenge

B. Challenge for cause If a potential juror's response to a question indicates that she or he may be biased, either attorney may challenge, or ask the court to remove that potential juror "for cause."

37. (p. 459) Which of the following is used as a basis for discharge by operation of law when performance is still objectively possible but would be extraordinarily injurious or expensive to one party? A. Frustration of purpose B. Commercial impracticability C. Alteration of the contract D. Anticipatory repudiation E. Anticipatory renunciation

B. Commercial impracticability

30. (p. 5) Molly's reference to precedent involves which of the following? A. Statutory law that governs civil actions unless revoked by new common law B. Common law that is law unless revoked by new statutory law C. Administrative law that is law unless revoked by new common law D. Executive decisions that are law unless revoked by new administrative law E. Administrative law that is law unless revoked by new executive decisions

B. Common law that is law unless revoked by new statutory law Case law, also called common law, is the collection of legal interpretations made by judges which are law unless revoked later by new statutory law.

40. (p. 463) Which of the following damages are designed to put the plaintiff in the position he or she would have been in had the contract been fully performed? A. Equitable B. Compensatory C. Public D. Legal E. Punitive

B. Compensatory

45. (p. 203) The primary type of damages in tort law is referred to as _____. A. Punitive damages B. Compensatory damages C. Nominal damages D. Accrual damages E. Perspective damages Because the primary objective of tort law is to compensate victims, the primary type of damages is compensatory damages, designed to compensate the victim for all the harm caused by the person who committed the tort.

B. Compensatory damages

14. (p. 452) Contracts containing conditions affecting the performance obligations of the parties are called ______ contracts. A. Uncertain B. Conditional C. Unreasonable D. Voidable E. Void

B. Conditional

59. (p. 199) What claim would William have against Annette for taking the lawn chair? A. Trespass to property. B. Conversion. C. Private nuisance. D. Negligence. E. Harassment. Conversion occurs when a person permanently removes personal property from the owner's possession and control.

B. Conversion.

33. (p. 158) Which of the following occurs when companies bill consumers for optional services that the consumers did not order? A. Slamming B. Cramming C. Stuffing D. Fraudulent adding E. Fraudulent transfer

B. Cramming Cramming is a scheme in which companies bill consumers for optional services they did not order.

13. (p. 12) Which of the following refers to the ability to understand the structure of what someone is saying and then apply a set of criteria to evaluate its worth? A. Absolute skills B. Critical-thinking skills C. Cost-benefit skills D. Reviewability skills E. Traditional lawyer skills

B. Critical-thinking skills Success in business requires the development of critical-thinking skills - the ability to understand the structure of what someone is saying and then apply a set of criteria to evaluate its worth.

28. (p. 155) Which of the following is the misappropriation of trust funds or money held in a fiduciary capacity? A. False entries B. Defalcation C. False pretenses D. Ponzi scheme E. Pretexting

B. Defalcation According to Exhibit 7-1, defalcation involves the misappropriation of trust funds or money held in a fiduciary capacity.

31. (p. 434) A party to a contract who transfers his or her duty to perform to a third party who is not part of the original contract is called a[n] _____. A. Delegatee B. Delegator C. Assignor D. Assignee E. Transferor

B. Delegator

21. (p. 454) The parties' discharge of their obligations by doing what they respectively agreed to do under the terms of the contract is called ____. A. Discharge by tender B. Discharge by performance C. Discharge by finishing D. Discharge by absolution E. Discharge by reason

B. Discharge by performance

42. (p. 441) A[n] ______ beneficiary is a third party who benefits from a contract in which the promisor agrees to give a gift to the third party. A. Creditor B. Donee C. Incidental D. Promised E. Avowed

B. Donee

40. (p. 439) Which of the following is a type of intended beneficiary? A. Creditor, donee, and incidental B. Donee and creditor, but not incidental C. Incidental and creditor, but not donee D. Creditor but not donee or incidental E. Donee but not creditor or incidental

B. Donee and creditor, but not incidental

59. (p. 328) Which of the following is correct regarding the final status of the negotiations between Donna and Charles? A. Donna rejected Charles' offer by making a counteroffer. B. Donna did not reject Charles' offer because she merely made an inquiry. C. Donna cannot accept Charles' offer because he already sold the personal watercraft, and that terminated the offer to her. D. Donna cannot accept Charles' offer because it was revoked when he sold the hot tub to Everett. E. Donna cannot accept Charles' offer because she did not do so in her initial conversation with Charles.

B. Donna did not reject Charles' offer because she merely made an inquiry.

47. (p. 398) Which of the following occurs in Australia whenever an illegitimate threat is made to hold on to goods unless a payment is made or an agreement is entered into? A. Unconscionable duress B. Duress of goods C. Duress of merchandise D. Duress of trade E. Unreasonable duress

B. Duress of goods

22. (p. 1135) The ______ is the term used for the date an insurance policy begins coverage of an insured. A. Insured date B. Effective date C. Application date D. Acceptance date E. Covered date

B. Effective date

16. (p. 16) Which of the following is the study and practice of decisions about what is good, or right? A. Morals B. Ethics C. Consequences D. Law E. Business

B. Ethics Ethics is the study and practice of decisions about what is good, or right.

61. (p. 376) What type of agreement did Janice have the customer with green hair sign? A. Adhesion B. Exculpatory C. Procedural D. Substantive E. Malfeasance

B. Exculpatory

46. (p. 316) Once all the terms of the contract have been fully performed, the contract is said to be ___________. A. Executory B. Executed C. Anticipatory D. Ended E. Stopped

B. Executed

28. (p. 364) Which of the following occurs when a person reaches the age of majority and states, either orally or in writing, that he or she intends to be bound by the contract entered in to as a minor? A. Implied ratification B. Express ratification C. Express novation D. Implied novation E. Express ratification if the statement is in writing but nothing if the statement is only oral

B. Express ratification

35. (p. 195) Which of the following occurs when an individual is confined or restrained against his or her will for an appreciable period of time? A. Forcible detention. B. False imprisonment. C. Qualified imprisonment. D. Contained detention. E. False detention. False imprisonment occurs when an individual is confined or restrained against his or her will for an appreciable period of time.

B. False imprisonment.

27. (p. 155) Which of the following is a false document or sign of existence used to perpetrate fraud, such as making counterfeit money? A. False entries B. False token C. False pretenses D. Ponzi scheme E. Pretexting

B. False token According to Exhibit 7-1, the crime of "false token" involves a false document or sign of existence used to perpetrate a fraud, such as counterfeit money.

17. (p. 151) Which of the following is punishable by imprisonment for more than one year or death? A. Misdemeanor. B. Felony. C. Petty offenses. D. Tort offenses. E. Any business related crime.

B. Felony. Felonies include serious crimes, such as murder, that are punishable by imprisonment for more than one year or death.

30. (p. 104) Which amendment extends most of the provisions of the Bill of Rights to the states? A. Thirteenth B. Fourteenth C. Twenty-first D. Twenty-second E. Fortieth The Fourteenth Amendment extends most of the provisions in the Bill of Rights to the states, prohibiting state interference in citizens' exercise of their rights.

B. Fourteenth The Fourteenth Amendment extends most of the provisions in the Bill of Rights to the states, prohibiting state interference in citizens' exercise of their rights.

33. (p. 392) A[n] ______ is a false representation of a material fact that is consciously false and intended to mislead the other party. A. Negligent misrepresentation B. Fraudulent misrepresentation C. Scienter misrepresentation D. Acknowledged misrepresentation E. True misrepresentation

B. Fraudulent misrepresentation

58. (p. 433) What would be the most likely result if Fred sues Harry for the $4,000 payment? A. Harry will win because he did not expressly agree to the assignment. B. Fred will win because the right to receive payment could be validly assigned. C. Fred will win unless Harry can prove that Fred knew that Harry did not want the benefits assigned. D. Fred will lose unless Fred can prove that he was unaware that Harry did not want the benefits assigned. E. Harry will win because the portrait was personal in nature and payment for it could not be assigned.

B. Fred will win because the right to receive payment could be validly assigned.

37. (p. 110) What does the establishment clause of the First Amendment provide? A. Government cannot make a law prohibiting the free exercise of religion. B. Government cannot make a law establishing a religion. C. Government cannot make a law referencing religion in any manner. D. Government must establish laws respecting religion in order to prevent disruptive behavior such as terrorism and to allow free-exercise by the majority. E. That only religions recognized when the First Amendment was passed are entitled to recognition and protection.

B. Government cannot make a law establishing a religion. The establishment clause maintains that government "shall make no law respecting an establishment of religion."

34. (p. 334) Gretchen offers $100 to anyone who can return her lost dog, Sparky. Haley returns the dog and requests the money. Gretchen says that there is no binding contract. Which of the following is true regarding Gretchen's statement? A. Gretchen is incorrect because there is a binding bilateral contract. B. Gretchen is incorrect because there is a binding unilateral contract which Haley accepted by performing. C. Gretchen is correct because there is no binding bilateral contract. D. Gretchen is correct because there is no binding unilateral contract. E. Gretchen is correct because Haley acted incorrectly by her manner of attempted acceptance.

B. Gretchen is incorrect because there is a binding unilateral contract which Haley accepted by performing.

59. (p. 413) Which of the following is true regarding Harry's assertion that the statute of frauds is not satisfied because Rebecca did not sign the document? A. Harry is correct. B. Harry is incorrect because he is the one being sued, and he signed the document. C. Harry is incorrect because the statute of frauds did not require her signature so long as the selling price was referenced. D. Harry is incorrect because the statute of frauds did not require her signature so long as the type of subject matter involved was referenced. E. Harry is incorrect because the statute of frauds did not require her signature so long as the parties were clearly identified.

B. Harry is incorrect because he is the one being sued, and he signed the document.

"Lake House." Harry has two houses, a house on the lake and a house in town. Rebecca wants to buy the house on the lake. Harry and Rebecca orally agree that Rebecca will buy the house on the lake for $300,000. Harry hurriedly writes out a contract providing that he would sell "his house" to Rebecca for $300,000. Harry signs the top of the document. Rebecca does not sign at all. No merger clause is included in the contract. Harry backs out of the contract, and Rebecca sues him. He tells the judge that the statute of frauds is left unsatisfied because he did not sign the document at the end and also because Rebecca did not sign at all. He also tells the judge that, at any rate, the agreement referred to the house in town, not the house on the lake; and that under the parol evidence rule, he had the right to identify the correct house. 58. (p. 412-413) Which of the following is true regarding Harry's assertion that the statute of frauds is left unsatisfied because he did not sign the document at the end? A. Harry is correct. B. Harry is incorrect because while the statute of frauds would require his signature on the document, there is no requirement that the signature be at the end. C. Harry is incorrect because the statute of frauds did not require his signature so long as the selling price was referenced. D. Harry is incorrect because the statute of frauds did not require his signature so long as the type of subject matter involved was referenced. E. Harry is incorrect because the statute of frauds did not require his signature so long as the parties were clearly identified.

B. Harry is incorrect because while the statute of frauds would require his signature on the document, there is no requirement that the signature be at the end.

57. (p. 306) Which of the following describes Rick's role in the transaction? A. He was the offeror. B. He was the offeree. C. He was the assentor. D. He was the assentee. E. He was the offeree and the assent.

B. He was the offeree.

20. (p. 453) Which of the following describes conditions that are not explicitly stated but are inferred from the nature and language of the contract? A. Express B. Implied C. Conditional D. Concurrent E. At large

B. Implied

47. (p. 83) Which of the following is generally true regarding minitrials? A. It is more costly than arbitration. B. In a typical minitrial, business representatives have settlement authority. C. A minitrial utilizes a jury to make a recommended decision. D. A minitrial must follow and come after a failed mediation. E. A minitrial must follow and come after an arbitration.

B. In a typical minitrial, business representatives have settlement authority. In the typical minitrial, the business representatives, who presumably understand the complex matters of the dispute better than an outside arbitrator, have settlement authority.

25. (p. 1139) A[n] ______ clause states that after an insurance policy has existed for a specified period of time, the insurance company cannot contest any statements made in the insurance application. A. Antilapse B. Incontestability C. Assurance D. Approval E. Waiver

B. Incontestability

27. (p. 391) A[n] ______ misrepresentation results from a false statement about a fact material to an agreement that the person making the statement believed to be true. A. Wrongful B. Innocent C. False D. Misleading E. Illegal

B. Innocent

13. (p. 702) Which of the following is a term used in bankruptcy for debtors who cannot pay their debts in a timely fashion? A. Statutory debtors B. Insolvent debtors C. Failed transactors D. Foreclosed debtors E. Acknowledged transactors

B. Insolvent debtors

50. (p. 421) Which of the following are written contracts intended to be the complete and final representation of the parties' agreement? A. Complete contracts B. Integrated contracts C. Adhesion contracts D. Bilateral contracts E. Acknowledged contracts

B. Integrated contracts

56. (p. 118) If the law's classification scheme is based on gender, the law will be subject to ___. A. Rational basis scrutiny B. Intermediate scrutiny C. Severe scrutiny D. Strict scrutiny E. Legal scrutiny

B. Intermediate scrutiny If the law's classification scheme is based on gender or on the legitimacy of children, courts use intermediate scrutiny.

29. (p. 706) By filing a[n] ______ petition under Chapter 7, creditors can attempt to force a debtor into bankruptcy. A. Voluntary B. Involuntary C. Complaint D. Accusatory E. Dispute

B. Involuntary

57. (p. 712) What is the status of the exemption she claimed on the residence? A. It will likely be allowed because the value claimed is within the federal exemption allowed. B. It will likely be allowed because although it is more than the federal exemption, no creditor filed an objection to it. C. It will likely be disallowed because the federal limit for an exemption for a residence is $10,000. D. It will likely be disallowed because the federal limit for an exemption for a residence is $5,000. E. The status of the exemption is unclear without further information regarding the resale value of the home.

B. It will likely be allowed because although it is more than the federal exemption, no creditor filed an objection to it.

29. (p. 9) The officer's reference to the need for Molly to obey duly authorized law is a reference to which of the following? A. The historical school of law B. Legal positivism C. Natural law D. Legal realism E. Stare decisis

B. Legal positivism The concept of legal positivism sees our proper role as obedience to duly authorized law.

59. (p. 10) Which of the following is based on the idea that, when ruling on a case, judges consider more than just the law; they also weigh factors such as social and economic conditions? A. Cost-benefit analysis B. Legal realism C. Historical school D. Legal positivism E. Executive positivism

B. Legal realism Legal realism is based on the idea that, when ruling on a case, judges need to consider more than just the law; they also weigh factors such as social and economic conditions, since legal guidelines were designed by humans and exist in an ever-changing environment.

52. (p. 317) A ________________ is an agreement by the person who issues a letter to pay a sum of money on receipt of an invoice and other documents. A. Letter of agreement B. Letter of credit C. Letter of acknowledgement D. Negotiated credit instrument letter E. Letter of simple contract

B. Letter of credit

"Pet Pig Farm." Marcy wanted to buy Lucy's land and use it to breed small pigs to be kept as pets. Marcy told Lucy that having water on the property was very important although she did not mention to Lucy her plan to breed small pigs. Lucy assured her that a spring ran through one corner of the property. Therefore, Marcy agreed to buy the farm. Marcy, who loved pigs, assumed that the neighbors would be pleased with the pigs being in the area. Lucy also agreed to sell Marcy a used truck for $5,000. After the contract for the land sale was entered into, Marcy had a land survey done, and it was discovered that actually the spring did not run through the corner of Lucy's property. The area in which the spring ran actually belonged to a neighbor. Additionally, when Lucy brought Marcy the used truck, Marcy said, "That's not the truck!" It was discovered that Lucy, who had two trucks, thought that Marcy had bought the older truck although Marcy thought she had purchased the newer truck. Marcy was also surprised when she received a petition signed by all surrounding landowners objecting to the presence of the pigs and threatening to sue Marcy for nuisance. It will cost Marcy more than she had agreed to pay Lucy in order for Marcy to obtain a similar farm which actually has a spring on it. 50. (p. 391) Assuming that Lucy innocently made a misrepresentation regarding the spring running through the corner of the farm with no reason to believe that was incorrect, which of the following is true, considering only the lack of a spring issue, if Marcy does not want to go through with the sale? A. Marcy may rescind the contract and recover compensatory damages. B. Marcy may rescind the contract, but she may not recover damages. C. Marcy may sue for damages, but she may not rescind the contract. D. Marcy may rescind the contract, or she may keep the contract and sue for damages. E. Marcy has no remedy based on an innocent misrepresentation based on the theory that she should have checked more closely before entering into the contract.

B. Marcy may rescind the contract, but she may not recover damages.

11. (p. 68) Which of the following is a type of ADR? A. Consultation B. Mediation C. Case argument D. Case analysis E. Focus grouping

B. Mediation The term ADR refers to the resolution of legal disputes through methods other than litigation, such as negotiation, mediation, arbitration, summary jury trials, minitrials, neutral case evaluations, and private trials.

51. (p. 422) One way parties can indicate their desire to create an integrated contract is through the use of a[n] ______ clause. A. Complete B. Merger C. Adhesion D. Bilateral E. Acknowledged

B. Merger

60. (p. 51) Bob sued Jane over a motor vehicle accident. Bob and Jane settled the case prior to the trial for $1,000. The lawsuit is now ______. A. Ripe B. Moot C. Cased D. Standard E. Remanded

B. Moot Usually the issue of ripeness arises when one party claims that the case is moot—in other words, there is no point in the court hearing the case because no judgment can affect the situation between the parties.

66. (p. 55) The court may grant a ______ if after reviewing the evidence in the case, there is no factual dispute and one party is entitled to judgment prior to trial. A. Motion for judgment on the pleadings B. Motion for summary judgment C. Motion for sanctions D. Motion for discovery E. Motion for production

B. Motion for summary judgment The judge grants a motion for summary judgment if, after examining the evidence, no factual disputes are found.

20. (p. 387) A[n] ______ mistake is a mistake that is shared by both parties to an agreement. A. Unclear B. Mutual C. Unilateral D. Clear E. Double

B. Mutual

23. (p. 408) Which of the following is false regarding the statute of frauds and promises made in consideration of marriage? A. Agreements regarding marriage in which one party is gaining something other than a return on his or her promise to marry are within the statute of frauds and must be in writing. B. Mutual promises to marry fall within the statute of frauds. C. Prenuptial agreements fall within the statute of frauds. D. A prenuptial agreement is not automatically enforceable just because it is in writing. E. When one party promises something to the other as part of an offer of marriage, the contract must be in writing to be enforceable.

B. Mutual promises to marry fall within the statute of frauds.

53. (p. 9) The concept of _____ suggests that individuals should have the freedom to disobey a law enacted by people if their conscience goes against the law and they believe the law is wrong. A. Legal positivism B. Natural law C. Legal Realism D. Conscience reaction E. Comparative law

B. Natural law Under natural law, individuals not only have basic human rights but also the freedom to disobey a law enacted by people if their conscience goes against it and they believe it is wrong.

44. (p. 166) A defendant who argues that commission of a crime was necessary to prevent a more severe crime from occurring is relying upon the defense of _______. A. Entrapment B. Necessity C. Justifiable use of force D. Duress E. Inescapable action

B. Necessity One possible defense, known as the necessity defense, is to say a crime was necessary to prevent a more severe crime from occurring.

35. (p. 394) Which of the following refers to an intentional failure to provide pertinent information about a projected contract? A. Concealment B. Nondisclosure C. Negligence D. Secretion E. Entombment

B. Nondisclosure

35. (p. 458) Which of the following occurs when the parties to the agreement wish to replace one of the parties with a third party? A. Accord and satisfaction B. Novation C. Substituted contract D. Mutual rescission E. Alteration

B. Novation

25. (p. 309) Contract law is said to be based on a[n] ___________ theory, meaning that the existence and interpretation of the contract is based on the outward manifestations of intent by the parties. A. Subjective B. Objective C. Interpretive D. Appearing E. Unilateral

B. Objective

16. (p. 428) Which of the following is a contractual party who agrees to receive something from the other party? A. Obligor B. Obligee C. Assignor D. Assignee E. Boundee

B. Obligee

18. (p. 306) The person who makes an offer is called a[n] ___________. A. Offeree B. Offeror C. Agreeor D. Agree E. Inquirer

B. Offeror

18. (p. 405) As discussed in the text, a main purpose of the statute of frauds is to prevent unreliable _____ evidence from interfering with a contractual relationship. A. Hearsay B. Oral C. Irrelevant D. Immaterial E. Inconclusive

B. Oral

35. (p. 416) Under ____, if the buyer in an alleged contract for the sale of land has paid any portion of the sale price, has begun to permanently improve the land, or has taken possession of the land, the courts will consider the contract partially performed, and this partial performance will amount to proof of the contract. A. Substantial performance B. Partial performance C. Sales substantiation D. The purchase proof rule E. The sales proof rule

B. Partial performance

36. (p. 353) In return for his oral promise to pay her $100, Penny promises her uncle that she will not violate laws against speeding for one year. Penny abides by her promise, but her uncle refuses to pay. Which of the following is true regarding whether Penny is entitled to the money? A. Penny is entitled to the money because she upheld her part of the bargain. B. Penny is not entitled to recover because she had a preexisting duty to obey laws against speeding. C. Penny is not entitled to recover because obeying traffic laws was actually good for her, not something that would constitute a detriment. D. Penny is not entitled to recover unless the agreement was put under seal. E. Penny is entitled to recover, but only ½ of the amount, because a family member is involved and the agreement was not in writing.

B. Penny is not entitled to recover because she had a preexisting duty to obey laws against speeding.

"Cheap Motorcycle." Tony, a hateful, disgruntled, business law teacher notices that a student, Peter, who is past the age of majority, has a nice motorcycle that is for sale. Peter has struggled through school, is in his last semester, and needs to pass business law in order to graduate. Tony tells Peter that he would like to see Peter pass and, in the next sentence, says that he wants to buy the motorcycle for $100, a price far below the value of the motorcycle. Peter asks if Tony is serious about the price, and Tony replies, "I have the power here! Take it or leave it!" Tony proceeds to draw up a contract for the sale of the motorcycle for $100 which Peter signs. Peter does some research and finds that Tony has had several arrests for driving under the influence in a nearby town. As an act of revenge, Peter tells Tony that unless Tony sells Peter his new Mustang convertible for $50, he is publishing the facts about the arrests in the school newspaper. Tony reluctantly agreed to the deal. 54. (p. 397-398) Which of the following is true if Peter seeks to rescind the contract for the sale of the motorcycle? A. Peter may rescind the contract on grounds of fraud or on grounds of duress. B. Peter may rescind the contract on grounds of duress or on grounds of unconscionability. C. Peter may rescind the contract on grounds of undue influence or on grounds of duress. D. Peter may rescind the contract on the ground that although he is past the age of majority, he is still a student. E. Peter may not rescind the contract.

B. Peter may rescind the contract on grounds of duress or on grounds of unconscionability.

38. (p. 6) The term ______ involves the use of past decisions to guide future decisions. A. Commonality B. Precedent C. Restatement D. Uniformity E. Modeling

B. Precedent Precedent consists of past decisions in similar cases that guide later decisions.

25. (p. 408) Which of the following are debts incurred in an initial contract? A. Secondary obligations B. Primary obligations C. Secondary promises D. Collateral promises E. Suretyship promises

B. Primary obligations

38. (p. 439) The ______ in a third-party beneficiary contract is the party to the contract who made the promise that benefits the third party. A. Promisee B. Promisor C. Obligor D. Obligee E. Assignor

B. Promisor

46. (p. 443) When a donee beneficiary may enforce rights under a contract, it may be done so only against the ____. A. Promisee B. Promisor C. Obligor D. Initial contracting parties E. Assignee

B. Promisor

20. (p. 347) Which of the following is an exception to the rule requiring consideration? A. Promissory agreement B. Promissory estoppel C. Quasi estoppel D. Quasi agreement E. Promissory performance

B. Promissory estoppel

21. (p. 347) Which of the following occurs when three conditions are met: one party makes a promise knowing the other party will rely on it; the other party does rely on it; the only way to avoid injustice is to enforce the promise? A. Promissory agreement B. Promissory estoppel C. Quasi estoppel D. Quasi agreement E. Promissory performance

B. Promissory estoppel

42. (p. 466) Which of the following types of damages are designed to punish the defendant and deter him and others from engaging in similar behavior in the future? A. Consequential B. Punitive C. Liquidated D. Nominal E. Repugnant

B. Punitive

46. (p. 347) Christen graduates from college, receives a job offer across the country, and moves there giving up her apartment and cancelling all the other job interviews. After she gets there, she is told that there is no job. What may she recover in most states? A. Nothing B. Reliance damages C. Liquidated damages D. Acknowledged damages E. Approved damages

B. Reliance damages

15. (p. 385) When a contract is voidable, it may be ______. A. Chargeable B. Rescinded C. Deassented D. Reassented E. Uncharged

B. Rescinded

55. (p. 1139) Which of the following is most likely true regarding Sally's reliance on an incontestability clause if typical state laws are in effect? A. Sally is correct, and the insurance has been in effect over one year, a sufficient length of time for the incontestability clause to bar any defense by the insurer based on her failure to mention Bobby on the application. B. Sally is incorrect because the incontestability clause does not generally apply until coverage has been in effect for at least two years. C. Sally is incorrect because the incontestability clause operates to deny her the right to dispute inaccuracies on the application, not as a bar against the insurer. D. Sally is correct because the incontestability clause acts to bar an insurer from denying coverage in cases in which any driver with permission is driving an insured's vehicle. E. Sally is incorrect because incontestability clauses were barred by federal law a number of years ago.

B. Sally is incorrect because the incontestability clause does not generally apply until coverage has been in effect for at least two years.

31. (p. 105) Which amendment provides that the government cannot infringe on citizens' right to bear arms? A. First B. Second C. Fifth D. Sixth E. None

B. Second Exhibit 5-2, "Summary of the Bill of Rights," reflects the protection of the Second Amendment that in light of the need for a well-regulated militia for security, government cannot infringe on citizens' right to bear arms.

63. (p. 52) The plaintiff must provide the defendant in a lawsuit with a copy of the complaint. That process is called ______. A. Summons issuance B. Service of process C. Service delivery D. Subpoena delivery E. In personam service

B. Service of process Service of process occurs when the party's attorney serves (delivers) a copy of the complaint and a summons to the opposing counsel.

60. (p. 458) Which of the following is true regarding Alice's refusal to keep Creaky and Toady? A. She is discharged from performance because of frustration of purpose. B. She is discharged from performance because of impossibility of performance. C. She committed a material breach. D. She failed to substantially perform but only committed an immaterial breach. E. She is guilty of only a nominal breach because she had a good excuse for breaching.

B. She is discharged from performance because of impossibility of performance.

65. (p. 155) Of which of the following offenses, if any, is Alice guilty of by buying stock? A. She is guilty of insider trading because she tipped information. B. She is guilty of an insider-trading violation because she traded on tipped information. C. She is guilty of extortion. D. She is guilty of larceny. E. She is not guilty of any offense.

B. She is guilty of an insider-trading violation because she traded on tipped information. Insider-trading violations may also include "tipping" such information and trading on it by the person "tipped."

57. (p. 406) Which of the following is true regarding Wilma's statement to the judge that the agreement to sell the car was covered by the statute of frauds? A. She was correct. B. She was incorrect because while the UCC has a provision regarding writings for the sale of certain goods, that provision is not a part of the statute of frauds. C. She was incorrect because the statute of frauds provision involving the sale of goods only applies to goods costing over $1,500. D. She was incorrect because the statute of frauds provision involving the sale of goods only applies to goods costing over $2,000. E. She was incorrect because the statute of frauds provision involving the sale of goods only applies to goods costing over $5,000.

B. She was incorrect because while the UCC has a provision regarding writings for the sale of certain goods, that provision is not a part of the statute of frauds.

56. (p. 189) Statements made by Maryann to her friends that were defamatory of Candy are what type of defamation? A. Libel but not slander. B. Slander but not libel. C. Both libel and slander. D. No tort was committed because the statements were made only to friends of Maryann, not to business acquaintances of Candy. E. No tort was committed because the falsehood involved matters of appearance not business-related matters. If defamation is made orally, it is slander.

B. Slander but not libel.

51. (p. 468) Which of the following requires that the breaching party fulfill the terms of the agreement? A. Specific obligation B. Specific performance C. Absolute obligation D. Identified obligation E. Absolute performance

B. Specific performance

43. (p. 418) What does the term "parol" in the "parol evidence rule" mean? A. Words establishing penalties B. Speech or words, specifically words outside the original writing C. Oral speech as opposed to written words D. Written words as opposed to oral speech E. Signature required

B. Speech or words, specifically words outside the original writing

33. (p. 5) Legislative acts passed by state legislatures can be found in the ______. A. U.S. Code B. State codes C. Uniform Register D. State Reporter E. State Reference Manual

B. State codes Legislative acts are written into the appropriate state codes when they are enacted by state legislatures.

12. (p. 5) Joan comes to Mike's law office to ask him about the law in regard to dogs running at large in her neighborhood. Mike tells Joan that he will research the issue and get back with her. Where should Mike look first in order to locate applicable law? A. Restatements B. State statutes C. Case law D. The state constitution E. Executive orders

B. State statutes Case law is law unless revoked by new statutory law; therefore, statutory law should be consulted first.

32. (p. 5) The rules and regulations put forth by legislatures are referred to as _______ law. A. Administrative B. Statutory C. Uniform D. Proper E. Secondary

B. Statutory The assortment of statutes, or rules and regulations put forth by legislatures, is what we call statutory law.

26. (p. 309) As a general rule, the ________ intent of the parties is not relevant when determining whether a contract exists; rather, what is relevant is how they represented their intent through their actions and words. A. Objective B. Subjective C. Unilateral D. Comprehensive E. Considered

B. Subjective

38. (p. 75) If a contract does not provide for arbitration, parties may submit a specific dispute involving a contractual provision to arbitration through the use of a ______. A. Binding arbitration clause B. Submission agreement C. Binding mediatory clause D. Suggested ADR resolution clause E. The parties may not submit a specific dispute to arbitration if the contract does not provide for arbitration

B. Submission agreement If a contract does not contain a binding arbitration clause, parties may secure arbitration by entering into a submission agreement, a contract providing that a specific dispute will be resolved through arbitration.

17. (p. 452) A condition ______ is a future event that terminates the obligations of the parties when it occurs. A. Precedent B. Subsequent C. Concurrent D. At large E. Certain

B. Subsequent

52. (p. 115) Which of the following refers to the basic fairness of laws that may deprive an individual of her life, liberty, or property? A. Procedural due process B. Substantive due process C. Independent due process D. The prohibition against taking E. The prohibition against pervasive regulation

B. Substantive due process Substantive due process refers to the basic fairness of laws that may deprive an individual of her life, liberty, or property.

70. (p. 56) Billy, a witness to a motor vehicle accident, is gravely ill with cancer. Pat, who was injured in the accident, would like to preserve his testimony for trial in case he dies before the trial date. What should Pat do? A. Send interrogatories to Billy. B. Take Billy's deposition. C. Send a request to admit to Billy that the accident was the defendant's fault. D. Have a conference with the judge and Billy. E. There is nothing she can do.

B. Take Billy's deposition. The parties may use depositions when a witness is elderly, moving, or ill such that he may be unavailable at the time of the trial.

49. (p. 1142) Which of the following types of life insurance provides coverage for a specified term? A. Whole-life B. Term-life C. Surrender-life D. Useful-life E. Entire-life

B. Term-life

13. (p. 440-441) Alice owned a condominium directly above Sam. Alice failed to take proper care of some plumbing problems, and on several occasions Alice's plumbing problems caused leaking into Sam's apartment resulting in property damage. Both Alice and Sam had signed a condominium association agreement providing that each tenant would pay for any damage caused; that the agreement could be enforced by the management of the association or, in a proper case, by an aggrieved owner; and that adherence to the agreement was required "for the benefit of the Association and any person acquiring or owning an interest in the property." The association itself refused to sue Alice in order to recover damages with which to reimburse Sam. Therefore, Sam sued Alice himself. She claimed that he had no standing to sue. Which of the following is the most likely result of the dispute if the court follows Allan v. Nersesova, the case in the text involving a similar issue? A. That Sam could proceed but only if he could convince the association to join the lawsuit with his. B. That Sam was an intended beneficiary of the agreement between Alice and the association; that he had standing to sue; and that under the terms of the agreement, the association's failure to act gave him the right to proceed. C. That the agreement between Alice and the association addressed issues involving intentional wrongdoing, such as out-of-control parties, not issues involving utilities and that Sam, therefore, could not sue. D. That Sam was an intended beneficiary of the agreement between Alice and the association but that he had no right to sue because he nevertheless lacked standing. E. That Sam had standing based on the association's failure to act but that he nevertheless had no right to bring suit because he was not an intended beneficiary of the agreement between Alice and the association.

B. That Sam was an intended beneficiary of the agreement between Alice and the association; that he had standing to sue; and that under the terms of the agreement, the association's failure to act gave him the right to proceed.

12. (p. 1137-1138) Which of the following was the result in Hartford Underwriters Insurance Company v. The Cincinnati Insurance Company, the case in the text involving whether insurance coverage was available to a party injured when a vehicle hit her while she was loading a van and the policy at issue provided coverage for a person "occupying" a vehicle defined as "in, upon, getting in, on, out or off"? A. That a jury question was presented as to the meaning of the policy language. B. That any ambiguity in the language was resolved against the insurer writing the policy, that a reasonable reading of the policy included the claim, and that coverage was therefore available. C. That any ambiguity in the language was resolved against the claimant, that a reasonable reading of the policy indicated that incidents of the type involved were excluded, and that coverage was therefore unavailable. D. That the language was not ambiguous and that it clearly provided coverage. E. That the language was not ambiguous and that it clearly excluded coverage.

B. That any ambiguity in the language was resolved against the insurer writing the policy, that a reasonable reading of the policy included the claim, and that coverage was therefore available.

59. (p. 354) Which of the following should be the result in regard to Penny's obligation to Credit Card Company B? A. That the company is not bound by its promise because the debt was liquidated. B. That because Penny offered and the company accepted a different performance in discharge of the obligation, the company is bound. C. That because the car is worth only $1,000, nowhere near the amount of the debt, the company is released from its promise. D. That under equitable principles, upon disaffirming the agreement, Penny may keep the car, and the company must take a deduction of 50% on all amounts due. E. That under equitable principles, upon disaffirming the agreement, Penny must transfer the car to the company, and the company must take a deduction of 50% on all amounts due after sums received from the sale of the car are credited to Penny's account.

B. That because Penny offered and the company accepted a different performance in discharge of the obligation, the company is bound.

36. (p. 75) According to the text, which of the following are criticisms of arbitration? A. That arbitration is more expensive than court litigation. B. That companies can more easily hide misdoing. C. That it is too easy to get an arbitration award reversed by a judge. D. That parties have less control through the arbitration process than through a judicial action. E. That arbitration actions are less private than judicial actions.

B. That companies can more easily hide misdoing. Some scholars are concerned about the privacy associated with arbitration.

13. (p. 353) Which of the following was the judge's ruling in Jamil Blackmon v. Allen Iverson, the case in the text in which the plaintiff alleged that the defendant, a professional athlete, wrongfully failed to pay him a percentage of proceeds received from using the nickname "The Answer" in merchandising although the defendant agreed to do so after the plaintiff suggested the use of the nickname? A. That consideration was lacking because the defendant was not bound to use the nickname. B. That the defendant's promise to pay was past consideration insufficient to create a binding contract. C. That consideration was present and that the defendant was liable to the plaintiff. D. That the issue of consideration was irrelevant because consideration was not required in this type of contract. E. That the defendant was required to pay the plaintiff only half of the percentage initially offered because a gift situation was involved.

B. That the defendant's promise to pay was past consideration insufficient to create a binding contract.

14. (p. 379) What did the U.S. Supreme Court rule in Buckeye Check Cashing Inc., v. Cardegnaet, the case in the text involving whether the court or the arbitrator should determine decide the issues of a case when illegality in relation to a contract is claimed? A. That an arbitrator should address charges of illegality involving either an arbitration provision or a contract as a whole. B. That when an arbitration provision in a contract is not specifically challenged, an arbitrator should address a charge of illegality to a contract as a whole. C. That when an arbitration provision in a contract is not specifically challenged, a court should address a charge of illegality to a contract as a whole. D. That the court should address charges of illegality involving either an arbitration provision or a contract as a whole. E. That whether a court or an arbitrator should address charges of illegality involving either an arbitration provision or a contract as a whole depends upon the first to file rule.

B. That when an arbitration provision in a contract is not specifically challenged, an arbitrator should address a charge of illegality to a contract as a whole.

48. (p. 8) Which of the following is an independent agency? A. The Federal Deposit Insurance Corporation B. The Consumer Product Safety Commission C. The General Services Administration D. The Small Business Administration E. The Office of Personnel Management

B. The Consumer Product Safety Commission Exhibit 1-4 "Major Federal Administrative Agencies" reflects that the Consumer Product Safety Commission is an independent agency.

58. (p. 176) Carla learns that her employer, a healthcare facility, is committing fraud against the government by filing false Medicare claims. Under which of the following might she obtain a portion of any recovery obtained by the government? A. RICO. B. The False Claims Act. C. The Sarbanes-Oxley Act of 2002. D. The Medicare Recovery Act. E. The Healthcare Fraud Act.

B. The False Claims Act. Under the False Claims Act, private citizens may sue employers for fraud against the government.

54. (p. 117) Which of the following is true regarding privacy rights? A. The U.S. Supreme Court has said that the U.S. Constitution does not provide any right to privacy. B. The U.S. Supreme Court has found that U.S. citizens have a right to privacy based upon the U.S. Constitution. C. The U.S. Constitution specifically provides for a right to privacy within the Second Amendment. D. The U.S. Constitution specifically provides for a right to privacy within the Sixth Amendment. E. The U.S. Supreme Court has found that U.S. citizens have a right to privacy based upon the U.S. Constitution, and the U.S. Constitution specifically provides for a right to privacy within the Sixth Amendment.

B. The U.S. Supreme Court has found that U.S. citizens have a right to privacy based upon the U.S. Constitution. Courts have interpreted the Ninth Amendment, together with the First, Third, Fourth, and Fifth amendments, as providing individuals with a right to privacy.

25. (p. 46) In what state is XYZ Bank, a federally chartered bank, considered a citizen? A. The bank is considered a citizen of any state in which it is located, meaning any state in which the bank has branches. B. The bank is considered a citizen of the state in which it is located, meaning the state in which its main office as specified in its articles of incorporation is located. C. The bank is considered a citizen only of Washington D.C. D. The bank is considered a citizen only of the state in which it does its largest volume of business. E. The bank is considered a citizen of Washington D.C. and also of the state in which it does its largest volume of business.

B. The bank is considered a citizen of the state in which it is located, meaning the state in which its main office as specified in its articles of incorporation is located. According to the Supreme Court in Wachovia Bank N.A. v. Schmidt, a federally chartered bank is located in and is a citizen only in the state in which its main office, as specified in its articles of incorporation, is located.

55. (p. 353) In a lawsuit between the bank and Ted regarding the reward funds, who is likely to prevail and why? A. The bank is likely to prevail because Ted only provided past consideration. B. The bank is likely to prevail because Ted had a preexisting duty to catch Victor. C. The bank is likely to prevail because Ted's promise to catch Victor was illusory. D. Ted is likely to prevail because his promise to catch Victor resulted in a binding bilateral contract. E. Ted is likely to prevail because an enforceable unilateral contract exists based on his performance.

B. The bank is likely to prevail because Ted had a preexisting duty to catch Victor.

35. (p. 334) When acceptance is examined under the common law, how do the basic requirements for a valid acceptance compare with those for a valid offer? A. The basic requirements for a valid acceptance are materially different from those for a valid offer. B. The basic requirements for a valid acceptance parallel those for a valid offer. C. The basic requirements for a valid acceptance are different from those for a valid offer only because an offer must be in writing. D. The basic requirements for a valid acceptance are different from those for a valid offer only because an acceptance must be in writing. E. The basic requirements for a valid acceptance are different from those for a valid offer only because an offer must be revoked immediately but acceptance can be withheld for a reasonable period of time.

B. The basic requirements for a valid acceptance parallel those for a valid offer.

33. (p. 41) Paul lives in Florida but owns property in Tennessee for which he has not paid property tax in several years. Assuming the state meets procedural requirements, which of the following is true? A. The court can exert in personam jurisdiction over the property itself and sell it to satisfy the tax debt. B. The court can exert in rem jurisdiction over the property and sell it to satisfy the tax debt. C. The court can exert both in personam jurisdiction and in rem jurisdiction over Paul but must wait until his return to the state in order to sell the property to satisfy the tax debt. D. The court can exert both in personam jurisdiction and in rem jurisdiction over the property itself and may take control of the property, but the court must wait until Paul's return to the state in order to sell the property to satisfy the tax debt. E. The court has no right to sell the property to satisfy the tax debt because no jurisdiction is present.

B. The court can exert in rem jurisdiction over the property and sell it to satisfy the tax debt. If a defendant has property in a state, a plaintiff may file suit against the defendant's property instead of the owner through in rem jurisdiction over the property.

12. (p. 351) Which of the following was the result on appeal in Thelma Agnes Smith v. David Phillip Riley, the case in the text in which the plaintiff who had lived with the defendant out of wedlock for several years sought after they broke up to enforce two agreements regarding the sale and assignment of property to her? A. The court ruled in favor of the defendant on the basis that a recitation of nominal consideration of $1 along with love and affection was insufficient consideration to support a conveyance. B. The court ruled in favor of the plaintiff on the basis that a recitation of nominal consideration of $1 along with consideration of love and affection was adequate consideration to support the agreements. C. The court ruled in favor of the defendant on the basis that the plaintiff's previous deposit of funds into a joint checking account was insufficient consideration for the later agreements. D. The court ruled in favor of the plaintiff on the basis that the plaintiff's previous deposit of funds into a joint checking account was sufficient consideration for the later agreements. E. The court ordered the parties to divide on a 50/50 basis the assets in question based on their domestic partnership.

B. The court ruled in favor of the plaintiff on the basis that a recitation of nominal consideration of $1 along with consideration of love and affection was adequate consideration to support the agreements.

13. (p. 377) Which of the following was the result on appeal in Eric Lucier and Karen Haley v. Angela and James Williams, Cambridge Associates LTD., and Al Vasys, the case in the text in which, after finding significant problems with their roof, the plaintiffs claimed that provisions in a home inspection contract illegally limited the liability of the defendants? A. The court ruled in favor of the plaintiffs on the basis that although the contract was not unconscionable, public policy was violated. B. The court ruled in favor of the plaintiffs on the basis that the limitation of liability provision in the contract was unconscionable and violated the public policy of the state. C. The court ruled in favor of the defendants on the basis that no contract of adhesion was involved and that, therefore, by definition the contract satisfied public policy. D. The court ruled in favor of the defendants on the basis that the plaintiffs freely entered into the contract and should, therefore, be bound to its terms. E. The court ruled in favor of the defendants on the basis that while the court would intervene in appropriate cases, a presumption against a finding of unconscionability exists in home inspection contracts; and the plaintiffs failed to rebut that presumption.

B. The court ruled in favor of the plaintiffs on the basis that the limitation of liability provision in the contract was unconscionable and violated the public policy of the state.

40. (p. 314) Which of the following is the most likely measure of recovery when a quasi-contract is involved? A. The amount set forth in the contract. B. The fair market value of the matter involved. C. The wholesale price of any good involved. D. The amount sought by the plaintiff in the Complaint. E. Damages will be computed the same way as they are computed for any other contract.

B. The fair market value of the matter involved.

52. (p. 10) Alice's plan to seek change through following what others have done in the past, petitioning city council, is rooted in which of the following? A. Legal positivism B. The historical school C. Legal realism D. Natural law E. Cost-benefit analysis

B. The historical school One of the guidelines used for shaping the law is tradition or custom, referenced as the historic school.

37. (p. 710) Who calls the creditors' meeting in a Chapter 7 proceeding? A. The trustee B. The interim trustee C. The bankruptcy judge D. The district court judge E. At least three of the creditors

B. The interim trustee

60. (p. 35) What is a difficulty with the application of virtue ethics? A. The applicable categorical imperatives. B. The lack of agreement about the meaning of "the good life." C. The applicable principle of rights. D. The ethics of care analysis. E. The lack of agreement regarding which rules on balance produce the greatest amount of pleasure for the greatest number of people.

B. The lack of agreement about the meaning of "the good life." A difficulty with the application of virtue ethics is the lack of agreement about the meaning of "the good life."

20. (p. 100) What do courts generally presume regarding laws passed in accordance with states' police power? A. There is no presumption. B. The laws are valid. C. The laws are invalid. D. The laws are invalid unless it involves a First Amendment right. E. The laws are invalid unless it involves regulation of interstate commerce.

B. The laws are valid. Although the supremacy clause establishes the sovereignty of federal law, courts generally presume that laws passed in accordance with states' police power are valid.

22. (p. 332) Which of the following refers to the right of an offeror to revoke an offer? A. The offeror is the "controller of his offer." B. The offeror is the "master of his offer." C. The offeror is the "proponent of his offer." D. The offeror is the "adjudicator of his offer." E. The offeror is the "arbiter of his offer."

B. The offeror is the "master of his offer."

61. (p. 713) Which of the following is the most likely result of a claim of preferential payment based on the payment to the jewelry store? A. The payment was not preferential because it was for a consumer good and was not made within 30 days of the filing of the bankruptcy petition. B. The payment is presumed preferential on the basis that it was made within 90 days of the filing of the bankruptcy petition only if the trustee is able to establish that the jewelry store received more through the transfer than the jewelry store would have received through bankruptcy proceedings. C. The payment is presumed preferential on the basis that it was made within 90 days of the filing of the bankruptcy petition only if the trustee is able to establish Mindy's insolvency at the time and that the jewelry store received more through the transfer than the jewelry store would have received through bankruptcy proceedings. D. Because it was for a consumer good, the payment was not preferential unless the bankruptcy trustee can prove intent to defraud. E. The payment was preferential because it was made within 90 days of the filing of the bankruptcy petition.

B. The payment is presumed preferential on the basis that it was made within 90 days of the filing of the bankruptcy petition only if the trustee is able to establish that the jewelry store received more through the transfer than the jewelry store would have received through bankruptcy proceedings.

24. (p. 103) Which of the following prohibits states from discriminating against citizens of other states when those nonresidents engage in ordinary and essential activities such as seeking employment? A. The full faith and credit clause B. The privileges and immunities clause C. The contract clause D. The citizens' rights clause E. The first amendment

B. The privileges and immunities clause The privileges and immunities clause prohibits states from discriminating against citizens of other states when those nonresidents engage in ordinary and essential activities including buying and selling property, seeking employment, and using the court system.

53. (p. 115) What does the Fifth Amendment's takings clause reference? A. The right of the government to take private property for public use without paying compensation to the owner. B. The requirement that the government pay the owner just compensation if the government wants to take private property for public use. C. The right of the government to put individuals in jail for up to ten days without a hearing. D. The right of the government to put individuals in jail for up to five days without a hearing. E. The requirement that the government compensate an owner for anything destroyed during a search.

B. The requirement that the government pay the owner just compensation if the government wants to take private property for public use. The Fifth Amendment's taking clause provides that when government takes private property for public use, it must pay the owner just compensation, or fair market value, for the property.

46. (p. 418) Which of the following is false regarding the parol evidence rule? A. The purpose of the rule is to prevent evidence that substantially contradicts an agreement in its written form. B. The rule is a rule of evidence. C. The rule relates to substantive legal issues. D. The rule is not a unitary concept or rule. E. The rule is an amalgamation of different rules and conditions.

B. The rule is a rule of evidence.

17. (p. 94) Which clause provides that the Constitution, laws, and treaties of the United States constitute the supreme law of the land? A. The First Amendment, clause three B. The supremacy clause C. The commerce clause D. The Eighth Amendment, clause one E. The federalism clause

B. The supremacy clause The supremacy clause, located in Article VI of the Constitution, provides that the Constitution, laws, and treaties of the United States constitute the supreme law of the land, "any Thing in the Constitution or Laws of any State to the Contrary notwithstanding."

14. (p. 33) Which of the following presents a problem when considering the theory of ethics known as absolutism? A. The questionable nature of the rules in most absolutist repositories seems overly flexible when applied to different situations. B. The unquestionable nature of the rules in most absolutist repositories seems overly inflexible when applied to different situations. C. The lack of objectivity. D. The fact that most individuals associated with this theory have been proven to have acted to the detriment of their followers in one way or another. E. The allegation that an excessive number of followers actually follow consequentialism.

B. The unquestionable nature of the rules in most absolutist repositories seems overly inflexible when applied to different situations. The unquestionable nature of the rules in most absolutist repositories seems overly inflexible when applied to different situations.

14. (p. 93) The U.S. Constitution allocates the power of the federal government among _____ branches of the government. A. Two B. Three C. Four D. Five E. Six

B. Three In addition to allocating authority between state and federal governments, the Constitution allocates the power of the federal government among the three branches of government.

19. (p. 703) Which of the following titles of the United States Code contains the Bankruptcy Code? A. Title 9 B. Title 11 C. Title 7 D. Title 15 E. Title 34

B. Title 11

37. (p. 396) Which of the following refers to special relationships in which one person has taken advantage of his or her dominant position in a relationship to unduly persuade the other person? A. Fraudulent misrepresentation B. Undue influence C. Pressing dominance D. Pressing persuasion E. Relationship dominance

B. Undue influence

37. (p. 27) The ______ for ethical behavior seeks consideration of what the world would be like if a decision is copied by everyone else. A. Golden rule B. Universalization test C. Public disclosure D. Relevant disclosure E. World rule

B. Universalization test The universalization test for ethical behavior seeks consideration of what the world would be like if a decision is copied by everyone else.

53. (p. 34) An ethical theory that urges managers to take those actions that provide the greatest pleasure after having subtracted the pain or harm associated with the action in question is called ______. A. Deontology B. Utilitarianism C. Kantian ethics D. Absolutism E. Ethical relativism

B. Utilitarianism Like many consequentialist theories of ethics, utilitarianism urges managers to take those actions that provide the greatest pleasure after having subtracted the pain or harm associated with the action in question.

30. (p. 24) Positive abstractions that capture our sense of what is good or desirable are called ______. A. Ethical ideas B. Values C. Conscience demands D. Desirable principles E. Action goals

B. Values Positive abstractions that capture our sense of what is good or desirable are called values.

43. (p. 46) Billy knows that he can bring his case against Bob in a state court in Tennessee. He is unsure, however, of which county in which to proceed. Which of the following address the proper county? A. In personam jurisdiction B. Venue C. Subject-matter jurisdiction D. Diversity jurisdiction E. Long-arm jurisdiction

B. Venue Once a court is in the proper court system, venue determines which trial court in the system will hear the case.

45. (p. 418) When may a court rule find parol evidence admissible to further the court's understanding of an agreement? A. When a court determines that there is significant disagreement regarding the complete and final version of the agreement. B. When a court determines that a written agreement does not represent a complete and final version of the agreement. C. When a court determines that there is disagreement between the parties over performance of the agreement once performance has actually started. D. When a court determines that the plaintiff failed to do sufficient research to determine if signing the agreement was advisable. E. When a court determines that either party failed to do sufficient research to determine if signing the agreement was advisable.

B. When a court determines that a written agreement does not represent a complete and final version of the agreement.

37. (p. 196) Which of the following is generally true regarding a storekeeper who detains a suspected shoplifter? A. There is no special rule for shopkeepers. Shopkeepers commit the tort of false imprisonment if they detain anyone even if that person is suspected of shoplifting. Instead, the police should be called. B. When a retailer has a reason to believe that a person is guilty of shoplifting, the store may question the person about said shoplifting in a reasonable manner and for a reasonable length of time. C. Whenever a retailer has a reason to believe that a person is guilty of shoplifting, the store may detain the person for any length of time but may not ask any questions prior to the arrival of the police. D. The shopkeeper may detain the shoplifter only for a reasonable length of time but may not ask any questions prior to the arrival of the police. E. The shopkeeper may detain a shoplifter but for no longer than 20 minutes because by law it is assumed that it should take no longer than that amount of time for law enforcement officers to arrive. Retailers are protected under "shopkeeper's privilege," but the suspect cannot be held for an unreasonable length of time, and questioning must be reasonable.

B. When a retailer has a reason to believe that a person is guilty of shoplifting, the store may question the person about said shoplifting in a reasonable manner and for a reasonable length of time.

24. (p. 332) As a general rule, when is revocation effective? A. When it is mailed by the offeror. B. When it is received by the offeree. C. One day after it is made. D. Two days after it is made. E. Three days after it is made.

B. When it is received by the offeree.

40. (p. 112) When can government agents obtain a search warrant? A. When they can establish reasonable cause. B. When they can establish probable cause. C. When they can establish cause to a substantial certainty. D. Anytime they have an informant. E. Anytime the judge is in his office and they show identification as government agents.

B. When they can establish probable cause. Government officials can obtain search warrants only if they can show probable cause to believe that the search will uncover specific evidence of criminal activity.

46. (p. 328) Which of the following is true regarding distinguishing an offer from an invitation to negotiate? A. Whether an offer in fact existed is a question of law. B. Whether an offer in fact existed is a question of fact. C. Whether an offer in fact existed is a mixed question of law and fact. D. Whether an offer in fact existed depends solely on whether the alleged offer included a specific price. E. Whether an offer in fact existed depends solely on whether an acceptance of the alleged offer was made immediately so that the offeror knew he or she was bound.

B. Whether an offer in fact existed is a question of fact.

21. (p. 411) Under the Uniform Commercial Code, contracts for the sale of goods totaling more than ______ must be in writing. A. $200 B. $300 C. $500 D. $600 E. $1,000

C. $500

45. (p. 48) How many circuits does the U.S. Court of Appeals have? A. 6 B. 50 C. 12 D. 10 E. 13

C. 12 The United States has 12 circuits, including a circuit for the District of Columbia.

24. (p. 73) The arbitrator typically provides a decision within ____ days of an arbitration hearing. A. 10 B. 25 C. 30 D. 90 E. 120

C. 30 The arbitrator typically provides a decision within 30 days of an arbitration hearing.

40. (p. 713) For how many days prior to the filing of a Chapter 7 bankruptcy petition is a debtor assumed insolvent? A. 120 B. 60 C. 90 D. 45 E. 30

C. 90

16. (p. 150) Which of the following is an example of the imposition of strict liability? A. A robber pulls a gun to rob a bank teller. B. A burglar breaks into a home to steal jewelry. C. A business sells cigarettes to a minor. D. A minor shoplifts in a department store. E. An adult shoplifts in a department store.

C. A business sells cigarettes to a minor. Liability without fault, or strict liability, applies to actions that, regardless of the care taken, are specifically prohibited, such as selling cigarettes or alcohol to a minor.

26. (p. 333) Which of the following is an offer made by an offeree to an offeror relating to the same matter as the original offer and proposing a substituted bargain differing from that proposed by the original offer? A. A revocation B. An acceptance C. A counteroffer D. A cross offer E. A bilateral offer

C. A counteroffer

36. (p. 710) Which of the following is a meeting of all creditors listed in the Chapter 7 required schedules for liquidation? A. A debt meeting B. A control meeting C. A creditors' meeting D. An enforcement meeting E. A counseling meeting

C. A creditors' meeting

42. (p. 355) Assuming no exception applies, which of the following is true regarding the effect of a debtor offering to pay less money than is owed as full payment on a debt for which there is no dispute over the amount or existence of the debt, and the creditor agrees? A. A liquidated debt is involved, and there is an accord and satisfaction. B. A liquidated debt is involved, and there is an accord but no satisfaction. C. A liquidated debt is involved, and there is neither a satisfaction nor an accord. D. An unliquidated debt is involved, and there is an accord and satisfaction. E. An unliquidated debt is involved, and there is an accord but not satisfaction.

C. A liquidated debt is involved, and there is neither a satisfaction nor an accord.

39. (p. 712-713) Which of the following is a payment made by an insolvent debtor that gives preferential treatment to one creditor over another? A. An unfair payment B. An unequal payment C. A preferential payment D. An unendorsed payment E. An unapproved payment

C. A preferential payment

21. (p. 71) Which of the following is true regarding strikes under the National Labor Relations Act? A. A union must contact the State Mediation Consortium to attempt to mediate its demands before beginning a strike to achieve higher wages or better working hours. B. A union must contact the National Mediation Service to attempt to mediate its demands before beginning a strike to achieve higher wages or better working hours. C. A union must contact the Federal Mediation and Conciliation Services to attempt to mediate its demands before beginning a strike to achieve higher wages or better working hours. D. A union must contact the Judicial Arbitration and Mediation Services to attempt to mediate its demands before beginning a strike to achieve higher wages or better working hours. E. A union has no obligation to inquire into mediation before beginning a strike for any reason.

C. A union must contact the Federal Mediation and Conciliation Services to attempt to mediate its demands before beginning a strike to achieve higher wages or better working hours. Under the National Labor Relations Act (NLRA), a union must contact the Federal Mediation and Conciliation Services to attempt to mediate its demands before beginning a strike to achieve higher wages or better working hours.

54. (p. 34) A business manager who deceives everyone because the manager believes that deception maximizes pleasure over pain in a given situation is acting consistently with which ethical theory? A. Act deontology B. Ethical relativism C. Act utilitarianism D. Ethical fundamentalism E. Rule utilitarianism

C. Act utilitarianism According to act utilitarianism, a business manager who deceives an employee may be acting morally if the act of deception maximizes pleasure over pain for everyone involved.

62. (p. 53) A defendant uses a[n] ______ when her or his answer admits that the facts contained in the complaint are accurate but also includes additional facts that justify the defendant's actions and provide a legally sound reason to deny relief to the plaintiff. A. Secondary answer B. Pleading defense C. Affirmative defense D. Formal answer E. Personam answer

C. Affirmative defense A defendant uses an affirmative defense when her or his answer admits that the facts contained in the complaint are accurate but also includes additional facts that justify the defendant's actions and provide a legally sound reason to deny relief to the plaintiff.

50. (p. 84) When does a private trial typically occur? A. After a jury trial and prior to appeal. B. After a case has been filed in federal court, but parties must wait at least 30 days. C. After a case has been filed in either state or district court. D. Before a case has been filed in any court. E. Upon order of a federal judge only.

C. After a case has been filed in either state or district court. Generally, a private trial occurs after a case has been filed in either state or district court.

34. (p. 429) Paul and Mary have an agreement that Mary will buy Paul's house. Later Mary orally assigns the right to buy the house to Ally, one of Paul's former girlfriends. When Ally shows up with the money, Paul says "No way! You ditched me to date Rick. I'm not ever letting you get anything from me!" Which of the following is true in regard to the dispute between Paul and Ally? A. Ally can enforce the assignment only if the agreement that Paul and Mary had was in writing. B. Ally can enforce the assignment. C. Ally cannot enforce the assignment because it was not in writing. D. Ally cannot enforce the assignment because Paul did not specifically grant Mary the power to assign the contract. E. Ally cannot enforce the assignment because assignments to purchase property cannot ever be assigned for public policy reasons.

C. Ally cannot enforce the assignment because it was not in writing.

56. (p. 85) Which of the following is true regarding the federal appellate court system's use of ADR? A. All federal courts use arbitration but few have mediation programs. B. While ADR is popular at the district court level, few federal appellate courts use it. C. Almost all federal circuit courts of appeal have mediation programs underway. D. By law ADR is outlawed at the federal appellate court level. E. All federal appellate courts use early neutral case evaluation but none use mediation.

C. Almost all federal circuit courts of appeal have mediation programs underway. In the federal system, almost all the circuit courts of appeal have mediation programs.

46. (p. 398) The resulting contract from an agreement reached because one of the parties has so much more bargaining power than the other that he or she dictates the terms of the agreement is called which of the following? A. An outrageous contract B. An out-of-bounds contract C. An adhesion contract D. An untrue contract E. An unaffirming contract

C. An adhesion contract

55. (p. 453) The responsibility of Maurice to make arrangements to give the window installer access to the home is referred to as which of the following? A. A condition subsequent B. A condition precedent C. An implied condition D. An express condition E. An acknowledged condition

C. An implied condition

32. (p. 194) Without obtaining advance permission, Annie places an unflattering photograph of the president of the college which she attends on folders that she is selling outside of class for extra money. Which of the following is true? A. Annie has committed defamation of the college president in the form of slander. B. Annie has committed defamation of the college president in the form of libel. C. Annie has appropriated for commercial gain the photograph which constitutes an invasion of privacy. D. Annie has committed both defamation and invasion of privacy toward the college president. E. Annie has not committed any tort. Appropriation for commercial gain occurs when someone uses another person's name, likeness, voice, or other identifying characteristic for commercial gain without that person's permission.

C. Annie has appropriated for commercial gain the photograph which constitutes an invasion of privacy.

51. (p. 187) Millie's threat to punch Bernard in the nose and her action in raising back her arm in support constitute a[n] _______________. A. Assault and battery B. Battery C. Assault D. Justified retribution E. Negligence An assault occurs when one person places another in fear or apprehension of an immediate, offensive bodily contact.

C. Assault

20. (p. 428-429) Which of the following is false regarding the rights of an assignee and assignor? A. Assignees essentially fill in for the assignor as the legal recipient of contractual duties. B. Assignees acquire the same contractual duties as the assignor had. C. Assignees are offered more protection than assignors. D. The obligor may raise any of the same defenses for nonperformance against the assignee that he would have been able to raise against the assignor. E. When an assignor transfers rights to an assignee, the assignor legally gives up all rights he or she previously had to collect on the contract.

C. Assignees are offered more protection than assignors.

26. (p. 432-433) Which of the following is true regarding whether a contract may be assigned even in the presence of an antiassignment clause? A. Assignments made by operation of law may be assigned, but no other assignments may be made in the presence of an antiassignment clause. B. Assignments for the right to receive monetary payments may be assigned, but no other assignments may be made in the presence of an antiassignment clause. C. Assignments made by operation of law, assignments for the right to receive monetary payments, and assignments for the right to receive damages for a breach of contract to sell goods or services may be assigned even in the presence of an antiassignment clause. D. No contractual rights or duties may be assigned in the presence of an antiassignment clause. E. Antiassignment clauses are void as against public policy and have no effect on the right of assignment.

C. Assignments made by operation of law, assignments for the right to receive monetary payments, and assignments for the right to receive damages for a breach of contract to sell goods or services may be assigned even in the presence of an antiassignment clause.

11. (p. 422) Sally has a large farm and significant other assets. She agreed to loan her nephew Todd $100,000 with payments of principle and interest to be made yearly. A few years later she and Todd got into a dispute because Sally did not like his new girlfriend, Polly. Soon thereafter Todd got notice that Sally was suing him for not paying interest on the note. Todd defended on the basis that two years after the initial loan agreement was entered into, he and Sally entered into an oral agreement that he would perform services on her farm in lieu of paying interest on the note. If the court follows the reasoning of the court in the Case Opener involving Monroe Bradstad and Jeanne Garland, which of the following is the most likely result of the dispute between Sally and Todd involving whether he owes past interest amounts? A. Todd will be required to pay the interest amounts because the agreement involving performing services in lieu of paying interest was not in writing. B. Todd will be required to pay the interest amounts because the parol evidence rule bars evidence of any oral agreement outside the written agreement. C. Assuming the court credits Todd's account of events, Todd will not be required to pay the interest amounts because the oral agreement will be considered a separate enforceable agreement. D. Assuming the court credits Todd's account of events, Todd will not be required to pay the interest amounts because the oral agreement will be considered an extension and part of the original written agreement. E. Assuming the court credits Todd's account of events, based on the parol evidence rule, Todd will be required to pay only 1/2 of the interest amounts.

C. Assuming the court credits Todd's account of events, Todd will not be required to pay the interest amounts because the oral agreement will be considered a separate enforceable agreement.

29. (p. 353) Yolanda agrees to bathe and groom Wendy's dog, Fluffy Puff, for $30. Yolanda agreed to the price before seeing Fluffy Puff who is a chubby dog with lots of hair. Yolanda tells Wendy that if she is going to groom Fluffy Puff, the price will be $40. Wendy reluctantly agrees but tells Yolanda that she should not have been surprised that a dog named Fluffy Puff would have lots of hair. Yolanda bathes and grooms Fluffy Puff, but Wendy will only pay $30. Which of the following is correct regarding Yolanda's entitlement to the extra $10? A. Yolanda is entitled to the extra $10 because a valid bilateral contract existed. B. Yolanda is entitled to the extra $10 because a valid unilateral contract existed. C. Assuming the unforeseen circumstances rule does not apply, Yolanda is not entitled to the extra $10 because she had a preexisting duty to bathe and groom Fluffy Puff for $30. D. Assuming the unforeseen circumstances rule does not apply, Yolanda is not entitled to the extra $10 because Wendy's promise to pay $30 was illusory. E. Assuming the unforeseen circumstances rule does not apply, Yolanda is not entitled to the extra $10 because past consideration was involved.

C. Assuming the unforeseen circumstances rule does not apply, Yolanda is not entitled to the extra $10 because she had a preexisting duty to bathe and groom Fluffy Puff for $30.

24. (p. 188) Mike gets angry because Ben made a better grade on a test than he did. They get into an argument, and Mike takes a swing at Ben intending to hit him. Ben shoves Mike in order to avoid the blow. Which of the following is true regarding Ben's actions? A. Ben has committed a battery. B. Ben has committed both an assault and a battery. C. Ben has not committed an assault or a battery because he acted in self-defense. D. Ben cannot rely on self-defense because he was involved in the argument and not completely innocent. E. Ben cannot rely upon self-defense because his life was not in danger. The most common defense is self-defense, responding to the force of another with comparable force to defend yourself.

C. Ben has not committed an assault or a battery because he acted in self-defense.

33. (p. 435) Bill contracts with Judy to wash her car and then delegates the duty to Paul. Paul fails to wash the car. Which of the following is true regarding Bill's duty to Judy, if any? A. Bill has no duty to Judy so long as she did not expressly object to the delegation. B. Bill has no duty to Judy regardless of whether she objected to the delegation. C. Bill continues to be bound to Judy to see that her car gets washed. D. Bill continues to be bound to Judy to see that her car gets washed only if the contract expressly prohibited delegation. E. Bill continues to be bound to Judy to see that her car gets washed unless he already paid Paul for the job.

C. Bill continues to be bound to Judy to see that her car gets washed.

56. (p. 1135) Which of the following, if any, will ABC Insurance most likely be required to prove in order to deny coverage based on the discrepancy between the application and Bobby's driving? A. Only that Sally's misrepresentation was material. B. Only that the company's knowledge of the misrepresentation would have resulted in rejection of Sally's application. C. Both that Sally's misrepresentation was material and that knowledge of the misrepresentation would have resulted in the refusal to provide insurance. D. That Sally's misrepresentation was material; that knowledge of the misrepresentation would have resulted in rejection of her application; and that the insurer's loss would be in an amount over $10,000. E. There is no proof that ABC Insurance can provide to avoid coverage because, as a matter of law, it is clear that coverage must be provided based on Bobby's permissive use of the vehicle.

C. Both that Sally's misrepresentation was material and that knowledge of the misrepresentation would have resulted in the refusal to provide insurance.

28. (p. 455) A _____ occurs whenever a party fails to perform his or her obligations under the contract. A. Split B. Break C. Breach D. Misdeed E. Mistake

C. Breach

58. (p. 1141) On which of the following legal theories would the insurer likely attempt to deny coverage? A. Negligence B. Recklessness C. Breach of contract D. Misrepresentation E. Illegality

C. Breach of contract

47. (p. 354) Tina, an experienced pool contractor, and Bruce agree on a price for Tina to build a pool in Bruce's backyard. While the area is not known for rocks, unfortunately Tina unexpectedly encounters a significant problem with solid rock in the backyard when she starts to dig. She tells Bruce that unless she receives an extra $5,000, she cannot complete the job. Bruce agrees thinking to himself that he has a way out. When Tina finishes the pool, Bruce refuses to pay the additional $5,000. Which of the following is the most likely result of their dispute? A. Bruce will be required to pay because a typical, unilateral contract is involved, and he got the benefit of his bargain. B. Bruce will be required to pay because a typical, bilateral contract is involved, and he got the benefit of his bargain. C. Bruce will be required to pay because unforeseen circumstances are an exception to the preexisting duty rule. D. Bruce will not be required to pay because he provided no additional consideration, and the preexisting duty rule applies. E. Bruce will only be required to pay ½ of the agreed upon amounts because of the calculations involved under the preexisting duty rule.

C. Bruce will be required to pay because unforeseen circumstances are an exception to the preexisting duty rule.

15. (p. 16) Which of the following is the application of ethics to special problems and opportunities experienced by those in business? A. Situational ethics B. Consequentialism C. Business ethics D. Sarbanes-Oxley principles E. Business utilitarianism

C. Business ethics Business ethics is the application of ethics to special problems and opportunities experienced by business people.

15. (p. 361) Which of the following is an element of a legally binding contract? A. Inquiry B. Acknowledgement C. Capacity D. Knowledge E. Affirmance

C. Capacity

59. (p. 51) The ______ requirement ensures that courts do not render advisory opinions. A. Attachment B. Subject-matter jurisdiction C. Case or controversy D. In rem E. In personam

C. Case or controversy The case or controversy (or justiciable controversy) requirement ensures that courts do not render advisory opinions.

17. (p. 703) Which of the following chapters is used as a reorganization of the debtor's financial affairs under supervision of the bankruptcy court? A. Chapter 7 B. Chapter 9 C. Chapter 11 D. Chapter 14 E. Chapter 15

C. Chapter 11

19. (p. 2) Which type of law delineates the rights and responsibilities involved in relationships between persons and their government? A. Criminal B. Procedural C. Civil D. Natural E. Positive

C. Civil Civil law delineates the rights and responsibilities implied in relationships between persons and their government.

30. (p. 1141) If insurance covers some type of business risk, the insurance is called ______ insurance. A. Business loss B. Profit loss C. Commercial D. Economy E. Economic

C. Commercial

34. (p. 1141) A policy of fidelity insurance is an example of which of the following types of insurance? A. Business loss B. Profit loss C. Commercial D. Economy E. Economic

C. Commercial

35. (p. 1141) A policy of title insurance is an example of which of the following types of insurance? A. Business loss B. Profit loss C. Commercial D. Economy E. Economic

C. Commercial

30. (p. 309) The law of contracts is primarily _______________ law. A. Comprehensive B. Statutory C. Common D. Restated E. Modified

C. Common

56. (p. 9) Which of the following is reported in the Federal Reporter? A. Statutes B. Executive orders C. Common law D. Administrative laws E. Local ordinances

C. Common law Exhibit 1-5 "Where to Locate the Law," shows that the Federal Reporter is a source for common law.

58. (p. 463) Willis' offer to put Robert in the position he would have been in had the proper faucets and linoleum been used is based on the measure used for what type of damages? A. Nominal B. Punitive C. Compensatory D. Liquidated E. Consequential

C. Compensatory

18. (p. 453) Which of the following conditions occur when each party's performance is conditioned on the performance of the other? A. Precedent B. Subsequent C. Concurrent D. At large E. Certain

C. Concurrent

58. (p. 306) Which of the following is the term representing the $50 to be provided by Rick and the book to be provided by Beverly? A. Encouragement B. Material C. Consideration D. Inducement E. Provisions

C. Consideration

40. (p. 1142) Which of the following types of insurance protects contractors against liability for injuries that might occur while completing a job, excluding injuries to employees? A. Professional liability B. Compensation insurance C. Contractors' liability D. Building liability E. Harm liability

C. Contractors' liability

20. (p. 406) Which of the following is a type of contract that does not fall within the scope of the statute of frauds? A. Contracts related to an interest in land B. Promises made in consideration of marriage C. Contracts related to any lease of land or equipment D. Contracts whose terms prevent possible performance within one year E. Contracts for one party to pay the debt of another if the initial party fails to pay

C. Contracts related to any lease of land or equipment

37. (p. 162) Which of the following is true regarding corporate executives being held personally liable for business crime under the "responsible corporate officer" doctrine? A. A corporate executive may never be held personally liable for a business crime. B. Corporate executives may only be held personally liable for a business crime if they benefited personally from their actions in executing the business crime. C. Corporate executives may be found personally liable for a business crime even if they did not engage in, direct, or know about a specific criminal violation. D. A court may not assess criminal liability on a corporate executive unless the executive directly engaged in the specific criminal violation. E. Criminal liability may not be assessed against a corporate executive unless the executive directly engaged in the criminal activity and also profited directly and personally from the criminal activity.

C. Corporate executives may be found personally liable for a business crime even if they did not engage in, direct, or know about a specific criminal violation. Under the "responsible corporate officer" doctrine, a court may assess criminal liability even on a corporate executive or officer who did not engage in, direct, or know about a specific criminal violation.

30. (p. 434) A[n] ______ occurs when a party to a contract transfers his or her duty to perform to a third party who is not part of the original contract. A. Transfer B. Assignment C. Delegation D. Performance E. Unenforceable occurrence

C. Delegation

48. (p. 84) In which of the following do parties select a neutral third party and explain their respective positions to this neutral, who then evaluates the strengths and weaknesses of the case? A. Summary jury trial B. Med-arb C. Early neutral case evaluation D. Private trials E. Neutral submission

C. Early neutral case evaluation With early neutral case evaluation, the parties select a neutral third party and explain their respective positions to this neutral, who then evaluates the strengths and weaknesses of the case.

19. (p. 361) Which of the following occurs when a minor's parents or legal guardians give up their right to exercise legal control over the minor, typically when the minor moves out of the parents' house and begins supporting himself or herself? A. Ratification B. Disaffirmance C. Emancipation D. Legal release E. Reaffirmance

C. Emancipation

46. (p. 467) From what country did equitable remedies, as applied in the U.S., grow? A. France B. Italy C. England D. Spain E. Portugal

C. England

25. (p. 454) A contractual condition of satisfaction is considered a[n] ______ condition that must be met before the other party's obligation to pay for the performance arises. A. Partial B. Conditional C. Express D. Implied E. Concurrent

C. Express

25. (p. 154) Which of the following is the making of threats for the purpose of obtaining money or property? A. Bribery B. Criminal Fraud C. Extortion D. Larceny E. Importation

C. Extortion Extortion, otherwise known as blackmail, is the making of threats for the purpose of obtaining money or property.

47. (p. 719) Which of the following is true regarding the number of creditors who must vote to accept a reorganization plan under a Chapter 11 proceeding? A. For the plan to be accepted, one-third of the class of unsecured creditors must vote to approve it. B. For the plan to be accepted, one-half of the class of secured creditors must vote to approve it. C. For the plan to be accepted, two-thirds of the creditors of each class of creditors must vote to approve it. D. For the plan to be accepted, three-fourth of the creditors of each class of creditors must vote to approve it. E. For the plan to be accepted, one-fourth of the class of unsecured creditors must vote to approve it.

C. For the plan to be accepted, two-thirds of the creditors of each class of creditors must vote to approve it.

41. (p. 112) Which amendment protects citizens from unreasonable searches and seizures? A. First B. Third C. Fourth D. Sixth E. Tenth

C. Fourth The Fourth Amendment guarantees citizens the right to be "secure in their persons, their homes, and their personal property."

41. (p. 1142) Which of the following types of insurance protects a garage owner from liability to persons who are injured by the operation of the garage? A. Transportation liability B. Employee liability C. Garage liability D. Vehicle liability E. Peril

C. Garage liability

36. (p. 160) Which of the following is a person who illegally accesses or enters another person's or a company's computer system to obtain information or to steal money? A. Backer B. Reacher C. Hacker D. Trespasser E. Illicit user

C. Hacker Computer crimes may be committed by a hacker—a person who illegally accesses a computer system to obtain information or steal money.

60. (p. 420-421) Which of the following is true regarding Harry's assertion that under the parol evidence rule he had the right to identify the house referenced in the contract? A. Harry is correct. B. Harry is incorrect because under the parol evidence rule, Rebecca, as the buyer, would be allowed to identify the subject matter in the event of a discrepancy. C. Harry is incorrect because under the parol evidence rule, the judge would likely allow oral evidence regarding the house at issue in order to clarify an ambiguity. D. Harry is incorrect because the parol evidence rule would not apply in situations involving an ambiguity. E. Harry is incorrect because the parol evidence rule would not apply in the absence of a merger clause.

C. Harry is incorrect because under the parol evidence rule, the judge would likely allow oral evidence regarding the house at issue in order to clarify an ambiguity.

56. (p. 417) Which of the following is true regarding Wally getting a loan and putting a new roof on the house? A. Wally should have known better, and his actions would be of no use to him in attempting to enforce the contract. B. The judge would consider his actions under the UCC as exceptions to the parol evidence rule. C. His actions would likely amount to promissory estoppel, which establishes an exception to the statute of frauds. D. His actions would be considered as admissions. E. His actions would be considered only because Wilma told the judge that she had orally agreed to the contract.

C. His actions would likely amount to promissory estoppel, which establishes an exception to the statute of frauds.

61. (p. 11) Candy wants to start an Internet business doing business domestically as well as internationally. She is told by the Chinese government that certain items on her site are objectionable and illegal, and that if she wants to do business in China, she must remove the objectionable material. Which of the following is true? A. Candy is within her rights and should stand her ground. She is a U.S. citizen, and so long as she obeys U.S. laws, she can do business in China. B. Candy is within her rights only if she petitioned her state senator and obtained his or her permission to proceed. C. If Candy wants to do business in China, she must abide by Chinese law. D. By international law, there is a set fee of $10,000 that Candy can pay if she wants to obey only U.S. law. If she pays that amount, she can continue in China without any modification. E. By international law, there is a set fee of $5,000 that Candy can pay if she wants to obey only U.S. law. If she pays that amount, she can continue in China without any modification.

C. If Candy wants to do business in China, she must abide by Chinese law. Candy should understand comparative law which studies and compares the laws in different countries. The Chinese government does not want its citizens to have access to certain information and websites; and to do business there, Candy must conform to the Chinese standards.

40. (p. 355) Which of the following is true under the UCC regarding checks marked "paid-in-full"? A. If a business inadvertently cashes such a check, the business has 30 days from the date it cashed that check to offer repayment in the same amount to the debtor and avoid an accord and satisfaction. B. If a business inadvertently cashes such a check, the business has 60 days from the date it cashed that check to offer repayment in the same amount to the debtor and avoid an accord and satisfaction. C. If a business inadvertently cashes such a check, the business has 90 days from the date it cashed that check to offer repayment in the same amount to the debtor and avoid an accord and satisfaction. D. If a business inadvertently cashes such a check, the business has 120 days from the date it cashed that check to offer repayment in the same amount to the debtor and avoid an accord and satisfaction. E. The business has no recourse, and the debt is deemed discharged and satisfied.

C. If a business inadvertently cashes such a check, the business has 90 days from the date it cashed that check to offer repayment in the same amount to the debtor and avoid an accord and satisfaction.

27. (p. 78) Will Jill likely be bound by the arbitration provision that she can only receive $150 in damages? A. Yes, she signed the agreement. B. She will likely be bound only if the company can show that it has not made a substantial profit in the past 12 months. C. If an arbitration award on that basis is appealed, a federal district judge would likely find the provision unenforceable. D. She can avoid the provision if she testifies that she did not read it before signing the agreement. E. She will likely be bound unless she can show that the company made a misrepresentation to her.

C. If an arbitration award on that basis is appealed, a federal district judge would likely find the provision unenforceable. According to Exhibit 4-2, limitations on punitive damages or attorney fees are likely to be causes for refusing to uphold cases involving arbitration agreements.

37. (p. 369) If a licensing statute is intended to protect the public's health, safety, and welfare, an agreement with an unlicensed professional is typically deemed _____. A. Executed B. Enforceable without a fine C. Illegal and unenforceable D. Enforceable but with a fine E. Usury

C. Illegal and unenforceable

46. (p. 84) Which of the following is true regarding the use of arbitration and mediation in e-commerce cases? A. Increasingly, litigants are using arbitration, but not mediation, to resolve disputes in e-commerce cases. B. Increasingly, litigants are using mediation, but not arbitration, to resolve disputes in e-commerce cases. C. Increasingly, litigants are using arbitration and mediation to resolve disputes in e-commerce cases. D. Arbitration is allowed by federal law in e-commerce cases, but mediation is not allowed. E. Mediation is allowed by federal law in e-commerce cases, but arbitration is not allowed.

C. Increasingly, litigants are using arbitration and mediation to resolve disputes in e-commerce cases. Increasingly, litigants are using arbitration and mediation to resolve disputes in e-commerce cases.

51. (p. 33-34) What is the basis of consequentialism? A. Deontology B. Categorical imperatives C. Inquiry into the consequences D. Disregard of consequences E. Act utilitarianism

C. Inquiry into the consequences Consequentialism is a general approach to ethical dilemmas that requires that we inquire about the consequences to relevant people of our making a particular decision.

62. (p. 438-439) What type of third-party beneficiary is Sam? A. Intended and donee B. Creditor and incidental C. Intended and creditor D. Donee and incidental E. Creditor and donee

C. Intended and creditor

15. (p. 186) _________ torts occur when the defendant takes an action intending certain consequences will result or knowing certain consequences are likely to result. A. Criminal B. Liability C. Intentional D. Negligent E. Strict-liability Intentional torts occur when the defendant takes an action intending certain consequences or knowing they are likely to result.

C. Intentional

38. (p. 196) Which of the following occurs when someone engages in outrageous, intentional conduct likely to cause extreme emotional distress to the party toward whom the conduct is directed? A. Negligent infliction of emotional distress. B. Intentional infliction of strict-liability distress. C. Intentional infliction of emotional distress. D. Reckless invasion of solitude. E. Psychological infliction of distress. Sometimes called the "tort of outrage," intentional infliction of emotional distress occurs when someone engages in outrageous, intentional conduct likely to cause extreme emotional distress to another party.

C. Intentional infliction of emotional distress.

14. (p. 185) Which of the following are common classifications of torts? A. Intentional, negligent, and criminal. B. Intentional, criminal, and strict liability. C. Intentional, negligent, and strict liability. D. Criminal, negligent, and strict liability. E. Administrative, civil, and criminal. In the United States, torts are classified as intentional, negligent, or strict liability.

C. Intentional, negligent, and strict liability.

43. (p. 33) How is absolutism different from ethical relativism and situational ethics? A. It applies utilitarianism. B. It holds that a cost-benefit analysis should be applied. C. It holds that whether an action is moral does not depend on the perspective of the person facing the ethical dilemma. D. It applies virtue ethics and concentrates on the accepted values of the person at issue as well as those of the community involved. E. It applies corporate ethics principles.

C. It holds that whether an action is moral does not depend on the perspective of the person facing the ethical dilemma. Unlike ethical relativism and situational ethics, absolutism holds that whether an action is moral does not depend on the perspective of the person facing the ethical dilemma.

46. (p. 168) Which of the following is true regarding the Fourteenth Amendment? A. It is part of the Bill of Rights. B. Its safeguards only apply at the federal level. C. It is not a part of the Bill of Rights and it extends federal guarantee of due process and most constitutional protections to all states. D. It is a part of the Bill of Rights, its protections apply at the federal level, and its protections also apply at the state level. E. It is a part of the Bill of Rights, and its protections apply only at the federal level.

C. It is not a part of the Bill of Rights and it extends federal guarantee of due process and most constitutional protections to all states. While not part of the Bill of Rights, the Fourteenth Amendment does contain important constitutional safeguards that extend the federal guarantee of due process—and most constitutional protections—to all states.

14. (p. 215) Assume Bob, who had no notice of any heart problem, is driving and suddenly has an unexpected heart attack causing him to run over a student crossing the street breaking the student's leg in the process. Which of the following is true? A. The student can recover upon a showing of injury. Nothing else is required. B. The student may recover only if the student can show that the student was in the marked crosswalk. C. It is unlikely that the student can recover because the accident could not have been avoided even with reasonable care. D. The student can recover in an action for negligence only if it can be shown that Bob had insurance. E. The student can recover only if the student can establish that the student did not have any medical insurance. Sometimes harm occurs because an individual suffers an unfortunate accident, an incident that simply could not be avoided, even with reasonable care.

C. It is unlikely that the student can recover because the accident could not have been avoided even with reasonable care.

22. (p. 151) Which of the following is the secretive and wrongful taking and carrying away of the personal property of another with the intent to permanently deprive the rightful owner of its use or possession? A. Robbery B. White-collar burglary C. Larceny D. Arson E. Criminal fraud

C. Larceny Although the definition may vary slightly state by state, larceny is the secretive and wrongful taking and carrying away of the personal property of another with the intent to permanently deprive the rightful owner of its use or possession.

32. (p. 709) Which of the following is false regarding actions that may be taken while an automatic stay is in effect in a Chapter 7 proceeding? A. Creditors cannot attempt to repossess property during bankruptcy proceedings. B. A creditor who received a judgment against a debtor prior to the bankruptcy filing may not act to enforce the judgment. C. Legal actions to collect child support payments are subject to the stay. D. The court may exclude secured creditors from the stay if they petition the court to show that they do not have adequate protection under the stay. E. If the debtor was a debtor in a bankruptcy case that was dismissed within a year of the current bankruptcy case filing, the stay automatically terminates 30 days after the current filing.

C. Legal actions to collect child support payments are subject to the stay.

13. (p. 385) Which of the following involves a promise to buy or sell that the courts will require the parties to obey? A. Bilateral assent B. A special agreement C. Legal assent D. Contractual affirmance E. Legal affirmance

C. Legal assent

22. (p. 308) Which of the following references the requirement that a contract not be either illegal or against public policy? A. Consideration B. Capacity C. Legal object D. Illegal prohibition E. Ethical requirement

C. Legal object

44. (p. 467) Under which of the following type of damages do the parties specify in advance the damages if there is a particular kind of breach? A. Consequential B. Punitive C. Liquidated D. Nominal E. Repugnant

C. Liquidated

31. (p. 41) Laws which enable the court to serve a defendant outside the state as long as the defendant has sufficient minimum contacts within the state and it seems fair to assert jurisdiction are called ______. A. Minimum contact statutes B. Significant contact statutes C. Long-arm statutes D. In rem statutes E. Quasi in rem statutes

C. Long-arm statutes Long-arm statutes, passed by most states, enable the court to serve defendants outside the state as long as the defendant has sufficient minimum contacts within the state and it seems fair to assert long-arm jurisdiction over him or her.

34. (p. 416) All states except ______ adhere to the admission exception to the statute of frauds. A. Hawaii and Alaska B. Louisiana and New York C. Louisiana and California D. Kentucky and Florida E. North Carolina and Montana

C. Louisiana and California

47. (p. 1142) Which of the following is false regarding marine insurance in Scotland? A. Scotland has a Marine Insurance Act in its mercantile law that addresses insurance contracts. B. Marine insurance policies cover most marine activities including liability to third parties in the event of difficulties while at sea. C. Marine insurance policies are among the most simple and easy to understand insurance policies. D. Marine insurance policies tend to be exacting. E. Before an insurer will sign a policy, the value of the item insured must be specified in the contract.

C. Marine insurance policies are among the most simple and easy to understand insurance policies.

57. (p. 189) As far as the statements made to her friends are concerned, which of the following is true in regards to Maryann's statement that Candy cannot recover because Candy has not suffered a loss of income? A. Maryann is correct. B. Maryann is correct only if she can show that she did not intend to cause Candy loss of income. C. Maryann is incorrect because her statements constituted slander per se. D. Maryann is incorrect because general damages will be presumed. E. Maryann is incorrect but only because Candy cannot establish liable per se. In most states, an exception to the requirement of special damages in slander cases occurs if the defamation constitutes slander per se, statements so inherently harmful that general damages are presumed. A claim that someone is professionally incompetent falls into the category of slander per se.

C. Maryann is incorrect because her statements constituted slander per se.

18. (p. 330) The __________ terms of a contract are those terms that would allow a court to determine what the damages would be in the event that one of the parties breaches the contract. A. Important B. Significant C. Material D. Adequate E. Identifiable

C. Material

29. (p. 455) A[n] _____ discharges the nonbreaching party from his or her obligations under the contract. A. Immaterial breach B. Substantial breach C. Material breach D. Delineated breach E. Crossed breach

C. Material breach

30. (p. 455) Which of the following occurs when a party unjustifiably fails to substantially perform his or her obligations under the contract? A. Immaterial breach B. Substantial breach C. Material breach D. Delineated breach E. Crossed breach

C. Material breach

39. (p. 164) Which of the following is generally a legitimate defense to a charge of a crime? A. Mistake of law B. Vicarious liability C. Mistake of fact D. Mistake of felony E. Mistake of actus reus

C. Mistake of fact A mistake-of-fact defense tries to prove the defendant made an honest and reasonable mistake that negates the guilty-mind element of a crime.

27. (p. 2) Which of the following is true regarding Molly's predicament? A. Molly can be given a ticket and prosecuted criminally by government officials, but she cannot be sued for a civil violation. B. Molly can be sued for a civil action and must pay for Sam's car, but she cannot be prosecuted for a criminal violation. C. Molly can be sued in a civil action by Sam, and she can also be prosecuted by the government for a criminal violation. D. So long as Molly has insurance and can pay for Sam's vehicle damage, she cannot be prosecuted in a civil or criminal action. E. Sam can prosecute Molly in a criminal action, but he cannot sue her in a civil action.

C. Molly can be sued in a civil action by Sam, and she can also be prosecuted by the government for a criminal violation. Civil law, involving a preponderance of the evidence standard, delineates the rights and responsibilities implied in relationships between persons and their government; and criminal law, involving a standard of guilt beyond a reasonable doubt, regulates incidents in which someone commits an act against the public as a whole.

38. (p. 1132) Penny, a bit of a hypochondriac, decides that she should have MRIs covering her whole body and insists that her doctor order them. Penny tells her doctor that she is not concerned about cost because she has great insurance. Which of the following is the appropriate and recognized term for the problem associated with her behavior as far as an insurer is concerned? A. Hypochondria neurosis B. Hypochondria psychosis C. Moral hazard D. Medical excessiveness E. Unfair persuasiveness

C. Moral hazard

48. (p. 391) The reasoning in innocent misrepresentation cases resembles the reasoning in a[n] ______ case. A. Duress B. Unilateral mistake C. Mutual mistake D. Fraudulent misrepresentation E. Negligent misrepresentation

C. Mutual mistake

35. (p. 5) The group that urges states to enact model laws to provide greater uniformity of law is called the ______. A. Model Law on Uniform State Laws Organization B. Federal Uniform Law Commission C. National Conference of Commissioners on Uniform State Laws D. Model and Uniform Law Consortium E. Uniform Statutory Enforcement Commission

C. National Conference of Commissioners on Uniform State Laws The National Conference of Commissioners on Uniform State Laws (NCC) regularly urges states to enact model laws to provide greater uniformity.

53. (p. 173) Which of the following is a plea in which the defendant does not admit guilt but agrees not to contest the charges? A. Petit defense. B. Information. C. Nolo contendere. D. Sine qua non. E. Plea avoidance.

C. Nolo contendere. A defendant may plead nolo contendere, not admitting guilt but agreeing not to contest the charges.

27. (p. 454-455) If a contract does not clearly specify that the satisfaction is to be personal, the ______ standard applies. A. Express B. Subjective C. Objective D. Absolute E. Unbiased

C. Objective

42. (p. 418) The ______ rule is a common law rule that addresses the admissibility of oral evidence as it relates to written contracts. A. Oral admissibility B. Oral evidence C. Parol evidence D. Frauds evidence E. Deficient evidence

C. Parol evidence

19. (p. 151) Which of the following are minor offenses usually punishable by a jail sentence of less than six months or a small fine with an example being violation of a building code? A. Insignificant offenses. B. Felonies. C. Petty offenses. D. Tort offenses. E. Any business related crime.

C. Petty offenses. Petty offenses, such as violating a building code, are minor misdemeanors usually punishable by a jail sentence of less than six months or a small fine.

16. (p. 1132) Which of the following is a term used to define the payment made by an insured party in exchange for a later payment by an insurer in the event of damage or injury to insured property or person? A. Tag B. Bill C. Premium D. Assessment E. Requirement

C. Premium

"Not So Rich Uncle." Bruce is attempting to convince Sally to marry him. He promises her that if she will marry him, he will buy a new Mercedes automobile for her within six months of the marriage and take her on a world tour within a year of the marriage date. Sally reluctantly agrees, and they sign an agreement by which Bruce agrees to provide the Mercedes and world tour. Bruce and Sally marry on January 1. Unexpectedly, on March 1, Bruce's supposedly rich uncle, Frank, dies. Frank has no living relatives other than Bruce and has a will leaving everything to Bruce who is also appointed executor. In attempting to settle the estate, Bruce agrees orally to pay out of his own pocket debts of Frank totaling $10,000. Sally is concerned about Bruce's doing so. Bruce tells her not to worry because he will get all the money back when the estate settles. Bruce admits to a number of friends that he agreed to settle the debts out of his own pocket because he needed to obtain assets from the estate in a hurry and did not want anything to slow down probate. The assets were needed in large part to satisfy his obligations to Sally. Surprisingly, it later came to light that prior to his death Frank had signed away all his assets to his girlfriend in Argentina. There was nothing left in the estate for Bruce to inherit. Bruce disavowed his agreement to pay the $10,000 to various creditors of Frank. 52. (p. 408) Which of the following is the appropriate term for the marriage agreement entered into between Bruce and Sally? A. Marital solution agreement B. Marital dissolution agreement C. Prenuptial agreement D. Marriage acknowledgement agreement E. Marriage consideration agreement

C. Prenuptial agreement

58. (p. 199) Which of the following would be the most appropriate cause of action, if any, against Annette based upon the farm animals and the music? A. Trespass to property. B. Harassment. C. Private nuisance. D. Negligence. E. No cause of action is appropriate because Annette is entitled to use her property as she sees fit. A private nuisance occurs when a person uses her property in an unreasonable manner that harms a neighbor's use or enjoyment of his property.

C. Private nuisance.

14. (p. 428) Parties not in ______ usually do not have rights to a contract. A. Acknowledged contract B. Diverse contract C. Privity of contract D. Close contract E. Privileged contract

C. Privity of contract

57. (p. 375) Which of the following would be a possible defense to Bobby's contract involving chores based upon the size of the print on the back of the contract? A. Substantive unconscionability B. Unclear drafting C. Procedural unconscionability D. Outrageous wording E. Adhesion conscionability

C. Procedural unconscionability

44. (p. 375) A party who claims that he or she could not understand contractual terms because of tiny, hard-to-read print on the back of an agreement and the excessive use of legalese is referring to which of the following? A. Substantive unconscionability. B. Adhesion conscionability. C. Procedural unconscionability. D. Exculpatory clauses. E. An in pari delicto agreement.

C. Procedural unconscionability.

42. (p. 1142) Which of the following types of insurance protects the producer or manufacturer of a good from loss incurred by people who are injured using the good? A. Contractors' liability B. Strict liability C. Product liability D. Business operations E. Consumer protection

C. Product liability

24. (p. 348) As discussed in the case of Double AA Builders Ltd., v. Grand State Construction L.L.C., which of the following may be used to necessitate that a subcontractor perform according to the terms of its bid because the contractor has relied on the subcontractor's bid? A. Consideration B. Primary consideration C. Promissory estoppel D. Reality estoppel E. Secondary consideration

C. Promissory estoppel

49. (p. 204) ___________ damages are damages awarded to punish the defendant and to deter others from similar conduct. A. Nominal B. Compensatory C. Punitive D. Retaliatory E. Revenge Punitive damages are awarded both to punish conduct that is extremely outrageous and to deter similar activity by the defendant and others.

C. Punitive

51. (p. 317) A[n] _______________ arises when a person acknowledges in court that he or she will perform some specified act or will pay a price upon failure to do so. A. Contract under seal B. Voidable contract C. Recognizance D. Implied-in-fact E. Informal contract

C. Recognizance

23. (p. 387) In cases where both parties to a contract are mistaken about either a current or a past material fact, either can choose to ______ the contract. A. Uphold B. Confirm C. Rescind D. Refute E. Disclaim

C. Rescind

49. (p. 34) Which of the following theories most accurately fits the advice given by Jenny? A. Deontology B. Act utilitarianism C. Rule utilitarianism D. Ethical relativism E. Virtue ethics

C. Rule utilitarianism Rule utilitarianism holds that general rules that on balance produce the greatest amount of pleasure for all involved should be established and followed in each situation.

47. (p. 114) Which of the following references rights Sam had in regard to a hearing? A. Sam's right to substantive due process. B. Sam's First Amendment rights. C. Sam's right to procedural due process. D. Sam's Fourth Amendment rights. E. Sam's Second Amendment rights.

C. Sam's right to procedural due process. At a minimum, procedural due process entitles a person to notice of any legal action against them, and to a hearing before an impartial tribunal.

58. (p. 711) What is the status of the exemption she claimed for individual retirement account funds? A. She will not be able to claim that exemption. B. The status of the exemption is unclear without further information regarding beneficiaries of the IRA. C. She will be able to claim that exemption. D. She will be able to claim that exemption but only up to $50,000. E. She will be able to claim that exemption but only up to $25,000.

C. She will be able to claim that exemption.

40. (p. 6) When courts rely on precedent, they are obeying ______. A. Common analysis B. Res judicata C. Stare decisis D. In rem process E. Federal law

C. Stare decisis When courts rely on precedent, they are obeying the principle of stare decisis ("standing by their decision"), in which rulings made in higher courts become binding precedent for lower courts.

32. (p. 41) Which of the following is the same as attachment jurisdiction? A. In rem jurisdiction B. Personal jurisdiction C. Subject-matter jurisdiction D. Equitable jurisdiction E. Quasi in rem jurisdiction

C. Subject-matter jurisdiction Courts can gain quasi in rem jurisdiction, or attachment jurisdiction, over a defendant's property unrelated to the plaintiff's claim.

33. (p. 457) Which of the following occurs when, instead of canceling a contract, the parties substitute a new agreement in place of the original? A. Accord and satisfaction B. Novation C. Substituted contract D. Mutual rescission E. Alteration

C. Substituted contract

64. (p. 53) Which of the following is a document that notifies the defendant of the lawsuit and explains that if the defendant does not respond to the lawsuit within a certain period of time, a default judgment will be entered? A. Complaint B. Answer C. Summons D. Instructional guide E. Transactional analysis

C. Summons The summons tells the defendant that if he or she does not respond to the lawsuit within a certain period of time, the plaintiff will receive a default judgment.

50. (p. 317) How many states still allow a contract without consideration to be enforced if it is under seal? A. Five B. Eight C. Ten D. Twenty E. Thirty

C. Ten

22. (p. 454) An offer of performance by being ready, willing, and able to perform is known as ____. A. Offering B. Showing C. Tender D. Completer E. Implied acceptance

C. Tender

11. (p. 338) Which of the following was the result in Alexander v. Lafayette Crime Stoppers Inc., the case in the text in which the plaintiffs sued for collection of reward money offered to catch a serial killer by the defending publications, and the publications defended on the basis that the plaintiffs failed to provide notice as required by the reward offers because the plaintiffs provided relevant information to law enforcement, not the defendants? A. That the plaintiffs accepted the reward offers by performance when they provided information to law enforcement and were, therefore, entitled to recover. B. That the plaintiffs were entitled to prevail because by law they were required to contact law enforcement, not the defendants. C. That defendants did not receive acceptance of the reward offer and that, therefore, no contract was formed. D. That defendants revoked the reward offer before it was accepted and that, therefore, no contract was formed. E. That reward offers cannot constitute offers and that, therefore, no contract was formed.

C. That defendants did not receive acceptance of the reward offer and that, therefore, no contract was formed.

38. (p. 415) What was the result in Stewart Lamle v. Mattel Inc., the case in the text in which the plaintiff claimed that in discussions Mattel agreed to a three-year license agreement to distribute a board game the plaintiff created, and that the agreement was confirmed by Mattel through an email, but that Mattel later wrongfully refused to enter into a written contract and follow through with the deal? A. That as a matter of law the oral agreement was not enforceable because there was no writing. B. That it was up to a jury to decide if fairness mandated that Mattel be required to follow through with the admitted deal. C. That it was up to a jury to decide matters including whether the parties intended to be bound by the oral agreement and whether an email contained the material terms of the oral contract. D. That as a matter of law the parties intended to be bound by the oral agreement and that the email involved, sent by an agent of Mattel, contained the material terms of the oral contract thereby binding Mattel to the agreement. E. That no writing was required because the agreement did not come within the statute of frauds.

C. That it was up to a jury to decide matters including whether the parties intended to be bound by the oral agreement and whether an email contained the material terms of the oral contract.

16. (p. 400) Which of the following was the result on appeal in the Case Opener involving the claim that Michael Jordan owed $5 million based on his agreement to pay the plaintiff's mother on the premise that he was the father although it was later determined that the child was not his? A. That the agreement to pay $5 million could be rescinded based on a mutual mistake of fact. B. That the agreement to pay $5 million could be rescinded based on the mother's fraud. C. That the agreement to pay $5 million could be rescinded based on either a mutual mistake of fact or based on the mother's fraud. D. That the agreement to pay $5 million could not be rescinded because Jordan was aware of a question about his parentage. E. That the agreement to pay $5 million could not be rescinded because Jordan waited too long in which to complain about the contract.

C. That the agreement to pay $5 million could be rescinded based on either a mutual mistake of fact or based on the mother's fraud.

12. (p. 407) Which of the following was the result in the Case Nugget in the text involving the dispute between Dr. Ralph M. Aurigemma and New Castle Care, LLC, involving whether an oral agreement entered into on September 4 involving Dr. Aurigemma serving as medical director from October 1 of that year until October 1 of the next year was enforceable? A. That the contract was enforceable because agreements for professional services do not come within the protection of the statute of frauds. B. That the contract was enforceable because of the partial-performance exception to the statute of frauds. C. That the contract was not in writing and, therefore, could not be enforced. D. That the contract could not be enforced because of the parol evidence rule. E. That the contract could be enforced because of the parol evidence rule.

C. That the contract was not in writing and, therefore, could not be enforced.

51. (p. 169) Of which of the following must a defendant be informed before questioning? A. That the defendant must answer questions, or there will be a presumption of guilt at trial. B. That statements made to law enforcement before arraignment may not be used against the defendant in court. C. That the defendant has the right to consult an attorney before speaking to the police. D. That unless the defendant can afford any attorney, the defendant will not have an attorney. E. That the right to an attorney does not begin until after the defendant is arraigned.

C. That the defendant has the right to consult an attorney before speaking to the police. The Miranda rights and warnings include the warning, "You have the right to consult an attorney before speaking to the police and have an attorney present during any questioning now or in the future."

54. (p. 174) A judge reports that a jury was "hung". What does the judge mean? A. That the jury wanted to hang the defendant by imposing a heavy sentence. B. That the jury wanted to hang the prosecutor for unjustly charging the defendant. C. That the jury could not reach a verdict. D. That the jury had waited an excessive amount of time before reaching a verdict. E. That the jury had waited an excessive amount of time before retiring for the evening.

C. That the jury could not reach a verdict. A jury unable to reach a verdict is a "hung jury."

14. (p. 409-410) What did the appellate court rule in the case in the text, Power Entertainment Inc., v. Football League Properties Inc., involving the enforceability of an alleged oral agreement by which the plaintiff assumed a third party's debt owed to the defendant in return for the defendant transferring a licensing agreement to the plaintiff? A. That the plaintiff was barred from recovery by the suretyship provision of the statute of frauds. B. That the plaintiff could recover because the original agreement between the third party and the defendant was in writing. C. That the oral agreement fell outside the statute of frauds if the plaintiff satisfied the main purpose doctrine. D. That the oral agreement fell outside the statute of frauds if the plaintiff satisfied the parol evidence rule. E. That the plaintiff could recover as a matter of law because the statute of frauds does not apply to suretyship agreements.

C. That the oral agreement fell outside the statute of frauds if the plaintiff satisfied the main purpose doctrine.

15. (p. 702) In which of the following did Congress make comprehensive changes to bankruptcy law? A. The Bankruptcy Trust, Reconciliation, and Remedial Amendments of 2000 B. The Bankruptcy Fraud Protection Act of 2007 C. The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 D. The Bankruptcy Fraud and Consumer Shield Act of 2006 E. The Insolvency Protection Amendments of 2006

C. The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005

25. (p. 191) Which of the following gives immunity to providers of interactive computer services for liability they might otherwise incur on account of material disseminated by them but created by others? A. The Internet Communications Act of 2000. B. The Interactive Computer Services Protection Act of 2004. C. The Communications Decency Act of 1996. D. The Internet Communications Protection Act of 1998. E. The Blog Protection Act of 2001. One section of the Communications Decency Act of 1996 gives immunity to providers of interactive computer services for liability they might otherwise incur on account of material disseminated by them but created by others.

C. The Communications Decency Act of 1996.

29. (p. 434) Which of the following states that in the case of multiple assignments of the same right, the first assignee to give notice of assignment to the obligor is the party with rights to the contract? A. The first-assignment-in-time rule B. The last-assignment-in-time rule C. The English rule D. The French rule E. The American rule

C. The English rule

40. (p. 336) Which of the following sets forth the common law rule that the terms of an acceptance must mirror the terms of an offer? A. The Matching Rule B. The Complete Rule C. The Mirror Image Rule D. The Exact Rule E. The Parallel Rule

C. The Mirror Image Rule

59. (p. 177) Which of the following was passed largely in response to business scandals of the early 2000's, such as those implicated by Enron, WorldCom, Global Crossing, and Arthur Anderson? A. RICO. B. The False Claims Act. C. The Sarbanes-Oxley Act. D. The Medicare Recovery Act. E. The Healthcare Fraud Act.

C. The Sarbanes-Oxley Act. Congress passed the Sarbanes-Oxley Act in 2002 largely in response to the business scandals of the early 2000s that implicated firms such as Enron, WorldCom, Global Crossing, and Arthur Andersen.

31. (p. 411) Which of the following is needed in order to satisfy the UCC's requirement for a written document? A. The contract or memorandum needs only to state the price of the goods. B. The contract or memorandum needs only to state the quality of the goods. C. The contract or memorandum needs only to state the quantity to be sold. D. The contract or memorandum needs to state the price of the goods and the quality of the goods, but not the quantity to be sold. E. The contract or memorandum needs to state the price of the goods, the quality of the goods, and also the quantity to be sold.

C. The contract or memorandum needs only to state the quantity to be sold.

53. (p. 709) Assuming that Mona does not object to the bankruptcy proceeding, what is the next step that should occur? A. The court should appoint a temporary trustee. B. The court should appoint a trustee. C. The court should enter an order of relief. D. The court should hold a creditor's meeting. E. The court should determine if any claims have priority.

C. The court should enter an order of relief.

17. (p. 16) A local Chamber of Commerce plans a seminar on "the social responsibility of business in our community." What does that term reference? A. The responsibility of business to make profit for shareholders. B. The responsibility of business to have annual meetings. C. The expectations that the community imposes on firms doing business inside its borders. D. The expectations of employees regarding wage rates. E. The expectations of management in regard to adequate utility resources.

C. The expectations that the community imposes on firms doing business inside its borders. The social responsibility of business consists of the expectations that the community imposes on firms doing business inside its borders.

26. (p. 408) Which of the following is an exception as to when a secondary obligation needs to be in writing? A. The primary-purpose rule B. The resulting-fact rule C. The main-purpose rule D. The delineated rule E. The personal-obligation standard

C. The main-purpose rule

43. (p. 114) Which of the following is an exception to the rule that administrative searches usually require search warrants? A. The regulatory exception B. The reasonable-search exception C. The pervasive-regulation exception D. The compelling-need exception E. The controlling-principle exception

C. The pervasive-regulation exception Although administrative searches usually require search warrants, courts have established an exception to this rule in that if an industry has a long history of pervasive regulation, a warrantless search is not unreasonable although the pervasive-regulation exception is not always easy to interpret.

40. (p. 43) For purposes of diversity-of-citizenship, where does a corporation reside? A. The state of incorporation only. B. Only the state in which the corporation has its principal place of business. C. The state in which the corporation has its principal place of business and the state of incorporation. D. Any state in which the corporation does business. E. Any state in which the corporation has done business within the last five years.

C. The state in which the corporation has its principal place of business and the state of incorporation. A business may reside in two states: the state of its incorporation and the state of its principal place of business.

35. (p. 710) Which of the following is false regarding rights of a trustee in a Chapter 7 bankruptcy? A. The trustee takes possession of the debtor's property and has it appraised. B. If someone else holds the debtor's property, the trustee has the power to require the person to return that properly. C. The trustee examines the debtor's records but may not even temporarily take over the debtor's business. D. The trustee can initiate collection actions but must also defend against creditor actions. E. The trustee separates the exempt property from the nonexempt property and sells the nonexempt property.

C. The trustee examines the debtor's records but may not even temporarily take over the debtor's business.

15. (p. 452) Which of the following is true regarding types of conditions? A. There is only one type of condition: precedent. B. There are two types of conditions: precedent and subsequent. C. There are three types of conditions: precedent, subsequent, and concurrent. D. There are four types of conditions: precedent, subsequent, concurrent, and timeliness. E. There are at least ten types of conditions, and their identification varies based upon the subject matter.

C. There are three types of conditions: precedent, subsequent, and concurrent.

56. (p. 397) Which of the following is true if Tony seeks to rescind the contract for the sale of the Mustang? A. Tony may rescind the contract on grounds of fraud. B. Tony may rescind the contract on grounds of misappropriation of name or likeness. C. Tony may rescind the contract on grounds of duress. D. Tony may rescind the contract on grounds of defamation. E. Tony may not rescind the contract because truth is involved.

C. Tony may rescind the contract on grounds of duress.

48. (p. 60) Which of the following is true regarding trials in Japan? A. The Japanese trial system has juries that function similar to juries in America. B. The discovery process in the Japanese court system is much simpler than that in America. C. Trial involves a series of discrete meetings between the parties and the judge. D. Known evidence must be automatically exchanged without request or order of the court. E. Only civil penalties may be imposed in civil cases for parties violating judicial orders. The Japanese legal system has no juries, the discovery process is not as simple as it is in the U.S., and trial is a series of discrete meetings between the parties and the judge.

C. Trial involves a series of discrete meetings between the parties and the judge.

43. (p. 375) The term ______ refers to the fact that an agreement is so unfair that it is void of conscience. A. Unreasonable B. Outrageous C. Unconscionable D. Unrealistic E. Unbelievable

C. Unconscionable

42. (p. 316) A valid contract may be valid but _____________ when there is some law that prohibits the courts from enforcing it. A. Executed B. Executory C. Unenforceable D. Novated E. Condoned

C. Unenforceable

19. (p. 387) A[n] ______ mistake is the result of an error by one party about a material fact. A. Unclear B. Mutual C. Unilateral D. Clear E. Single

C. Unilateral

22. (p. 387) Although there are some exceptions, a[n] ______ mistake does not generally void a contract. A. Unclear B. Mutual C. Unilateral D. Clear E. Single

C. Unilateral

37. (p. 312) In a[n] _____________ contract, the offeror wants a performance to form the contract. A. Trilateral B. Bilateral C. Unilateral D. Complete E. Anticipatory

C. Unilateral

44. (p. 443) Creditor beneficiaries can enforce their rights under a contract whenever the contract is _____. A. Fair B. Incidental C. Valid D. Substantial E. Recognizable

C. Valid

58. (p. 35) The ethical system in which the development of virtues, or positive character traits such as courage, justice, and truthfulness, is the basis for morality is called ______. A. Absolutism decision B. Virtual analysis C. Virtue ethics D. Fundamentalist approach E. Categorical imperative

C. Virtue ethics Virtue ethics is an ethical system in which the development of virtues, or positive character traits such as courage, justice, and truthfulness, is the basis for morality.

17. (p. 330) In an auction _________, the seller is treated as making an offer to accept the highest bid. A. Without controls B. With controls C. Without reserve D. With reserve E. Without qualifications

C. Without reserve

56. (p. 59) Was the judge correct in disallowing Jane's testimony regarding what Susie told her about the tire? A. No, the judge was wrong and should have considered that testimony. B. Yes, the judge was correct to disallow the testimony because it involved a possible criminal action. C. Yes, the judge was correct to disallow the testimony because it was hearsay. D. Yes, the judge was correct to disallow the testimony but only because Susie was in the courtroom and could testify herself; otherwise, it should have been allowed. E. Yes, the judge was correct to disallow the testimony but only because it purportedly came from an admitted friend of the defendant, not an independent witness; otherwise, it should have been allowed.

C. Yes, the judge was correct to disallow the testimony because it was hearsay. Hearsay is impermissible because the opposing attorney cannot question the person who made the original statement to determine the statement's veracity.

56. (p. 177) Under the Sarbanes-Oxley Act, it is now a felony to willfully fail to maintain proper records of audits and work papers for at least ______ years. A. 2 B. 3 C. 4 D. 5 E. 6

D. 5 Under the Sarbanes-Oxley Act, it is a felony to willfully fail to maintain proper records of audits and work papers for at least five years.

45. (p. 346) Which of the following was involved when the government, in attempting to help AIG, agreed with AIG to lend AIG up to $85 billion in exchange for nearly 80 percent of AIG's stock? A. An accord and satisfaction B. An accord but not a satisfaction C. A unilateral contract D. A bilateral contract E. An unliquidated contract

D. A bilateral contract

21. (p. 704) Which of the following is false regarding bankruptcy cases? A. The Bankruptcy Rules set forth procedures for bankruptcy cases. B. Bankruptcy cases are referred to bankruptcy judges, under the authority of the district courts. C. An appeal of a bankruptcy ruling goes to the district court judge. D. A jury is not allowed in a bankruptcy proceeding. E. Bankruptcy cases are filed in federal district courts.

D. A jury is not allowed in a bankruptcy proceeding.

48. (p. 114) Which of the following is true regarding the Fifth Amendment's protection against self-incrimination? A. A person only has to be a witness against himself or herself if a felony is involved. B. A person does not have to be a witness against himself or herself if a first criminal offense is involved. C. A person does not have to be a witness against himself or herself if prison time is involved as opposed to a mere fine. D. A person does not have to be a witness against himself or herself in a criminal case. E. A person has to be a witness against himself or herself.

D. A person does not have to be a witness against himself or herself in a criminal case. The Fifth Amendment protects against self-incrimination, meaning that in a criminal case, the defendant does not have to testify in court as a witness against herself or himself.

17. (p. 351) Which of the following is not an example of consideration? A. A promise to stay in a job until a particular project is complete. B. A promise to your football coach to refrain from riding your motorcycle during football season even though you love riding it. C. A promise to cook dinner for your roommate for the next six months. D. A promise to buy skis for $300 if you like them. E. A promise to stop staying out late at night during exam week.

D. A promise to buy skis for $300 if you like them.

54. (p. 408) Which of the following is the most likely result of Bruce's attempt to avoid his agreement to pay creditors of the estate out of his own pocket? A. He will be able to avoid the agreement because it was not in writing. B. He will be able to avoid the agreement because a promise to pay the debts of an estate would not come within the statute of frauds. C. A promise to pay debts of an estate out of an executor's own funds would come within the statute of frauds, but the oral agreement Bruce made will likely be enforceable under the substantial-purpose rule. D. A promise to pay debts of an estate out of an executor's own funds would come within the statute of frauds, but the oral agreement Bruce made will likely be enforceable under the main-purpose rule. E. A promise to pay debts of an estate out of an executor's own funds would come within the statute of frauds; but regardless of whether the debtors can establish reliance, the oral agreement Bruce made will likely be enforceable because he admitted he had agreed to pay.

D. A promise to pay debts of an estate out of an executor's own funds would come within the statute of frauds, but the oral agreement Bruce made will likely be enforceable under the main-purpose rule.

18. (p. 346) In a bilateral contract, the consideration for each promise is ____. A. A completed act B. The beginning of action in acceptance, even if it is not complete C. An acknowledgement D. A return promise E. An agreement

D. A return promise

11. (p. 185) Which of the following is a tort? A. A civil or criminal action in state court. B. A civil or criminal action in state court or federal court. C. A breach of contract. D. A wrong or injury to another, other than a breach of contract. E. A wrong or injury to another, including a breach of contract. A tort is a wrong or injury to another, other than a breach of contract.

D. A wrong or injury to another, other than a breach of contract.

27. (p. 192) When a[n] _______________ privilege exists, one cannot be sued for defamation for any false statements made, regardless of intent or knowledge of the falsity of the claim. A. Simple B. Complex C. Defamation D. Absolute E. Compounded A person with absolute privilege cannot be sued for defamation for any false statements made, regardless of intent or knowledge of their falsity.

D. Absolute

41. (p. 336) Which of the following is generally true if no means of communicating an acceptance is specified in an offer? A. The acceptance must be in writing. B. The acceptance must be made verbally either by telephone or in person. C. No valid contract may be entered into because the offer must specify a means by which to accept. D. Acceptance may be made by any reasonable means. E. Acceptance must be made orally or in writing within twenty-four hours.

D. Acceptance may be made by any reasonable means.

36. (p. 458) Which of the following is not a way in which a contract may be discharged by operation of law? A. Alteration of the contract B. Bankruptcy C. Impossibility of performance D. Accord and satisfaction E. Commercial impracticability

D. Accord and satisfaction

58. (p. 9) Which of the following is reported in the Code of Federal Regulations? A. Statutes B. Executive orders C. Common law D. Administrative law E. Congressional orders

D. Administrative law Exhibit 1-5 "Where to Locate the Law," shows that administrative law is reported in the Code of Federal Regulations and the Federal Register.

37. (p. 43) Over which of the following does the federal court system have exclusive jurisdiction? A. Admiralty cases only B. Bankruptcy cases only C. Federal copyright cases only D. Admiralty, bankruptcy, and federal copyright cases E. The federal court system has no exclusive jurisdiction

D. Admiralty, bankruptcy, and federal copyright cases The federal court system has exclusive jurisdiction over very few cases: admiralty cases, bankruptcy cases, federal criminal prosecutions, lawsuits in which one state sues another state, claims against the United States, and cases involving federal copyrights, patents, or trademarks.

52. (p. 429) Which of the following is true regarding an assignee's acceptance of assigned rights? A. A creditor beneficiary must accept assignment of rights, but there is no requirement that a donee beneficiary do so. B. A donee beneficiary must accept assignment of rights, but there is no requirement that a creditor beneficiary do so. C. An assignee must agree to accept assigned rights, and there is a strict protocol for doing so. D. An assignee may decline an assignment if he has not agreed to it and declines in a timely fashion after learning of it. E. An assignee may only decline an assignment if a delegation of duties is also involved.

D. An assignee may decline an assignment if he has not agreed to it and declines in a timely fashion after learning of it.

41. (p. 355) Which of the following is true regarding the effect of a debtor offering to pay less money than is owed as full payment on a debt when the debt itself, in its entirety, is in dispute, and the creditor agrees? A. A liquidated debt is involved, and there is an accord and satisfaction. B. A liquidated debt is involved, and there is an accord but no satisfaction. C. A liquidated debt is involved, and there is neither a satisfaction nor an accord. D. An unliquidated debt is involved, and there is an accord and satisfaction. E. An unliquidated debt is involved, and there is an accord but not satisfaction.

D. An unliquidated debt is involved, and there is an accord and satisfaction.

43. (p. 355) Assuming no exception applies, which of the following is true regarding the effect of a debtor offering to pay less money than is owed as full payment on a debt for which there is a dispute over the amount of the debt, and the creditor agrees? A. A liquidated debt is involved, and there is an accord and satisfaction. B. A liquidated debt is involved, and there is an accord but no satisfaction. C. A liquidated debt is involved, and there is neither a satisfaction nor an accord. D. An unliquidated debt is involved, and there is an accord and satisfaction. E. An unliquidated debt is involved, and there is an accord but not satisfaction.

D. An unliquidated debt is involved, and there is an accord and satisfaction.

23. (p. 152) Which of the following includes destruction of a building using an explosive device? A. Extortion B. Embezzlement C. Larceny D. Arson E. Criminal fraud

D. Arson The definition of "arson" is typically expanded to include other real property beyond dwellings, as well as destruction by means other than burning, such as the use of explosive devices.

18. (p. 428) What is the term for the party to a contract who transfers his or her rights to a contract to a third party? A. Transferor B. Transferee C. Relator D. Assignor E. Assignee

D. Assignor

27. (p. 410) Within the statute of frauds, "land" encompasses not only the land and soil itself but anything ______ to the land. A. Relating B. Adjacent C. Contracted D. Attached E. Pertinent

D. Attached

27. (p. 706) Once a voluntary liquidation proceeding under Chapter 7 is filed, the debtor's prepetition assets form the ____. A. Corpus B. Remainder C. Residual estate D. Bankruptcy estate E. Relinquished asset pool

D. Bankruptcy estate

60. (p. 309) Which of the following would be the correct analysis of the effect of the discovery that Rick has a book that is not appropriate for the class? A. Rick is stuck with the book because he objectively agreed to purchase it. B. Rick is stuck with the book because Beverly did not commit fraud. C. Rick is stuck with the book because Beverly subjectively thought it was the correct book, and Rick did not openly disagree before the contract was executed. D. Because the parties had a mutual misunderstanding, the parties did not come to a meeting of the minds, and there is no contract. E. Because both parties were mistaken, at Rick's option he may return the book; but only half of the purchase price would be required as a refund from Beverly because she is not guilty of fraud.

D. Because the parties had a mutual misunderstanding, the parties did not come to a meeting of the minds, and there is no contract.

18. (p. 1132) A[n] ______ is a term identifying the person who receives insurance proceeds in the event of injury or damage. A. Receiver B. Obtainer C. Insured D. Beneficiary E. Identified

D. Beneficiary

35. (p. 311) A[n] ______________ contract is commonly defined as a promise in exchange for a promise. A. Unilateral B. Trilateral C. Complete D. Bilateral E. Classified

D. Bilateral

27. (p. 41-42) Ann, a Massachusetts resident, breached a contract entered into in Florida with Bruce. Bruce successfully obtains a judgment against Ann for $150,000 in a Florida state court. Ann lives in a nice apartment in Massachusetts, and her only substantial asset is a vacation beach house in North Carolina. Which of the following is true regarding Bruce's ability to obtain funds from a sale of the beach house? A. Bruce is only entitled to obtain funds from property located in Florida, the location of the lawsuit, and cannot benefit from the property in North Carolina. B. Bruce is only entitled to obtain funds from property located in Florida, the location of the lawsuit, or from Massachusetts, Ann's domicile, and cannot benefit from the property in North Carolina. C. Bruce will be able to sell the beach house in North Carolina through attachment jurisdiction, and he is entitled to keep any funds obtained in excess of amounts owed. D. Bruce will be able to sell the beach house in North Carolina through attachment jurisdiction, but he must return to Ann any funds obtained in excess of amounts owed. E. Under federal law, Bruce will only be able to sell the beach house through attachment jurisdiction if after two years Ann has failed to satisfy the judgment, and any sums received in excess of amounts owed to Bruce go the Federal Housing Administration.

D. Bruce will be able to sell the beach house in North Carolina through attachment jurisdiction, but he must return to Ann any funds obtained in excess of amounts owed. Courts can also gain quasi in rem jurisdiction, or attachment jurisdiction, over a defendant's property unrelated to the plaintiff's claim; but any amounts obtained in excess of amounts owed must be returned to the defendant.

48. (p. 353) Tina, an experienced pool contractor, and Bruce agree on a price for Tina to build a pool in Bruce's backyard. Tina discovers that she did not initially figure in enough of a charge for labor. She tells Bruce that unless she receives an extra $5,000 with which to hire workers, she cannot complete the job. Bruce agrees thinking to himself that he has a way out. When Tina finishes the pool, Bruce refuses to pay the additional $5,000. Which of the following is the most likely result of their dispute? A. Bruce will be required to pay because a typical, unilateral contract is involved, and he got the benefit of his bargain. B. Bruce will be required to pay because a typical, bilateral contract is involved, and he got the benefit of his bargain. C. Bruce will be required to pay because unforeseen circumstances are an exception to the preexisting duty rule. D. Bruce will not be required to pay because he provided no additional consideration, and the preexisting duty rule applies. E. Bruce will only be required to pay ½ of the agreed upon amounts because of the calculations involved under the preexisting duty rule.

D. Bruce will not be required to pay because he provided no additional consideration, and the preexisting duty rule applies.

16. (p. 93) How was the process of judicial review established under which courts review legislative and executive actions to determine whether they are constitutional? A. By vote of the U.S. Senate B. By vote of the U.S. House of Representatives C. By vote of both the U.S. Senate and the U.S. House of Representatives D. By early common law E. By executive proclamation

D. By early common law Although the Constitution does not explicitly allow courts to review legislative and executive actions to determine whether they are constitutional, early common law established this process, which is known as judicial review.

33. (p. 334) In which of the following ways may an offeree accept a unilateral contract? A. By making a counteroffer or by a signed writing. B. By signed writing only. C. By either verbal acceptance or a signed writing. D. By performance only. E. By performance, by a verbal acceptance, or by a signed writing.

D. By performance only.

69. (p. 157) By which of the following acts, if any, did Dr. Fred commit health care fraud? A. Dr. Fred did not commit any acts of healthcare fraud. B. By the submission of false claims to Medicare only. C. By the receipt of kick-backs from Slick Slim only. D. By the submission of false claims to Medicare and also by the receipt of kick-backs from Slick Slim. E. By submitting false claims to Medicare, by receiving kick-backs from Slick Slim, and also by merely listening to what Slick Slim had to say.

D. By the submission of false claims to Medicare and also by the receipt of kick-backs from Slick Slim. Submitting false claims to insurance plans such as Medicare or Medicaid is health care fraud, as is prescribing unneeded equipment to patients for kick-backs from the equipment manufacturers.

49. (p. 721) Which of the following provides for adjustment of debts of family farmers? A. Chapter 6 B. Chapter 8 C. Chapter 10 D. Chapter 12 E. Chapter 20

D. Chapter 12

25. (p. 2) The action Bob has against Betty for defamation involves which of the following? A. Criminal law and public law B. Civil law and public law C. Insider law and public law D. Civil law and private law E. Administrative law and public law

D. Civil law and private law Civil law delineates the rights and responsibilities implied in relationships between persons and their government, and private law regulates disputes between private individuals or groups.

23. (p. 454) Which of the following are the two primary kinds of performance? A. Partial and significant B. Partial and complete C. Partial and substantial D. Complete and substantial E. Complete and significant

D. Complete and substantial

51. (p. 85) What types of ADR techniques exist in Japan? A. Compromise and conciliation, but not arbitration B. Conciliation and arbitration, but not compromise C. Arbitration, but not compromise or conciliation D. Compromise, conciliation, and arbitration E. ADR is outlawed in Japan

D. Compromise, conciliation, and arbitration Japan's ADR techniques come in three forms: compromise, conciliation, and arbitration.

49. (p. 317) The reference to __________________ comes from the days when the contract was literally sealed by a piece of soft wax into which an impression was made. A. Implied-in-fact contracts B. Implied-in-law contracts C. Contracts under wax D. Contracts under seal E. Contracts under pressure

D. Contracts under seal

48. (p. 317) Which of the following is an example of a formal contract? A. Contracts under seal but not executed contracts or letters of credit. B. Executed contracts but not contracts under sale or letters of credit. C. Letters of credit and contracts under seal, but not executed contracts. D. Contracts under seal letters of credit, but not executory contracts. E. Contracts under seal, letters of credit, and also executed contracts.

D. Contracts under seal letters of credit, but not executory contracts.

21. (p. 308) Which of the following represents the legal ability to enter into a binding agreement? A. Majority B. Emancipation C. Contractual knowledge D. Contractual capacity E. Informed consent

D. Contractual capacity

15. (p. 2) Laws are enforced by which of the following? A. State legislatures B. Federal Congress C. Community consensus D. Courts E. The executive branch

D. Courts Law is enforceable in the courts the community maintains.

13. (p. 452) Which of the following is true regarding ways by which a party's contractual obligations may be discharged? A. Performance is the only way a party's contractual obligations may be discharged. B. The failure of a condition to occur and performance are the only ways a party's contractual obligations may be discharged. C. Operation of law is the only way a party's contractual obligations may be discharged. D. Discharge may occur through material breach by one or both parties. E. Discharge may not occur through the failure of a condition to occur.

D. Discharge may occur through material breach by one or both parties.

12. (p. 452) When a party's obligations under a contract are terminated, the party is said to be ____. A. Finished B. Terminated C. Completed D. Discharged E. Recoursed

D. Discharged

42. (p. 165) Assuming the requisite elements are proven, which of the following is a defense when it is established that a crime is committed because the person committing the act was threatened with immediate bodily harm or loss of life unless the offense was committed? A. Entrapment. B. Necessity. C. Justifiable use of force. D. Duress. E. Inescapable action.

D. Duress. If Greg threatened Bill with immediate bodily harm or loss of life unless Bill performed a wrongful act, Bill can use the duress defense.

39. (p. 397) Which of the following is involved in a situation in which a person refuses to perform according to a contract unless the other person either signs another contract with the one making the threat or pays that person a higher price than was specified in the original agreement? A. Fraudulent duress B. Contractual duress C. Negligent duress D. Economic duress E. Specific duress

D. Economic duress

32. (p. 105) Which amendment prohibits cruel and unusual punishment? A. Second B. Fourth C. Fifth D. Eighth E. Tenth

D. Eighth Exhibit 5-2, "Summary of the Bill of Rights" reflects the protection of the Eighth Amendment prohibiting cruel and unusual punishment.

35. (p. 159) Bank teller Ben receives $1,000 from a customer for deposit into the customer's bank account. Instead of placing the money into the customer's account, Ben puts it into his pocket. Which of the following offenses has he committed? A. Forgery B. False entries C. False token D. Embezzlement E. Cramming

D. Embezzlement Embezzlement is the wrongful conversion of another's property by one lawfully in possession of it.

29. (p. 309) Today's law of contracts originated from judicial decisions in ______. A. France B. Italy C. Spain D. England E. Switzerland

D. England

"Fast Food Dilemma." Richard, who just started at his new job as an assistant manager at a fast-food restaurant, wants to make a good impression. He thinks that things are going great. On only the second day on the job, however, he sees his boss Jill, the manager, slink out of the restaurant with a big box of hamburger that she puts in her car. Jill then speeds away. Richard is fairly certain that Jill did not pay for the hamburger. Richard asks advice of his best friend, Bruce; his girlfriend, Sally; his sister, Jenny; and his dad, Frank. Bruce says that there are no real objective standards and that Richard should just decide what is best for him. Sally says that Richard should focus on the consequences and focus on the greatest benefit to all involved. She believes that it will do no real harm for Richard to keep his mouth shut because the fast-food restaurant is making plenty of money and probably does not pay Jill enough anyway. Plus, getting in trouble with Jill could cause problems at work, and if Richard loses his job, Richard and Sally might have to put off their marriage. Jenny says that on balance the rule producing the greatest good would be to tell Jill because stealing does not generally produce the greatest satisfaction. Richard's dad says that as a matter of principle Richard should tell Jill because stealing is simply wrong. 47. (p. 33) Which of the following theories most accurately fits the advice given by Bruce? A. Deontology B. Act utilitarianism C. Rule utilitarianism D. Ethical relativism E. Virtue ethics

D. Ethical relativism According to ethical relativism, individuals must evaluate actions on the basis of what they feel is best for them.

47. (p. 376) A statement releasing one of the parties to an agreement from all liability, regardless of who is at fault or what the injury suffered is, would be referred to as a[n] ______ agreement. A. Substantive B. Adhesion C. In pari delicto D. Exculpatory E. Res Ipsa

D. Exculpatory

32. (p. 156) Ed goes door-to-door selling magazine subscriptions. Ed knows, however, that he is simply taking money for subscriptions and has absolutely no intention of ever arranging for the provision of magazines. Which of the following offenses, if any, has he committed? A. Defalcation B. False entry C. False token D. False pretenses E. Ponzi scheme

D. False pretenses False pretenses, a type of fraud, is the illegal obtaining of property belonging to another through materially false representations of an existing fact, with knowledge of their falsity and intent to defraud.

45. (p. 443) The state of New York does not grant a donee beneficiary the right to enforce a contract unless the promisee is connected to the donee through a ______ relationship. A. Valid B. Recognized C. Substantial D. Familial E. Marital

D. Familial

32. (p. 26) The idea that we should interact with other people in a manner consistent with the manner in which we would like them to interact with us is called the ______. A. Equalization Rule B. Ethical Realization Rule C. Silver Rule D. Golden Rule E. Ten Commandments Rule

D. Golden Rule The idea that we should interact with other people in a manner consistent with the manner in which we would like them to interact with us is called the Golden Rule.

16. (p. 86) Is Brice correct that a federal law provides that arbitration agreements involving international businesses are unenforceable? A. He is partially correct. The law only applies to any country not a party to the North American Free Trade Agreement. B. He is partially correct. The law only applies to any country that has signed the North American Free Trade Agreement. C. He is partially correct. The law only applies to European countries. D. He is incorrect. E. He is correct.

D. He is incorrect. Currently, 144 countries belong to the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards, otherwise known as the New York Convention, which ensures that an arbitration award will be enforced by countries that are parties to the treaty.

"Teenage Driver." Sally bought a new car, a yellow convertible. She also had a teenage son at home, Bobby, but she did not plan to let him drive the car. She was annoyed because Bobby had run her last car into the lake. Sally decided to change insurers because she thought her previous insurance agent was annoyed over Bobby's antics. She went to ABC Insurance to apply. She got an application from Mark. Sally was a little nervous because the application asked about other drivers in the home. It also asked if there were any teenagers in the home. Sally answered "no" on both counts because she had no plans to let Bobby drive. Sally got full coverage on the car, and the policy was issued shortly after she completed the application. She renewed the policy without revising any of the information she provided. Thirteen months later, Sally really needed some gas in the car for the next day. Under the belief that he had sufficiently matured, Sally sent Bobby to get some gas at the station just down the street. Unfortunately, a drunk driver who had no insurance hit the car and totaled it. Sally immediately called Mark. When Mark reviewed the police report, however, he told Sally that there would be no coverage on the car because Bobby was driving. Sally said that was completely unfair and that she would appeal to the jury. Sally told Mark that ABC issued the policy and that she was relying on the incontestability clause. Mark told Sally that she was wrong and that based on how disputes were handled under the policy, she would not even see a jury. 54. (p. 1139) Which of the following is true regarding Mark's statement that Sally would never see a jury? A. He is correct based on provisions in most policies denying the insured the right to contest policy provisions. B. He is incorrect, and insurers may not require as a condition of a policy that an insured give up the right to a trial by jury. C. He is correct based on provisions in most policies providing that the insurance company has the final word regarding coverage. D. He is likely referencing a provision requiring arbitration contained in some policies. E. He is likely referencing a provision requiring that any dispute be settled by the Insurance Adjustors of America contained in some policies.

D. He is likely referencing a provision requiring arbitration contained in some policies.

"Irresponsible Teen." At age 17, in a state in which the age of majority is 18, Sally purchased a prom dress from Formal Stuff. She wore it to the prom and then attempted to return it to the store claiming that she was a minor and that she was entitled to a refund. The dress had clearly been worn and had a purple stain which Sally claimed was from grape juice. Additionally, a few days before she turned 18, Sally purchased a used car from Dings and Dents used cars. She had a deal whereby she paid $100 per month on the car. She drove the car and made payments for six months after she turned 18. Sally then returned the car to Dings and Dents, informed the owner that she was under 18 when she entered into the contract to purchase the car, and told the owner that she was returning the car for a full refund. Dings and Dents claimed the car was a necessity. Sally and her parents disagreed claiming that the parents were ready and willing to provide a car to Sally, and that she only purchased the car from Dings and Dents because she liked that particular style and color. When purchases of the dress and car were made, the sellers knew that Sally was under the age of 18. 52. (p. 362) Which of the following is true regarding Sally's attempt to return the damaged dress? A. In all states Sally has the right to keep the dress and get a refund. B. In all states Sally must return the dress; but she has a right to a full refund. C. Regardless of what she does with the dress, Sally has no right to a refund in any state. D. In some states Sally would have an obligation of restitution to the store. E. In all states Sally would have an obligation of restitution to the store.

D. In some states Sally would have an obligation of restitution to the store.

17. (p. 361) Which of the following is some sort of mental or physical defect that prevents a person from being able to enter into a legally binding contract? A. Immajority B. Capacity C. Chronic illness D. Incapacity E. Terminal illness

D. Incapacity

50. (p. 380) A[n] ______ contract is one requiring complete performance by both parties, even if it appears as if the contract contains multiple parts. A. Adhesion B. Divisible C. Justifiable D. Indivisible E. Independent

D. Indivisible

28. (p. 706) Which of the following is false regarding bankruptcy proceedings in Spain? A. In order to be effective, an arrangement representing a proposed settlement between the debtor and creditors must be approved by creditors representing at least 20 percent of the debtor's liabilities and by the judge. B. A failure to obtain the necessary approval of a proposed settlement between the debtor and creditors may result in the debtor's liquidation. C. Bankruptcy proceedings start with a finding of insolvency. D. Insolvency means that the business has failed to meet at least some financial obligations for at least six months. E. The bankruptcy filing may be done voluntarily by the debtor company, or it may be done involuntarily by the debtor's creditors in an enforced bankruptcy.

D. Insolvency means that the business has failed to meet at least some financial obligations for at least six months.

28. (p. 1133) To have a[n] ______ in property or life, a person must be subject to economic loss if there is damage or harm to the person or property. A. Acknowledged loss B. Protected loss C. True injury D. Insurable interest E. Understandable failure

D. Insurable interest

50. (p. 338-339) Which of the following is true regarding the Uniform Electronic Transactions Act? A. It eliminates all effects of the mailbox rule. B. It provides that offers may not be accepted electronically but otherwise retains aspects of the mailbox rule. C. It provides that acceptances may not be made electronically but otherwise retains aspects of the mailbox rule. D. It seems to create an electronic version of the mailbox rule. E. It delays the effect of the mailbox rule by 8 hours.

D. It seems to create an electronic version of the mailbox rule.

54. (p. 436) Which of the following is true regarding Jan's statement to Billy that he had no right to assign the contract? A. Jan is correct because a personal type of service was involved. B. Jan is correct because the contract did not specifically give Billy the right to assign the contract. C. Jan is correct because a delegation as well as an assignment was involved. D. Jan is incorrect because the contract was not a personal service, and there was no requirement that the contract specifically reference the right to assign rights and duties. E. Jan is incorrect only because the contract and assignment were for an amount under $1,000. Otherwise, Billy had no right to assign the contract without her permission.

D. Jan is incorrect because the contract was not a personal service, and there was no requirement that the contract specifically reference the right to assign rights and duties.

"Painted House." Billy had a contract to paint Jan's house for $800 including the duty to clean up any debris. The contract between Billy and Jan did not address assignment in any way. Billy, who was very busy, assigned the contract, specifying that it included the right to receive the money and the duty to paint the house, to Richard who was interested in making some extra money and had experience painting. Billy did not tell Jan about the assignment because he did not want any trouble nor did Richard mention the assignment to her. In fact, Richard never met Jan because he painted while she was at work. After Richard did a good job painting the house, Jan sent a check to Billy for $800. Billy needed the money to pay some bills, so he spent it. He thought he would have money coming in with which to pay Richard, but that did not happen. Richard asked Jan for $800 when it was not forthcoming from Billy. Jan refused. Richard said that he was going to sue her. Jan called Billy and told him that he had no right to assign the contract. Another problem involved disposal of debris. Although Richard was a good, competent painter, he forgot and left some old paint cans at Jan's house. Jan demanded that Billy come and properly dispose of the paint cans because they could not simply be put in the trash. Billy refused and told her that she would have to get Richard to dispose of the paint cans because that was his responsibility. Jan called Richard who told her that he was busy and that clearing out the paint cans was Billy's responsibility. 53. (p. 433) What would be the likely result of a lawsuit brought by Richard against Jan to recover the $800? A. Richard will win because Jan accepted the risk that the contract would be assigned. B. Richard will win only so long as Billy has not been declared bankrupt because Jan will be able to recover the amounts at issue from Billy. C. Richard will win only so long as the assignment was for an amount under $1,000. D. Jan will win because she had no notice that the contract had been assigned and could, therefore, legally pay Billy. E. Jan will win only so long as the assignment was for an amount over $500.

D. Jan will win because she had no notice that the contract had been assigned and could, therefore, legally pay Billy.

39. (p. 463) Monetary damages are also referred to as ______ damages. A. Equitable B. Fair C. Public D. Legal E. Injunctive

D. Legal

44. (p. 1142) Which of the following types of insurance provides a specific sum of money on the death of the insured? A. Casualty B. Consumer C. Risk D. Life E. Occurrence

D. Life

34. (p. 354) In a[n] ______ debt, there is no dispute about the fact that money is owed and the amount of money owed. A. Actual B. Acknowledged C. Certain D. Liquidated E. Unliquidated

D. Liquidated

68. (p. 157) Which of the following offenses, if any, did Dr. Fred commit when he used UPS to send correspondence and samples of the bands to patients? A. False pretenses B. Fraudulent use of transit C. Defalcation D. Mail fraud E. He is not guilty of any offense

D. Mail fraud In 1994 Congress amended the Mail Fraud Act of 1990 to include commercial carriers and courier services such as FedEx and UPS.

"Divorce fallout." Dr. Fred, following a messy divorce, has encountered significant financial difficulties. Dr. Fred has a friend named Slick Slim who tells Dr. Fred that he has been making lots of money by selling people a wristband that allegedly places pressure on a nerve that signals hunger resulting in a lack of appetite. Slick Slim tells Dr. Fred that, although the device does not really work, people who want to lose weight and look good in their bathing suits will do anything. Slick says the wristband sells like hotcakes. Slick also tells Dr. Fred that he will pay Dr. Fred five dollars for every band that Dr. Fred can sell to his patients. Dr. Fred proceeds to mail letters to patients suggesting the use of the band for weight loss. He also uses UPS to mail samples of the band to some patients along with letters encouraging purchase of the bands. Dr. Fred then proceeds to bill Medicare for office consultations he has with patients when they come in to purchase the bands. The scheme is wildly successful. Dr. Fred is able to entirely satisfy his alimony obligations within just a few months. Unfortunately, as patients begin to see that they are not having any weight loss, he has been receiving numerous complaints, and a friend of his told him that he could even be facing some criminal prosecution. 67. (p. 156) By mailing correspondence to patients encouraging purchase of the band, which of the following offenses, if any, did Dr. Fred commit? A. False pretenses B. Fraudulent use of transit C. Defalcation D. Mail fraud E. He is not guilty of any offense

D. Mail fraud One of the most frequently prosecuted frauds is mail fraud, the use of mail to defraud the public, which is a federal crime under the Mail Fraud Act of 1990.

52. (p. 387) Which of the following would be the result if Marcy attempts to rescind the contract and recover damages only on the basis of the neighbor's objection to a pig farm? A. Marcy may rescind the contract and recover damages because Lucy made an implied misrepresentation. B. Marcy may rescind the contract but may not recover damages because Lucy made an implied misrepresentation. C. Marcy may recover damages but may not rescind the contract because Lucy made an implied misrepresentation. D. Marcy may not rescind the contract nor may she recover damages because she, Marcy, made a unilateral mistake. E. Marcy may rescind the contract but may not recover damages because she, Marcy, made a unilateral mistake.

D. Marcy may not rescind the contract nor may she recover damages because she, Marcy, made a unilateral mistake.

51. (p. 396) Assuming that Lucy fraudulently made a misrepresentation regarding the spring running through the corner of the farm knowing the statement was not correct, which of the following is true, considering only the lack of a spring issue, if Marcy does not want to go through with the sale? A. Marcy may rescind the contract and recover compensatory damages. B. Marcy may rescind the contract, but she may not recover damages. C. Marcy may sue for damages, but she may not rescind the contract. D. Marcy may rescind the contract, or she may keep the contract and sue for damages. E. Marcy must allow Lucy an opportunity to cure, or fix, the problem; and in the event that is not done, she may not rescind the contract although she can sue for damages.

D. Marcy may rescind the contract, or she may keep the contract and sue for damages.

56. (p. 330) What is the likely result in the lawsuit brought by Mary against Barry for the table? A. Barry will win because Mary was simply making an offer that he was free to decline. B. Barry will win because the price was clearly insufficient for the table. C. Barry will win because no acceptance occurred. D. Mary will win because the auction was without reserve, and Barry had agreed to accept the highest bid. E. Barry will win because he did not inform attendees in writing that the auction was without reserve.

D. Mary will win because the auction was without reserve, and Barry had agreed to accept the highest bid.

55. (p. 189) As far as the editorial is concerned, which of the following is true in regards to Maryann's statement that Candy cannot recover because she cannot show loss of income? A. Maryann is correct. B. Maryann is correct only if she can establish that she did not intend to cause economic loss to Candy. C. Maryann is incorrect because her actions would be considered liable per se. D. Maryann is incorrect because general damages would be presumed. E. Maryann is incorrect because Candy has proven special damages. In the case of libel, "general damages" are presumed; and the victim is entitled to compensation for damages that are presumed to flow from defamation but are hard to prove, such as humiliation.

D. Maryann is incorrect because general damages would be presumed.

13. (p. 69) Which of the following is an extension of negotiation? A. Arbitration B. Minitrials C. Neutral case evaluations D. Mediation E. Private trials

D. Mediation Mediation is an extension of negotiation.

48. (p. 419) A[n] ______ agreement is a clause parties include in a written agreement that states that the written agreement accurately reflects the final, complete version of the agreement. A. Adhesion B. Complete C. Parol D. Merger E. Consolidation

D. Merger

45. (p. 467) The obligation to use reasonable efforts to minimize damage resulting from a breach is referred as the duty to ______ one's damages. A. Reduce B. Remit C. Reform D. Mitigate E. Migrate

D. Mitigate

32. (p. 457) Which of the following occurs when parties agree that they simply wish to discharge each other from their mutual obligations and therefore rescind or cancel the contract? A. Accord and satisfaction B. Novation C. Substituted contract D. Mutual rescission E. Alteration

D. Mutual rescission

"To the Dogs." Alice loves all animals and is starting a new grooming business for them. She believes that animals are very important and plans to exceed any applicable regulations regarding cleanliness and health standards. Alice thinks, however, some local regulations make no sense. For example, there is a local ordinance that all dogs must be kept on a leash at all times when not in an inside area. Although Alice is placing her business on a large lot with a fenced outside area allowing plenty of room for dogs to run free, she plans to obey the leash regulation and all others. She is aware, however, that some members of the community have had success in changing local regulations by petitioning city council. Alice plans to proceed in that manner to attempt a change in the leash law. 50. (p. 9) Alice's idea that dogs have basic rights, and her plan to exceed laws involving cleanliness and health standards is rooted in which of the following? A. Legal positivism B. The historical school C. Legal realism D. Natural law E. Cost-benefit analysis

D. Natural law The term natural law describes certain ethical laws and principles believed to be morally right and "above" the laws devised by humans.

16. (p. 186) _____ torts occur when the defendant is careless and acts in a way that subjects other people to an unreasonable risk of harm. A. Criminal B. Liability C. Intentional D. Negligent E. Strict-liability Negligent torts occur when the defendant acts in a way that subjects other people to an unreasonable risk of harm.

D. Negligent

50. (p. 51) Regardless of what court is involved, can Jim act as plaintiff for the employees? A. Yes, so long as he gets permission slips from all of them. B. Yes, so long as no employee files an objection. C. Yes, so long as he gives any money he receives to them. D. No, because he lacks standing. E. No, because venue is lacking.

D. No, because he lacks standing. For a person to have standing, the outcome of a case must personally affect him or her.

18. (p. 73) Was Brice correct when he told Jenny that if she lost at the arbitration level, a federal judge would consider the case anew without consideration of the arbitration agreement? A. Yes, because an action in court is considered completely separate from an arbitration proceeding. B. Yes, but only if Jenny filed an "Intent to Seek Further Relief" form with the arbitrator. C. No, because the arbitration agreement would completely bar Jenny's ability to file a court action. D. No, because in a later court action, a federal judge in district court would only reverse an arbitrator's decision for certain reasons such as that the arbitrator displayed bias or corruption. E. Brice is correct only because an international company is involved.

D. No, because in a later court action, a federal judge in district court would only reverse an arbitrator's decision for certain reasons such as that the arbitrator displayed bias or corruption. The U.S. Supreme Court has upheld provisions of the Federal Arbitration Act limiting the circumstances under which a federal court should set aside an arbitration award.

43. (p. 466) When no actual damages result from the breach of a contract, the court may award the plaintiff ______ damages. A. Consequential B. Punitive C. Liquidated D. Nominal E. Repugnant

D. Nominal

44. (p. 114) Which of the following is true regarding the right of the federal government to obtain business books and records? A. The government has an absolute right to business books and records so long as a subpoena is issued by a grand jury. B. The government has no rights to such records without a search warrant, and a grand jury subpoena is insufficient regardless of whether a sole proprietor or a corporate shareholder is involved. C. Obtaining books and records from a sole shareholder of a corporation and also from a sole proprietor based only upon a subpoena issued by a grand jury violates the right against self-incrimination. D. Obtaining books and records from a sole proprietor based only on a subpoena from a grand jury violates the owner's rights against self-incrimination, but seizing records from a sole shareholder of a corporation in that manner does not violate rights against self-incrimination. E. Obtaining books and records from a sole shareholder of a corporation based only on a subpoena from a grand jury violates the shareholder's rights against self-incrimination, but seizing records from a sole proprietor in that manner does not violate rights against self-incrimination.

D. Obtaining books and records from a sole proprietor based only on a subpoena from a grand jury violates the owner's rights against self-incrimination, but seizing records from a sole shareholder of a corporation in that manner does not violate rights against self-incrimination. In Braswell v. United States, the U.S. Supreme Court found that "subpoenaed business records are not privileged, and as a custodian for the records, the act of producing the records is in a representative capacity, not a personal one, so the records must be produced." The Court held that a subpoena on such records violates the privilege against self-incrimination if a business is a sole proprietorship.

23. (p. 332) If a person wishes to ensure that an offer will in fact be held open for a set period of time, the person may do so by entering into a[n] ______________ contract with the offeror. A. Clear B. Explicit C. Irrevokable D. Option E. Adhesion

D. Option

27. (p. 333) If a[n] __________ contract exists, the administrator of an offeror's estate must hold the offer open until it expires in accordance with the contract. A. Bilateral B. Unilateral C. Complete D. Option E. Controlled

D. Option

33. (p. 354) Which of the following is true regarding whether an accepted offer to pay part of a debt is consideration? A. Partial payment is consideration under all circumstances. B. Partial payment is not consideration under any circumstances. C. Partial payment is consideration if a liquidated debt is involved. D. Partial payment is consideration if an unliquidated debt is involved. E. Partial payment is consideration if an exception applies to the general rule that partial payment is not consideration for an unliquidated debt.

D. Partial payment is consideration if an unliquidated debt is involved.

26. (p. 706) Which of the following is considered a debtor eligible for Chapter 7 relief in bankruptcy? A. Banks B. Railroads C. Health maintenance organizations D. Partnerships E. Insurance companies

D. Partnerships

30. (p. 365) Which of the following is true regarding the ability of persons suffering from a mental illness to enter into a binding contract? A. Persons suffering from a mental illness have no capacity to enter into a binding contract. B. Persons suffering from a mental illness have full capacity to enter into a binding contract so long as they do not present a danger to themselves or others. C. Persons suffering from a mental illness have full capacity to enter into a binding contract so long as they inform the other party that they are in treatment. D. Persons suffering from a mental illness may have full, limited, or no legal capacity to enter into a binding contract depending on the nature and extent of their mental deficiency. E. Persons who suffer from a mental illness always have full capacity to enter into a binding contract.

D. Persons suffering from a mental illness may have full, limited, or no legal capacity to enter into a binding contract depending on the nature and extent of their mental deficiency.

29. (p. 193) Which of the following is true regarding the groups generally considered to be public figures for purposes of the public figure privilege to actions for defamation? A. Politicians, but not entertainers, are generally considered to be public figures. B. Entertainers, but not politicians, are generally considered to be public figures. C. Small business owners and politicians, but not entertainers, are generally considered to be public figures. D. Politicians and entertainers, but not small business owners, are generally considered to be public figures. E. Small business owners, but not politicians or entertainers, are generally considered to be public figures. Public figures are those in the public eye, typically politicians and entertainers.

D. Politicians and entertainers, but not small business owners, are generally considered to be public figures.

29. (p. 155) Which of the following is an investment swindle in which high profits are promised from fictitious sources and early investors are paid off with funds raised from later investors? A. False entries B. False token C. False pretenses D. Ponzi scheme E. Pretexting

D. Ponzi scheme Exhibit 7-1: According to Exhibit 7-1, a Ponzi scheme involves an investment swindle in which high profits are promised from fictitious sources and early investors are paid off with funds raised from later ones.

22. (p. 408) A[n] ______ agreement is an agreement two parties enter into before marriage that clearly states the ownership rights each party enjoys in the other party's property. A. Preliminary B. Planned C. Approved D. Prenuptial E. Arranged

D. Prenuptial

17. (p. 2) Assume a business person who owns a computer equipment store is delinquent in paying rent to the landlord. The resulting dispute focuses on _____ law. A. Public B. Preferential C. Consensual D. Private E. Black letter

D. Private Private law regulates disputes between private individuals or groups.

49. (p. 84) Which of the following is an ADR method in which a referee is selected and paid by the disputing parties to offer a legally binding judgment in a dispute? A. Summary jury trial B. Minitrial C. Early neutral case evaluation D. Private trial E. Neutral submission

D. Private trial Several states now allow private trials, an ADR method in which a referee is selected and paid by the disputing parties to offer a legally binding judgment in a dispute.

49. (p. 168-169) Ordinarily, to obtain an arrest warrant, a law enforcement agent must demonstrate that there is ________ that a suspect committed or is planning to commit a crime. A. Likely cause B. Suspected cause C. Certainty D. Probable cause E. Information

D. Probable cause Ordinarily, to obtain the necessary arrest warrant, the agent must demonstrate that there is probable cause, or likelihood, that a suspect committed or is planning to commit a crime.

43. (p. 1142) Which of the following types of insurance protects members of specific professions from liability associated with their professional acts? A. Business liability B. Licensed C. Trained liability D. Professional liability E. Consumer

D. Professional liability

21. (p. 1132) The transfer and distribution of risk done by an insurer is known as _____. A. Insurance management B. Insured protection C. Spread protection D. Risk management E. Casualty management

D. Risk management

22. (p. 187) Robby calls Bobby on the telephone and threatened to come over and break his nose. Which of the following is true? A. Robby's conduct constitutes a battery. B. Robby's conduct constitutes an assault. C. Robby's conduct constitutes both a battery and an assault. D. Robby's conduct does not constitute an assault because there is no question of immediate bodily harm. E. Robby's conduct does not constitute an assault because there was no physical contact. If someone called on the telephone and threatened to come over and break someone's nose, this is not an assault because there is no question of immediate bodily harm.

D. Robby's conduct does not constitute an assault because there is no question of immediate bodily harm.

52. (p. 328) What is the most likely result in Walter's lawsuit against Sally in which he claims that she must pay $3,000 for the car at issue? A. Walter will win because Sally made an offer that he properly accepted. B. Walter will win because Sally agreed to pay a reasonable amount for the vehicle. C. Sally will win because the agreement was not put into written form and signed by both parties. D. Sally will win because she merely expressed interest and did not make an offer. E. Sally will win because she was not provided sufficient time in which to consider the offer.

D. Sally will win because she merely expressed interest and did not make an offer.

48. (p. 335) Prudence, a mean business law teacher, offers $50 to any student who will mow her lawn. Sam goes right over and begins mowing. Just before he finishes, Prudence goes over and tells him that she revokes her offer. Which of the following is true regarding Sam's entitlement to payment? A. Sam is not entitled to payment because a bilateral contract was involved that could only be accepted by full performance prior to revocation. B. Sam is not entitled to payment because a unilateral contract was involved that could only be accepted by full performance prior to revocation. C. Sam is entitled to only a proportional recovery based on the amount of work he had done prior to the revocation because Prudence always retained the right to validly revoke. D. Sam is entitled to recover because a unilateral contract was involved, and he was entitled to a reasonable amount of time to complete the job. E. Sam is entitled to recover because a bilateral contract was involved, and he was entitled to a reasonable amount of time to complete the job.

D. Sam is entitled to recover because a unilateral contract was involved, and he was entitled to a reasonable amount of time to complete the job.

59. (p. 309) Which of the following is true regarding Beverly's claim that she subjectively believed the book was an appropriate edition and that an enforceable contract, therefore, existed? A. She is correct because contract law is based upon a subjective theory of contracts. B. She is correct because her genuinely held belief establishes that she did not commit fraud. C. She is correct because agreements for the sale of goods are based on a subjective theory. D. She is incorrect because her subjective belief would not be the basis for a determination of whether the contract would be enforced in this case and also because fraud is not necessary in order to find a breach of contract. E. She is correct but only if Rick subjectively believed the same as she did.

D. She is incorrect because her subjective belief would not be the basis for a determination of whether the contract would be enforced in this case and also because fraud is not necessary in order to find a breach of contract.

43. (p. 200) A false statement of a material fact regarding ownership of business property that results in a loss of sales is referred to as _______. A. Slander of quality B. Trade libel C. Libel of title D. Slander of title E. Libel of sale If a statement of disparagement relates to ownership of the business property, it is slander of title.

D. Slander of title

31. (p. 156) Zack, the president of ABC Company, falsified documents to make it appear as if he had been granted stock options on certain dates, and he selected the dates after the fact, picking dates on which the stock price was low. Which of the following offenses, if any, did he commit? A. Insider trading B. Pretexting C. Defalcation D. Stock option backdating E. He did not commit any offense

D. Stock option Stock-option backdating occurs when an employee falsifies documents to make it appear as if the company had granted options on certain dates. backdating

55. (p. 117) If a law prevents individuals from exercising a fundamental right, the law will be subject to ___. A. Intermediate scrutiny B. Rational basis scrutiny C. Severe scrutiny D. Strict scrutiny E. Legal scrutiny

D. Strict scrutiny If a law prevents individuals from exercising a fundamental right, the action will be subject to strict scrutiny.

26. (p. 363) Which of the following is the majority rule regarding a minor's misrepresentation of his or her age? A. That if a competent party relies on a misrepresentation in good faith, the minor gives up the right to disaffirm the agreement. B. That the minor must restore the competent party to that party's precontractual position before obtaining the disaffirmance. C. That the minor may disaffirm but that the competent party has the right to sue the minor in tort and recover damages for fraud. D. That misrepresentation does not affect the minor's right to disaffirm the contract. E. That misrepresentation results in the minor receiving a return of only half the consideration he or she supplied.

D. That misrepresentation does not affect the minor's right to disaffirm the contract.

73. (p. 157) Which of the following was the result in U.S. v. Ruiz, the case in the text involving the defending deputy superintendent of New Mexico's insurance division who was convicted of offenses including mail fraud after he told insurers that they could avoid paying the fines for violation of licensing requirements if they contributed to certain charities? A. That although the defendant violated certain laws, he did not violate the mail fraud statute because he did not himself mail fraudulent solicitations which is required for the offense of mail fraud. B. That although the defendant used the mail to provide the illegal option to insurers, that in and of itself was insufficient to establish mail fraud. C. That because the defendant used the mail to provide the illegal option to insurers, that in and of itself was sufficient to establish mail fraud. D. That proof that the defendant directed that donations be made directly to charities established the reasonably foreseeable result that the mail would be used which was sufficient evidence to support his conviction. E. That proof that the defendant directed that donations be made directly to charities established the reasonably foreseeable result that the mail would be used but that such foreseeability was insufficient to support his conviction.

D. That proof that the defendant directed that donations be made directly to charities established the reasonably foreseeable result that the mail would be used which was sufficient evidence to support his conviction. According to the court, "The evidence that Mr. Ruiz directed two insurance companies to make charitable donations directly to the charities, alone, establishes that he set forces in motion, the reasonably foreseeable result of which would be the use of the mail to further his fraudulent scheme."

42. (p. 387) Selma agreed to buy a used car from Hillary for $2,000. Hillary drew up the contract providing that the exchange would occur the next week. Unfortunately, Hillary was not very good with the keyboard and typed in $1,200 as the price of the car. Selma noticed that the contract said $1,200, not $2,000, and was very pleased. She signed it without saying anything. When it was time to make the exchange, Selma gave Hillary $1,200. In response to Hillary's inquiry regarding an additional $800, Selma pulled out the contract and showed her that it said $1,200. Hillary immediately responded that she had made a typographical error. Selma said that there was no mistake on her part because she knew exactly what she was doing and that she thought that Hillary had decided to give her a deal on the car. Which of the following is Hillary's best argument for a rescission of the contract? A. That a unilateral mistake was involved and that courts typically allow relief in situations involving unilateral mistakes as opposed to mutual mistakes. B. That the mistake resulted from a sale of goods, as opposed to the provision of services, and that courts are more likely to grant relief for a mistake when actual physical work is not involved. C. That because a bilateral contract, as well as a unilateral mistake was involved, most courts would grant relief. D. That the mistake resulted from an accidental clerical error and that it would be unconscionable to enforce the contract. E. That duress was involved because of Selma's wrongful behavior.

D. That the mistake resulted from an accidental clerical error and that it would be unconscionable to enforce the contract.

49. (p. 349) Which of the following was the result in the case in the text Hamer v. Sidway, in which, after performance by his nephew, an uncle reneged on a promise to the nephew to pay him $5,000 if the nephew refrained from drinking liquor, using tobacco, swearing, and playing cards or billiards for money until he was 21 years of age? A. That because refraining from the conduct at issue benefited his character and health, the nephew could not recover. B. That no consideration was involved, and the nephew could not recover because the consideration from him did not consist of money or goods. C. That no consideration was involved, and the nephew could not recover because the proof established that the nephew had no interest in engaging in the items at issue, and avoiding them was no detriment to him. D. That the nephew could recover because he supplied consideration. E. That the nephew could recover, but only under promissory estoppel an amount compensating him for his reliance on the promise.

D. That the nephew could recover because he supplied consideration.

11. (p. 356) Which of the following was the result on appeal in the Case Opener involving the alleged breach of an oral contract based on the plaintiff lawyer loaning a corporate client funds and the client later reneging on a promise, made in gratitude, to give the lawyer 3 percent of the company's stock? A. That the promise to transfer the stock flowed from the loan transaction and was enforceable by the plaintiff. B. That the promise was unenforceable because lawyers may not loan clients money. C. That the promise was enforceable only if the total the plaintiff received in funds did not violate state usury laws involving maximum interest rates. D. That the promise was not enforceable because it was a gift. E. That the promise was enforceable as a gift.

D. That the promise was not enforceable because it was a gift.

34. (p. 28) Which of the following is true regarding activities of the Public Company Accounting Oversight Board? A. The Board ensures that auditors and public accounting firms compile accurate and truthful financial reports for the companies they audit, but it has no responsibility in regard to whistle-blowing protection. B. The Board requires that companies devise a system that allows employees to report suspicions of unethical behavior, but it does not address financial reports prepared by auditors and public accounting firms. C. The Board requires that the universalization test be used as the primary ethical guideline and also mandates protection for whistle-blowers who report suspicious activity involving financial reports. D. The Board ensure that auditors and public accounting firms compile accurate and truthful financial reports for the companies they audit and also requires that companies devise a system that allows employees to report suspicions of unethical behavior. E. The Public Company Accounting Oversight Board was abolished during the Obama administration and no longer exists.

D. The Board ensure that auditors and public accounting firms compile accurate and truthful financial reports for the companies they audit and also requires that companies devise a system that allows employees to report suspicions of unethical behavior. As set forth in Exhibit 2-7, the Public Company Accounting Oversight Board is responsible for ensuring that auditors and public accounting firms compile accurate and truthful financial reports for the companies they audit. The act also requires that companies devise a system that allows employees to report suspicions of unethical behavior within the company. The act also protects these whistle-blowers from being fired or from retaliation by their employer for reporting a possible problem within the company.

23. (p. 96) Which of the following was the result at the U.S. Supreme Court level in United States v. Lopez, the case in which the Court addressed the constitutionality of the Gun-Free School Zone Act? A. The Court ruled that the law was a valid exercise of congressional authority under the full faith and credit clause. B. The Court ruled that the law was a valid exercise of congressional authority contained within the Bill of Rights. C. The Court ruled that Congress exceeded its power under the Bill of Rights when it passed the act. D. The Court ruled that Congress exceeded its commerce clause authority when it passed the act. E. The Court ruled that the law was a valid exercise of the Court's authority under the commerce clause.

D. The Court ruled that Congress exceeded its commerce clause authority when it passed the act. In Lopez the Court ruled that Congress had exceeded its commerce clause authority when it passed the Gun-Free School Zone Act.

72. (p. 167) Upon which amendment did Martin rely in refusing to testify at trial? A. The Second Amendment. B. The Third Amendment. C. The Fourth Amendment. D. The Fifth Amendment. E. The Sixth Amendment. To "take the fifth" is to invoke your constitutional right not to testify against yourself.

D. The Fifth Amendment. To "take the fifth" is to invoke your constitutional right not to testify against yourself.

40. (p. 165) Which of the following allows a defendant to be found not guilty by reason of insanity if he or she did not understand the nature of the act? A. The irresistible impulse act. B. The involuntary act. C. The substantial capacity test. D. The M'Naghten test. E. The necessity defense.

D. The M'Naghten test. Approximately one-third of the states still apply the M'Naghten test, also known as the "right-wrong test" which allows a defendant to be found not guilty if he or she did not understand the nature of the act.

42. (p. 336) Which of the following provides that an acceptance is valid when it is placed in the mailbox? A. The Acceptance Rule B. The Contract Rule C. The Reasonable Rule D. The Mailbox Rule E. The Contract Legality Rule

D. The Mailbox Rule

43. (p. 336) Which of the following provides that a revocation is effective only when received by the offeree? A. The Acceptance Rule B. The Contract Rule C. The Reasonable Rule D. The Mailbox Rule E. The Contract Legality Rule

D. The Mailbox Rule

54. (p. 318) Which of the following states that if a writing, or term in question, appears to be plain and unambiguous on its face, its meaning must be determined from the four corners of the instrument without resort to outside evidence, with the words being given their ordinary meaning? A. The Interpretation Rule B. The Simple Rule C. The Understandable Rule D. The Plain Meaning Rule E. The Comprehensive Rule

D. The Plain Meaning Rule

36. (p. 110) As expressed in the text, which of the following expresses the United Nations declaration on hate speech? A. The United Nations' declaration protects hate speech to the same degree as courts in the U.S. discussed in the text. B. The United Nations' declaration states that speech is only recognized as "hate speech" if it is gender-based. C. The United Nations' declaration states that speech is only recognized as "hate speech" if it is racially based. D. The United Nations' declaration states that hate speech is not a protected form of expression. E. There is no United Nations declaration on hate speech because that body expressly determined that any decision on the matter should be postponed.

D. The United Nations' declaration states that hate speech is not a protected form of expression. The international community is less protective of hate speech than the U.S., and the United Nations declaration and a number of foreign laws state that hate speech is not a protected form of expression.

43. (p. 82) Billy signs an arbitration agreement providing that he will arbitrate any disputes with his employer, ABC Company. Billy believes that ABC Company has discriminated against him in violation of the Americans with Disabilities Act. The EEOC also investigated the situation and brought an action against ABC Company alleging that ABC Company discriminated against Billy in violation of the Americans with Disabilities Act. What is the effect of the arbitration clause in regards to the action brought by the EEOC? A. The arbitration clause is enforceable and binding on the EEOC. B. The arbitration clause is enforceable and binding on the EEOC only if ABC Company provided the EEOC with a copy of the agreement before the suit was filed. C. The arbitration clause is enforceable and binding on the EEOC only if Billy is the only employee in the company who has allegedly been discriminated against under the Americans with Disabilities Act. D. The arbitration clause is not binding on the EEOC. E. The EEOC can avoid the arbitration clause only if it can show that it prosecuted ABC Company in the past and that ABC Company is a repeat offender.

D. The arbitration clause is not binding on the EEOC. In the case of Equal Employment Opportunity Commission v. Waffle House Inc., the U.S. Supreme Court ruled that the Equal Employment Opportunity Commission was not foreclosed from litigating claims involving an employee because the employee signed a mandatory arbitration agreement.

20. (p. 306) Which of the following is a definition for consideration? A. Being cordial in the negotiation of contracts. B. Refraining from unethical behavior in the negotiation of contracts. C. Being cordial and refraining from unethical behavior in the negotiation of contracts. D. The bargained-for exchange. E. A contract negotiated in person as opposed to by telephone or e-mail.

D. The bargained-for exchange.

21. (p. 339) Which of the following is true when an offer authorizes a certain mode of acceptance but does not require it, and an offeree attempts to accept the offer through a method other than the authorized means? A. The acceptance becomes a counteroffer that the original offeror may or may not accept. B. There is no contract, and the attempted acceptance is of no effect. C. There is a contract only if the acceptance is received by the time that acceptance through the authorized means would have been received. D. The contract is not formed until the acceptance is received by the offeror. E. Authorizing but not requiring a certain type of acceptance has no effect, and the mailbox rule applies.

D. The contract is not formed until the acceptance is received by the offeror.

24. (p. 309) An attorney who says that a contract lacks "the proper form" is typically referencing which of the following? A. The agreement lacked a proper offer. B. The contract lacked a proper acceptance. C. The contract lacked consideration. D. The contract lacked a writing. E. The contract lacked both an appropriate offer and an appropriate acceptance.

D. The contract lacked a writing.

23. (p. 192) Which of the following was the result in Thomas P. Lamb v. Tony Rizzo, the case in the text in which the defending newspaper reporter claimed that he could not be held liable to the plaintiff for making alleged defamatory statements because the plaintiff's reputation as a kidnapper and murderer serving three life sentences was so bad that his reputation could not be further harmed? A. The court allowed the lawsuit to proceed ruling that whether the plaintiff already had a bad reputation was irrelevant in relation to a defamation lawsuit. B. The court allowed the lawsuit to proceed ruling that whether the plaintiff already had a bad reputation was irrelevant in relation to the lawsuit involved, an action for libel, although the plaintiff's reputation would likely have barred an action for slander. C. The court allowed the lawsuit to proceed ruling that whether the plaintiff already had a bad reputation was irrelevant in relation to the lawsuit involved, an action for slander, although the plaintiff's reputation would likely have barred an action for libel. D. The court dismissed the lawsuit recognizing that the facts fit within the jurisdiction's description of when the libel-proof doctrine might apply based upon the plaintiff's already bad reputation. E. The court dismissed the lawsuit on the basis that the statements were not false but also recognized that the only proof justifying application of the libel-proof doctrine is proof that a defendant has been sentenced to death. The court dismissed the lawsuit recognizing that the facts of the case fitted within the state's description of when the libel-proof doctrine might apply.

D. The court dismissed the lawsuit recognizing that the facts fit within the jurisdiction's description of when the libel-proof doctrine might apply based upon the plaintiff's already bad reputation.

12. (p. 399) Which of the following was the result in Orville Arnold and Maxine Arnold v. United Companies and Michael T. Searls, involving the issue of whether an arbitration agreement entered into as part of a consumer loan transaction containing a substantial waiver of the consumer's rights, including access to the courts, while preserving for all practical purposes the lender's right to a judicial forum, is void as a matter of law? A. The court upheld the agreement based upon principles of freedom of contract. B. The court upheld the agreement as far as the plaintiffs' duty to arbitrate but stated that the same obligation would be imposed on the defendants. C. The court upheld the agreement so long as the parties agreed that plaintiffs would not be required to pay the defendants' attorney fees even if the defendants prevailed at arbitration. D. The court found that the waiver of the plaintiffs' rights to a judicial forum considered along with the defendants' retention of such rights and other unfair aspects of the agreement required a finding that the arbitration agreement was void. E. The court found that the agreement was void because a consumer loan transaction was involved.

D. The court found that the waiver of the plaintiffs' rights to a judicial forum considered along with the defendants' retention of such rights and other unfair aspects of the agreement required a finding that the arbitration agreement was void.

11. (p. 380) What was the result in the Case Opener in which customers of Apple attempted to disaffirm purchases of game currency by their children? A. The court dismissed the lawsuit on the basis that the parents were bound by the Terms of Service and notifications of their original contracts with Apple binding them to future purchases of game currency when their passwords were used. B. The court dismissed the lawsuit on the basis that the parents were bound by the Terms of Service and notifications of their original contracts with Apple binding them to future purchases of game currency regardless of whether passwords were used. C. The court dismissed the lawsuit on the basis that no contractual agreement was needed in order for the parents to be bound in regard to purchases of game currency so long as their passwords were used. D. The court refused to dismiss the lawsuit because no case law was provided to prove that Apple's Terms of Service served as a contract for all subsequent transactions. E. The court refused to dismiss the lawsuit because as a matter of law parents cannot be required to contractually agree to future purchases by children that are unapproved by the parents.

D. The court refused to dismiss the lawsuit because no case law was provided to prove that Apple's Terms of Service served as a contract for all subsequent transactions.

12. (p. 437) Which of the following was the result on appeal in Forest Commodity Corp. ("FCC") v. Lone Star Industries Inc., the case in the text in which the Forest Commodity Corp. denied that it violated a contractual nonassignability clause and claimed that it was entitled to recover on a breach of contract claim because the defendant did not fully perform? A. The court ruled that FCC did not violate a nonassignability clause and that it was entitled to recover. B. The court ruled that even though FCC violated the nonassignability clause, the nonassignability clause was against public policy; and FCC was allowed to recover. C. The court ruled that even though FCC violated the nonassignability clause, the other party also violated a nonassignability clause resulting in FCC being able to recover its full claim. D. The court ruled that FCC violated a nonassignability clause and was therefore unable to recover on its claim. E. The court ruled that FCC violated a nonassignability clause but that because the other party also violated a nonassignability clause, FCC's recovery would be reduced by 50%, not completely barred.

D. The court ruled that FCC violated a nonassignability clause and was therefore unable to recover on its claim.

14. (p. 315) Which of the following was the result on appeal in Reisenfeld & Co. v. The Network Group Inc.; Builders Square Inc.; Kmart Corp., the case in the text involving whether the plaintiff could recover from BSI in the situation in which BSI contracted with Network Group to lease property, and Network Group contracted with the plaintiff agreeing to pay a certain commission for his work but then defaulted on the contract? A. The court ruled that because it was a third-party beneficiary, BSI was required to pay the plaintiff the full amount of the commissions claimed. B. The court ruled that because it was a third-party beneficiary, BSI was required to pay the plaintiff the reasonable value of the services rendered, not necessarily the contractual amount promised for commissions. C. The court ruled that because a quasi-contract was involved, BSI was required to pay the plaintiff the full amount of the commissions claimed. D. The court ruled that because a quasi-contract was involved, BSI was required to pay the plaintiff the reasonable value of the services rendered, not necessarily the contractual amount promised for commissions. E. The court ruled that because the plaintiff did not have a contract with BSI, the plaintiff was entitled to no recovery from BSI.

D. The court ruled that because a quasi-contract was involved, BSI was required to pay the plaintiff the reasonable value of the services rendered, not necessarily the contractual amount promised for commissions.

13. (p. 328) What was the result in the case in the text Lucy v. Zehmer involving whether allegations of joking prevented the formation of the contract involved? A. The court ruled that the contract would not be enforced because one of the parties was subjectively joking. B. The court ruled that the contract would not be enforced because one of the parties was joking, and a reasonable person should have known that. C. The court ruled that the contract would not be enforced because the parties had been drinking although they were not intoxicated. D. The court ruled that the agreement would be enforced because under the applicable standard, it was not apparent that joking was involved. E. The court ruled that the contract would be enforced because of what the parties verbally said regardless of whether an objective person would have thought joking was involved.

D. The court ruled that the agreement would be enforced because under the applicable standard, it was not apparent that joking was involved.

60. (p. 177) Under the Sarbanes-Oxley Act, which of the following is true regarding the destruction of documents in a federal bankruptcy investigation? A. The destruction of documents in a federal bankruptcy investigation is a misdemeanor with possible sentences of up to 364 days in jail. B. The destruction of documents in a federal bankruptcy investigation is a felony with possible sentences of up to 364 days in jail. C. The destruction of documents in a federal bankruptcy investigation is a felony with possible sentences of up to 5 years in jail. D. The destruction of documents in a federal bankruptcy investigation is a felony with possible sentences of up to 20 years in jail. E. The destruction of documents in a federal bankruptcy investigation is a felony with possible sentences of life imprisonment.

D. The destruction of documents in a federal bankruptcy investigation is a felony with possible sentences of up to 20 years in jail. Under the Sarbanes-Oxley Act, the destruction of documents in a federal bankruptcy investigation is a felony with possible sentences of up to 20 years' imprisonment.

15. (p. 321) Which of the following was the result in the Case Opener in which Hallmark claimed that an arbitration ruling against a former employee should be upheld? A. The former employee was barred from proceeding in court because of the binding arbitration clause. B. The former employee was barred from proceeding in court based on the statute of limitations which expired while she was pursuing her remedies in arbitration. C. The former employee was allowed to proceed in court because she had exhausted her remedies in the arbitration arena. D. The former employee could proceed with an action in court because there was no consideration for the arbitration agreement and, therefore, no valid agreement. E. The former employee could proceed with an action in court because, as a matter of law, arbitration agreements are barred in the arbitration context.

D. The former employee could proceed with an action in court because there was no consideration for the arbitration agreement and, therefore, no valid agreement.

11. (p. 390) Susie and Sam have significant funds invested with a stock broker named Will and also with other brokers. Susie and Sam decided to divorce. Susie was really interested in investments, so the divorce decree provided that Susie would retain "all investment accounts," and Sam would receive a "cash settlement" from funds the parties had in the bank. Six months after the divorce was final, it was discovered that Will had absconded to parts unknown with all the money invested with him. Susie could have withdrawn the funds at the time of the divorce, before Will left town, but she had no reason for concern and left the funds there for investment purposes. After discovering Will's wrongdoing, Susie asked Sam to renegotiate the divorce agreement, but he refused. Which of the following is the most likely result of their dispute if the court follows the decision of the court in Simkin v. Blank, discussed in the text? A. The original divorce agreement will be rescinded, and the parties will be required to renegotiate the agreement because Susie and Sam were mutually mistaken in regard to investing with Will. B. The original divorce agreement will be rescinded, and the parties will be required to renegotiate the agreement because the investment accounts with Will were a significant basis of the divorce agreement, and Will's fraud caused termination of that contract. C. The original divorce agreement will be rescinded, and the parties will be required to renegotiate the agreement because, regardless of whether or not Will was guilty of fraud, the end result is that Susie did not receive the benefit of her bargain. D. The original divorce agreement will be enforced only in part because based on their mutual mistake in regard to investing with Will, the parties will be required to renegotiate the part of the contract involving the investments with Will. E. The original divorce agreement will be enforced.

D. The original divorce agreement will be enforced only in part because based on their mutual mistake in regard to investing with Will, the parties will be required to renegotiate the part of the contract involving the investments with Will.

"Consumer Debt." Mona had not been keeping up with her spending and bought several expensive items. She had numerous credit cards and some unsecured loans. She had a total of 14 creditors. All her debt was consumer debt, and Mona really wished that she had not put all those new clothes on her credit card. Although Mona was struggling, she did not want to file for bankruptcy because she did not want a bad credit score. Three of her credit card companies, however, who had unsecured claims against her totaling $14,500, signed and filed an involuntary bankruptcy petition against her under Chapter 7. Mona is unsure about how to proceed. While she is several months behind on a number of payments, including alimony payments she believes were unfairly awarded to her ex-husband, she does not particularly want to go bankrupt. She believe that the creditors have been unfair in not allowing her additional time in which to pay. On the other hand, she would really like to be rid of her excessive debt and stop collection efforts on the part of her ex-husband. 51. (p. 707) Which of the following is true regarding the involuntary petition for bankruptcy filed by some of Mona's creditors? A. Involuntary petitions are not allowed under Chapter 7. B. At least 5 creditors must file in order for an involuntary petition to be accepted; therefore, the involuntary petition will be dismissed in Mona's case. C. Only 3 creditors may file an involuntary petition, but their aggregate claims must be $20,100; therefore, the petition will be dismissed in Mona's case. D. The petition was properly filed because 3 or more creditors with unsecured claims totaling $14,425 or more signed the petition for involuntary bankruptcy. E. The petition was properly filed because only 2 or more creditors with secured or unsecured claims totaling at least $10,500 must sign a petition for involuntary bankruptcy.

D. The petition was properly filed because 3 or more creditors with unsecured claims totaling $14,425 or more signed the petition for involuntary bankruptcy.

37. (p. 70) Which of the following is true regarding the remedy if a party does not abide by an agreement reached in mediation? A. Because mediation is a voluntary process, there is no legal remedy. B. The remedy is to return to mandatory mediation. C. The remedy is to proceed to arbitration. D. The remedy is to sue for breach of contract. E. The remedy is to proceed to a minitrial.

D. The remedy is to sue for breach of contract. If one of the parties does not follow the agreement, that party can be sued for breach of contract.

25. (p. 388) Which of the following is true regarding the elements that must be satisfied in order for a mutual mistake to interfere with legal consent? A. The required elements are: (1) a basic assumption about the subject matter of the contract, and (2) an admission by one of the parties that a misrepresentation occurred. B. The required elements are: (1) a basic assumption about the subject matter of the contract, and (2) a material effect on the agreement. C. The required elements are: (1) a basic assumption about the subject matter of the contract, and (2) an adverse effect on a party who did not agree to bear the risk of mistake at the time of the agreement. D. The required elements are: (1) a basic assumption about the subject matter of the contract, (2) an adverse effect on a party who did not agree to bear the risk of mistake at the time of the agreement, and (3) a material effect on the agreement. E. The required elements are: (1) a basic assumption about the subject matter of the contract, (2) an adverse effect on a party who did not agree to bear the risk of mistake at the time of the agreement, (3) a material effect on the agreement, and (4) fraud.

D. The required elements are: (1) a basic assumption about the subject matter of the contract, (2) an adverse effect on a party who did not agree to bear the risk of mistake at the time of the agreement, and (3) a material effect on the agreement.

"Courtroom Surprises." Wilma agrees to sell Wally her house for $200,000. Wilma, Wally, and the house are all located in Tennessee. She also orally agrees to sell her used car to Wally for $1,000. Wilma and Wally discuss the fact that the house needs some repairs. Wilma gives Wally a key and tells him to do whatever he wants with the house. In reliance on her promise to sell the house, Wally sells his home, gets a loan, and has a new roof put on Wilma's house because of leaks that needed to be repaired to prevent further damage. When presented with the written agreements of sale for the home and the car, however, Wilma refuses to sign either. Wally sues, and the case proceeds to trial. Wilma tells the judge in court under oath that she orally agreed to sell the house but that she changed her mind before signing and that she believes she has protection under the statute of frauds. She tells the judge that no agreement was ever made regarding the car and that she also has protection under the statute of frauds regarding that matter. 55. (p. 415-416) Which of the following is true regarding Wilma's statement to the judge under oath that she orally agreed to sell the house? A. The statement has no effect because of the statute of frauds. B. The statement would be excluded from consideration as parol evidence but only because it involved an amount in excess of $5,000. C. The judge would be estopped from considering the evidence. D. The statement would be classified as an admission and would establish an exception to the statute of frauds involving the agreement on the house. E. The statement would be excluded from consideration because of the collateral interest rule.

D. The statement would be classified as an admission and would establish an exception to the statute of frauds involving the agreement on the house.

59. (p. 69) Which of the following is true regarding the form of ADR known as "negotiation"? A. The ADR process known as "negotiation" is the same as the ADR process known as "mediation." B. There is only one approach to negotiation, problem-solving. C. There is only one approach to negotiation, adversarial. D. There are two approaches, adversarial negotiation and problem-solving negotiation. E. There is no form of ADR known as negotiation.

D. There are two approaches, adversarial negotiation and problem-solving negotiation. A party can enter negotiations with one of two approaches: adversarial or problem solving.

62. (p. 311-313) Which of the following is an appropriate characterization of the agreement between Debby and Max? A. They had a bilateral, express agreement. B. They had a bilateral, implied agreement. C. They had a bilateral and unilateral agreement. D. They had a unilateral, express agreement. E. They had a unilateral, implied agreement.

D. They had a unilateral, express agreement.

45. (p. 398) Which of the following occurs when one of the parties to a contract has so much more bargaining power than the other that he or she dictates the terms of the agreement? A. Unfairness B. Cohesiveness C. Disconnection D. Unconscionability E. Unprovable

D. Unconscionability

17. (p. 1132) An insurer may also be called a[n] _____. A. Overseer B. Underseer C. Overwriter D. Underwriter E. Guarantor

D. Underwriter

30. (p. 354) Which of the following is true regarding the preexisting duty rule? A. Unforeseen circumstances is an exception, but additional work and past consideration are not exceptions. B. Additional work is an exception, but unforeseen circumstances and past consideration are not exceptions. C. Past consideration is an exception, but unforeseen circumstances and additional work are not exceptions. D. Unforeseen circumstances and additional work are exceptions, but past consideration is not an exception. E. Unforeseen circumstances and past consideration are exceptions, but additional work is not an exception.

D. Unforeseen circumstances and additional work are exceptions, but past consideration is not an exception.

39. (p. 5) The ______ is a body of law significant to business activities including sales, banking, and warranty. A. Federal Business Code B. Model Business Code C. Uniform Transactional Model D. Uniform Commercial Code E. Marketing Transaction Code

D. Uniform Commercial Code The Uniform Commercial Code is a body of law significant for business activities including sales laws and other regulations affecting commerce, such as bank deposits and collections, title documents, and warranties.

34. (p. 310) All contracts can be categorized as either ___________ or __________. A. Unilateral; complete B. Unilateral; trilateral C. Bilateral; trilateral D. Unilateral; bilateral E. Bilateral; complete

D. Unilateral; bilateral

38. (p. 371) Which of the following occurs when a party gives a loan at an interest rate exceeding the legal maximum? A. No enforceable legal violation B. Interest prohibition C. Principle reduction D. Usury E. Plenary

D. Usury

41. (p. 316) A[n] _____________ contract is one that contains all the legal elements of a contract. A. Voidable B. Executed C. Formal D. Valid E. Approved

D. Valid

43. (p. 441) Which of the following references the maturing of rights such that a party can legally act on the rights? A. Absoluting B. Gelling C. Forming D. Vesting E. Finishing

D. Vesting

21. (p. 361) Because their contracts are ____, minors have the right, until a reasonable time after reaching the age of majority, to _____ or void their contracts. A. Void; disaffirm B. Void; affirm C. Void; resist D. Voidable; disaffirm E. Voidable; affirm

D. Voidable; disaffirm

20. (p. 703) Which of the following is true regarding the law that is relevant to bankruptcy claims? A. Only federal statutory law is relevant. B. Only state statutory law is relevant. C. While bankruptcy law is state law, federal law applies to bankruptcy cases in the sense that federal laws regarding debtor's property and creditor claims may apply. D. While bankruptcy law is federal law, state law applies to bankruptcy cases in the sense that state laws regarding debtor's property and creditor claims may apply. E. Only federal common law is relevant to bankruptcy claims.

D. While bankruptcy law is federal law, state law applies to bankruptcy cases in the sense that state laws regarding debtor's property and creditor claims may apply.

"Powder Room Mess." For $300,000, Willis agrees to build a new home for Robert, who is very picky. Willis builds the home to Robert's specifications with one exception. The faucets and linoleum flooring in an upstairs powder room are not exactly what Robert specified. That was a mistake on Willis' part, but he had not intentionally failed to follow specifications. When Robert sees the powder room, he goes ballistic and tells Willis that he will not pay Willis anything for the house. It will take $300 to put in correct faucets and linoleum. Willis says that he is willing to pay $300 to put Robert in the position he would have been in had the correct faucets and linoleum been used, but that is all he is willing to pay. 56. (p. 455) Which of the following is true regarding the breach, if any, that occurred? A. Willis did not breach the contract. B. Willis materially breached the contract. C. Willis substantially breached the contract. D. Willis breached the contract. E. Willis committed an anticipatory breach of the contract.

D. Willis breached the contract.

16. (p. 330) If nothing is stated to the contrary in the terms of an auction, an auction is presumed to be ______. A. Without controls B. With controls C. Without reserve D. With reserve E. Without qualifications

D. With reserve

43. (p. 11) Which of the following is true regarding Zach's legal problems in Zeno? A. Zach can rely upon the federal statutory laws of the U.S. as a defense but not the U.S. Constitution. B. Zach is entitled to all U.S. Constitutional rights in Zeno because he is a U.S. citizen, but he cannot rely on statutory law. C. Zach can rely on U.S. laws as a defense only if he obtains an opinion from the office of the U.S. attorney that his operations in the U.S. have strictly complied with the law. D. Zach must obey the laws of Zeno when operating a business in Zeno and cannot rely upon U.S. laws as a defense. E. Zach can rely upon the federal statutory laws of the U.S. as a defense. Additionally, Zach is entitled to all U.S. Constitutional rights in Zeno because he is a U.S. citizen.

D. Zach must obey the laws of Zeno when operating a business in Zeno and cannot rely upon U.S. laws as a defense. Zach should understand comparative law; and to do business in another country, Zach must conform to that country's standards.

29. (p. 78) What effect will the provision that the arbitration will be conducted at the company's home state have on the agreement? A. None; only because an employee/employer relationship is involved. B. None because Jill freely signed the agreement. C. None because a domestic company, not an international one, is involved. D. A court will be unlikely to enforce the agreement only if it can be proven that Jill did not read the agreement before she signed it. E. A court may be more likely to not enforce the agreement because of the distance and expense involved.

E. A court may be more likely to not enforce the agreement because of the distance and expense involved. As recognized in Exhibit 4-2, drafters of arbitration agreements should consider other parties when determining where to hold arbitration. If a company states in its arbitration clause that all disputes will be arbitrated in its state of incorporation, a court might be more likely to not enforce the agreement.

"Beauty Shop Woes." When Janice went to work as a hair stylist in Rick's beauty shop, she entered into an agreement with Rick whereby if she left she would not work for another beauty shop within 50 miles for 2 years. Rick trained Janice in a number of new techniques. After nine months, Janice was offered a great job down the street at a new beauty shop, she quit Rick, and had a number of customers follow her down the street to her new job. Rick claimed that she had signed a contract and had no right to go to work at the new shop. Janice disagreed and told Rick that no judge in the country would enforce such an agreement. Janice told Rick that she was more worried about a customer who was threatening to sue her because her hair turned green after Janice worked on it. Janice said that she knew that the customer's hair was damaged; but that she told the customer that odd results could result from a dye attempt, and had her sign a contract that she released Janice from all liability and would not sue. The customer, however, sued anyway. 59. (p. 374) The agreement Rick and Janice entered into is referred to as which of the following? A. A competition agreement B. A prohibited competition agreement C. A covenant not to misappropriate D. A policy agreement E. A covenant not to compete

E. A covenant not to compete

22. (p. 352) Which of the following would not be considered an example of consideration? A. A promise to be on time for class all semester. B. A promise to stop drinking sports drinks. C. A promise to walk the neighbor's dog. D. A promise to call the police if the neighbor's alarm system should go off while they are on vacation. E. A promise to pay your employees as required by law.

E. A promise to pay your employees as required by law.

62. (p. 103) Which of the following is true regarding the ability of individual states to collect sales tax on Internet transactions? A. Individual states may without restriction collect sales tax from merchants on items purchased through the Internet by in-state residents. B. Only with permission of Congress, granted on a state-by-state basis, may individual states collect from merchants sales tax on items purchased through the Internet by in-state residents. C. States cannot collect sales tax on Internet sales from merchants nor may a state require that its citizens report Internet purchases so that they may be taxed. D. A state cannot collect sales tax from merchants unless sales to the state's citizens amount to more than 1 million in the aggregate. E. A state can collect sales tax from a merchant only if the merchant has a store or distribution center in the state.

E. A state can collect sales tax from a merchant only if the merchant has a store or distribution center in the state. Sales taxes are a large source of revenue for state governments, but states can require that a business submit sales tax payments only if the business has a store or distribution center in the state.

36. (p. 5) When the organization in charge of proposing uniform laws proposes a statute, which of the following is true? A. All states must adopt the uniform statute within one year. B. All states must adopt the uniform statute within six months. C. The uniform statute automatically goes into effect without any action by state legislatures. D. A state legislature is not required to adopt the uniform statute; but if the state legislature decides to go forward with adoption, all portions of the statute must be adopted. E. A state legislature can ignore the proposed uniform law, adopt it in full, or adopt it in part.

E. A state legislature can ignore the proposed uniform law, adopt it in full, or adopt it in part. The response to suggestions regarding uniform laws is entirely in the hands of the state legislatures, and they can ignore a suggestion or adopt part or all of the proposed model law.

43. (p. 316) Which of the following is in effect not a contract at all? A. A voidable contract B. An executory contract C. An implied contract D. An executed contract E. A void contract

E. A void contract

23. (p. 308) Which of the following may represent a lack of genuine assent? A. Acceptance secured through fraud, duress, or misrepresentation, but not acceptance through undue influence. B. Acceptance secured through undue influence, misrepresentation, or duress, but not through fraud. C. Acceptance secured through fraud or duress, but not through misrepresentation or undue influence. D. Acceptance secured through fraud, dress, or undue influence, but not through misrepresentation. E. Acceptance secured through fraud, duress, undue influence, or misrepresentation.

E. Acceptance secured through fraud, duress, undue influence, or misrepresentation.

45. (p. 7) Which of the following is true regarding administrative agencies? A. There are state administrative agencies, but no federal administrative agencies. B. There are federal administrative agencies, but no state administrative agencies. C. There are state and federal administrative agencies, but no local administrative agencies. D. Administrative agencies exist only at the local county level. E. Administrative agencies exist at the federal, state, and local level.

E. Administrative agencies exist at the federal, state, and local level. The federal, state, and local governments have dozens of administrative agencies.

30. (p. 334) In the absence of a time condition in an offer, the offer will expire _________. A. In forty-eight hours B. In seven days C. In ten days D. In forty-five days E. After a reasonable amount of time

E. After a reasonable amount of time

59. (p. 1140) Which of the following is true regarding the assertion of Alice that the insurer was not liable for accidents that were the fault of the insured? A. Alice is correct because insurance on vehicles is meant to assist drivers who are involved in accidents through no fault of their own. B. Alice is correct only if Prudence has had at least two previous accidents. C. Alice is only correct if Prudence is still carried on a parent's insurance policy. D. Alice is likely correct only because Prudence is a student with a student policy. E. Alice is incorrect.

E. Alice is incorrect.

15. (p. 406) Which of the following is false regarding written contracts? A. Disputes are easier to settle when contractual terms are solidified in writing. B. The moment of writing allows both parties to reconsider terms and ensure what they desire. C. In general, written contracts aid in the conduct of smooth business contracts. D. The idea of requiring a writing comes from an English law. E. All contracts must be in writing in order to be enforced.

E. All contracts must be in writing in order to be enforced.

34. (p. 368) Which of the following is true regarding an agreement to commit a crime or a tort? A. An agreement to commit a crime is enforceable and deemed legal so long as the substance of the agreement was deemed a crime after the agreement was entered into, but an agreement to commit a tort is unenforceable. B. An agreement to commit a tort is enforceable, but an agreement to commit a crime is unenforceable. C. An agreement to commit a crime is unenforceable, and an agreement to commit a tort is unenforceable unless a business tort is involved in which case the agreement is enforceable. D. An agreement to commit a crime is unenforceable, and an agreement to commit a tort is unenforceable unless a privacy tort is involved in which case the agreement is enforceable. E. An agreement to commit a crime is unenforceable, and an agreement to commit a tort is unenforceable.

E. An agreement to commit a crime is unenforceable, and an agreement to commit a tort is unenforceable.

48. (p. 443) Which of the following is true regarding the rights of an incidental beneficiary to a contract to sue to recover incidental rights? A. An incidental beneficiary may sue to enforce incidental contractual rights so long as those rights have vested. B. An incidental beneficiary may sue to enforce incidental contractual rights only if the incidental beneficiary was once a creditor beneficiary. C. An incidental beneficiary may sue to enforce incidental contractual rights only if the incidental beneficiary was once a donee beneficiary. D. An incidental beneficiary may sue to enforce incidental contractual rights only if the incidental beneficiary is also a second-party beneficiary. E. An incidental beneficiary cannot sue to enforce a contract which provided incidental benefits.

E. An incidental beneficiary cannot sue to enforce a contract which provided incidental benefits.

57. (p. 455) Which of the following is true regarding the appropriate amount of damages, if any? A. There are no damages because Willis did not breach the contract. B. Robert will not have to pay for the house because Willis failed to perform as required. C. Even though Willis substantially performed, Robert will not have to pay for the house because Willis materially breached the contract. D. Robert is released from paying for the house because of the anticipatory breach. E. Any damages awarded would be in the range of $300, the amount it would take to fix the breach.

E. Any damages awarded would be in the range of $300, the amount it would take to fix the breach.

38. (p. 164) Which of the following are considered infants under the law in regards to criminal activity? A. Any child five and under. B. Any child ten and under. C. Any child twelve and under. D. Any child sixteen and under. E. Any person under the age of majority.

E. Any person under the age of majority. By law, persons under the age of majority (the age at which someone becomes a legal adult) are considered infants.

19. (p. 428) What is the term for the third party who receives an assignment of contract rights? A. Transferor B. Transferee C. Relator D. Assignor E. Assignee

E. Assignee

54. (p. 334) What is the most likely result in the lawsuit brought by Barbara against Walter? A. Walter will win because he was only engaged in preliminary negotiations. B. Walter will win because the advertisement was simply inviting customers, such as Barbara, to make an offer. C. Walter will win because he properly revoked the offer. D. Barbara will win because the ad would be treated as an offer that she properly accepted. E. Barbara will win because she properly made an offer that was accepted by Walter when she did the hula hooping.

E. Barbara will win because she properly made an offer that was accepted by Walter when she did the hula hooping.

55. (p. 435) Which of the following is true regarding Billy's claim that he had no duty to pick up the paint cans? A. Billy is correct because he validly delegated that duty to Billy. B. Billy is incorrect because the job was a personal service, and he had no right to assign either rights or duties under the contract. C. Billy is incorrect but only because the job was for under $1,000. D. Billy is correct only because Richard properly painted the house and was, therefore, responsible for ancillaries. If Richard had improperly painted the house, Billy would have had remaining duties. E. Billy is incorrect because his delegation did not affect his obligation to Jan.

E. Billy is incorrect because his delegation did not affect his obligation to Jan.

"Accounting Advice." Brad, a newly hired Certified Public Accountant, who barely passed his boards, was asked by a business client, a chief executive officer, about the effect of the Sarbanes-Oxley Act on an accounting issue. Brad assured the client that the client should not be concerned about the Act because it is very vague, unspecific, and difficult to understand. Brad told the CEO that in any event, the CEO could not be held personally responsible regardless of what happened because only company business was involved. Brad also told the CEO that there is no oversight involved with the act. Later that same day, a coworker of Brad discovered that the CEO had been involved in misstating some financial reports and had also destroyed financial documents to cover up fraud. An employee at the company, Laura, had informed the coworker as well as the SEC. When the issue was mentioned to the CEO, he immediately fired Laura. 39. (p. 28) Which of the following is true regarding Brad's statement that the CEO could not be held liable for violations of the act? A. Brad is correct. Under no circumstances can a CEO be held personally responsible for violations under the act. Any fines would be imposed upon the business entity. B. Brad is incorrect. The act provides for harsh penalties, and a CEO who knows that the company's financial reports are incorrect but claims that they are truthful, can be heavily fined. There are no penalties, however, for destruction of financial documents. C. Brad is incorrect. The act provides for harsh penalties, and a CEO who destroys or changes financial documents to mislead can be heavily fined. There are no penalties, however, for misstatements of a company's financial reports because the company is solely responsible for its statements. D. Brad is incorrect, but any fine against a CEO under the act cannot exceed a nominal amount of $1,000. E. Brad is incorrect. The act provides for harsh penalties, and a CEO who knows that the company's financial reports are incorrect but claims that they are truthful, can be heavily fined. Additionally, a CEO who destroys or changes financial documents to mislead can be heavily fined.

E. Brad is incorrect. The act provides for harsh penalties, and a CEO who knows that the company's financial reports are incorrect but claims that they are truthful, can be heavily fined. Additionally, a CEO who destroys or changes financial documents to mislead can be heavily fined. As set forth in Exhibit 2-7, if the CEO or CFO knows that the company's financial reports are incorrect but claims they are truthful, or if he or she destroys or changes financial documents, the imposed fine can run into millions of dollars.

56. (p. 34-35) A person who believes that they should not cheat on a drug test because if everyone did so, the drug test would be meaningless is applying a[n] ______. A. Ethics of care B. Virtual analysis C. Cost-benefit analysis D. Fundamentalist approach E. Categorical imperative

E. Categorical imperative According to the categorical imperative, an action is moral only if it would be consistent for everyone in society to act in the same way.

18. (p. 703) Which of the following chapters recognizes insolvency proceedings pending in a foreign country and relief for foreign debtors? A. Chapter 7 B. Chapter 9 C. Chapter 11 D. Chapter 14 E. Chapter 15

E. Chapter 15

60. (p. 333) What effect does the accidental destruction of the personal watercraft have on the deal between Charles and Joan? A. Charles is in breach of contract and must pay Joan damages because she accepted before he could tell her about the fire. B. Charles is in breach of contract and must purchase a similar watercraft to transfer to Joan. C. Charles is not in breach of contract because an insufficient material term involving who would move the watercraft was omitted. D. Charles is not in breach of contract because the offer was not sufficiently definite. E. Charles is not in breach of contract because of destruction of the subject matter.

E. Charles is not in breach of contract because of destruction of the subject matter.

66. (p. 155) Of what offense, if any, is Alice guilty of by her method of payment? A. Ponzi scheme B. Insider-trading scheming C. Pretexting D. Check defalcation E. Check kiting

E. Check kiting Exhibit 7-1 recognizes the offense of "check kiting" involving drawing checks on an account in one bank and depositing them in an account in a second bank when neither account has sufficient funds to cover the amounts drawn.

57. (p. 118) Which of the following is true regarding rights of the citizens of Belarus? A. The constitution restricts movement outside of the country. B. The defendant in a criminal case has no protection from providing evidence against himself or herself. C. Citizens have the right to profess any religion, but they must profess some religion. D. The constitution limits the workweek to 30 hours. E. Citizens accused of crimes are presumed innocent until proven guilty.

E. Citizens accused of crimes are presumed innocent until proven guilty. The constitution of Belarus, adopted in 1994, provides Belarusian citizens with an exhaustive set of rights that surpasses most other nations' constitutions and guarantees, for example, that citizens accused of crimes are presumed innocent until proven guilty.

50. (p. 722) Which of the following is false regarding Chapter 12 of the bankruptcy code? A. A family farmer under Chapter 12 must have regular annual income. B. The family farmer's gross income must be at least 50 percent farm-dependent. C. At least 50 percent of the family farmer's debt must be farm-related. D. The debt must be under a certain debt cap. E. Congress modeled Chapter 12 after Chapter 7 relief.

E. Congress modeled Chapter 12 after Chapter 7 relief.

45. (p. 316) Which of the following contracts are usually voidable? A. Contracts entered into as a result of fraud, but not duress or undue influence. B. Contracts entered into as a result of duress or undue influence, but not fraud. C. Contracts entered into as a result of undue influence or fraud, but not duress. D. Contracts entered into as a result of fraud or duress, but not undue influence. E. Contracts entered into as a result of fraud, duress, or undue influence.

E. Contracts entered into as a result of fraud, duress, or undue influence.

46. (p. 718) Which of the following are permitted to file under Chapter 11 reorganization? A. Stockbrokers B. Commodities brokers C. Banks D. Savings and loan companies E. Corporate debtors

E. Corporate debtors

28. (p. 78) What effect would the provision requiring that she pay have on the agreement? A. It will have no effect because Jill signed it, and she is bound by it. B. Jill will be bound by the provision because while under federal law she had three days in which to back out of the agreement, she did not do so. C. Jill will be bound by the agreement unless she testifies that she did not read it. D. Jill will be bound by the agreement unless she can prove that she was orally promised it would not be enforced. E. Courts have refused to enforce arbitration agreements that require that the plaintiff pay the costs of the arbitration.

E. Courts have refused to enforce arbitration agreements that require that the plaintiff pay the costs of the arbitration. According to Exhibit 4-2, courts have refused to enforce arbitration agreements that require that the plaintiff pay the costs of the arbitration.

23. (p. 348) Which of the following is true regarding the adequacy of consideration? A. Courts generally consider the adequacy of consideration in determining whether to enforce a contract. B. Courts consider the adequacy of consideration only if something is sold for less than 90% of its market value. C. Courts consider the adequacy of consideration only if something is sold for less than 80% of its market value. D. Courts consider the adequacy of consideration only if something is sold for less than 70% of its market value. E. Courts seldom consider the adequacy of consideration but will do so if fraud is involved.

E. Courts seldom consider the adequacy of consideration but will do so if fraud is involved.

37. (p. 418) Even if they would normally have to be in writing, if applicable criteria are met, oral contracts for _____ goods are enforceable. A. Retailed B. Wholesale C. Collateral D. Consumer E. Customized

E. Customized

47. (p. 203) Which of the following is not a typical type of compensatory damage? A. Pain and suffering. B. Cost to repair damaged property. C. Medical expenses. D. Lost wages. E. Damages to punish the defendant for wrongdoing. Compensatory damages are typically rewarded for pain and suffering, costs of repairing damaged property, medical expenses, and lost wages.

E. Damages to punish the defendant for wrongdoing.

59. (p. 34) Which of the following consists of acting on the basis of the recognition that certain actions are right or wrong, regardless of their consequences? A. Act utilitarianism B. Rule utilitarianism C. Situational ethics D. Virtue ethics E. Deontology

E. Deontology Deontology consists of acting on the basis of the recognition that certain actions are right or wrong, regardless of their consequences.

75. (p. 59) The questioning of Brenda by Linda's lawyer is called ______, and the questioning of Brenda by Sam's lawyer is called ______. A. Absolute examination; counter-examination B. True examination; analysis examination C. True examination; trickster examination D. Direct examination; interrogating examination E. Direct examination; cross-examination

E. Direct examination; cross-examination The plaintiff's attorney questions the witness in direct examination; and after direct examination, opposing counsel may cross-examine the witness.

15. (p. 216) Which of the following must a plaintiff prove to win a negligence case? A. Duty, breach of duty, and causation, but not damages. B. Breach of duty only. C. Duty and causation only. D. Causation and damages. E. Duty, breach of duty, causation, and damages. To win a negligence case, the plaintiff must prove four elements: (1) duty, (2) breach of duty, (3) causation, and (4) damages.

E. Duty, breach of duty, causation, and damages.

27. (p. 351) For a court to enforce a promise, ______ must offer consideration. A. The offeror but not the offeree B. The offeree but not the offeror C. The acceptee but not the acceptor D. The acceptor but not the acceptee E. Each side to the contract

E. Each side to the contract

28. (p. 102) Which of the following is true regarding Ellen's statement? A. Ellen is incorrect. The U.S. Congress has complete discretion on taxation. B. Ellen is partially incorrect because before the U.S. Congress taxes one state's residents at a higher rate than citizens of other states, a rational relationship between the difference and governmental need must be shown. C. Ellen is incorrect because before the U.S. Congress taxes one state's residents at a higher rate than citizens of other states, an important need must be shown. D. Ellen is incorrect because before the U.S. Congress taxes one state's residents at a higher rate than citizens of other states, a disparity of income of over 30% between one state and another must be shown. E. Ellen is correct.

E. Ellen is correct. Although Article I, Section 8, of the Constitution gives the federal government the "Power to lay and collect Taxes, Duties, Imports and Excises," the taxes laid by Congress must be uniform across the states.

49. (p. 411) Which of the following is false regarding international treatment of evidentiary matters? A. German law does not have a parol evidence rule. B. France has a limited parol evidence rule. C. The parol evidence rule in France does not apply to commercial contracts. D. England requires that promises to pay for the debt of others be in writing. E. England has significantly increased the number of contracts falling within the statute of frauds since the original act was passed.

E. England has significantly increased the number of contracts falling within the statute of frauds since the original act was passed.

45. (p. 34) Which of the following requires that we see murder as a moral action as long as the murderer believes that the action is best for himself or herself? A. Absolutism B. Deontology C. Categorical imperative D. Uncertainty of thought E. Ethical relativism

E. Ethical relativism Ethical relativism denies the existence of objective moral standards. For example, ethical relativism requires that we see murder as a moral action as long as the murderer believes that the action is best for himself or herself.

61. (p. 36) The ______ adherents believe that when one individual, the caregiver, meets the needs of one other person, the cared-for party, the caregiver is helping to meet the needs of all the individuals who fall within the cared-for party's web of care. A. Deontology B. Utilitarianism C. Absolutism D. Virtue ethics E. Ethics of care

E. Ethics of care Ethics-of-care theorists argue that when one individual, the caregiver, meets the needs of one other person, the cared-for party, the caregiver is actually helping to meet the needs of all the individuals who fall within the cared-for party's web of care.

17. (p. 387) Which of the following is true regarding European courts? A. European courts are in total disagreement with the reluctance of American courts to interfere with a contract because the value of the item in question has changed since the agreement. B. European courts refuse to assume that parties accept the risk when they make a contract that the value might change later. C. European courts permit rescission of the contract for a mistake of value when the mistake involves more than 10 percent of the value at the time of the contract. D. European courts permit rescission of the contract for a mistake of value when the mistake involves more than 40 percent of the value at the time of the contract. E. European courts permit rescission of the contract for a mistake of value when the mistake involves more than 50 percent of the value at the time of the contract.

E. European courts permit rescission of the contract for a mistake of value when the mistake involves more than 50 percent of the value at the time of the contract.

53. (p. 363) In the dispute between Sally and the owner of Dings and Dents, which of the following is true regarding the claim of Sally and her parents that the car was a necessary? A. The claim will have no effect because the law does not recognize the concept of necessaries when minors are involved. B. Social status is irrelevant as a matter of law in addressing a claim that an item was a necessary. C. Whether or not parents would buy the item at issue is irrelevant in addressing a claim that an item was a necessary. D. A minor may not disaffirm a contract for a frivolous matter that is clearly not required. E. Even if a minor disaffirms a contract for a necessary, the minor will still be held liable for the reasonable value of the necessary.

E. Even if a minor disaffirms a contract for a necessary, the minor will still be held liable for the reasonable value of the necessary.

53. (p. 85) Bobby has a lawsuit in federal district court and asks Sally, a first year law student, about court-annexed ADR. What should Sally tell him? A. Mediation is required by law in federal district court. B. Arbitration is required by law in federal district court. C. Mediation is required by law in federal district court, but arbitration is not required. D. Neither mediation nor arbitration is required by law in federal district court, but all litigants must present a summary of their positions to a case neutral. E. Federal district courts vary on the approved ADR methods.

E. Federal district courts vary on the approved ADR methods. Each district court can decide whether to require ADR.

"Sexual harassment ADR." Jenny works at the Mexican fast-food restaurant which is owned by an international company located in Mexico. Jenny is very angry with her supervisor, Sleaze, as he has been making inappropriate sexual comments to her and other employees. Jenny decides to sue and retains a lawyer, Brice. Brice talks with the owners of the restaurant and is informed that Jenny signed an agreement to mediate and also to arbitrate any claims. Jenny informed Brice about other employees who entered into such agreements and later complained of harassment. Brice promises her that under federal law, he is legally entitled to get copies of all documents used during any other mediations and arbitrations and that he is also entitled to get detailed information regarding what was said and agreed upon by them. Brice also tells Jenny that, while he is not going to bring it up now, if they so choose, Brice and Jenny can avoid the arbitration agreement because under a new federal law, such agreements cannot be enforced if one of the companies involved is internationally based. He also tells Jenny in response to her question about the possibility of mediation in her case to forget it because mediation is pretty much the same thing as arbitration. Brice tells Jenny that an option is to arbitrate and, if the outcome is bad at arbitration, file a court action in federal court. Brice says that the federal court judge would not consider an arbitrator's decision in making a determination. 15. (p. 70) Assuming that Uniform Mediation Act provisions and the Federal Arbitration Act apply, can Brice obtain information regarding what occurred at previous mediations and arbitrations? A. Under federal law, Brice is entitled to all documents introduced at both mediations and arbitrations, and he can also get copies of statements, but only for proceedings at which a court reporter was present. B. Under federal law, in regard to mediations, Brice can get copies of any written documents reviewed but not accounts of statements; and he cannot get any information regarding previous arbitrations. C. Under federal law, Brice can get accounts of statements but not copies of written documents in regard to both mediations and arbitrations. D. Under federal law, Brice can get copies of documents but not accounts of statements in regard to both mediations and arbitrations. E. Federal law does not entitle Brice to any information from previous mediations or arbitrations.

E. Federal law does not entitle Brice to any information from previous mediations or arbitrations. In an attempt to create uniformity in mediation procedures, the American Bar Association committee helped draft the Uniform Mediation Act (UMA), which provides for a mediation privilege, which protects communications made during mediation as privileged; and some scholars also are concerned about the privacy associated with arbitration.

31. (p. 25) Which of the following are values in the WPH process of ethical decision making? A. Freedom only B. Security only C. Efficiency only D. Freedom and security, but not efficiency E. Freedom, security, and efficiency

E. Freedom, security, and efficiency Exhibit 2-5 "Primary Values and Business Ethics" outlines an efficient way to apply this second step in the WPH framework referencing the values of freedom, security, justice, and efficiency.

"Lawn maintenance." Bob and Susan ran a lawn maintenance company for several years. They, however, encountered a dispute regarding the allocation of profit and agreed to discontinue their business. They cannot agree on a number of issues involving not only profits, but also winding up the business, disposing of equipment, and other matters. They agreed to hire an arbitrator to settle their disputes. Bob suggested that they use a local lawyer named George to arbitrate the matter, and Susan agreed. Susan had some medical problems and requested that the arbitration be postponed for a short time. Bob objected to her request. George would not agree stating to Susan's request for a postponement stating that any arbitration proceeding must be heard within 30 days and that the time period was nearly over. George conducted the arbitration hearing. He refused to hear any evidence from any witnesses explaining that he only had the authority to hear testimony from Bob and Susan. Therefore, Susan was not able to present testimony of a property appraiser she had hired. George proceeded to rule in favor of Bob on all counts. Susan was very discouraged and discussed the situation with her friend Sally. Sally said "My goodness! Didn't you know that George and Bob play golf together every week, that Bob is married to George's cousin, and that Bob has loaned money to George in the past?" Susan immediately calls George and asks him about his connection with Bob. George acknowledges those connections. He tells Sally, however, that he was perfectly fair and that there is nothing she can do. The Federal Arbitration Act applies. 33. (p. 73) Which of the following is accurate regarding George's refusal of a continuance based upon Susan's medical problem? A. George's statement that a hearing must be held within 30 days was correct. B. George was prohibited by law from granting a continuance over Bob's objection. C. George was incorrect regarding the time in which a hearing must be held because under the Federal Arbitration Act, the applicable time period is 60 days. D. Under the Federal Arbitration Act, an arbitration proceeding may not be postponed based upon illness. E. George was probably wrong in refusing the continuance, and that could present a basis upon which to set aside his award.

E. George was probably wrong in refusing the continuance, and that could present a basis upon which to set aside his award. An arbitration award may be set aside under the Federal Arbitration Act if the arbitrator refused to postpone a hearing despite sufficient cause.

63. (p. 313) Which of the following is true regarding Max's statement that he did not have to pay the emergency room charges? A. He is correct. B. He is incorrect because there was a bilateral, express contract. C. He is incorrect because there was a unilateral, express contract. D. He is partially correct in that because a quasi-contract existed, he would have to pay; but he would only have to pay fair market value, not what the hospital requested. E. He is incorrect because there was a binding implied contract.

E. He is incorrect because there was a binding implied contract.

66. (p. 316) Which of the following is true regarding Jackson's assertion that Penny must pay him at this point if the neighbor fails to do so? A. He is correct because an express contract existed, and he made an honest mistake for which Penny must accept the risk. B. He is correct because an implied contract existed, and he made an honest mistake for which Penny must accept the risk. C. He is correct because an implied-in-law contract existed. D. He is correct because a valid contract existed; and, after his performance, it is considered executed. E. He is incorrect unless he can somehow establish that Penny gave him poor directions or was otherwise at fault in informing him which deck to paint, and the contract remains executory.

E. He is incorrect unless he can somehow establish that Penny gave him poor directions or was otherwise at fault in informing him which deck to paint, and the contract remains executory.

35. (p. 74) Did George act properly in hearing the dispute? A. He acted properly because it is presumed that arbitrators are unbiased regardless of their relationship with a party. B. He acted properly because he only had to reveal the information at issue if Susan had directly asked about it. C. He should have revealed that he was married to Bob's cousin, but none of the other information had to be revealed. D. He should have revealed that he had received loans from Bob, but he had no obligation to reveal other information. E. He should have revealed all the information and should have refused to arbitrate the case. His actions would be considered by a federal district judge and the award would likely be set aside because of showing of bias.

E. He should have revealed all the information and should have refused to arbitrate the case. His actions would be considered by a federal district judge and the award would likely be set aside because of showing of bias. An arbitration award may be set aside under the Federal Arbitration Act if the arbitrator displays bias or corruption.

"Revenge." Jane, a first year law student, while walking to school in inclement weather, accidentally slipped on ice knocking down Greg, another first year law student, breaking his glasses. He was very angry with Jane and let the air out of one of her car tires. Greg also decided to sue Jane for negligence claiming as damages $300 for his broken glasses. He decided that he already knew all about the law and did not need a lawyer. Greg sued Jane in state court. Jane, in the same lawsuit, brought an action against Greg for letting the air out of her tire. At the trial in state court, Jane told the judge that a friend, Susie, told her that she saw Greg let the air out of Jane's tire. The judge disallowed Jane's testimony on that issue. Susie, however, who was in the courtroom also came and testified to that effect. The state court judge ruled in favor of Jane. Greg said that he was not giving up and that he would seek double damages on appeal in federal court. Jane and Greg live in different states when not attending school. After the trial, Jane reported Greg's action of letting the air out of her tire to the police who said that they would proceed with a criminal action against Greg. Greg goes to see Alex, a recent graduate who had just passed the bar, and asked Alex to represent him in a federal court appeal. 54. (p. 47) What advice should Alex give to Greg regarding an appeal filed in federal court? A. He should tell Greg that a federal appeal looks promising and that he will be glad to represent Greg for an hourly rate of $400. B. He should tell Greg that the federal appeal looks good only if Greg can get Jane to admit she was negligent. C. He should tell Greg that the federal appeal looks good only if Susie does not come to testify in person. D. He should tell Greg that the federal appeal is not possible unless Greg first gets the trial court judge to certify the case to federal court. E. He should tell Greg to forget about a federal court appeal because an appeal from a state trial court would not be to federal court.

E. He should tell Greg to forget about a federal court appeal because an appeal from a state trial court would not be to federal court. The U.S. legal system has two parallel court structures, a federal system and a state system; and once a plaintiff tries a case in one of the systems, the case remains in that system throughout the appeals process.

61. (p. 394) Which of the following is true regarding Willy's rights in regards to the ring purchase? A. He will not be able to rescind the contract because Weaver did not make an express false statement regarding the ring. B. He will not be able to rescind the contract because Weaver did not know the ring was a fake when the initial agreement was made. C. He will not be able to rescind the contract unless he can prove that Weaver was at least negligent in not realizing the ring was a fake when the initial agreement was made. D. He will be able to rescind the agreement because Weaver was guilty of duress. E. He will be able to rescind the agreement because Weaver was guilty of fraudulent misrepresentation.

E. He will be able to rescind the agreement because Weaver was guilty of fraudulent misrepresentation.

60. (p. 394) Which of the following is true regarding Willy's rights in regards to the car purchase? A. He will not be able to rescind the contract because Weaver made no affirmative statements. B. He will not be able to rescind the contract unless he can prove that he expressly asked Weaver if the mileage was run backwards on the car, and Weaver failed to reveal that the odometer had been altered. C. He will not be able to rescind the contract because the mileage alteration did not affect the engine of the car. D. He will be able to rescind the contract because of duress practiced by Weaver. E. He will be able to rescind the contract because of the fraudulent misrepresentation on the part of Weaver.

E. He will be able to rescind the contract because of the fraudulent misrepresentation on the part of Weaver.

"Saturday Auction." Barry, an auctioneer, held an auction on a Saturday morning. At the beginning of the auction, Barry announced that the auction was being held without reserve. Helen, Mary, and Chris were all in attendance. Helen saw an old cash register with a stuck drawer that she thought would look great in her den. The auctioneer put the cash register up for sale noting that the drawer was stuck but that it could probably be fixed with little effort. Helen bought it for $20. When she got it home, she discovered that it actually contained $5,000. Unfortunately, Helen had a teenage son named Tad who started bragging to his friends about the family's good fortune. Barry heard about what had happened and sued Helen for return of the $5,000. At the same auction, Mary saw a great deal on a used table. She bid $20 on it. No one else bid anything. Barry announced that $20 was clearly insufficient for the table, that it was worth much more than that, and that he was taking it out of the auction. Chris started bidding on a diamond ring for his girlfriend. He bid $2,000. Just as Barry was getting ready to say "Sold," Chris looked over at his girlfriend, decided that he was not sure about marriage, and leaped up yelling "I revoke." Barry, however, immediately after, yelled "Sold." Barry sues Chris attempting to obtain the money for the engagement ring. Barry also sues Helen seeking to recover the $5,000 contained in the stuck drawer. Mary sues Barry attempting to obtain possession of the table. 55. (p. 330) In the lawsuit in which Barry sues Helen for return of the $5,000, which of the following is the most likely result? A. Barry will win because when an auction is held without reserve, the auctioneer is entitled to repossess any item at will. B. Barry will lose only because he was not the actual seller. He was only selling at auction for someone else. The seller, however, would win in an action against Helen. C. Barry would win because Helen made an insufficient offer. D. Helen will win only if she can show that Barry had knowledge that cash was in the drawer before he sold it. E. Helen will win because the auction was without reserve, and she properly bid on and bought the cash register with everyone knowing that the cash drawer was stuck.

E. Helen will win because the auction was without reserve, and she properly bid on and bought the cash register with everyone knowing that the cash drawer was stuck.

32. (p. 336) Which of the following is true regarding acceptable means of acceptance if no means of communicating an acceptance is specified in an offer? A. If no means of communicating an acceptance is specified in an offer, acceptance must be done through the U.S. mail system. B. If no means of communicating an acceptance is specified in an offer, acceptance must be done either in person or through telephone communication. C. If no means of communicating an acceptance is specified in an offer, acceptance must be done either through the U.S. mail or through fax transmittal. D. If no means of communicating an acceptance is specified in an offer, acceptance must be done either through U.S. mail or through e-mail. E. If no means of communicating the acceptance is specified, any reasonable means is generally acceptable.

E. If no means of communicating the acceptance is specified, any reasonable means is generally acceptable.

35. (p. 43) Which of the following is true regarding state and federal court jurisdiction? A. State courts begin with exclusive jurisdiction until a federal court intervenes. B. In all cases, state courts have concurrent jurisdiction with the federal courts. C. Federal courts begin with exclusive jurisdiction until a state court intervenes. D. In all cases, state courts have exclusive jurisdiction unless the state's Supreme Court grants jurisdiction to a federal court in the state. E. In some cases, state courts have exclusive jurisdiction; in some cases, state courts have concurrent jurisdiction with the federal courts; and state courts also have the power to hear all cases not within the exclusive jurisdiction of the federal court system.

E. In some cases, state courts have exclusive jurisdiction; in some cases, state courts have concurrent jurisdiction with the federal courts; and state courts also have the power to hear all cases not within the exclusive jurisdiction of the federal court system. State courts have the power to hear all cases not within the exclusive jurisdiction of the federal court system; state courts also have exclusive jurisdiction over certain cases; and state courts at times have concurrent federal jurisdiction meaning that both state and federal courts have jurisdiction over a case.

48. (p. 720) Which of the following is false regarding Chapter 13 of the bankruptcy code? A. Chapter 13 permits individuals with regular income to pay their debts to creditors in installment plans under the supervision of the court. B. Any debtor who files under Chapter 13 could also have filed under Chapter 11. C. Chapter 13 repayment plans are usually simpler and less expensive than Chapter 11 plans. D. By statute Chapter 13 plans last between 36 and 60 months. E. Individuals, partnerships, and corporations may file for a Chapter 13 repayment plan.

E. Individuals, partnerships, and corporations may file for a Chapter 13 repayment plan.

52. (p. 468) Which of the following is an order either forcing a person to do something or prohibiting a person from doing something? A. Specification B. Directive C. Instructional edict D. Demand E. Injunction

E. Injunction

45. (p. 1132) Which of the following is true regarding the reduction of the impact of moral hazard by insurers? A. It is not possible for insurers to reduce the risk of moral hazard, and this is seen as a risk of doing business. B. Insurers refuse to pay claims believed to result from the effects of moral hazard. C. The only avenue for insurers seeking to reduce moral hazard is through the use of deductibles. D. The only avenue for insurers seeking to reduce moral hazard is through refusing to insure those who have previously made multiple insurance claims. E. Insurance companies lessen the impact of moral hazard by requiring that individuals with insurance make co-payments or pay a deductible.

E. Insurance companies lessen the impact of moral hazard by requiring that individuals with insurance make co-payments or pay a deductible.

29. (p. 410) Which of the following is true regarding what is considered an interest in land within the statute of frauds? A. Interests in land within the statute of frauds include promises to sell crops annually and agreements between parties for profit sharing from the sale of real property, but not boundary disputes that have been settled through the use of land. B. Interests in land within the statute of frauds include promises to sell crops annually, but not agreements between parties for profit sharing from the sale of real property or boundary disputes that have been settled through the use of land. C. Interests in land within the statute of frauds include boundary disputes that have been settled through the use of land, but not promises to sell crops annually or agreements between parties for profit sharing from the sale of real property. D. Interests in land within the statute of frauds include boundary disputes that have been settled through the use of land and promises to sell crops annually, but not agreements between parties for profit sharing from the sale of real property. E. Interests in land within the statute of frauds include promises to sell crops annually, agreements between parties for profit sharing from the sale of real property, and boundary disputes that have been settled through the use of land.

E. Interests in land within the statute of frauds include promises to sell crops annually, agreements between parties for profit sharing from the sale of real property, and boundary disputes that have been settled through the use of land.

67. (p. 55) Which of the following is true regarding tools of discovery? A. The only tool of discovery is interrogatories. B. Depositions are the only tool of discovery available to plaintiffs, but defendants may use both interrogatories and depositions. C. Summary motions, interrogatories, and depositions, are tools of discovery available to all parties. D. Interrogatories and depositions are tools of discovery available to all parties, but summary motions and requests to produce documents are not tools of discovery. E. Interrogatories, depositions, and requests to produce documents are all tools of discovery available to all parties.

E. Interrogatories, depositions, and requests to produce documents are all tools of discovery available to all parties. Common discovery tools are interrogatories, requests to produce documents, and depositions.

13. (p. 317) Which of the following is true regarding the type of marriage contract discussed in the text called the muta'a? A. It is a type of premarital contract typical to the U.S. in which the parties agree ahead of time how property and assets should be divided in the event of divorce. B. It is a contract by which the female agrees to a divorce if there are no children from the marriage within five years. C. It is a contract by which the female agrees to a divorce if there are no children from the marriage within three years. D. It is a temporary type of arrangement called a "responsibility marriage" in which the female is paid to care for the male's elderly parents. E. It is a temporary type of arrangement called a "pleasure marriage" in which the female is paid for sexual intimacy.

E. It is a temporary type of arrangement called a "pleasure marriage" in which the female is paid for sexual intimacy.

11. (p. 93) According to the principle of federalism established by the U.S. Constitution, how is the authority to govern allocated? A. It is allocated to the federal government. B. It is allocated to the states. C. It is allocated to local jurisdictions. D. It is allocated to the U.S. Senate. E. It is divided between federal and state governments.

E. It is divided between federal and state governments. The U.S. Constitution establishes a system of government based on the principle of federalism, according to which the authority to govern is divided between federal and state governments.

"Bank Robbery." Safe Bank was robbed of a significant sum of cash by a robber later identified as Victor Victory. Safe Bank offered a reward of $10,000 to anyone who captured or provided information leading to the capture of Victor. Ted, a police officer in town, promised Safe Bank officials that he would apprehend Victor. While on duty, Ted arrested Victor at a hamburger joint in town. He found Victor based upon a hunch he had after Ursula, who dated Victor, told him about various places Victor enjoyed eating. The bank refuses to pay either Ursula or Ted any of the reward money. 54. (p. 346) Which of the following is true regarding the offer of the reward? A. It pertained to a bilateral contract that could be accepted only with consideration consisting of a promise. B. It pertained to a bilateral contract that could be accepted only with consideration consisting of performance. C. It pertained to a bilateral contract that could be accepted with consideration consisting of a promise or performance. D. It pertained to a unilateral contract that could be accepted with consideration consisting of a promise. E. It pertained to a unilateral contract that could be accepted with consideration consisting of performance.

E. It pertained to a unilateral contract that could be accepted with consideration consisting of performance.

30. (p. 70) Which of the following is true regarding the Uniform Mediation Act? A. There is no Uniform Mediation Act because of the controversy involved in attempting to negotiate such an act. B. It provides for a mediation privilege but does not specifically require that mediators identify conflicts of interest, and all states have adopted it. C. It does not provide for a mediation privilege but does specifically require that mediators identify conflicts of interest, and all states have adopted it. D. It provides for a mediation privilege but does not specifically require that mediators identify conflicts of interest, and less than half the states have adopted it. E. It provides for a mediation privilege, mediators are required to identify any conflicts of interest, and less than half the states have adopted it.

E. It provides for a mediation privilege, mediators are required to identify any conflicts of interest, and less than half the states have adopted it. The Uniform Mediation Act (UMA) provides for a mediation privilege, protects communications made during mediation as privileged, and requires that mediators identify any conflicts of interest; and, thus far, nine states have enacted the UMA.

39. (p. 371) Which of the following is the maximum interest rate? A. 20% B. 15% C. 12% D. 10% E. It varies depending on the state involved.

E. It varies depending on the state involved.

40. (p. 28) Which of the following is true regarding the Act and Laura's firing? A. The act does not provide protection for whistle-blowers such as Laura. B. The act provides protection for whistle-blowers only if it can be shown that a significant amount of money, in excess of $5,000, was involved in the incident involved. C. The act provides protection for whistle-blowers only if it can be shown that a significant amount of money, in excess of $10,000, was involved in the incident involved. D. The act provides protection for whistle-blowers who work for an accounting firm, but not for any other employees. E. Laura's whistle-blowing would be protected under the act, and her firing was illegal.

E. Laura's whistle-blowing would be protected under the act, and her firing was illegal. As set forth in Exhibit 2-7, the Sarbanes-Oxley Act protects whistle-blowers from being fired or from retaliation by their employer for reporting a possible problem within the company.

16. (p. 2) A majority of citizens in a democracy can agree to permit certain authorities to make and enforce rules describing what behavior is permitted and encouraged in their community. These rules are what we refer to as the ______. A. Electoral college B. Community standard C. Democratic validation D. Stare decisis E. Law

E. Law A majority of citizens in a democracy can agree to permit certain authorities to make and enforce rules of behavior in their community, and these rules are the law.

54. (p. 709; 715) Which of the following is true regarding the claims of Mona's ex-husband for alimony? A. Any efforts to collect on the past due alimony are stayed by the bankruptcy proceeding, and the claim for alimony is subject to discharge. B. Any effort to collect on the past due alimony are stayed by the bankruptcy proceeding, but alimony payments are nondischargeable. C. Efforts to collect on past due alimony payments accrued prior to the filing of the bankruptcy petition are stayed, but efforts to collect on alimony payments accruing after the filing of the bankruptcy petition are not stayed; and alimony payments are nondischargeable. D. Efforts to collect on past due alimony payments accrued only after the filing of the bankruptcy petition are stayed, but efforts to collect on alimony payments accrued before the filing of the bankruptcy petition are not stayed; and alimony payments are nondischargeable. E. Legal action to collect alimony is not subject to the stay, and alimony payments are non dischargeable.

E. Legal action to collect alimony is not subject to the stay, and alimony payments are non dischargeable.

18. (p. 386) When a mistake of fact occurs, ______ is absent. A. Legal coherence B. Bilateral understanding C. Joint reasoning D. Contractual concurrence E. Legal assent

E. Legal assent

36. (p. 1141) An individual would purchase ______ insurance to protect his or her business from tort liability to third parties. A. Tort B. Property C. Litigation D. Group E. Liability

E. Liability

"Portraits." Belinda, a famous portrait painter, agreed to paint Harry's portrait for $4,000. She also agreed to paint the portraits of Michelle's two Corgi dogs, Baby and Bree. Michelle agreed to pay Belinda $10,000 for the two Corgi portraits. Belinda charged Michelle more because dogs annoyed her. Belinda met the spoiled dogs, and they really got on her nerves. Plus, she was behind on finishing Harry's portrait. Belinda, therefore, assigned the right to receive the money for the dog portraits and delegated the duty to paint the dog portraits to her assistant, Fred. He eagerly accepted and painted the portraits. She also assigned to Fred, as payment for amounts she owed him for various duties, the right to receive payment from Harry. The contract Belinda had with Michelle did not address assignment in any way. The contract Belinda had with Harry, however, prohibited the right to assign payment for services received. Harry fancied himself as an experienced business person and insisted on that provision because he had read somewhere that such a clause was a good idea. Belinda finished the portrait of Harry and called him to come and pick it up. Meanwhile, a disgruntled secretary who disliked Belinda told both Michelle and Harry about the assignments to Fred. Michelle was furious and refused to pick up the portrait or pay anyone. Harry likewise refused to pay for his portrait. 56. (p. 435) What would be the most likely result if Belinda sues Michelle for the $10,000 payment? A. Belinda will win only if Fred did a good job on the portraits. B. Belinda will win regardless of what type of job Fred did on the portraits so long as he was a qualified portrait painter. C. Belinda will win because Fred was employed as her assistant. D. Belinda will win because the contract did not contain an express provision prohibiting assignment or delegation of contractual rights and duties. E. Michelle will win because the portrait was personal in nature and could not be assigned.

E. Michelle will win because the portrait was personal in nature and could not be assigned.

57. (p. 435) What would be the most likely result if Fred sues Michelle for the $10,000 payment? A. Fred will win only if Fred did a good job on the portraits. B. Fred will lose because Michelle's only obligation is to pay Belinda. C. Fred will win unless Michelle can prove that Fred knew that she did not want him to do the portraits. D. Fred will lose unless Fred can prove that he was unaware that Michelle did not want him to do the portraits. E. Michelle will win because the portrait was personal in nature and could not be assigned.

E. Michelle will win because the portrait was personal in nature and could not be assigned.

62. (p. 171) Which of the following Supreme Court cases established the right to counsel before questioning by the police? A. Whaley v. Reeves B. Glover v. Smith C. U.S. v. Glover D. U.S. v. Parks E. Miranda v. Arizona

E. Miranda v. Arizona According to the Supreme Court in Miranda v. Arizona, "Prior to any questioning, the person must be warned that he has a right to remain silent, that any statement he does make may be used as evidence against him, and that he has a right to the presence of an attorney, either retained or appointed."

21. (p. 429) Which of the following, if any, is needed in order for an assignment to be valid? A. UCC 2-301 Form B. UCC 4-305 Form C. Business 2-547 Form D. Business 4-298 Form E. No form is required.

E. No form is required.

28. (p. 410) Which of the following is false regarding the statute of frauds provision relating to an interest in land? A. The statute is intended to prevent oral claims to the existence of a contract for the sale of land. B. The statute requires a writing as evidence of a contract to sell land. C. A claim to an oral contract for the sale of land is not enough to prove a contract of sale existed. D. Mortgages on land are within the statute of frauds. E. No leases are within the statute of frauds.

E. No leases are within the statute of frauds.

47. (p. 168) Which of the following is true regarding the manner in which the exclusionary rule is derived from the U.S. Constitution? A. It is specifically set forth in the Fourth Amendment. B. It is specifically set forth in the Fifth Amendment. C. It is specifically set forth in the Sixth Amendment. D. It is specifically set forth in the Eighth Amendment. E. No section of the U.S. Constitution specifically states the provisions of the exclusionary rule.

E. No section of the U.S. Constitution specifically states the provisions of the exclusionary rule. The exclusionary rule, not stated in any specific amendment, holds that all evidence obtained in violation of the constitutional rights spelled out in the Fourth, Fifth, and Sixth amendments is normally not admissible at trial.

"Appellate Court." Jim, who is a bit eccentric, says that he is fed up with the way a certain employer in his town treats employees and that he is going to sue on behalf of all those employees. Jim also says that he is going to start his case at the appellate court level, skipping over all those "lesser" judges. Jim says that those justices will surely hear him out and that he will also seek a jury. 49. (p. 49) Will an appellate court hear Jim's case? A. Yes, so long as a state trial court judge approves and certifies the case for the appellate court without holding a trial first. B. Yes, but only if Jim can prove that he would have had to wait at least a year for a trial at the trial court level. C. Yes, but only if Jim files his case in state court as opposed to federal court. D. Yes, but Jim is not entitled to a jury. E. No, because Jim is required to first file the case in the appropriate trial court.

E. No, because Jim is required to first file the case in the appropriate trial court. In state court systems, most cases begin in a trial court of general jurisdiction.

"Pet Flicks." Jill went to work as an independent contracting photographer for Exotic Pet Flicks, a company specializing in photographing exotic pets, such as monkeys and snakes, with their owners. The company's home office was in California, but Jill worked in Florida. Before she started work, Jill signed an agreement to arbitrate any dispute she had with the company. The arbitration agreement provided that in the event of a dispute, Jill would completely cover the cost of the arbitration; that she could only receive up to $150 in damages regardless of her claims, punitive or otherwise; and that any arbitration would be conducted at the company's home office. The agreement also provided that the arbitrator was not bound to strictly follow the official court rules of evidence. Jill signed the agreement because she really needed a job and liked animals. Her only previous animal photography experience, however, had been with cats and dogs. Jill's contract provided that she would be paid $100 per shoot and that the company would take steps to ensure her safety. One day she was called in to photograph a skunk and its owner. She was told by the receptionist at Exotic Pet Flicks that the skunk had been altered so that it could not spray. Jill felt safe. Unfortunately, the skunk had not been altered. Just as she was starting to shoot, the skunk became upset. It ran over, sprayed Jill, and in the resulting commotion, Jill's expensive camera was knocked over and broken. Plus, Jill's outfit was ruined and she stank for days. Jill wants to sue Exotic Pet Flicks for $5,000 to cover the cost of her camera, her clothing, and her general stinkiness for several days. Jill says that she cannot afford to pay for the arbitration. 26. (p. 73) Would the arbitration agreement be deemed void because it provided that the arbitrator was not bound by the federal rules of evidence? A. Yes. B. Only if the arbitrator was not also a lawyer. C. Only if the arbitrator was a lawyer. D. The agreement to arbitrate would be upheld so long as the arbitrator agreed to at least apply federal hearsay rules. E. No, because the rules of evidence applicable in a trial are typically relaxed in arbitration.

E. No, because the rules of evidence applicable in a trial are typically relaxed in arbitration. The rules of evidence applicable in a trial are typically relaxed in arbitration.

43. (p. 715) Which of the following is false regarding nondischargeable debts under a Chapter 7 bankruptcy filing? A. Nondischargeable debts include claims of willful or malicious conduct by the debtor that caused injury to another person or property. B. Nondischargeable debts include specific student loans, unless payment of the loans imposes undue hardship on the debtor. C. Nondischargeable debts include debts not discharged in previous bankruptcies. D. Nondischargeable debts include judgments against a debtor for claims resulting from the debtor's drinking and driving. E. Nondischargeable debts include claims for back taxes or government fines within four years of filing for bankruptcy.

E. Nondischargeable debts include claims for back taxes or government fines within four years of filing for bankruptcy.

53. (p. 50) Which of the following is true regarding state courts of appeal? A. States only have an intermediate court of appeal if there is no state Supreme Court. B. In states that do not have an intermediate court of appeal, appeals go to the federal court of appeals. C. In states that do not have an intermediate court of appeal, there is no right of appeal to any court. D. All states in this country have intermediate courts of appeal. E. Not all states have intermediate courts of appeal; in those states, appeals go to the state court of last resort.

E. Not all states have intermediate courts of appeal; in those states, appeals go to the state court of last resort. Because approximately half the states lack intermediate courts of appeal, appeals from trial courts in these states go directly to the state court of last resort.

28. (p. 353) A promise to do something that you are already obligated to do is ____. A. Valid consideration because it is illusory consideration B. Valid consideration only in the employment context C. Valid consideration because it is past consideration D. Valid consideration only if a sale of goods is involved E. Not valid consideration

E. Not valid consideration

26. (p. 454) A contractual condition of satisfaction may be judged by either a[n] ______ or ______ standard. A. Objective; express B. Subjective; express C. Objective; absolute D. Absolute; express E. Objective; subjective

E. Objective; subjective

74. (p. 59) The statements made to the jury by the lawyers immediately after the jury was chosen are referred to as ______. A. Direct statements B. Closing selection statements C. Jury statements D. Influential statements E. Opening statements

E. Opening statements Once the attorneys have impaneled, or selected, a jury, the case begins with opening statements.

32. (p. 392) In China which of the following is true regarding the treatment of fraudulent misrepresentations by outsiders? A. Outsiders have been fined but by law are allowed to continue operation in the country because of the country's concern with joint ventures. B. Outsiders have been prohibited from doing further business with Chinese firms but not fined because of the country's concern with its reputation with foreign investors. C. Outsiders are jailed for at least 20 years by law. D. Outsiders are jailed for at least 10 years, fined heavily, and have all property confiscated. E. Outsiders have been fined heavily and refused permission to enter into more agreements with Chinese firms.

E. Outsiders have been fined heavily and refused permission to enter into more agreements with Chinese firms.

26. (p. 58) Which of the following is true regarding the use of peremptory challenges based on gender? A. Peremptory challenges may not be based on gender unless a sexually based crime, such as rape, is involved. B. Only one peremptory challenge per party may be based on gender. C. Peremptory challenges may be based on gender only so long as lawyers for all parties agree. D. Peremptory challenges may be based on gender. E. Peremptory challenges may not be based on gender.

E. Peremptory challenges may not be based on gender. According to the Supreme Court in J.E.B. v. Alabama, "When persons are excluded from participation in our democratic processes solely because of race or gender, this promise of equality dims, and the integrity of our judicial system is jeopardized."

19. (p. 1132) The parties express their agreement for insurance in a document called a[n] _____. A. Catalog B. Brochure C. Application D. Notification E. Policy

E. Policy

21. (p. 2) Assume a restaurant chain is forced to pay damages for breach of contract to a supplier. What type of law is involved? A. Public law only B. Private law only C. Civil law only D. Public, private, and civil law E. Private law and civil law

E. Private law and civil law Civil law identifies the remedies available when someone's rights are violated, and private law regulates disputes between private individuals or groups.

51. (p. 114) Which of the following are types of due process? A. Procedural, substantive, and independent B. Substantive, independent, and full faith C. Independent, full faith, and substantive D. Independent, full faith, and procedural E. Procedural and substantive

E. Procedural and substantive The due process clause guarantees two types of due process: procedural and substantive.

31. (p. 1141) If the purpose of an insurance policy is to protect property from loss or damage, the insurance is ______ insurance. A. Material B. Loss C. Economic D. Business E. Property

E. Property

35. (p. 22) According to the text, which of the following may be a part of the "how" in the WPH process of decision making? A. Public disclosure, universalization, security, and the Golden Rule B. Values, public disclosure, and security C. Profit maximization, security, and public disclosure D. Whistle-blowing, the Golden Rule, values, and public disclosure E. Public disclosure, universalization, and the Golden Rule

E. Public disclosure, universalization, and the Golden Rule Exhibit 2-3, The WPH Process of Ethical Decision Making, reflects that "public disclosure," "universalization," and the "Golden Rule" are all part of the How process in the WPH Framework.

"Inattentive Driving." Molly, a first year law student, decided to skip class and drive off campus to check on her new dress for the upcoming school dance. While driving, Molly is busy talking on her cell phone with her friend Sharon to convince her to going to the dance with Molly's brother who has a big crush on Sharon. Unfortunately for Molly, there is a statute in her state outlawing talking on a cell phone while operating a motor vehicle. Molly crashes into the side of Sam's new convertible when she looks down to pick up a can of soda she just dropped onto her new jeans. A police officer just down the street comes over to investigate. Molly explains to him that it was difficult to hold the cell phone in one hand, the soda in the other, and also drive. The officer was not impressed. Around that time Sam comes along. He is furious regarding the significant dent in his new car. Molly says she has insurance and that she will cover the whole incident. Sam says that is insufficient; but Molly says that under case precedent, that is his only remedy. The officer is annoyed because it is his lunch break. He tells Molly that she must obey duly authorized law, and proceeds to write several citations to her. 26. (p. 2) Which type of law is involved in the above situation considering Molly's interaction with both the officer and Sam? A. Public law but not private law B. Private law but not public law C. Civil law and private law but not public law D. Criminal law and public law but not private law E. Public law, private law, civil law, and criminal law

E. Public law, private law, civil law, and criminal law Private law regulates disputes between private individuals; public law controls disputes between private individuals and their government; civil law delineates the rights and responsibilities implied in relationships between persons; and criminal law regulates incidents in which someone commits an act against the public as a whole.

33. (p. 367) Because ______ does not favor intoxication, the courts tend to be unsympathetic to intoxicated parties and will fairly liberally interpret behavior that seems like ratification as ratifying the contract. A. Morality B. Popular opinion C. Medical literature D. Religion E. Public policy

E. Public policy

47. (p. 334) Which of the following was the result in the case in the text Adone v. Paletto involving the rejection of a purported acceptance of an offer of compromise because it was not made within the time limit of 10 days specified in the offer? A. Rejection of the acceptance was unjustified because offers of compromise may not contain time limits. B. Rejection of the acceptance was unjustified because allowing only 10 days for acceptance is unreasonable. C. Rejection of the acceptance was unjustified because of the plaintiff's severe injuries. D. Rejection of the acceptance was enforceable because a trial had already been held. E. Rejection of the acceptance was enforceable because the 10 days in which the other party had to accept had expired.

E. Rejection of the acceptance was enforceable because the 10 days in which the other party had to accept had expired.

47. (p. 50) Which of the following is true regarding the court system in the Republic of China (Taiwan)? A. It is identical to the court system in the U.S. B. For civil and criminal cases, and for cases interpreting the country's constitution, the Supreme Court is the court of last resort. C. All cases go directly from the trial court to the Supreme Court, and there is no intermediate appellate court system. D. While constitutional issues are heard by the country's Supreme Court, regular civil and criminal cases are heard by the Court of the Judicial Yuan. E. Responsibility for interpreting the country's constitution falls to the Constitutional Court of the Judicial Yuan.

E. Responsibility for interpreting the country's constitution falls to the Constitutional Court of the Judicial Yuan. While Taiwan's Supreme Court is the court of last resort for civil and criminal cases, responsibility for interpreting the country's constitution falls to the Constitutional Court of the Judicial Yuan.

47. (p. 7) Which of the following contains summaries of common law rules in a particular area of the law? A. U.S. Code B. State Administrative Codes C. Executive Proclamations D. Case Reporters E. Restatements of the Law

E. Restatements of the Law Restatements of the law are summaries of the common law rules in a particular area of the law.

51. (p. 348) Which of the following is true regarding Richard's claim regarding the inadequacy of house cleaning as consideration? A. Richard is correct because cleaning house would not constitute a benefit to the promisor. B. Richard is correct because cleaning house would not constitute a detriment to the promisee. C. Richard is correct because Denise had only promised - she had not actually performed. D. Although, contrary to Richard's assertion, house cleaning can be consideration, it was not in this case because his apartment was already fairly clean. E. Richard is incorrect because house cleaning would constitute consideration that would support a contract, and the court would not likely be concerned with the fact that the cleaning duties would be light.

E. Richard is incorrect because house cleaning would constitute consideration that would support a contract, and the court would not likely be concerned with the fact that the cleaning duties would be light.

53. (p. 188) Which of the following is true regarding Sally's actions toward Millie? A. Sally committed an assault. B. Sally committed a battery. C. Sally committed both an assault and a battery. D. Sally did not commit any offense because she did not actually hurt Millie. E. Sally did not commit any offense because she was acting in the defense of Bernard. Defense of others is a defense to a charge of battery.

E. Sally did not commit any offense because she was acting in the defense of Bernard.

61. (p. 443) Which of the following would be the likely result if Sally sues Trudy and Bob for the $40 promised to her for her birthday? A. Sally will win as to both because they are equally liable to provide the funds. B. Sally will win as to Bob but win as to Trudy only if she can prove that Bob is insolvent and unable to pay. C. Sally will win as to Bob but win as to Trudy only if she can prove that she cannot find Bob in order to serve process on him. D. Sally will lose as to both Trudy and Bob because promises to give gifts are unenforceable in the absence of reliance. E. Sally will lose as to Trudy because Trudy had no obligation to go through with the gift, but she will win as to Bob.

E. Sally will lose as to Trudy because Trudy had no obligation to go through with the gift, but she will win as to Bob.

40. (p. 198) Jane is unhappy with her neighbor, Sam, because Sam will not allow her to swim in his swimming pool. She tells him that unless he lets her swim in the pool, she will bring an action against him for nuisance because he plays his stereo late at night at times. While the stereo does not bother Jane because she is up late anyway, she thinks that will encourage Sam to let her swim in the pool. Sam, however, continues to refuse to allow Jane to swim in his pool, and Jane proceeds to sue Sam for nuisance. Which of the following is true? A. Jane is completely within her rights and has done nothing wrong because Sam really is playing the stereo late at night. B. Sam can sue Jane for malicious prosecution and win only if he wins the nuisance action. C. Sam can sue Jane for abuse of process and win only if he wins the nuisance action. D. Sam can sue Jane for malicious prosecution and win regardless of whether or not he wins the nuisance action. E. Sam can sue Jane for abuse of process and win regardless of whether or not he wins the nuisance action. Abuse of process is more general and applies to both criminal and civil matters in which a legal procedure is misused to achieve a different goal than it intends.

E. Sam can sue Jane for abuse of process and win regardless of whether or not he wins the nuisance action.

53. (p. 346) Which of the following is true regarding the dispute between Richard and Sam regarding whether Sam must return anything? A. Sam must return the computer only. B. Sam must return the business law book only. C. Sam must return the communications book only. D. Sam must return the computer, the business law book, and the communications book. E. Sam does not legally have to return anything.

E. Sam does not legally have to return anything.

27. (p. 102-103) Which of the following is true regarding Sam's statement? A. Sam is correct. B. Sam is correct only if the state is making efforts to put social programs into effect and is not acting unreasonably in refusing to provide other needed services. C. Sam is partially correct in saying that Congress has no authority to link highway funds with social services, but any other funds may be linked to social services by executive order. D. Sam is partially correct in saying that Congress has no authority to link highway funds with social services, but other funds may be linked to social services by an act of Congress. E. Sam is incorrect.

E. Sam is incorrect. As with its power to tax, Congress can use its spending power to achieve social welfare objectives, and as an example, in the 1987 case of South Dakota v. Dole, the Supreme Court upheld a federal statute granting federal funds for state highways to only those states in which 21 is the legal drinking age.

"Used Car Sales." Walter sells used cars. He is seeking a way to increase sales and profits because he would like to take his girlfriend on a nice diving trip to the Grand Cayman Islands. The first thing that Walter does is say that during the first week of December, he will give a $500 rebate on used cars that are under two years old. To spice things up, he also offers to sell any car on the lot that is over five years old for $1,000 to the first three customers who can hula hoop ten hours straight on December 7th. (Hula hooping was a practice popular some years ago in which a large hoop would be swung around by a person, usually around the waist.) Walter was not very concerned about the hula hooping issue because he thought that no one would be able to hula hoop for ten hours straight. Walter put an advertisement pertaining to the rebate and the hula hoop opportunity in the local newspaper. The promotion went over very well. Although Walter had several cars available, he ran out of cars under two years old within one day. During the rest of the week shoppers were told that no cars of that description were available. Sam was very angry at Walter for not having a car available that was under two years old so that he could get a good deal and a $500 rebate. On December 7th, while Walter was watching the hula hoopers, Sally was shopping for a car. She was in college and did not have much money. She saw one, an older car, a real clunker, that she liked; but she really did not know if it could be repaired sufficiently to be dependable. Walter had not even put a price on it because he planned to have it crushed. Sally was going to talk to her parents about it. Walter eventually approached her, and Sally asked him if he would take $450 for the car. Walter said, "Yes, sold." Sally tried to explain that she needed to talk to her parents first, but Walter would not hear of it. While Walter was still fuming from his encounter with Sally, Zack walked up and started to criticize the nature of Walter's inventory. Walter told him that he had great cars. Zack pointed at an old jalopy that was banged up, had 200,000 miles on it, and a cracked windshield. Zack said, "Sure, I'll pay $100,000 for that car!" Walter said, "Sold." Zack said, "Wait a minute. I was only kidding." Walter said, "No way." Meanwhile all the hula hoopers dropped out well prior to ten hours of hula hooping except for Barbara. She completed the hula hooping and asked for her car for $1,000. Walter refused saying that the offer was revoked. Sam and Barbara sued Walter, and Walter sued Zack and Sally. Under the applicable law in Walter's state, common law will be applied, and there are no state statutes impacting the situation. 51. (p. 329) Which of the following is the most likely result in the lawsuit brought by Sam complaining that Walter ran out of cars available for a rebate? A. Sam will win because Walter was required to have sufficient cars on hand for anyone who requested one. B. Sam will win because a rebate was involved. C. Sam will win because Walter should have run another ad revoking the offer. D. Sam will lose because he did not properly accept the offer. E. Sam will lose because a court would interpret the intent of Walter as being to invite readers to make an offer that Walter was free to reject.

E. Sam will lose because a court would interpret the intent of Walter as being to invite readers to make an offer that Walter was free to reject.

60. (p. 435) Which of the following is the likely result if Sam sues Betty for the $40 that Trudy owes him for the book? A. Sam will lose because the attempted delegation was against public policy. B. Sam will lose because his only right of action is against Trudy. C. Sam will lose because he was not aware of the assignment before the duties were completed. D. Sam will win only if he can prove that Trudy has insufficient funds with which to pay him. E. Sam will win.

E. Sam will win.

28. (p. 391) When a person who makes a misrepresentation has no knowledge about the falsity of the claim, it is said that the person lacked ____. A. Information B. Premeditation C. Planning D. Plotting E. Scienter

E. Scienter

49. (p. 379) Which of the following are contracts that contain multiple parts which can each be performed separately and for which separate consideration is offered? A. Independent contracts B. Substantive contracts C. Adhesion contracts D. Justifiable contracts E. Severable contracts

E. Severable contracts

26. (p. 23) Which of the following are stakeholders of a business? A. Shareholders but not employees B. Employees but not shareholders C. Customers but not employees or shareholders D. Management but not employees E. Shareholders, employees, customers, and management

E. Shareholders, employees, customers, and management The stakeholders of a firm are the many groups of people affected by the firm's decisions.

60. (p. 374) Which of the following is true regarding Janice's claim that no judge in the country would enforce such an agreement? A. She is correct because such agreements are considered in restraint of trade in every state. B. She is incorrect because such agreements are criminally illegal in every state. C. She is incorrect because while no court would approve a geographical restriction, some courts recognize time restrictions as being valid. D. She is incorrect because all courts approve such agreements so long as it can be shown the employee gained a benefit other than pay from the employment. E. She is incorrect because courts across the country vary in regards to the enforceability of such agreements.

E. She is incorrect because courts across the country vary in regards to the enforceability of such agreements.

65. (p. 314) Which of the following is correct regarding Penny's assertion that the neighbor will be required to pay Jackson? A. She is correct. The neighbor will be required to pay Jackson under a theory of quasi-contract. B. She is correct. The neighbor will be required to pay Jackson based upon an implied-in-fact contract. C. She is correct. The neighbor will be required to pay Jackson based upon an implied-in-law contract. D. She is correct. The neighbor will be required to pay Jackson based upon an express contract. E. She is incorrect. The neighbor will not be required to pay Jackson.

E. She is incorrect. The neighbor will not be required to pay Jackson.

39. (p. 412-413) Which of the following is true regarding a signature on a document falling within the statute of frauds? A. There is no requirement of any signature of either party to satisfy the statute of frauds. B. Any party required to sign must sign at the beginning of the document. C. Any party required to sign must sign at the end of the document. D. Any party required to sign must sign both at the end and at the beginning of the document. E. So long as it is meant as a signature, a party required to sign may sign at any place on the document.

E. So long as it is meant as a signature, a party required to sign may sign at any place on the document.

36. (p. 43) Which of the following is true regarding federal jurisdiction? A. There is no exclusive federal jurisdiction in civil matters. B. If a case falls within the federal jurisdiction, it may not fall within state jurisdiction. C. Some cases fall within both federal jurisdiction and state jurisdiction, but there is no exclusive federal court jurisdiction. D. Some cases fall within both federal jurisdiction and state jurisdiction, but that only occurs in criminal matters. E. Some cases fall within both federal jurisdiction and state jurisdiction, but the federal court system has exclusive jurisdiction over some cases.

E. Some cases fall within both federal jurisdiction and state jurisdiction, but the federal court system has exclusive jurisdiction over some cases. Federal courts have exclusive jurisdiction over claims arising under federal statutes that specify exclusive federal jurisdiction, including some civil matters, and federal courts at times have concurrent federal jurisdiction meaning that both state and federal courts have jurisdiction over a case.

45. (p. 326) Which of the following is true regarding the Uniform Commercial Code? A. It does not affect the making of an agreement and only applies after an agreement is formed. B. It applies only in situations not addressed at all by the common law. C. It applies only to clarify common law in situations in which the common law is unclear. D. It applies in all situations involving agreements. E. Some elements of a contract under the common law have been modified under the UCC for contracts for the sale of goods.

E. Some elements of a contract under the common law have been modified under the UCC for contracts for the sale of goods.

17. (p. 185) ________ torts occur when the defendant takes an action that is inherently dangerous and cannot ever be undertaken safely, no matter what precautions the defendant takes. A. Criminal B. Liability C. Intentional D. Negligent E. Strict-liability Strict-liability torts occur when the defendant takes an action that is inherently dangerous and cannot ever be undertaken safely, no matter what precautions the defendant takes.

E. Strict-liability

19. (p. 330) Which of the following terms would be considered material terms? A. Subject matter but not price, quantity, quality, or parties B. Price and subject matter, but not quantity, quality or parties C. Quantity, quality, and subject matter, but not price or parties D. Subject matter, quality, and price, but not quantity or parties E. Subject matter, price, parties, quality, and quantity

E. Subject matter, price, parties, quality, and quantity

29. (p. 104) The first _____ amendments to the U.S. Constitution are known as the Bill of Rights. A. Five B. Six C. Eight D. Nine E. Ten

E. Ten The first 10 amendments to the U.S. Constitution, known as the Bill of Rights, substantially affect government regulation of business.

12. (p. 93) According to the ______ Amendment to the Constitution, all powers that the Constitution neither gives exclusively to the federal government nor takes from the states are reserved for the states. A. First B. Second C. Fifth D. Sixth E. Tenth

E. Tenth According to the Tenth Amendment to the Constitution, all powers that the Constitution neither gives exclusively to the federal government nor takes from the states are reserved for the states.

43. (p. 393) Which of the following was the result on appeal in the case in the text, Gary W. Cruse and Venita R. Cruse v. Coldwell Banker/Graben Real Estate Inc., in which the court considered whether the plaintiffs could prevail based on alleged misrepresentations by a salesman that a house was new when it was actually not new leading the plaintiffs to forego a home inspection? A. That the realtor had merely engaged in sales talk when marketing the home as new which could not be relied upon by the purchasers. B. That the plaintiffs were barred from proceeding because they knew that the home builder had occupied the house. C. That the plaintiffs were barred from proceeding because they signed an "as-is" disclaimer. D. That as a matter of law the plaintiffs were allowed to recover. E. That a jury question was presented on whether the plaintiffs could have justifiably relied on the defendants' misrepresentation.

E. That a jury question was presented on whether the plaintiffs could have justifiably relied on the defendants' misrepresentation.

21. (p. 21) Which of the following is true regarding revelations involving Enron and WorldCom? A. That their upholding of high ethical standards in regard to accounting practices supports the conclusion that the business world should be allowed to regulate itself. B. That WorldCom, a privately held company, had high ethical standards but that Enron, a publicly traded company, engaged in illegal accounting practices supporting the conclusion that privately held companies should be allowed to regulate themselves whereas publicly held companies need significant government regulation. C. That WorldCom, a privately held company, engaged in illegal accounting practices but that Enron, a publicly traded company, had high ethical standards supporting the conclusion that privately held companies need significant government regulation whereas publicly held companies should be allowed to regulate themselves. D. That although illegal accounting practices occurred, it is so difficult to find and regulate such practices that any regulation should be left to the free market. E. That accounting issues with these companies illustrate that the business world cannot be allowed to regulate itself ethically and that government oversight is needed.

E. That accounting issues with these companies illustrate that the business world cannot be allowed to regulate itself ethically and that government oversight is needed. The revelations of Enron and WorldCom suggested quite blatantly that the business world could not be allowed to regulate itself ethically, and their downfall in part led to many federal regulations designed to promote truthfulness and ethical practices among business managers.

20. (p. 18-20) Which of the following was the result in U.S. v. Alfred Caronia, the case in the text in which the defending pharmaceutical representative was charged with illegally promoting off-label use of a drug? A. That the defendant had not indeed promoted off-label use of the drug at issue, and the case was dismissed. B. That although the defendant promoted off-label use of the drug at issue, the off-label use was later approved as a valid and appropriate use, and the case was dismissed. C. That the defendant's speech failed to meet the criteria for classification as commercial speech and that, therefore, the defendant had no constitutional argument in opposition to the charges against him. D. That although the defendant's speech met the criteria for classification as commercial speech, no constitutional protection has been historically extended to that type of speech; and the defendant, therefore, had no constitutional argument in opposition to the charges against him. E. That although the defendant's speech met the criteria for classification as commercial speech entitled to constitutional protection under some conditions, the government met the requirements for regulation of the particular speech at issue involving off-label usage.

E. That although the defendant's speech met the criteria for classification as commercial speech entitled to constitutional protection under some conditions, the government met the requirements for regulation of the particular speech at issue involving off-label usage. Although the court in U.S. v. Alfred Caronia found that the defendant's statements met the criteria for classification as commercial speech entitled to protection under some circumstances, the defendant's speech was not constitutionally protected because of the reasons advanced by the government for the regulation at issue.

60. (p. 355) Which of the following would be the result in a majority of states in regard to Penny's obligation to the dive shop? A. That because the debt was unliquidated and the dive shop cashed the check, an accord and satisfaction occurred, and Penny owes nothing. B. That because the debt was liquidated, no accord and satisfaction occurred, and Penny owes the full $2,000. C. That in order to satisfy equitable principles, the parties would split the remaining debt with Penny owing $1,000. D. That under the UCC, Penny would be required to pay the full amount, but the dive shop would be estopped from charging any interest. E. That because the dive shop offered, through issuance of the check, full repayment, no accord and satisfaction existed; Penny owes the full $2,000.

E. That because the dive shop offered, through issuance of the check, full repayment, no accord and satisfaction existed; Penny owes the full $2,000.

12. (p. 707) Which of the following did the court determine in In re Holsinger, the case in the text in which the debtor requested a waiver of debt-counseling under the Bankruptcy Abuse Prevention and Consumer Protection Act? A. That imminent foreclosure of real property and resultant eviction qualified as exigent circumstances entitling the debtor to a waiver of the debt-counseling requirement. B. That credit-counseling may be waived when the debtor establishes that work obligations prevent attendance at any counseling session within 20 miles. C. That credit-counseling may be waived when the debtor establishes that work obligations prevent attendance at any counseling session within 50 miles. D. That credit-counseling is in effect optional and may be waived when the debtor establishes that attendance would create a hardship, for example, in regard to family matters. E. That even imminent foreclosure of real property does not entitle a debtor to waiver when other requirements in relation to debt counseling remain unsatisfied.

E. That even imminent foreclosure of real property does not entitle a debtor to waiver when other requirements in relation to debt counseling remain unsatisfied.

"Trick or Treat?" Penny has significant credit card debt following her diving trip with her boyfriend, Sam, to the Grand Cayman islands. Some of the diving trips cost more than she expected, and these extra expenses were unforeseen. Penny recently took a business law class and thought that she might be able to find a way out of her troubles. She owed $2,000 to Credit Card Company A and $3,000 to Credit Card Company B. She also owed $2,000 to the local dive shop for diving equipment she purchased for the trip. Penny is in negotiations with the dive shop over that amount because she had a problem with a mask fogging on the trip and had to replace it while on the trip at a charge of $100. While the mask issue did not significantly interfere with the trip, Penny thought that she should get at least some deduction on the overall bill. Penny called Credit Card Company A and told them that she was a poor student and could not afford to pay the entire $3,000 she owed. The representative of Credit Card Company A, who was working her last day, told Penny just to pay $50, and that would be considered payment in full. The representative sent Penny an e-mail to that effect. Penny was very pleased and went right out and quit her job at the campus bookstore because she did not really like dealing with student problems and thought that with the reduction from Credit Card Company A, she would have no problem in regard to having extra money. Although her parents supplied her with a large monthly allowance, Penny had the job at the bookstore so that she would have more money for clothes shopping and fun activities. In relation to Credit Card Company B, Penny called up and once again pled her case as a poor student. She talked Credit Card Company B into taking a used car with a blown-up engine worth around $1,000 in exchange for the debt. Penny did not lie about the value of the car, but she made it sound as good as possible. Transfer details regarding the car were worked out through e-mail. Finally, Penny sent the dive shop a check for $1,000 marked "paid in full." Much to her surprise and pleasure, the dive shop did indeed cash the check. Penny, however, was distraught to find that within 30 days, Credit Card Company A sent her a bill for $1,950; Credit Card Company B sent her a bill for $3,000; and from the dive shop she received a check for $1,000 along with a bill for $2,000. Faced with all these claims, Penny decided to look for work. She ended up two weeks later with a job selling beauty products that she liked much better than the bookstore job. It did not require dealing with pesky students. Assume all credit card company representatives had authority to make the agreements at issue. 57. (p. 347) What is Credit Card Company A's best argument in relation to enforcing Penny's obligations? A. That the agreement constituted a bad deal for the card company. B. That only past consideration was involved. C. That student debt is not dischargeable as a matter of law and that the card company owed no obligation to Penny regardless of statements made. D. That its promise was clearly an illusory promise that Penny should have known could not be enforced once the card company discovered the true circumstances. E. That no consideration existed for its promise, and that based on Penny's circumstances and behavior, enforcing the debt would not result in injustice to Penny.

E. That no consideration existed for its promise, and that based on Penny's circumstances and behavior, enforcing the debt would not result in injustice to Penny.

52. (p. 51) Yolanda found a better job and quit Robert's employment. Yolanda, however, wants to sue Robert because she believes that he may have terminated her employment in the future based on age discrimination. At this point, which of the following would be Robert's best defense to a lawsuit filed by Yolanda in the state in which she worked? A. That Yolanda lacks standing. B. That the court lacks in personam jurisdiction. C. That the state's long-arm statute does not apply. D. That a default judgment is appropriate. E. That the case is moot.

E. That the case is moot. A case is moot when there is no point in the court's hearing the case because no judgment can affect the situation between the parties.

51. (p. 374) Which of the following was the result in the case in the text William Cavanaugh v. Margaret McKenna, the case in which the plaintiff was sued for opening a funeral home after she agreed to refrain from doing so in her divorce as part of a covenant not to compete with her ex-husband? A. That the agreement was invalid because it was entered into in connection with a divorce, not in connection with either an employment agreement or the sale of a business. B. That the agreement was invalid because it was most analogous to the sale of a business and was unreasonable. C. That the agreement was valid because it was most analogous to an employment agreement and was reasonable. D. That the covenant was invalid because it did not contain an explicit time limitation. E. That the covenant was reasonable and valid and construed liberally because it was most analogous to the sale of a business.

E. That the covenant was reasonable and valid and construed liberally because it was most analogous to the sale of a business.

44. (p. 716-717) Which of the following was the result in Margaret Kawaauhau v. Paul W. Geiger, the case in the text in which the plaintiff claimed that the defending doctor, who had no malpractice insurance, could not discharge in bankruptcy a judgment for malpractice on the basis that he deliberately chose less effective treatment to cut costs while knowing that he was providing substandard care. A. That the defendant could not discharge the judgment because he was negligent. B. That the defendant could not discharge the judgment because he was reckless. C. That as a matter of public policy, the defendant could not discharge the judgment because he failed to carry malpractice insurance. D. That the defendant could discharge the judgment because as a matter of public policy, all malpractice judgments may be discharged. E. That the defendant could discharge the judgment because he did not intend to cause injury.

E. That the defendant could discharge the judgment because he did not intend to cause injury.

39. (p. 43) Which of the following is needed for diversity-of-citizenship? A. Only that the plaintiff not reside in the same state as the defendant. B. Only that the plaintiff reside in the same state as the defendant. C. Only that the controversy concern an amount in excess of $75,000. D. Only that the controversy concern an amount in excess of $100,000. E. That the plaintiff and the defendant reside in different states and that the controversy concerns an amount in excess of $75,000.

E. That the plaintiff and the defendant reside in different states and that the controversy concerns an amount in excess of $75,000. A diversity-of-citizenship case must satisfy two conditions: (1) The plaintiff(s) does(do) not reside in the same state as the defendant(s), and (2) the controversy concerns an amount in excess of $75,000.

33. (p. 196) Which of the following are defenses to an action for libel brought by a public figure in the United Kingdom regarding a statement made in the United Kingdom? A. Only that the statements were true. B. Only that the statements were made in Parliament. C. Only that the statements were made in court. D. That the statements were made in Parliament or court. E. That the statements were true, that the statements were made in Parliament, or that the statements were made in court. The only defenses to a charge of libel made by a public figure, or anyone else, are (1) the statements are true or (2) the statements were made in Parliament or court.

E. That the statements were true, that the statements were made in Parliament, or that the statements were made in court.

11. (p. 1133-1134) Which of the following was the result in Royal Capital Development LLC v. Maryland Casualty Company, the case in the text involving whether on a policy of insurance covering "direct physical loss of or damage to" a building that allows the insurer the option of paying either "the cost of repairing the building" or "the loss of value," the insurer must also compensate the insured for the diminution in value of the building if the insured elects to repair the building? A. That the insurer could choose between repairing the building or paying for its loss of value and that once proper repairs were made, the insurer had no obligation to cover any diminution in value. B. That unless the insured notified the insurer prior to the beginning of repairs that a claim for diminution in value would be made, the issue was waived because the insurer was entitled to take such a claim into consideration in making its decisions. C. That a claim for diminution in value could be made only if the insurer delayed in making repairs such that the insured had an equitable claim for diminution in value. D. That when a policy promised to pay the insured's loss, the insured has no claim for diminution in value if repairs are made. E. That when a policy promised to pay the insured's loss, the insured had a claim for diminution in value even if repairs were made.

E. That when a policy promised to pay the insured's loss, the insured had a claim for diminution in value even if repairs were made.

49. (p. 114) Which amendment protects against double jeopardy? A. The First Amendment B. The Second Amendment C. The Third Amendment D. The Fourth Amendment E. The Fifth Amendment

E. The Fifth Amendment The Fifth Amendment protects against double jeopardy.

24. (p. 153) Which of the following serves to combat bribery of foreign officials? A. The Foreign Official Bribery Act B. The International Bribery Prohibition Act C. The Fair Business Act D. The International Fair Business Practices Act E. The Foreign Corrupt Practices Act

E. The Foreign Corrupt Practices Act The Foreign Corrupt Practices Act (FCPA) serves to combat bribery of foreign officials.

37. (p. 336) Which of the following is false regarding how the Japanese tend to view contracts? A. The Japanese tend to view contracts as ongoing relationships. B. The Japanese tend to view contracts as relationships in which parties work with each other to smooth out any problems that arise in performance. C. The Japanese tend to be suspicious of long, detailed contracts. D. The Japanese have a preference for flexible contracts. E. The Japanese do not desire that any terms be left to be decided later.

E. The Japanese do not desire that any terms be left to be decided later.

45. (p. 167) Which amendment provides the right to a speedy and public trial? A. The Second Amendment. B. The Third Amendment. C. The Fourth Amendment. D. The Fifth Amendment. E. The Sixth Amendment.

E. The Sixth Amendment. Sixth Amendment protections are crucial to ensuring fair proceedings in a criminal trial including the right to a speedy and public trial.

44. (p. 339) Tina tells Barry that she will mow his yard for the summer for $800. Barry thinks about it and drops a note in the mail to Tina telling her that he rejects her offer. He thinks about it, however, and calls her to tell her that he accepts the offer before she receives his rejection. Which of the following is true under the mailbox rule? A. The offer was no longer outstanding because of the rejection. B. Barry could not accept verbally. C. Barry validly accepted, but his acceptance was revoked when Tina received the rejection. D. The acceptance was invalid because the mailbox rule requires that the time of payment be specifically set forth before an acceptance is formalized. E. The acceptance is valid, and the rejection has no effect.

E. The acceptance is valid, and the rejection has no effect.

14. (p. 88) What was the result in the Case Opener in which an employee of Hooters complaining of sexual harassment attempted to avoid a signed arbitration agreement? A. The court fully enforced the arbitration agreement as it was written. B. The court required that Hooters rewrite the arbitration agreement, and it was then enforced. C. The court itself rewrote the arbitration agreement, and it was then enforced. D. The court enforced the arbitration agreement in part, but required, contrary to the agreement, that Hooters provide the employee the specifics of its defenses at least 5 days before the commencement of the arbitration. E. The arbitration agreement was not enforced by the court.

E. The arbitration agreement was not enforced by the court. In refusing to uphold the arbitration agreement, the Fourth Circuit Court of Appeals held that although an agreement to arbitrate sexual harassment claims is generally enforceable, the employer in this particular case promulgated "egregiously unfair" arbitration rules that called into question its contractual obligation to draft the arbitration rules in good faith.

27. (p. 445) Which of the following was the result in the case in the text Wesley Locke v. Ozark City Board of Education, in which an umpire was injured by an angry parent and sued claiming that he was an intended third-party beneficiary under a contract the defending board of education had with the Alabama High School Athletic Association requiring police protection which was not provided? A. The umpire won as a matter of law because he was an intended third-party beneficiary to the contract between the defending school board and the athletic association, and the defendant had an absolute nondelegable duty to provide protection ensuring that no one was hurt. B. The umpire won as a matter of law because although he was not an intended third-party beneficiary to the contract between the defending school board and the athletic association, the defendant had an absolute nondelegable duty to provide protection ensuring that no one was hurt. C. The defending school board won as a matter of law because although the umpire was an intended third-party beneficiary to the contract, only the athletic association could proceed with a lawsuit. D. The defending school board won as a matter of law because the umpire was not an intended third-party beneficiary to the contract. E. The case was remanded for trial on the issue of whether adequate police protection was provided in view of the fact that the plaintiff was an intended third-party beneficiary to the contract between the school board and the athletic association.

E. The case was remanded for trial on the issue of whether adequate police protection was provided in view of the fact that the plaintiff was an intended third-party beneficiary to the contract between the school board and the athletic association.

28. (p. 23) Which of the following would be a stakeholder in the above company? A. The community only B. The shareholders only C. Future generations only D. The community and shareholders only E. The community, shareholders, and future generations

E. The community, shareholders, and future generations The stakeholders of a firm are the many groups of people affected by the firm's decisions.

36. (p. 335) Trudy signs a contract with ABC Book Club without reading it. The contract provides that new books will be sent to her eBook reader every month unless she sends notification rejecting the receipt of new books. Which of the following is true regarding whether the contract is binding? A. The contract is not binding because it illegally attempts to enforce acceptance by silence. B. The contract is binding but only if the parties have extensive previous dealings whereby acceptance by silence became an accepted form of business. C. The contract is not binding unless Trudy pays for at least one month's supply of books thereby indicating her intent to be bound. D. The contract is not binding because transmittal using electronics is involved. E. The contract is binding.

E. The contract is binding.

13. (p. 230) Which of the following was the result on appeal in John Coomer v. Kansas City Royals Baseball Team, the case in the text in which the plaintiff sued after being hit in the eye by a hotdog thrown into the stands by a team mascot during the "Hotdog Launch," a customary activity during games? A. The court affirmed a jury verdict in favor of the defense on the basis that the plaintiff assumed the risk of injury by hotdog because the tossing of the hotdogs was a customary event of which the plaintiff was or should have been aware before attending the game. B. The court dismissed the case on the basis that injuries at baseball games are an inherent part of the sport whether by baseball or by hotdog. C. The court dismissed the case on the basis that through a click agreement the plaintiff expressly agreed not to sue for any injuries when ordering the tickets through the Internet. D. The court affirmed a jury verdict finding for the defense on the basis that the plaintiff did not immediately report injuries to stadium officials. E. The court found that the jury was improperly instructed on the assumption of the risk defense and that the plaintiff did not assume the risk of injury by hotdog by attending the game. According to the court "that tossing out promotional items is a customary activity does not equate to a fan's consent to the risk of being hit by a promotional item."

E. The court found that the jury was improperly instructed on the assumption of the risk defense and that the plaintiff did not assume the risk of injury by hotdog by attending the game.

33. (p. 709) Which of the following is true regarding the effect of an automatic stay on claims of secured creditors in a Chapter 7 proceeding? A. The stay affects claims of secured creditors in the same way in which it affects claims of unsecured creditors. B. Secured creditors with claims of over $5,000 are not affected by the stay. C. Secured creditors with claims of over $15,000 are not affected by the stay. D. Secured creditors with claims of over $20,000 are not affected by the stay. E. The court may exclude secured creditors from the stay if they petition the court to show that they do not have adequate protection under the stay.

E. The court may exclude secured creditors from the stay if they petition the court to show that they do not have adequate protection under the stay.

61. (p. 163) What was the result in the case of U.S. v. Park, the case in which the defendant, the president of a national food-chain corporation, claimed he should not be held liable for allowing food in a warehouse to be exposed to rodent contamination because he had delegated responsibility to subordinates? A. The court dismissed all claims against him because of insufficient proof that he had actively allowed contamination. B. The court dismissed all claims against him because of insufficient proof of negligence. C. The court refused to dismiss claims against him because the offense was a strict liability offense. D. The court refused to dismiss claims against him because of insufficient proof of delegation. E. The court refused to dismiss claims against him because of proof that he had responsibility and authority to prevent the contamination or to correct it and failed to do so.

E. The court refused to dismiss claims against him because of proof that he had responsibility and authority to prevent the contamination or to correct it and failed to do so. According to the court, "[I]t is ... clear that the Government established a prima facie case when it introduced evidence sufficient to warrant a finding by the trier of the facts that the defendant had, by reason of his position in the corporation, responsibility and authority either to prevent in the first instance, or promptly to correct, the violation complained of, and that he failed to do so."

30. (p. 397) Which of the following was the result on appeal in the case of Evan Rothberg v. Walt Disney Pictures, the case in the text in which the defendant allegedly used undue influence to obtain a release of employee benefits from a person in the hospital dying of AIDS? A. The court ruled that the defendant was rightfully entitled to a summary judgment ruling in its favor because there was no direct evidence of legal undue susceptibility on the part of the weaker party. B. The court ruled that the defendant was rightfully entitled to a summary judgment ruling in its favor because there was no direct evidence of application of excessive pressure by the stronger party. C. The court ruled that the defendant was subject to summary judgment because the employer/employee relationship was present when the benefits at issue were granted, and no action for undue influence could later be brought against the employer. D. The court ruled that the plaintiff was entitled to recover as a matter of law because there was sufficient proof of undue influence. E. The court ruled that a jury question was presented as to whether undue influence was present.

E. The court ruled that a jury question was presented as to whether undue influence was present.

15. (p. 329) What was the result in the case nugget, Lefkowitz v. Great Minneapolis Surplus Store Inc., involving an advertisement for the sale of fur coats? A. The court ruled that the advertisement was not an offer because it involved a luxury good. B. The court ruled that the advertisement was an offer but that the customer who was suing had not properly accepted. C. The court ruled that the advertisement was not an offer because it was a ridiculously low offer which the plaintiff should have known was not to be taken seriously. D. The court ruled that the ad was not an offer because ads are never offers, only invitations for customers to make an offer. E. The court ruled that the ad was an offer and that the plaintiff properly accepted it.

E. The court ruled that the ad was an offer and that the plaintiff properly accepted it.

27. (p. 1144) Which of the following is true regarding whether the insureds in the "Case Opener" were entitled to insurance coverage for imported toxic Chinese drywall used in their home? A. The court ruled that the insureds were entitled to coverage for both property damage and personal injury based on their insurance company's warranties. B. The court ruled that the insureds were entitled to property damage coverage because of their insurance company's warranties, but not coverage for personal injuries. C. The court ruled that the insureds were entitled to coverage for personal injuries because of their insurance company's warranties, but not coverage for property damage. D. The court ruled that the insureds were entitled to full coverage only if they could establish that the insurer knew of the drywall problems when it issued the policy. E. The court ruled that the insureds were not entitled to coverage.

E. The court ruled that the insureds were not entitled to coverage.

24. (p. 1136-1137) Which of the following was the result on appeal in Equity Fire & Casualty Company v. Laurence Traver, the case in the text in which an insured on a policy of automobile insurance mailed a premium to the insurer, but it did not reach the insurer prior to the expiration date of the policy; and the insurer refused to provide coverage for a motor vehicle accident that occurred after the expiration date of the policy and before the premium was received? A. The court ruled that coverage was required under the policy because of the mailbox rule. B. The court ruled that coverage was not required under the policy because of the mailbox rule. C. The court ruled that coverage was not required under the policy because the insured did not meet his obligation of seeing that the premium amount was received by the insurer in a timely manner. D. The court ruled that coverage was required because the insured had a grace period of 7 days in order for the payment to arrive. E. The court ruled that under the unique facts of the case, there was acceptance of the renewal offer preventing a lapse of the policy.

E. The court ruled that under the unique facts of the case, there was acceptance of the renewal offer preventing a lapse of the policy.

38. (p. 710) How is a determination made regarding the identity of the trustee in a Chapter 7 proceeding? A. The bankruptcy judge appoints the trustee. B. The district court judge appoints the trustee. C. The court clerk appoints the trustee. D. The debtor appoints the trustee. E. The creditors elect the trustee.

E. The creditors elect the trustee.

20. (p. 331) What was the result in the case discussed in the text Andrus v. State Department of Transportation, and City of Olympia in which the plaintiff sued because a job offer was allegedly revoked? A. The plaintiff won because the city had validly offered him a job and had no right to revoke it. B. The plaintiff won because, while there was no contract, the court ruled that the city was not allowed to mislead him on equitable grounds and also on grounds of unlawful discrimination. C. The defendant won because it had truly received a bad reference. D. The defendant won because the plaintiff had not specifically accepted the job. E. The defendant won because the purported job offer contained insufficient information to be considered reasonably certain in regard to its terms.

E. The defendant won because the purported job offer contained insufficient information to be considered reasonably certain in regard to its terms.

18. (p. 18) Which of the following is the minimal standard essential for the development of business ethics? A. Meeting the requirements of deontology. B. Meeting the requirement of the public disclosure test. C. Meeting the requirement of utilitarianism. D. Satisfying the company's board of directors. E. The legality of a decision.

E. The legality of a decision. The legality of the decision in choosing a method of production, how to compete with competing firms, and the social responsibilities of the firm is the minimal standard that must be met for the firm to be an ethical business.

13. (p. 422) Blaine and Amanda orally agreed with Medical Center X for an in vitro fertilization procedure that would not result in the birth of an autistic child. They later signed a written contract stating that the medical center could not promise an absence of physical or mental defects and assumed no responsibility for such defects. The child conceived had autism. Which of the following is the most likely result of the parents' suit for breach of the oral agreement if the court follows the decision Scalisi et al. v. New York University Medical Center discussed in the text? A. The oral agreement will be enforced, and the parents will prevail under the exception to the parol evidence rule involving contracts conditioned on orally agreed upon terms. B. The oral agreement will be enforced, and the parents will prevail under the exception to the parol evidence rule involving contracts that are not final as they are part written and part oral. C. The oral agreement will be enforced, and the parents will prevail under the exception to the parol evidence rule involving contracts that are incomplete. D. The oral agreement will be enforced, and the parents will prevail under the exception to the parol evidence rule involving evidence of prior dealings or usage of trade. E. The medical center will prevail based upon the written contract.

E. The medical center will prevail based upon the written contract.

23. (p. 362) Which of the following is true regarding the obligation of a minor on disaffirmance? A. In all states, a minor must return any consideration in his control but is entitled to a full refund of any purchase price regardless of the condition of the consideration when returned. B. In all states, a minor is entitled to a full refund without returning consideration. C. In all states, a minor must return any consideration in his control, must make restitution, and must pay for any loss in value of the collateral. D. In all states, a minor only receives a return of half the minor's investment. E. The obligations of a minor upon disaffirmance vary from state to state.

E. The obligations of a minor upon disaffirmance vary from state to state.

58. (p. 86) According to the text, which of the following is true regarding defenses to an arbitration award under the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards? A. The only defense recognized is that the losing party did not receive notice of the arbitration. B. There are no recognized defenses. C. The only two recognized defenses are (1) that the arbitrator acted outside the scope of her or his authority when making the decision and (2) that one of the parties to the agreement did not have the authority to enter into a legal contract. D. The only two recognized defenses are (1) that one of the parties to the agreement did not have the authority to enter into a legal contract and (2) that the losing party did not receive notice of the arbitration. E. The only three recognized defenses are (1) that the arbitrator acted outside the scope of her or his authority when making the decision; (2) that one of the parties to the agreement did not have the authority to enter into a legal contract; and (3) that the losing party did not receive notice of the arbitration.

E. The only three recognized defenses are (1) that the arbitrator acted outside the scope of her or his authority when making the decision; (2) that one of the parties to the agreement did not have the authority to enter into a legal contract; and (3) that the losing party did not receive notice of the arbitration. Regarding the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards, there are three defenses to lack of enforcement of the arbitration award as follows: the arbitrator acted outside the scope of her or his authority when making the decision, one of the parties to the agreement did not have the authority to enter into a legal contract, and that the losing party did not receive notice of the arbitration.

60. (p. 713) Assuming the business partner received more than would have been received through bankruptcy proceedings, which of the following is the most likely result of a claim of preferential payment based on the payment to the business partner? A. The payment was not preferential because it was made over 90 days before the filing of the bankruptcy petition. B. The payment was not preferential because it was made over 120 days before the filing of the bankruptcy petition. C. The payment was not preferential because it was made over 180 days before the filing of the bankruptcy petition. D. The payment was preferential because it was made to a business partner and made within two years of the filing of the bankruptcy petition unless Mindy can establish that she was not insolvent when the payment was made. E. The payment was preferential on the basis that it was made to a business partner within two years of the filing of the bankruptcy petition only if the trustee is able to demonstrate that Mindy was insolvent when she made the payment.

E. The payment was preferential on the basis that it was made to a business partner within two years of the filing of the bankruptcy petition only if the trustee is able to demonstrate that Mindy was insolvent when she made the payment.

"Friends and Family." Mindy was very close to her family and friends. She also liked to spend and had a large amount of consumer debt for items such as jewelry, clothing, a personal watercraft, and a new car. Mindy was having problems making her credit card payments as they became due. She, however, wanted to make every effort to pay her debts. She had borrowed money from her mother for some jewelry and repaid that loan on January 1st. She repaid a loan to her business partner on May 15th of the same year. On September 1st of that year, she also repaid a loan to Friendly Jewelry Store because she wanted to remain on good terms with the manager. Unfortunately, Mindy was simply unable to continue making payments and on November 1st of that year, she filed a voluntary petition for bankruptcy relief under Chapter 7. 59. (p. 713) Assuming Mindy's mother received more than would have been received through bankruptcy proceedings, which of the following is the most likely result of a claim of preferential payment based upon the payment to the mother? A. The payment was not preferential because it was made over 90 days before the filing of the bankruptcy petition. B. The payment was not preferential because it was made over 120 days before the filing of the bankruptcy petition. C. The payment was not preferential because it was made over 180 days before the filing of the bankruptcy petition. D. The payment was preferential because it was made to a family member and made within two years of the filing of the bankruptcy petition unless Mindy can establish that she was not insolvent when she made the payment. E. The payment was preferential on the basis that it was made to a family member within two years of the filing of the bankruptcy petition only if the trustee is able to demonstrate that Mindy was insolvent when she made the payment.

E. The payment was preferential on the basis that it was made to a family member within two years of the filing of the bankruptcy petition only if the trustee is able to demonstrate that Mindy was insolvent when she made the payment.

12. (p. 340) What was the result in the Opening Case in which the plaintiff attempted to buy a jet from Pepsi for Pepsi points and some additional funds? A. The plaintiff prevailed, and Pepsi had to sell the jet as offered because Pepsi failed to specifically reserve details of the offer to a separate writing. B. The plaintiff prevailed, and Pepsi had to sell the jet as offered because Pepsi's advertisement was considered an offer which the plaintiff validly accepted. C. The plaintiff prevailed, and Pepsi had to provide the jet as offered because Pepsi did not revoke the offer soon enough. D. The plaintiff did not prevail because the jet was unobtainable as a military aircraft. E. The plaintiff did not prevail because Pepsi reserved the details of the offer to a separate writing, and Pepsi had the authority to reject the plaintiff's offer to purchase.

E. The plaintiff did not prevail because Pepsi reserved the details of the offer to a separate writing, and Pepsi had the authority to reject the plaintiff's offer to purchase.

49. (p. 461) Which of the following is true regarding the result in the case in the text Thrifty Rent-A-Car System v. South Florida Transport, in which the plaintiffs sued the defendant, the operator of a Thrifty franchise, for amounts owed, but the defendant resisted payment on the basis that several hurricanes rendered the business operations commercially impractical? A. The court ruled that the bad weather completely excused the defendant's performance. B. The court ruled that the parties had to jointly bear the burden of bad weather and that 50% of what the defendant owed would be excused. C. The court ruled that the defendant was legally entitled to additional time in which to pay, but that the defendant would be required to pay all amounts owed. D. The plaintiffs were entitled to recover because the defendant failed to anticipatorily repudiate the contract. E. The plaintiffs were entitled to recover for reasons including that the nonoccurrence of hurricanes was not a basic assumption of the agreement.

E. The plaintiffs were entitled to recover for reasons including that the nonoccurrence of hurricanes was not a basic assumption of the agreement.

"Thermal Imaging." Sam was engaged in the criminal activity of growing marijuana in his home using heat lamps in the process. The police randomly selected his street to search for illegal activity. Without any kind of a warrant, they used a thermal imager, an instrument that detects heat emissions, to determine that he was possibly engaged in illegal activity. The police immediately broke down Sam's door, searched his home, and arrested him. The police officer in charge told Sam that he had no right to keep silent and that he might as well confess. Sam proceeded to confess to growing marijuana and a number of other crimes. The judge was so angry with Sam that he threw him in jail for two months without any kind of hearing. Sam's lawyer, who just graduated from law school, is not sure if the police acted legally in Sam's case by using the thermal imager. Sam's lawyer also questions whether Sam had a right to remain silent, and he is concerned that the judge has not granted Sam a hearing. 45. (p. 113) Which of the following is true on the issue of whether the police acted within their rights by using the thermal imager? A. The police acted within their rights so long as they can show that they asked a judge for a warrant before using the thermal imager, but the judge refused. B. The police acted within their rights so long as they can show that the street was truly chosen at random for a search. C. The police acted within their rights so long as they can show that Sam had been in jail previously on a drug offense charge. D. The police acted legally so long as they can show that Sam had been in jail previously for any offense. E. The police violated Sam's Fourth Amendment rights in using the thermal imager.

E. The police violated Sam's Fourth Amendment rights in using the thermal imager. The U.S. Supreme Court, in a 2001 case, ruled that police using thermal-imaging devices to detect heat patterns emanating from private homes constitutes a search that requires a warrant.

"Green Gold." Martin owned a factory in which he manufactured furniture. Martin had some extra space in the factory and decided to use heat lamps to grow marijuana. He smuggled the marijuana into the hands of dealers by hollowing out the furniture and placing the marijuana inside and by putting the marijuana in drawers, etc. Law enforcement became suspicious and unexpectedly burst into the building without a warrant, discovering the marijuana. Martin asked the agent in charge about the lack of a warrant. The agent told him that Fourth Amendment protections did not extend to businesses. Martin was charged with growing marijuana. Martin refused to testify at trial. At his trial, however, the judge excluded any evidence obtained from the search, and Martin was declared not guilty because there was no evidence against him. The agent was very angry and arrested Martin immediately for the same offense as he was walking down the courthouse steps from the first trial. The agent tells Martin that he should be tried again because the judge was incorrect. Martin is placed in a holding cell and immediately calls his attorney in an attempt to get out of jail free. 70. (p. 167) Which of the following is correct regarding Fourth Amendment protections for businesses and the necessity of a search warrant prior to a search of a business? A. The protections of the Fourth Amendment are not extended to businesses. B. The protections of the Fourth Amendment are extended to businesses only if the businesses involve highly regulated industries. C. The protections of the Fourth Amendment are extended to businesses only if the businesses are sole proprietorships. D. The protections of the Fourth Amendment are extended to businesses, and warrants are necessary for any searches. E. The protections of the Fourth Amendment are extended to businesses although at times no warrant is necessary to search highly regulated industries.

E. The protections of the Fourth Amendment are extended to businesses although at times no warrant is necessary to search highly regulated industries. Fourth Amendment protections extend to businesses, and government inspectors may not legally enter a business to conduct an inspection without a warrant, except to search highly regulated industries such as food, liquor, or firearms.

24. (p. 388) George offers to sell Penelope a ring that George found in his yard. He and Penelope look at the ring and decide that they are not sure what it is, probably just a shiny stone. Penelope pays George $10 for the ring. The ring turns out to be a diamond worth much more than $10. George wants the ring back, and Penelope refuses. What is the most likely result? A. The ring will be returned to George because of mutual mistake. B. The ring will be returned to George because of unilateral mistake. C. The ring will be returned to George because of equity. D. The ring will remain with Penelope unless George can establish that he was negligent in not recognizing the ring's true value. E. The ring will remain with Penelope because the parties contracted on the assumption that they did not know the value of the ring.

E. The ring will remain with Penelope because the parties contracted on the assumption that they did not know the value of the ring.

42. (p. 47) Which of the following is typically an appropriate venue in a lawsuit? A. Only the trial court where the defendant resides. B. Only the trial court where the plaintiff resides. C. Only the location where the dispute occurred if the lawsuit focuses on a particular incident. D. Both the trial court where the defendant resides and the trial court where the plaintiff resides. E. The trial court where the defendant resides and also the location where the dispute occurred if the lawsuit focuses on a particular incident.

E. The trial court where the defendant resides and also the location where the dispute occurred if the lawsuit focuses on a particular incident. Usually, the trial court where the defendant resides is the appropriate venue; if the focus of the case is a particular incident, the trial court where the dispute occurred is an appropriate venue.

31. (p. 334) Which of the following is presumed to be a reasonable amount of time when considering whether an offer has expired? A. Forty-eight hours. B. Seven days. C. Ten days. D. Forty-five days. E. There is no set amount of time, and what constitutes a reasonable amount of time varies depending upon the subject matter of the offer.

E. There is no set amount of time, and what constitutes a reasonable amount of time varies depending upon the subject matter of the offer.

25. (p. 22) Which of the following is true under the WPH process of ethical decision making? A. The interest of management is ranked higher than that of employees when decisions are made. B. The interest of owners is ranked higher than that of both employees and management when decisions are made. C. When decisions are made, the interest of the community as a whole is considered last. D. The interest of management is ranked higher than that of employees when decisions are made, but the interest of owners is ranked higher than the interest of any group. E. There is not a framework under WPH for ranking one stakeholder above another.

E. There is not a framework under WPH for ranking one stakeholder above another. The framework addresses whom a decision would affect, the purpose of the decision, and the guidelines on how to make ethical decisions. There is no reference to ranking stakeholders at a higher level.

22. (p. 362) Which of the following is the age of majority in regard to the right to contract in Great Britain? A. 18 B. 19 C. 21 D. 16 E. There is not a set age of majority

E. There is not a set age of majority

14. (p. 1141) Which of the following is false regarding Internet liability protection policies? A. They typically cover claims involving copyright and trade infringement. B. They typically cover claims involving alleged plagiarism committed via the Internet. C. They typically cover claims involving failure to protect confidential information gathered online. D. They typically cover claims involving failure to stop a computer virus. E. They typically cover claims involving related to patents or trade secrets.

E. They typically cover claims involving related to patents or trade secrets.

44. (p. 418) What is a purpose of the parol evidence rule? A. To restrict oral evidence from being admitted that supports an agreement in its written form. B. To restrict written evidence from being admitted that supports an agreement in its written form. C. To restrict oral and written evidence from being admitted that supports an agreement in its written form. D. To restrict hearsay from being admitted that supports or contradicts an agreement in its written form. E. To restrict evidence from being admitted that substantially contradicts an agreement in its written form.

E. To restrict evidence from being admitted that substantially contradicts an agreement in its written form.

25. (p. 705) Which of the following is an individual who takes over administration of the debtor's estate? A. Administrator B. Aligner C. Organizer D. Reformer E. Trustee

E. Trustee

26. (p. 192) Which of the following may a person accused of defamation raise as a defense? A. Truth but not privilege. B. Privilege but not truth. C. Need and truth. D. Need, truth and privilege. E. Truth and privilege. A person accused of defamation can raise two defenses: truth and privilege.

E. Truth and privilege.

22. (p. 702) Which of the following is false regarding provisions of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005? A. Under the act, an individual may not generally be considered a debtor unless within 180 days prior to filing, the debtor receives credit counseling from a nonprofit budget and credit counseling agency. B. Under the act, if an individual was a debtor in a bankruptcy case that was dismissed within 180 days of the current case, the individual is generally not eligible to be a debtor under Chapters 7, 11, or 13. C. Under the act, if a previous bankruptcy was completed rather than dismissed, the individual is generally permitted to file for bankruptcy again. D. Under the act if a party completes a Chapter 7 bankruptcy, the party is not permitted to seek a Chapter 7 bankruptcy again for eight years. E. Under the act if a party has at least $10,000 in assets, the party may not file for any type of bankruptcy protection.

E. Under the act if a party has at least $10,000 in assets, the party may not file for any type of bankruptcy protection.

35. (p. 354) In a[n] ______ debt, the parties either dispute the fact that any money is owed or agree that some money is owed but dispute the amount. A. Disputed B. Unacknowledged C. Uncertain D. Liquidated E. Unliquidated

E. Unliquidated

56. (p. 346) In a lawsuit between the bank and Ursula, regarding the reward funds, who is likely to prevail and why? A. The bank is likely to prevail because Ursula only provided past consideration. B. The bank is likely to prevail because Ursula was tainted by being Victor's girlfriend. C. The bank is likely to prevail because no valid bilateral contract existed. D. Ursula is likely to prevail because a valid bilateral contract existed. E. Ursula is likely to prevail because an enforceable unilateral contract exists based on her provision of information leading to the capture of Victor.

E. Ursula is likely to prevail because an enforceable unilateral contract exists based on her provision of information leading to the capture of Victor.

14. (p. 385) Without legal assent a contract may be ____. A. Unmarketable B. Unchargeable C. Void D. Illegal E. Voidable

E. Voidable

35. (p. 432) Which of the following is true regarding assignment of rights in China? A. Free assignment of rights is permitted. B. Free assignment of rights is permitted only when a contract with a state authority is involved. C. Free assignment of rights is permitted only when a contract with a private party is involved unless the contract is one considered "for the good of the people." D. Assignment of rights is illegal. E. When a private party is involved, the assignor must first get the obligor's approval before an assignment is made.

E. When a private party is involved, the assignor must first get the obligor's approval before an assignment is made.

50. (p. 444) Which of the following is true regarding factors considered by a court in determining whether a party is an intended or incidental beneficiary? A. Whether performance of the contract is done directly to the third party and whether the contract directly states that the third party is the benefiting party, but not the third party's ability to control the specifics of performance of the contract. B. The third party's ability to control the specifics of performance of the contract but not whether performance of the contract is done directly to the third party or whether the contract directly states that the third party is the benefiting party. C. Whether the contract directly states that the third party is the benefiting party but not the third party's ability to control the specifics of performance of the contract or whether performance of the contract is done directly to the third party. D. Whether performance of the contract is done directly to the third party and the third party's ability to control the specifics of performance of the contract, but not whether the contract directly states that the third party is the benefiting party. E. Whether performance of the contract is done directly to the third party, the third party's ability to control the specifics of performance of the contract, and whether the contract directly states that the third party is the benefiting party.

E. Whether performance of the contract is done directly to the third party, the third party's ability to control the specifics of performance of the contract, and whether the contract directly states that the third party is the benefiting party.

53. (p. 327) What is the most likely result in the lawsuit brought by Walter against Zack? A. Walter will win because Zack properly made an offer that Walter accepted. B. Zack will win because he was merely expressing possible interest. C. Zack will win because Walter did not properly accept. D. Zack will win because under a subjective standard he was joking. E. Zack will win because under an objective standard, it appears he was joking.

E. Zack will win because under an objective standard, it appears he was joking.