LEOB Final Exam

As a general rule, a promise must be supported by consideration. Which of the following is an exception to the rule?

An obligation of record such as a judgment

One who contracts with an independent contractor has more control over the performance of the work than does an employer.

False

The Uniform Commercial Code states that when a contract for the sale of goods is modified by agreement of the parties, consideration is necessary to make it enforceable.

False

Which of the following is an example of passive fraud?

An attorney fails to tell his or her client of an offer to settle a case because he doesn't want his client to accept it, because he will make less money on the case.

As a result of workers' compensation statutes what happens when an employee is injured on the job?

An employer is not liable for a willfully self-inflicted injury.

The federal Civil Rights Act of 1964 does not apply to private corporations.

False

The legal system of the United States is based primarily on the French legal system.

False

The most common type of relief that courts of equity provide is monetary damages.

False

The verbal statement of the seller in which the article sold is warranted or guaranteed in a certain fashion is known as an implied warranty.

False

Writing is required when the person against whom enforcement of a sales contract is sought voluntarily admits, in the course of legal proceedings, to having made the sales contract.

False

The U.S. court system is established to

Follow the supreme to law of the U.S. as established by the Constitution

Jack, a second-hand dealer of cars, provides his clients with the opportunity to examine them. Jenny test-drove a car and got it checked by her mechanic as well. However, the mechanic missed a broken valve and the car broke down after the purchase. Which of the following is likely to happen in this scenario?

Jack is exempt from prosecution as the principle of caveat emptor applies.

Which of the following is NOT a duty the Agent owes the Principal

Surety

Which of the following is true of an auction sale?

There is no contract until and unless an auctioneer accepts a bidder's offer.

A foreign corporation who has authority to do business in the state is allowed to form contracts.

True

A minor, upon reaching the age of majority, must ratify the contract for it to be enforceable.

True

A partner who commits a tort has liability for indemnifying the partnership for any loss it sustains.

True

A stock option may be exercised at any point during the stated period of time in the contract.

True

Any contract entered into by a corporation that goes beyond its powers is called an ultra vires contract.

True

As fiduciaries of the corporation, directors incur liability for losses when they are caused by bad faith.

True

Delivery of a bearer instrument is sufficient to pass title.

True

Employers are allowed to administer polygraph tests if a specific incident of economic loss is being investigated, the employer provides security services, or manufactures, distributes, or dispenses drugs.

True

Every partner has the duty to abide by majority vote.

True

Federal labor legislation permits employees to organize a union to bargain for all employees. It also prohibits certain forms of conduct from the scene of labor negotiations and employment by condemning them as unfair labor practices.

True

If a contract is voidable due to mutual mistake, the parties might elect to rescind the contract.

True

In a small claims court, there is no jury and a judge tries the case.

True

In the absence of a statute to the contrary, a written partnership agreement need not be in a particular form.

True

Which of the following best describes whistleblowers?

They are people who expose wrongdoing in an organization.

Which of the following best describes by laws?

They are rules enacted by directors to govern a corporation's conduct.

In the event of bankruptcy, the law assigns the rights and duties of the debtor to the trustee in bankruptcy.

True

The board of directors is the primary policy-making body of the corporation.

True

The doctrine of strict liability can make the manufacturer of a dangerously defective product liable, even if there's no proof of negligence.

True

The owners or investors of a limited liability company are called members.

True

The powers of public corporations may be much greater than those of private corporations.

True

The sale of goods constitutes the largest number of contracts formed in the country's economic system.

True

To recover damages for a tort based upon negligence, the plaintiff is required to prove that there was a breach of duty by the tortfeasor to the plaintiff.

True

Under federal law, an employer may not discriminate against employees on the basis of race, color, religion, sex, national origin, age over 40, or disability.

True

Which of the following is true of restrictions on the sale of a private corporation's stock?

They frequently require a stockholder to offer to sell the stock to the corporation or other shareholders.

​Agents have a duty to keep principals informed of all facts pertinent to the agency.

True

In general, the defenses available in a dispute over a contract can be raised against holders in due course.

False

Rank the following Mississippi Courts, from highest (1) to lowest (4) in terms of jurisdiction and authority. Write the appropriate number by each. (4 points) Mississippi Inferior Courts (Justice, Municipal) Mississippi Courts of Appeals Mississippi Court of Original Jurisdiction (Circuit, Chancery) Mississippi Supreme Court

1. Mississippi Supreme Court 2. Mississippi Court of Appeals 3. Mississippi Trial Courts (Original Jurisdiction) 4. Mississippi Small Claims Courts

Commercial paper (is) are

A form of an IOU

What is a Holder in Due Course of a negotiable instrument? What conditions are required in order to be deemed a Holder in Due Course?

A holder who takes a negotiable instrament in good faith and for value is a holder in due course. There cannot be any clear proof of forgery or unauthenticated action of the negotiable document, or instrument. The document must have been accepted for its value. It must have been accepted in good faith. When accepted, the holder must not be aware of any default.

Which of the following is a duty a principal has toward the agent?

A principal must reimburse the agent for expenses incurred during the agency.

Which of the following should be contained in the articles of partnership?

Allowance of withdrawals of profits.

A business tort

Allows a wronged party to recover money damages

Which of the following is true of limited liability companies?

An LLC can be sued by third-parties as a separate entity.

Which of the following is most likely to be a tort based on negligence?

Automobile accidents

Which of the following is considered a fair labor practice by a union?

Barring a worker from membership in the union for nonpayment of reasonable dues

The _____ consists of ten amendments to the U.S. constitution specifically designed to protect the civil rights and liberties of citizens and the states.

Bill of Rights

Jones acted as Blake's agent for 12 years before this contract of agency was dissolved by Blake. However, Blake failed to convey this fact to those vendors with whom Jones contracted in the past. Which of the following is likely to occur if Jones negotiates future contracts with these vendors on Blake's behalf?

Blake would be bound by those contracts and would have to pay the contracted price.

If a partner acts as an agent for the partnership, the resulting contract:

Cannot be avoided by the other partners.

Which of the following statements is true of common law?

Cases in common law are decided on the basis of precedents.

In Mississippi, an appeal from the trial court (the court of original jurisdiction) is filed with the Mississippi Court of Appeals, rather than the Mississippi Supreme Court.

False

When one partner dies, the other partners must:

Dissolve the partnership unless the partnership agreement states otherwise.

Which of the following is true of a contract between two minors?

Each minor has the right to avoid the contract.

Which of the following is NOT a duty the Principal Owes the Agent

Exclusiveness

A deceased employee's family cannot recover damages for death which occurred during the course of employment.

False

A person who sells alcoholic beverages to a minor when such a sale is prohibited can recover on the contract.

False

A sole proprietor has very limited flexibility in managing the business.

False

All contracts must be in writing to be enforceable.

False

An instrument made payable to more than one person is not negotiable.

False

An offer that does not specify a particular manner of acceptance may be accepted only in writing.

False

At common law, individuals other than the parties to a contract can sue upon or seek to enforce the contract.

False

If commercial paper is made payable to whoever has possession of it, it is called order paper.

False

If performance in a contract becomes extremely difficult after the contract is formed, it automatically discharges the contract.

False

Which of the following is not true of a close corporation?

It has a large number of stockholders

Which of the following is true of the United States Supreme Court?

It has appellate jurisdiction in cases based on the U.S. Constitution.

Which of the following best describes the dissolution of a partnership?

It is the change in the relation of the partners by ending the present legal entity.

Which of the following best describes a share?

It is the unit value of a company's total stock.

Which of the following is true of the doctrine of promissory estoppel?

It requires the promisor to reasonably expect the promise to induce action by the promisee.

Mark and James established a partnership to deal in textiles. Both of them contributed equal capital to the partnership. Which of the following is true?

Mark and James have the right to participate in the management of the partnership

Mary and Sue, both adults, make a contract to purchase a car. Which statement is NOT true?

Must be for an illegal purpose

Which of the following is true regarding notice of a partnership's dissolution?

Notice of dissolution is not necessary when a dormant or a secret partner retires.

_____ is a unilateral act of a holder of an instrument, usually without consideration, whereby the holder gives up rights on the instrument.

Renunciation

A contract does not require

That all terms be completed even if they later become impossible to perform.

Which of the following acts govern the sales of movable personal property?

The Uniform Commercial Code

Which of the following is the way an agent should sign a contract in order to bind the principal and not the agent?

The agent should sign his or her name "as agent for principal".

Which of the following is true when a person hires an independent contractor to perform some tasks?

The contractor is solely responsible for the proper performance of the contract.

An implied warranty can normally be excluded by

The phrase "As Is"

When an employer and a union have a signed contract:

The union speaks and contacts for the employees collectively.

Which of the following tasks cannot be delegated to an agent?

Voting in a political election

In which of the following cases will a court refuse to enforce the provision of liquidated damages on a party?

When the amount of liquidated damages fixed by the contract is unreasonable

As an employee you will most likely receive orders/directives from

Your employer

In a written contract, Sheldon agreed to tutor the children of Mrs. Smith for a certain period of time. However, Sheldon, prior to starting classes, announced that he would not be able to tutor the children due to other commitments. In this case, there has been a(n):

anticipatory breach.

In the above promissory note, Jane Monroe is know as the ______________, and City Finance is known as the ______________. Does this instrument qualify as a negotiable instrument under the Uniform Commercial Code (UCC)?

drawer, payee, yes bc it is a form of payment that was in good faith.

What are the three types of powers every corporation has? Explain ( 5 Bonus points)

express, incidental, and implided

Kenneth was sentenced to six years in prison for forgery. In this case Kenneth has committed a(n) _____.

felony

What are laws? How are they different from ethics? In your opinion, why do we need laws and ethics to exist in society? What are some examples of how ethics have played a role in our law? Explain using suitable examples. (5 Bonus Points)

laws are rules of civil conduct commending right and prohibiting wrong. Ethics are a persons moral belief that something is right or wrong. The difference between the two is that a law is made from what the majority think is right and wrong. we need laws and ethics to exist in society because without them everything would be crazy. People would do what they thought was right even if others thought it was wrong and there would be nothing prohibiting their behavior. The majority has agreed that murder is wrong and for that reason we have laws prohibiting people to murder others. Without ethics and laws people would not be safe and protected from others.

Blake agreed to renovate Jane's house, and they drafted a written contract. However, Blake was unable to complete the renovation due to an accident. Blake's friend, Tom, agreed to complete the job, and Jane agreed to release Blake from the contract. The terms of the old contract remained the same. This process of substitution of a contract is known as a(n) _____.

novation

Where should a check be indorsed?

on the back along the trailing edge

A _______ is a court decision that determines the decision in a subsequent, similar case.

precedent

To recover for a tort based on negligence, the plaintiff must show:

the breach of the tortfeasor's duty to the injured party.

Which of the following is not one of the seven requirements for an instrument to be negotiable?

the instrument must provide for a sum of money, fixed or not.

How does negotiation differ from assignment?

​A party receiving an instrument by negotiation may obtain rights superior to those of the original holder.

What is the difference between an agreement and a contract?

​An agreement results whenever two people's minds meet on a subject, but a contract only exists when the parties intend to be legally obligated by the terms of the agreement.

The officers of a corporation:

​Are the agents of the corporation.

​When an assignment is made by an act of the parties, which of the following is true?

​If the original contract was required be in writing, the assignment must also be in writing.

Which of the following is a duty of an employer towards an employee?

​The employer must provide a reasonably safe place to work.

​When a contract can be terminated at any time by both an employer and an employee, the situation is known as _____.

​employment at will