Legal Environment of Business
Michelle attends a public university. If the university adopted a rule prohibiting more than 3 students from congregating in public without permission from the university, which constitutional amendment would this rule violate?
1st Amendment
Don's mechanic has advised him to repair the brakes on his car, but Don doesn't want to spend the money. One night shortly thereafter, he is driving down the street in his car and cannot stop at a red light, hitting Peter's car. The sound of the crash also startles a pet pot-bellied pig sleeping on the windowsill of a fifth-floor apartment nearby. The pig falls from the ledge and kills Vick, who happens to be walking by. Don is sued by Peter for his property damage and personal injuries, and he is also sued by Vick's family, because the sound of the car crash awoke the pig, which in turn caused Vick's death. How do you expect a court would rule in this situation?
A court would probably award damages against Don for Peter's damages, but not for Vick's death.
Which of the following acts would likely not result in strict liability being imposed on the defendant?
A debt collector who inflicts severe emotional distress on a debtor to induce the debtor to pay immediately.
Which of the following would be the highest legal authority in resolving a legal dispute?
A federal treaty
Which of the following is an example of false light defamation?
A newspaper runs a large headline stating, "Gang Violence Increases" next to a picture of Carl, a teenage boy. The picture of Carl is easily associated with this story, even though his picture appeared because he received a scholastic award.
Which form of organization allows one owner complete control over the business' operation?
A sole proprietorship
In which court would you expect a lawsuit for breach of a contract between two private individuals who are residents of the same state to be filed?
A state trial court
The "police power" refers to:
A state's power to enact laws safeguarding the health, safety, welfare, and morals of its citizens.
Offer
A statement demonstrating a willingness to enter into a contract
Which of the following is the most accurate way to describe a life insurance contract?
A third party donee-beneficiary contract
A life insurance contract is an example of which of the following?
A third-party donee-beneficiary contract
Which of the following statements about torts is correct?
A tortious act may also be a criminal act.
One would protect a process, method of production, or information that gives one business a competitive advantage using which of the following?
A trade secret
Alice is injured in a street accident because of Barney's negligence. Alice's injuries are much more severe than the average person would have suffered because she has brittle bones. In a lawsuit filed against Barney as a result:
Alice will be entitled to get all damages that she suffered as a result of the accident.
Which of the following started out as a trademark name?
All of these items started out as trademark names
Eric is an employee of a grocery store. He is fired because he repeatedly shows up for work late. He applies for unemployment benefits, but the store challenges his entitlement to benefits before the State Unemployment Insurance Department. A hearing held before a hearing officer over whether Eric gets benefits would be which of the following?
An adjudicatory proceeding involving an administrative agency.
Contract
An agreement to do, or not to do, a certain thing
An assault differs from a battery in that:
An assault is the placing of someone in fear of an imminent battery
Betsy owned a valuable historic United States flag. She had previously loaned the flag to her friend Andrew so that he could display the flag on the wall behind his office desk. One day while visiting Andrew in his office and admiring the flag, Betsy said to Andrew, "You are so fond of that flag, I would like you to have it!" Andrew responded with a gracious, "Thank you." In this situation:
Betsy has made a valid, binding gift because she intended to transfer present ownership to Andrew, Andrew accepted the flag, and it had already been delivered.
In the United States, which of the following is true of the legal system?
Both statutes and court decisions define legal rights and duties.
Shortly after Lori started to work at a new company, her co-worker, Brian, began asking her out. Lori said no, but Brian persisted. One day Brian walked up behind Lori and fondled her breasts. Which of the following statements is correct?
Brian committed the tort of battery.
Trademark
Can be lost if it becomes "generic"
The form of bankruptcy that is intended primarily to allow an insolvent business to "reorganize" by paying some creditors while reducing or eliminating other debts and obligations is known as:
Chapter 11
The form of bankruptcy that provides for the liquidation of a debtor's assets to repay the creditors, subject to the debtor's right to retain certain exempt property, or to re-affirm certain secured debts, is known as:
Chapter 7
A brother and sister could not legally own property under which of the following forms of co-ownership?
Community property
Which of the following is ordinarily not available as damages for breach of a contract?
Consequential damages
Creditor Beneficiary
Contract in which a third party was already owed a duty by one of the parties
Original Jurisdiction
Court in which a lawsuit must first be filed
If secured property is sold by the lender after it is repossessed, but the sale does not bring enough money to completely pay off the loan, the remaining amount owed is known as a ____________.
Deficiency
Dennis and Edna have been negotiating a real property deal for some time. Each has rejected offers that the other has made through their respective brokers. Dennis runs into Edna at a restaurant one day and says, "I think we can work out the terms of this thing without interference from the so-called experts." After an hour, they have reached an agreement. Dennis scribbles the terms on a cocktail napkin, which he and Edna sign. What is the status of their discussions?
Dennis and Edna have a binding contract assuming that all terms are set forth on the napkin.
Richard has a matter pending before an administrative agency. An administrative law judge rules against him. The agency has a rule requiring that someone challenging such a decision first file an administrative appeal to a three-member panel, but Richard files a lawsuit immediately. While of the following should the trial judge do?
Dismiss Richard's lawsuit because he failed exhaust his administrative remedies.
Eric runs The Salvage Company, Inc., which performs demolition of old buildings for a fee. While demolishing an old multi-story building with dynamite, a number of surrounding buildings are damaged by a shock wave caused by using a dynamite charge that is too big. If Eric's company is sued, what is the most likely result?
Eric's company will be strictly liable for any damage.
Procedural Law
Establishes the process by which litigation is conducted
David and Wilma own property as tenants in common. David dies and his will provides that "All my property" goes to his sister Evelyn. What happens to the property?
Evelyn and Wilma each own a 50% interest in the entire property as tenants in common.
John and Bill, who live in the same state, have written a novel together. After the book is completed, John sues Bill over the profits from the book. If he files the case in state court, what is the best explanation for his doing so?
Exclusive jurisdiction
Majority Opinion
Explanation by an appellate court why it has ruled in a certain way
A "trial type" hearing is used by a legislative body to enact new laws.
False
A contract that gives one party the unilateral right, though not the obligation, to set it aside because of a problem with how the contract was formed, is known as a void contract.
False
A debt collector who inflicts severe emotional distress on a debtor's child to induce the debtor to pay immediately will probably be strictly liable for those injuries.
False
A derivative work can be made from a work in the public domain, but not from a copyrighted work.
False
A doctor whose gross negligence during an operation renders a patient a permanent quadriplegic will probably be strictly liable for those injuries.
False
A product liability lawsuit is available to provide a remedy to a plaintiff only for physical injuries caused by goods.
False
A special legal process, known as a civil lawsuit, is used to challenge administrative decisions in court.
False
All of the rights protected by the Fifth Amendment are civil rights.
False
Among the advantages of a sole proprietorship are that it receives favorable tax treatment and that the owner has only limited liability for the business's debts.
False
Andy was a witness in a lawsuit. When asked why he fired Rachel, Andy replied, "Rachel was fired because we learned that she was stealing from the company." In fact, Rachel had not engaged in any theft. Rachel will be able to successfully sue Andy for defamation based on what Andy said in court.
False
As soon as the two parties to a written contract sign the agreement, the contract is executed even though certain things remain to be done by one or both parties.
False
Employees are not protected against sexual harassment under either federal or state anti-discrimination laws.
False
Following the ratification of the Constitution, the states retained no powers that they had had before it was adopted.
False
If someone claims ownership of a trade secret, that trade secret will cease to be protected after 20 years.
False
If someone has a copyright but it becomes too closely-associated with the name of a specific product, the copyright can be lost for that reason.
False
If the terms of a contract are uncertain, a court will always supply the missing terms so that the intent of the parties can be carried out.
False
In California, breach of warranty and similar legal theories are not available to plaintiffs in cases involving products that cause injury.
False
Like a public corporation, a limited liability company has a board of directors, requires that the board ratify actions taken by chief executive officer, and must follow all the other corporate formalities.
False
Litigation that does not really involve two parties, but instead is about a specific item of property, is known as in personam jurisdiction.
False
Mary was suspicious of her neighbor, Wingo Joe, because she thought he was involved in selling illegal drugs. One day she arrived at her apartment and saw a large paper sack tied up with string in front of Wingo Joe's door. She took the bundle into her apartment, opened it, and discovered it was full of cocaine. She called the police, and the neighbor was arrested. The neighbor's lawyer will be able to obtain a court order suppressing the evidence as having been illegally obtained, because no probable cause existed to justify opening up the paper bundle.
False
Ned and Eric are negotiating a contract. The contract includes standard language that all oral negotiations are deemed to be merged into the terms of the written agreement. Eric is reluctant to sign the contract, and Ned tells him that if he signs, he'll pay him $2,500 in addition to what the contract provides. Once the contract is signed, though, Ned refuses to pay the additional $2,500. As a matter of contract law, if Eric sues, he will be able to enforce the additional $2,500.
False
Once a partnership is established with the original number of partners, one cannot add or remove partners without changing the form of business organization to something else.
False
One of the major advantages of a partnership over a corporation is that a partnership offers the partners limited liability.
False
Pam signs a contract with Bob to buy Bob's house for $150,000 "if I am able to obtain a mortgage loan for $250,000, at no more than 5% interest, payable over 30 years." Pam tries in good faith but is unable to obtain the described loan and therefore refuses to proceed with the purchase. Pam is in breach of the contract.
False
Real property would likely not include growing crops.
False
Someone is liable for a strict liability tort if they fail to take sufficient precautions to prevent a risk of harm.
False
Someone who intentionally and without good cause breaches any contract is always potentially liable for punitive damages.
False
Someone who wants to make sure that she receives clear title to someone else's real property should insist upon receiving a quitclaim deed.
False
The federal government is prohibited from passing a bill of attainder, but the States are free to do so.
False
The instrument that ordinarily allows someone to vote for the board of directors of a corporation is preferred stock.
False
The most fundamental characteristic of territorial jurisdiction is that it gives a court the power to render a binding decision in a dispute between the parties to a lawsuit.
False
The purchaser of a franchise is known as the "franchisor."
False
The rules of law used in the U.S. today that are descended from the ancient Roman codes of statutes organized by subject matter is known as the common law system.
False
Tim learns that the Legislature in his state passed a law changing the safety requirements for his business. Complying with the law will cost so much that Tim must close his business down. If he challenges the law, a court should find that the Legislature's failure to notify Tim of the proposed law in time to oppose it deprived him of property without due process of law.
False
Under the Articles of Confederation, each state had representation in the Confederation Congress proportional to its population.
False
Unless it has a time limit stated, an offer will always remain open until the offeree accepts it, rejects it, or makes a counter-offer.
False
Vangel Fashions sends out its spring and summer catalog to Cindy. Cindy falls in love with the cute dress featured on the front cover of the catalog. When Cindy calls to order the dress, she is informed that the company has sold out of the dress. Cindy is upset and claims that the store is in breach of contract. Cindy can successfully sue the catalog company on the ground that it presented an offer, which she accepted when she called to order the dress.
False
Judicial Review
Federal Courts
The Statute of ________________ requires that certain contracts to be in writing.
Frauds
Fred makes a statement that harms John's reputation. John files a lawsuit against him for defamation. Fred relies on the defense of "privilege." "Privilege" in a defamation case would be defined as:
Fred's right to make a statement about John even though it harms John's reputation.
The ____________ Clause of the First Amendment protects the rights of citizens to worship as they choose. [HINT: Two-word answer]
Free Exercise
All the business forms listed below have limited liability except:
General Partnership
In his decision in Marbury v. Madison, Chief Justice Marshall made each of the following rulings except:
He concluded that Marbury had waited too long to file his lawsuit.
Mabel is a single, 40-year-old who has borrowed money on numerous occasions. Her payment record has been good, except she has been delinquent in paying a few bills. Which of the following is true regarding credit information gathered on Mabel?
If Mabel is rejected for a loan because of the credit report, the lender must tell her the source of the report.
Interference with contract is a variety of what more generalized business (or economic) tort?
Interference with prospective economic advantage
A motel owner, tired of losing towels to guests, installs a video camera behind a two-way mirror to monitor the possible thefts. If a guest discovers the camera and sues, under what legal theory, if any, is the guest likely to prevail?
Invasion of Privacy
How is the Thirteenth Amendment different from most other provisions of the Constitution?
It applies both to state action and to private conduct.
How is the Eighteenth Amendment to the United States Constitution different from all other amendments?
It is the only amendment that has been repealed.
John and Bill have written a novel together. After the book is completed, they get into a dispute about the who owns the copyright to the work. Bill sues John in California state court. If the judge dismisses the case, what is the best explanation for her doing so?
Lack of jurisdiction over the subject matter
John and Bill are in a car accident. Bill files a lawsuit against John in state court. Before Bill filed the suit, John had moved to Switzerland. If the judge dismisses the case, what is the best explanation for her having done so?
Lack of personal ("in personam") jurisdiction over John
Legislation
Laws created by law-making bodies such as a state legislature
Copyright
Length of ownership recently expanded to 95 years or life-plus-70 years
Which of the following is a person likely to be unable to recover in a strict liability case?
Liquidated Damages
One of the following kinds of damages might be available in a breach of contract case, but would not be available in a tort case. Which one?
Liquidated damages
One of the following kinds of damages might be available in a breach of contract case, but would not be available in a tort case. Which one?
Liquidation Damages
An important decision in which the Supreme Court confirmed that the Supremacy Clause provides the national governnment, or entities created by it (like a national bank), with immunity from taxation or other actions by the States, was:
M'Culloch v. Maryland
Martin sells a parcel of rural property, but in the deed he reserves to himself the right to visit his former property, upon advance notice to the new buyer, to hunt, fish, and cut firewood. Which of the following describes the resulting relationship?
Martin has an easement in gross and his former parcel is the servient tenement.
Mary is waiting for a bus when she gets into an argument with Kevin. Just as the bus arrives, she shoves him, and he hits his head on a tree. She notices blood where his head hit the tree as she boards the bus. Which of the following is correct?
Mary's conduct can result in both a criminal prosecution and a civil lawsuit.
Regulation of Interstate Commerce
National Government
The ideals set forth in such documents as the Declaration of Independence are based on what school of legal thought?
Natural law
The two competing proposals for organizing the new government at the Constitutional Convention were known as the __________ Plan and the ___________ Plan.
New Jersey, Virginia
On April 22, George submits a written offer to buy Andrew's house. The offer states that it will remain open until May 1. On April 28, the house is destroyed by fire. On April 29, Andrew, unaware of the fire, mailed a letter accepting the offer. Which of the following is true?
No contract was formed, because the offer was terminated by the fire.
Dave, Earl, and Fred form a partnership. Earl is a general partner, while Dave and Fred are limited partners. They follow all the steps required under the law to establish a limited partnership, and include the term "limited" in the business' title. One of the company's trucks later collides with a car, causing Bert severe injuries. The company carries the minimum insurance required in their state, but not enough for Bert's damages. Furthermore, neither Earl nor the business has sufficient assets to cover Bert's injuries, so Bert names Dave and Fred in the lawsuit. Is Bert likely to succeed against Dave and Fred?
No, because Dave and Fred followed all the proper steps to become limited partners.
Lou's Video Arcade hires Wingo Joe as a new employee. Wingo Joe does such a good job that Lou appoints him assistant manager just before Lou takes a three week vacation in Hawaii. Lou returns and is surprised to find that Wingo Joe has acquired many new DVDs at a huge discount compared to what Lou had been paying, and that he has stocked the shelves with many out-of-print titles that Lou previously could not obtain. Lou is digesting all of this when an FBI agent arrives and places Lou and Wingo Joe under arrest for criminal copyright violations. Is Lou criminally liable for Joe's conduct?
No, because Lou knew nothing about Wingo Joe's aggressive new business plan.
Joe, who lives in California, is in Maine on vacation. He visits a local grocery store that does business exclusively in Maine, and as he is exiting, he slips on ice on the sidewalk and breaks his leg. After he is treated for his injures, Joe returns to California and initiates a lawsuit against the store. Can Joe's case go forward in California?
No, because the company did business exclusively in Maine.
George inherits a cabin next to the Superior National Forest. He decides to start a business to fly people into the Superior National Forest, and also to take them canoeing and via motorboat into the National Forest, all to hunt and to fish therein. Shortly after he signs long-term leases on an aircraft, some canoes, a powerboat, and hunting and fishing equipment, a new administration comes to power in Washington. Once the new administration is sworn in, the Secretary of the Interior unexpectedly announces that she is banning the flight of aircraft over the Superior National Forest, and also hunting and fishing within the National Forest. As a result, George's new business is effectively over. His lessors refuse to let him out of his contracts. Assuming that the Secretary's declaration is within the powers of her office, can he do anything about his long-term contracts?
No, because the power to ban hunting, fishing, and overflights was always within the Secretary's power.
Alex agrees to install a sprinkler system on Jane's property for $1,000. When he is half through, he realizes that he will not make a profit unless he is paid $1,200, and demands that she increase the fee or he will stop work. Jane agrees, and Alex completes the job. Jane then pays him $1,000, refusing to pay "one cent more." Can he enforce the remaining $200?
No, because there was no consideration for the additional $200.
If my neighbor occasionally cuts across my lawn after I have asked him not to do so and I sue him, which kind of compensatory damages is a court most likely to award?
Nominal damages
Which of the following is NOT a form of intangible property?
Oil and other mineral interests.
Oliver and his theater group sell tickets and put on a performance of a play written 30 years ago. The play is still copyrighted, but they do not obtain permission from the copyright owner. If the owner discovers this and sues for damages, what is the likely result?
Oliver and his group will likely have to pay damages for the infringement.
Diversity of Citizenship
One basis for a case to be filed in federal court
Phil is hired as a contractor to construct a swimming pool for Oscar. When the work is complete, Oscar discovers that the pool is actually two feet shorter than the contact called for. Which of the following would be the proper remedy if Oscar sues Phil over the improperly done construction?
Oscar will be entitled to the difference between the value of what he bargained for and what he actually received, under the doctrine of substantial performance.
Article I of the Constitution prohibits both the Congress and the state governments from doing which of the following?
Passing bills of attainder and ex post facto laws
Fair Credit Reporting Act
Permits consumers to obtain a free annual credit report
The power to render a decision affecting a specific person before the court is an example of:
Personal ("in personam") jurisdiction.
The term that refers to an appellate court's ability to make a rule of law that is binding on lower courts in the same jurisdiction is known as:
Precedent
Original Constitution
Prohibition on Ex Post Facto Law
Federal Trade Commission Act
Prohibits deceptive advertising
Trade Secret
Protected under state, not federal law
Rachel and Cyndi started a retail business called Zebra Toy Company. The business is operated as a partnership. Under partnership law:
Rachel is personally liable for any business contracts entered into by Cyndi.
Truth in Lending Act
Requires disclosures about the finance charges and interest rates in consumer loans
Second Amendment
Right to Bear Arm
Fifth Amendment
Right to Compensation for Property Taken for Public Use
First Amendment
Right to Petition
Unenumerated Right recognized by court decisions
Right to Privacy
Each of the following has been a source for the development of the American law except:
Russian law
Option
Separate consideration paid for the right to decide whether to enter into a contract
Patent
Shortest-lived of the major forms of intellectual property.
Slander differs from libel in that:
Slander is spoken defamation, libel is written defamation.
Condition Precedent
Something that must occur before a party is obligated under a contract
Which of the following forms of expression is not protected by the First Amendment?
Speech that might cause a violent reaction ("fighting words")
Police Power
State Governments
Concurrent Power
States and the National Governments
In California, a person injured by a defective product will most likely rely on what legal theory in suing the product's manufacturer?
Strict product liability
Novation
Substitution of parties to a contract with no change of duties
Jenny asks her teenaged neighbor, Tommy, to water her flowers while she is on vacation. He does so without incident for three days, but on the fourth day he suffers a severe electrical shock. An examination of Jenny's property afterward discloses that water leaking from an upstairs toilet that Jenny negligently repaired caused the electrical shock when the water soaked through the walls, eventually reaching some wires and causing the outdoor faucet that Tommy used to become electrified. If Tommy sues and Jenny's lawyer tries to get the case dismissed, what is his most likely argument that the court should dismiss the case?
That Jenny could not have foreseen that a negligent repair to a toilet would cause electrical injuries on the outside of her property.
Which of the following is not required for most valid, legal offers?
That the offer be in writing.
The document that established the first government of the new nation following the defeat of the British during the Revolutionary War was known as:
The Articles of Confederation.
In deciding to eliminate segregation of schools based on race in Brown v. Board of Education, the U.S. Supreme Court relied on which provision of the Fourteenth Amendment?
The Equal Protection Clause
Dodd-Frank, a 2010 consumer federal consumer protection statute, strengthened the provisions of which of the following statutes?
The Fair Credit Billing Act
If California passed a law requiring newspapers to submit what they printed for prior approval by the government, which provision of the U.S. Constitution would this violate?
The First Amendment
A police officer is searching Wingo Joe's house with a search warrant that allows him to look for stolen wide-screen television sets. While searching the bedroom, he discovers cocaine in the bottom drawer of a dresser under some shirts. What provision of the U.S. Constitution would the discovery of the cocaine violate?
The Fourth Amendment
Public Law
The body of law that affects government and members of society generally
Private Law
The body of law that pertains to the relationship between individuals
Fred induced his aunt, Nancy, who was completely dependent upon Fred for her daily needs, to sign a contract that was highly favorable to Fred. How is a court likely to interpret this transaction?:
The contract is voidable by Nancy, because Fred used undue influence to make Nancy sign.
Bilateral Contract
The exchange of binding promises
If someone is injured in a situation that no one could reasonably foresee, what will be the legal result?
The injured person will not be entitled to recover any damages.
Remedy
The kind of relief a court can grant
The "Great Compromise" at the Constitutional Convention was which of the following?
The new Constitution would set up a Congress with two houses: one apportioned by population, and one in which each state would have equal representation.
Which of the following is ordinarily true regarding acceptance of an offer?
The offeree must accept the offer without making changes to its terms
Sam is in the business of supplying car parts to a manufacturer. He sends an e-mail to the head of procurement for the car company stating he can supply 500 units of a standard part at $100 per unit on the first of the following month. The procurement head responds, "We accept, but we only need 400 units next month." Which of the following it correct?
The response creates a binding contract because it is for a shipment of goods.
Ben operates a business that delivers parts to auto repair shops. Ben forgets to fill up his tank, and runs out of gas on the way to a delivery. When he fails to show up, the shop refuses to pay him. If Ben takes the shop to court, how is the judge most likely to rule?
The shop will win because Ben failed to perform as he agreed.
If someone goes to a grocery store and purchases $100 worth of merchandise, and neither the purchaser nor an employee of the grocery store says anything during the transaction, which of the following is the best explanation of this in contract terms?
This transaction involved an implied contract.
In a California civil case, what percentage of jurors must agree for there to be a verdict?
Three-fourths
Execute
To ensure that laws passed by a legislative body are carried out and enforced
Legislate
To follow a law-making process to create new statutes
Adjudicate
To make a decision following a trial-type hearing
Regulate
To use an administrative process to make businesses and individuals conform to standards
All of the rights provided by the Sixth Amendment are criminal rights.
True
An agreement by Phil that he owes Larry $500 for a "tab" that Jerry ran up would have to be in writing.
True
Bert's driving privilege was suspended because he received too many citations. Bert believes that his state's department of motor vehicles violated his due process rights. The DMV has an appeal process, but Bert believes it will take too long for him to follow it, and wants to file a lawsuit in court immediately to challenge the agency's action. The court should require Bert to follow the administrative appeal process before it will hear his lawsuit.
True
Congress passed a law entitled the Communications Decency Act. The law imposed penalties for displaying "indecent" material online where children could see it. Subsequently, the U.S. Supreme Court ruled that the law conflicted with the First Amendment of the U.S. Constitution. The Communications Decency Act is therefore void.
True
Edward operates an ice cream stand during the months of June, July, and August. Ernest's ice cream machine is broken and needs a new part. He contracts to have the part shipped to him by special carrier. Ernest emphasizes that the part needs to be delivered by May 25 or he will not be able to be open on June 1 as he has advertised. If the shipper fails to deliver the part on May 25, Ernest will be able to recover consequential damages caused by the delay.
True
Employers must have a job applicant's permission to request her consumer credit report as part of the job screening process.
True
Ernest operates an ice cream stand during the summer months of May, June, July, and August. Ernest's ice cream machine is broken and needs a new part to run. He contracts to have the part shipped to him by special carrier. Ernest emphasizes that the part needs to be delivered by April 25 or he will not be able to be open on May 1 as he has advertised. If the shipper fails to deliver the part on April 25, Ernest will be able to recover consequential damages, such as lost profits, caused by the delay.
True
If California passed a law prohibiting the ownership of firearms, this would violate the Second Amendment.
True
In his decision in Marbury v. Madison, Chief Justice John Marshall concluded that the Judiciary Act of 1789 expanded the "original jurisdiction" of the Supreme Court beyond what was permitted by Article III of the Constitution.
True
Jason was the Director of Internal Communications at XYZ, Inc. Jason learned that Ruth, an employee of XYZ, had tested positive for HIV. Subsequently, Jason published an article in XYZ's company newsletter disclosing Ruth's positive HIV-test. Jason and XYZ may be held liable for disclosure of private facts because a reasonable person would consider the disclosure very embarrassing and the information is not of legitimate concern to the public.
True
Mark has spent years creating multiple generations of an orange tree, with the resultant strain being much hardier in cold weather, yet having the desirable characteristics of orange trees that can only grown in warmer climates. Mark will be able to get a patent for this tree.
True
Members of certain professions are permitted to form professional corporations.
True
One valid defense in a defamation lawsuit is that the statement made by the defendant is an opinion, because an opinion cannot be proven to be true or false.
True
Owners of preferred stock have preference over common stockholders in liquidation.
True
Procedural law establishes the processes for settling disputes.
True
The adversarial system implies that the truth in a court case will be best brought out by the contest between the two sides' opposing legal and factual theories.
True
The contractual concept of "impossibility of performance" is more properly described as "frustration of purpose" or "commercial impracticability."
True
The only one of the "four unities" that both a tenancy in common and a joint tenancy share is unity of possession.
True
The term for the contract clause that often invokes the parol evidence rule is an integration clause.
True
Under the Articles of Confederation, one of the problems that developed was that each state could impose taxes on goods crossing state lines or passing through a state.
True
Using the Commerce Clause, Congress can even regulate actions that take place wholly within one state if the effect of many such actions will have an overall effect on commercial activity.
True
Comparative negligence differs from contributory negligence in that:
Under comparative negligence, an injured person will often be compensated even if he or she was somewhat at fault
Henry sends Vern a letter offering Vern six months of consulting work to commence May 1. Vern replies, "I accept, but I cannot begin until May 20." Which of the following is true?
Vern's response is a counteroffer that Henry can accept or reject.
Delegation
Voluntary transfer of duties under a contract
In which of the following situations would you expect a court to find performance of a contract was excused because of impossibility?
When the outbreak of a war makes a rare metal from the war zone unavailable.
David and Wilma own property as tenants in common. David dies and his will provides that "All my property" goes to his sister Evelyn. What happens to the property?
Wilma becomes the sole owner of the property upon David's death.
Common Law right antedating the Constitution but recognized in it
Writ of Habeas Corpus
Alan swings a golf club at Bill intending only to frighten him. He stops his swing six inches from Bill's head, but because the club has a defective shaft, the head comes off and strikes Bill, causing severe injury. If Bill chooses to sue the golf club manufacturer, will that company likely be found liable for at least some of the damages?
Yes, because the defect in the club contributed in part to Bill's injury.
Terry is a sophomore in high school and lives at home with her parents. She goes to a local restaurant with some friends. They decide to play a game sometimes called "dine and dash," i.e., to order expensive meals and then to walk out one by one with the bill unpaid. Terry is the last one in the restaurant and is caught by the manager before she can leave. She has no money to pay the bill, and the restaurant sues her and her parents in small claims court. Putting aside any criminal aspects of this situation, and assuming Terry is 16, can the restaurant hold her or her parents liable at least for the cost of her meal?
Yes, because the restaurant bill is for food.
George owns property near the Superior National Forest. He is a private pilot and leases aircraft to take visitors on pontoon trips into the interior of the National Forest. A few weeks after he signs a three-year lease for a fleet of aircraft, the Secretary of the Interior unexpectedly announces that she is banning pontoon plane flights over the Superior National Forest. Can George do anything about his contract with the aircraft leasing company?
Yes, on the grounds of commercial frustration.
James and his band played a very familiar song. However, they made up different words for the song that were intended to be funny. James's version of the popular song with different words is known as:
a "rap"
An event that must occur before a duty to perform under a contract arises is:
a condition precedent
Which form of business organization allows its owners to obtain protection from lawsuits by creditors and provides the maximum ability to raise capital?
a corporation
The most all-encompassing interest that one can own in real property is known as:
a fee simple absolute.
From California's point of view, a corporation chartered in another state is:
a foreign corporation.
The freely revocable property right that one acquires in a parking space or a seat at a sporting event is known as:
a license
Which form of business organization allows its owners to obtain protection from lawsuits by creditors yet still gives the day-to-day flexibility of operating it like a partnership?
a limited liability company
"Trade fixtures" refers to:
a special kind of fixture installed by the tenant of commercial property.
Which of the forms of intellectual property is protected under state law instead of federal law?
a trade secret
When someone challenges an administrative decision, the challenge normally starts before a decision-maker known as a [an] _______________________ [HINT: 3-word answer].
administrative law judge
An appurtenant easement differs from an easement in gross in that:
an easement in gross has a servient tenement, but no dominant tenement.
The only kind of contract in California which, if it is deliberately breached, can lead to the award of punitive damages, is:
an insurance company
The only kind of contract in California which, if it is deliberately breached, can lead to an award of punitive damages, is:
an insurance contract.
A reward is an example of:
an offer for a unilateral contract.
______________ is a trial-type procedure used to resolve lawsuits informally out of court.
arbitration
A company's trade secret lasts for:
as long as it is kept confidential.
Wingo Joe decides to kill Val. He knows Val takes a predictable path on a nightly walk. One foggy evening, Wingo Joe shoots at what he thinks is Val, but upon getting closer discovers a tree stump that, in the fog, looks much like a person. Assuming that these facts could be proven in a court of law, Wingo Joe has committed:
attempted murder
Waldo pushes George off of a building, not knowing that a hit man hired by someone else to kill George is watching through a rifle scope from a window in a nearby building. Seconds before George strikes the pavement, he is killed instantly by the hit man's bullet through his head. Assuming these facts could be proved in court, Waldo has committed:
attempted murder only
A special relationship between two people involving one party holding property in safekeeping for another is known as a:
bailment
John responds to an ad for $5.00 sport shirts at a store. The advertisement makes no mention of the stock on hand for the sale. Although John arrives on the first day of the sale, he is told that the store has "just run out" of sport shirts at that price, but that it does have a large selection at $19.99. If he pursues the matter, of what is he likely to accuse the store?
bait and switch
When the consideration for a contract consists of a promise exchanged for a promise, that is an example of a ______________ contract.
bilateral
A written agreement signed by both a buyer and seller for the sale of a house that is due to close escrow next month, would be a:
bilateral, express, executory contract.
Under the Fair Debt Collection Practices Act, a collection company is legally permitted to:
call the debtor between 8 a.m. and 5 p.m.
Janice wrote the piano score and lyrics for a song called "Feelings of Love" for a music class that she was taking at a local community college. She turned it in to her professor as one of the assignments for course credit. Janice:
can enforce her copyright, but to do so she must first register her song with the Copyright Office.
Ownership of ______ stock permits someone to vote for the members of a corporation's board of directors, and to bring shareholder derivative lawsuits.
common
If two individuals were citizens of different states and one of them filed a lawsuit against the other for breach of contract in the federal district court, this is an example of:
concurrent jurisdiction due to diversity of citizenship.
Which of the following is not necessary to create most enforceable contracts?
consideration that is nearly equal between the parties.
Jennie is booked on a Southern Airlines flight from Los Angeles to Miami, Florida. Jennie, a resident of California, is going to interview for a new job with a Miami firm. After the flight completed a stop in New Orleans, Jennie, nervous both about flying and the upcoming interview, decided to have a cigarette to calm her nerves. She went back to the rear of the plane and lit up. Just as she lit up, she noticed a sign on the ceiling reading, "Cigarette Smoking Is Illegal On This Flight." Jennie was unaware that Congress had passed a statute only two months prior to her flight banning cigarette smoking on "all passenger and commercial airline flights within the United States." Jennie is charged with violating the statute making smoking illegal on the flight. If she challenges this statute on constitutional grounds, the court should find the statute:
constitutional, because Congress is exercising its federal commerce power.
The legal doctrine that provided that a plaintiff could not recover if he or she was even 1% at fault was known as __________ negligence.
contributory
Under the "business judgment rule":
courts often defer to good-faith business decisions of corporate executives.
The same conduct can sometimes lead to both _________ and ________ legal consequences.
criminal, civil
As it was originally interpreted by the Supreme Court, the Bill of Rights:
did not apply to the state governments.
Ellen lives in a small town in Illinois. She is injured by Rhoda, who is driving through the town on her way home to Colorado from a trip to Maryland. If Ellen sues Rhoda for her injuries in a federal court in Illinois, this is an example of concurrent jurisdiction because of ________________ (Hint: Three-word answer).
diversity of citizenship
Life insurance is an example of a _________ third-party beneficiary contract. [Hint: one-word answer]
donee
A[an] __________ permits someone who is not an owner to come onto someone else's land to do things like cut firewood, take water from a well, or hunt.
easement in gross
Unlike federal law, California not only requires that an employee be paid overtime for working more than 40 hours per week, but also for working more than _________ hours per day.
eight
Wingo Joe intends to defend the criminal charges against him by establishing that the police placed the idea to commit a crime into his mind, and that he was not already pre-disposed to commit that crime. This defense is known as:
entrapment.
Because the national government was established only with the ratification of the Constitution, its powers must be based on something found in that document. These powers are known as ____________ powers. [One-word answer]
enumerated
Yesterday you signed a contract that today you vaguely remember signing because you had been drinking heavily at the time. If the other party attempts to enforce it, a court will probably:
examine the degree of your intoxication when the contract was signed.
Before a person challenges an administrative agency decision in court, that person must ________ his or her administrative remedies.
exhaust
Before a trial occurs, an attorney might do all of the following except:
file an appeal
Real property would likely not include:
furniture
The Second Amendment
has only applied to the state governments since 2010.
Unlike a statute, in which every word states the law, with a court case only the court's ________ (the legal principle or rule needed to decides that one case) establishes the law.
holding
One way in which a negligence lawsuit in California differs from a product liability lawsuit is:
in a product liability case, the defendant's mental state is unimportant.
One distinction between an intentional tort and a strict liability tort is:
in a strict liability case, the mental state of the defendant is unimportant.
A prosecutor is required to obtain a grand jury ______________ to charge someone with a felony in federal court. [Hint: One-word answer]
indictment
In California a form of direct democracy is practiced that is known as:
initiative and referendum.
Tracey discovers that there is a video camera behind the mirror in her hotel room. She can sue the owner of the motel for _______________. [Hint: three-word answer]
invasion of privacy
Mediation
is a means of resolving a dispute through what is essentially monitored (or assisted) negotiation.
Arbitration:
is a trial-type procedure used to resolve lawsuits informally out of court.
Edna works for a corporation that has no pension plan. Shortly before she plans to retire anyway, the company president surprises her with an offer of a monthly payment for life if she agrees not to work for any competitor for 9 months. Edna accepts, and then retires. The agreement:
is a valid bilateral contract.
Nate wants to operate a medical marijuana "accessory" business. He discovers that in his state, although medical marijuana is legal for limited purposes, it is illegal to advertise any drug paraphernalia or instrument that can be used to ingest any drug. If Nate challenges the law, a court is most likely going to find that the law:
is a valid exercise of the state's police power, because advertising is given only limited protection under the First Amendment.
a leasehold:
is an estate in land but is not an ownership interest.
Officer Ernest has arrested Miranda as a criminal suspect. Miranda:
is entitled to be read her rights if Officer Ernest decides to interrogate her.
Edna works for a corporation that has no pension plan. Shortly before she plans to retire anyway, the company president surprises her with a promise of a monthly payment for life in thanks for her years of service. Edna accepts, and then retires. The agreement:
is not a valid contract because the only consideration to the company is work Edna has already been paid for during her years of service.
Edna works for a corporation that has no pension plan. She believes that, even with Social Security, she cannot afford to retire. One day, the company president surprises her with a promise of a monthly payment for life in thanks for her years of service. Edna accepts, and because of the company president's promise of a monthly payment, retires. The agreement:
is probably not a valid contract because there is no consideration for the president's promise, but Edna can enforce it under the doctrine of promissory estoppel.
A contract is void if:
it has an illegal object.
One of the primary disadvantages of the corporate form of doing business is:
its profits are taxable to the business entity, and again when paid as dividends.
The primary advantage of a subchapter "S" corporation is:
its treatment of shareholders for income taxation purposes.
The Supremacy Clause provides that:
laws passed by the national government prevail over inconsistent laws passed by the State governments.
Common law is to the judiciary as statutory law is to:
legislatures.
While someone in a criminal case is found either "guilty" or "not guilty," in a civil case, someone sued for money damages in a civil case may or may not be found _______ for the alleged conduct.
liable
Ed's friend Rob has incurred a substantial bill at a local car repair shop. Rob calls Ed one day in a panic because the shop owner is threatening to sue him. Ed calls the owner and agrees to pay Rob's debt if the owner will agree not sue to Rob at that time. If Ed then fails to pay and is later named in a lawsuit, the repair shop will:
lose because Ed's agreement was not in writing.
An ex post facto law:
makes something done yesterday punishable as a crime today, even though the act was legal when done.
Wingo Joe decides to kill Ron. He kidnaps Ron and puts him in the trunk of his car, intending to take Ron to the desert, kill him there, and bury his body. While waiting at a stoplight, Joe is rear-ended, and Ron is killed. Joe is most likely guilty of:
murder
A jury decision in a California civil case:
must be by at least a three-fourths vote of the jurors, i.e., 9-3 when using a twelve-juror panel.
Torts may generally be divided into three categories: intentional, strict liability, and _____________.
negligence
Dave is driving down the street, preoccupied with dialing his cellular phone. A child races into the street, and Dave slams on the brakes, barely managing to miss the child. The child scoops up the ball and runs back to play. Dave has committed:
no tort at all
When the parties to a contract are substituted for new parties through mutual agreement, this is known as a _______________.
novation
The parol evidence rule is a prohibition against introducing __________ evidence to vary, alter, or contradict a written contract. [Hint: one-word answer]
oral
A person who has been tried for a crime and been found not guilty:
ordinarily can never be tried for that crime again.
In order for a plaintiff to win a case involving intentional infliction of emotion distress, she must prove the defendant acted in an extreme or __________ manner.
outrageous
An exception to copyright law that allows someone to ridicule a copyrighted work is known as __________.
parody
The process a secured party must follow to protect its rights in certain property that has been pledged to guarantee a loan, against people other than the debtor, is known as:
perfection
The text of the original (unamended) Constitution:
places restrictions on what both the federal government and the States can do.
Ownership of ______ stock confers no voting rights, but such stock does have an advantage in the payment of dividends and in claims on getting the assets of a corporation if the corporation's assets are liquidated.
preferred
Equal Opportunity Credit Act
prohibits discrimination against persons applying for credit
The purpose of criminal law is to:
punish offenders with imprisonment and fines
The Civil Rights Acts of 1866 and 1871 prohibit discrimination based only on ________________.
race
Commercial speech:
receives a lesser standard of protection than political speech
The first clause of the First Amendment prohibits Congress from making an establishment of ________________.
religion
Norton enters into a contract with Paul to buy some land. After the contract is signed, the parties enter into escrow, and Norton discovers that Paul does not have clear title to the property. When Paul refuses to let him out of the contract, Norton sues, asking the court to set the contract aside. The remedy that Paul seeks is known as:
rescission
Civil law in the United States governs:
rights and duties between persons in our society.
One of the most important duties of a trial judge is to:
rule on whether evidence is admissible in the court proceeding.
The _______ Amendment is the only amendment that has a dependent clause.
second
The division of executive, legislative, and judicial powers among the three branches of government is known as:
separation of powers.
A national magazine published an article about Vicki, a famous television star. Vicki is upset because the information contained in the story is not correct. If Vicki sues the magazine:
she will need to show that the magazine either knew the story was false or acted with reckless disregard of the facts.
The term for a mandatory injunction that forces one side to go through with certain kinds of contracts is known as _________. [Hint: two-word phrase]
specific performance
As originally interpreted, the provisions of the Bill of Rights did not apply to the _______ governments. [HINT: One-word answer]
state
An order from a court directing someone to appear at a certain time and place for a court proceeding and, in some cases, to provide documents at that time, is known as a _________________. [Hint: one-word answer]
subpoena
A motion that is sometimes filed after discovery is completed but before a case is ready to go to trial is known as a motion for ____________. [Hint: two-word answer]
summary judgment
The Bill of Rights consists of the first ______ amendments to the Constitution.
ten
If one party to a contract delegates their duty to perform:
that party is still obligated to perform if the person to whom he has delegated the duties fails to perform.
A person who receives phone calls from a creditor at 3:00 a.m. is likely to seek redress under what federal statute?
the Fair Debt Collection Practices Act
A company advertises a pain relief ointment called "Aspercreme," a topical pain ointment. The packaging states "the strong relief of aspirin right where you hurt." The product did not contain any aspirin. The Federal Trade Commission is likely to find that:
the advertising was deceptive and the company must specifically state in its promotions that the product did not contain aspirin.
"Judicial review" refers to:
the authority of a court to determine whether laws passed by Congress are constitutional.
Shays' Rebellion helped lead to the drafting of the U.S. Constitution because:
the central government's lack of control over interstate commerce likely harmed the new nation's fragile economy.
A business advantage of which a corporate officer takes advantage that should have first been offered by the officer to his corporation is an example of:
the corporate opportunity doctrine.
Edna works for a corporation with no pension plan. Shortly before she plans to retire, the company president surprises her with an offer of a monthly payment for life in thanks for her years of service. Edna accepts, and retires in another state. If the company stops paying her, she could probably file suit to enforce the promise in all of these courts except:
the court of appeal in the county where the corporation has its headquarters.
In a case in which the plaintiff relies on strict product liability, the injured person must prove that:
the defendant manufactured or sold a product that was defective and that the defect caused harm.
Tommie, a six year-old child, was seriously injured when he stuck a fork into an electrical outlet. His parents sued the restaurant where the incident occurred, claiming it should have had child-protective guards on the outlets. Whether the restaurant is liable will be dependent upon whether:
the incident was foreseeable.
The requirements for a patent include all of the following except:
the invention must be profitable.
The prohibition against introducing oral evidence to vary, alter or contradict a written contract is known as:
the parol evidence rule.
"ONCHA" refers to:
the requirements to obtain property belonging to another through adverse possession.
A misdemeanor differs from a felony based upon
the seriousness of the crime and the length of possible imprisonment.
condemnation is:
the way that the government involuntarily acquires land for a public purpose.
Unlike the national government, the state governments do not require authority from the U.S. Constitution to legislate because:
they possess the police power from their existence prior to the Constitution.
Specific performance of a contract to sell real property is available:
to the buyer but not to the seller.
A __________ is the form of intellectual property protected under state law, not federal law.
trade secret
A governmentally-protected combination of words and symbols used to distinguish business or the goods or services thereof from those of other businesses is known as a _______________. [Hint: One-word answer]
trademark
The only crime defined in the Constitution is _____________. [One-word answer]
treason
It is normally possible to divide any legal question into at least:
two parts
Charlie is the manager of a boxer. To promote his client, he sets up a booth at the State Fair that announces, "$1,000 to anyone who can go three minutes with 'Crusher' Kelley." Charlie is making an offer for a ____________ contract.
unilateral
When someone must perform a service or do a task in order to accept an offer for a contract, that is known as a ______________ contract.
unilateral
The three ways that power can be organized in a government are to have a strong central government (only); or to have a sharing of power between the central government and local governmental entities; or to have a weak central government, with most power held by the local governmental entities. These three models are known as the ______________, ______________, and ______________ systems.
unitary, federal, confederal
The process by which judges and/or lawyers question potential jurors before trial to make sure that they are unbiased is known as:
voir dire.
Special and general __________ deeds are used in many other states, but are generally not used in California for the transfer of real property.
warranty
Knowing the historical context of when a law was adopted is most important in helping to understand:
why the law was adopted.
Wingo Joe is charged in federal court with violating the civil rights of a person trying to register voters. He is tried in federal court and found not guilty. It happens that there is also a state statute that prohibits the same conduct, and the local district attorney decides to prosecute Wingo Joe for the same conduct that led to his federal trial. Joe:
will have to go to trial again in the state prosecution because the state is a different "sovereign."
Maude, who only weighed 125 pounds, was denied employment with Trucks R Us as a warehouse worker because she didn't meet the weight requirement of 160 pounds. Trucks argued the weight requirement was reasonable because warehouse workers often have to lift things weighing up to 100 pounds. If she sues Trucks, she will probably:
win because the weight requirement doesn't appear necessary for lifting 100 pounds, and would tend to weed out females, who often weigh less than males.
Millie ordered clothes from a mail-order catalog. No time was specified about when the goods would be shipped. In such a case the Federal Trade Commission requires that the company must ship the goods to Millie:
within 30 days after receiving the order.
In order to obtain a free annual credit report from each of the three major credit reporting agencies, someone should go to which of the following websites?
www.annualcreditreport.com
