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The federal government does not regulate activity that affects only: a. foreign trade b. interstate commerce c. intrastate commerce d. none of the above

Intrastate commerce

Which of the following statements is true of a life estate?

It gives a person the right to use property only for his own lifetime or for a time that is measured by the lifetime of somebody else.

Lilly hired Sherri to sell her house and agreed to pay her a 6 percent commission rate. Sherri failed the real estate licensing test but was able to find a buyer for Lilly's house. Lilly was unaware of Sherri's licensing situation. Which of the following statements is true in regard to the situation of the parties?

It is generally held that agreements by unlicensed persons to perform regulated services or engage in regulated businesses are illegal and therefore unenforceable.

Which of the following is correct regarding a novation?

It must indicate through language or surrounding circumstances that the obligee consented to the substitution of one obligor for another.

Which of the following statements is true of a tenancy at sufferance?

It occurs when a tenant remains in possession of the property after the expiration of a lease.

Which of the following statements is true of the Americans with Disabilities Act (ADA)?

It protects a qualified individual with a disability from discrimination on the basis of that disability.

Which of the following statements is true of the Equal Pay Act?

It requires that both sexes have equal pay for jobs that require equal responsibility and that are performed under similar working conditions.

Jack may return the game and receive a full refund.

FAB has three partners, Ramon, Janna, and Jackie, and $20,000 in assets when it begins its winding-up process. FAB owes $20,000 to a supplier, $25,000 on a bank note, and $5,000 to Jackie for a loan she gave to the partnership. FAB does not have a partnership agreement. What financial rights and obligations does Jackie have?

Jackie must pay a net amount of $5,000

Jennifer's actions changed her status from a limited partner to a general partner.

Jess is 17 years old and bought a new computer from Wallie. Three days after he turned 18, Jess sold the computer to his sister. Which of the following is the most likely result regarding any attempt by Jess to disaffirm the contract with Wallie?

Jess has indicated his intent to be bound by the contract by selling the computer and can no longer disaffirm.

A significant different between a joint venture & a partnership is that:

Joint venturers sometimes are held to have less implied & apparent authority than partners.

Laila rented an apartment from Imani Inc. Her guest, Joseph, slipped on a banana peel on the common stairway as he entered the apartment building. Given the scenario, _____.

Joseph can recover compensation from Imani Inc. if he can show that it did not use reasonable care in maintaining the stairway

A minority shareholder in a close corporation has little power and may be ___________ by the majority on issues such as reduction or elimination of dividends

"frozen out"

'Mens Rea' means a. "guilty mind" b. "reasonable-man" (person) standard c. "the rule of masses d. none of the above

"guilty mind"

When naming an LLC, the name must include _____________ or some other indication of the limited liability feature for the public

"limited liability company"

Like a corporations, courts will ___________ between an LLC and its members if it is found that the LLC was created with the intent to defraud creditors

"pierce the corporate veil"

C, D & E form a partnership. They make no express agreement concerning how profits are to be divided. Of the $30,000 initial capital of the firm, C & D each contributed $12,000. E contributes $6,000. The partnership had a profit of $15,000 in the first year. Given this info, D's share of the profits is:

$5,000 (1/3 of total)

If the United States Attorney General wins an Americans with Disabilities Act (ADA) case, the civil penalties assessed against the defendant can include which of the following? (Check all that apply)

$50,000 for a first violation Up to $100,000 for any subsequent violation

The court in Moren v. Jax Restaurant reached which of the following conclusions?

1. Moren's conduct was in the ordinary course of business, so the partnership is bound by it 2. the partnership must indemnify Moren for the damages caused by her negligence

The court in Jefferson Insurance Co. v. Curle made which of the following conclusions?

1. Shelley had a fiduciary obligation to Curle 2. Shelley's cancellation of the policy was binding on the partnership and Curle

How may a partnership ratify an unauthorized partner transaction?

1. accepting the benefit of the transaction 2. failing to repudiate it

Which of the following must a partner turn over to the partnership?

1. any profit earned from use of partnership property without the consent of the partners 2. earnings from any activity related to the partnership's business

Which of the following are steps in the termination of a partnership?

1. dissociation 2. winding up 3. termination

Which of the following are duties that partners owe the partnership?

1. duty to inform 2. duty of loyalty 3. duty of faith and fair dealing

Which of the following are types of conduct for which a partner is liable to the partnership?

1. knowing violation of the law 2. gross negligence 3. recklessness

What are the requirements for partnership by estoppel to apply?

1. the participants tell others they are partners 2. a third party relies on the assertion that the participants are partners 3. the third party suffers harm

A partner has a conflict of interest whenever the partnership does business with which of the following?

1. the partner 2. a company the partner has an ownership interest in 3. the partner's family

Under which of the following circumstances is a partnership not created?

1. the partners operate a charitable organization and do not intend to make a profit 2. the partners do not share profits

Which of the following are factors that a court will consider in determining a partnership exists?

1. whether there is a partnership agreement 2. whether the parties intend to make a profit 3. how losses and profits are divided 4. whether the parties are involved in the management of the business

A partnership is responsible for the intentional and negligent torts of a partner that occur under what circumstances?

1. with the actual authority of the partners 2. in the ordinary course of the partnership's business

Section ______ of the ______ recognizes the idea of an unconscionable contract.

2-302; Uniform Commercial Code

Astrid and Razi formed a partnership in which they agree to share profits 60 percent to Astrid and 40 percent to Razi. Losses will be shared

60 percent to Astrid and 40 percent to Razi, unless otherwise agreed

Which of the following is true regarding how courts apply the UCC's treatment of the issue of unconscionability?

A consumer dealing with a merchant is more likely to prevail on a claim of unconscionability than is a merchant dealing with another merchant.

This type of zoning ordinance is commonly used to control billboards.

A control of aesthetics

This type of zoning ordinance regulates the setback from the property lines or a portion of a lot that cannot be covered by a building.

A control of height and bulk

Which of the following is a taxable entity?

A corporation

Spencer sold his sandwich shop to Irene and signed an agreement that he would not compete with her for one year within the same city. Which of the following is true regarding the agreement?

A court would likely uphold the agreement on the basis that it is no broader than reasonably necessary to protect the buyer's interests

From a risk standpoint, a shareholder or a limited partner is better off than what other business entity?

A general partner

What is an element of a joint venture?

A measure of proprietorship of joint control of the enterprise

Which of the following would not fall under the Americans with Disabilities Act (ADA) mandate to accommodate individuals with a disability?

A private club

Which of the following is a right to enter another person's land and remove some product or part of it?

A profit

Which of the following would fall under the Americans with Disabilities Act (ADA) mandate to accommodate individuals with a disability? (Check all that apply)

A public park A museum A homeless shelter

Bob and Ann are divorcing. Ann is to receive a monetary settlement in return for conveying her interest in the parties' home to Bob. She wishes to convey any interest in the home that she has to him, but she does not want to make any additional promises in regard to title to the home. Which of the following should she use in order to convey her interest to Bob?

A quitclaim deed

Which of the following is an "ordinary owner" who sells her house?

A seller who was neither the builder nor the developer of the residential property

Which of the following is an illegal agreement in violation of anti-wagering statutes?

A wagering contract

Which of the following is not an invasion of privacy? A) A doctor calling a patient at work to discuss the dosage of prescription medications. B) A bill collector calling the debtor at home several times a day. C) The police illegally searching a suspect's home. D) Obscene phone calls

A) A doctor calling a patient at work to discuss the dosage of prescription medications.

The Americans with Disabilities Act covers people with: A) AIDS and AIDS-related illnesses. B) substance abuse addictions. C) neither (a) nor (b). D) both (a) and (b).

A) AIDS and AIDS-related illnesses.

The following would be considered a bona fide occupational qualification (BFOQ) permitted by Title VII: A) An employer refuses to employ a man to supervise her "women only" gym. B) An employer refuses to hire an African-American woman to work in his jewelry store solely because of her race. C) An employer refuses to hire a man with an Asian heritage as a bouncer in a bar because he believes people with such a heritage are not aggressive enough. D) all of the above.

A) An employer refuses to employ a man to supervise her "women only" gym.

While jogging across a golf course, Ralph is hit on the head by a flying golf ball. Maurice, the golfer, failed to yell the customary term "fore" before hitting the ball which would have warned Ralph to beware of the ball. If Ralph sues Maurice for negligence, Maurice may use which of the following defenses? A) Assumption of risk B) Contributory negligence C) Comparative negligence D) All of the above

A) Assumption of risk

Maya, a merchant, offers to sell Bonnie, another merchant, 3,000 laptop computers in a signed letter containing all the terms of the offer. The letter states that Maya will keep the offer open for four weeks. One week later, Maya writes Bonnie another letter attempting to revoke her offer. One week after that, Bonnie writes Maya a letter attempting to accept Maya's original offer. Here: A) Bonnie's acceptance is effective and a contract is created. B) Maya's revocation is effective. C) the contract is rendered void. D) none of the above.

A) Bonnie's acceptance is effective and a contract is created.

Judith is about to graduate from nursing school. The hospital has offered Judith a nursing position upon graduation. This contract contains a: A) Condition precedent B) Condition subsequent C) Condition concurrent D) None of the above

A) Condition precedent

On his way to work, Ronnie stops at the gas station to buy some gas. He pulls up to the pump, puts the gas in his vehicle and pays using his credit card. This is an example of which type of contract? A) Implied B) Express C) Quasi contract D) Unenforceable

A) Implied

Jack, a high school freshman, has agreed to purchase a term paper from Ashton to turn in for his upcoming assignment. Ashton is a senior and recently turned 18 years old. Which of the following best describes this agreement? A) Jack and Ashton have an agreement but not a contract. B) Jack and Ashton have a contract that may be voided by Jack only. C) Jack and Ashton have a contract that may be voided by Ashton only. D) Jack and Ashton have a contract that neither party may void.

A) Jack and Ashton have an agreement but not a contract.

Rachel agrees to sell her boat worth $3000 to Jake for $2000, but she later refuses to complete the deal. Jake sues for damages. What is the likely outcome? A) Jake will be awarded $1000 in compensatory damages. B) Rachel will be forced to sell the boat to Jake for $2000 under the doctrine of specific performance. C) Rachel will be forced to sell the boat under the doctrine of specific performance by will receive the full value of $3000 from Jake. D) Jake will be awarded $3000 in compensatory damages that he may use to buy a different boat.

A) Jake will be awarded $1000 in compensatory damages.

Jessica offers Preston $1,000 to paint her house. Before Preston can accept or reject the offer, the house burns to the ground. Preston hears about the fire and runs to Jessica's house, which is now a pile of ashes, and pours paint all over it. Preston tells Jessica that he as impliedly accepted the offer by "painting" the house and Jessica must fulfill her obligation and pay him the $1,000. Which of the following statements best describes the situation? A) Jessica wins. The offer was terminated when the house burnt down. B) Jessica wins. Preston cannot impliedly accept an offer. C) Jessica wins. Preston must have a written document to prove the offer existed. D) Preston wins. He fulfilled his obligation to the contract.

A) Jessica wins. The offer was terminated when the house burnt down.

Lakisha signed a permission slip for her daughter to participate in a field trip at school. The permission slip contained a clause releasing the school district of all liability if the child was injured on the field trip. The bus driver was under the influence of alcohol and caused a traffic accident. Lakisha's daughter suffered a broken arm in the accident. Which of the following statements is true? A) Lakisha may sue the school district because the permission slip contained an exculpatory clause. B) Lakisha may sue the school district because the permission slip is contrary to the usury law. C) Lakisha may not sue the school district because the permission slip contained a risk-shifting clause. D) Lakisha may not sue the school district because she waived her right to sue by signing the permission slip.

A) Lakisha may sue the school district because the permission slip contained an exculpatory clause.

Laura, a dog breeder, sends Michelle a letter on October 15th offering to sell Michelle her 1966 Mustang for $7,000 and states that the offer expires on October 31st. On October 21st, Laura sends Michelle a second letter revoking her offer to sell the car. Before receiving the revocation, Michelle sends Laura a letter accepting the offer on October 22nd. Which of the following statements is true? A) Laura has successfully revoked her offer. B) Laura may not revoke her offer because it is in writing. C) Laura may not revoke her offer because Michelle has accepted. D) Laura may not revoke her offer because Laura is a merchant.

A) Laura has successfully revoked her offer.

The American soldiers that captured Saddam Huessin were not entitled to the reward offered by the United States government based on: A) Preexisting Duty B) Past Consideration C) Illusory promises D) None of the above

A) Preexisting Duty

T Upon winning the lottery, Lillian orally promised $3 million to the local parks department to construct a new playground. The total cost of the playground is $5 million so the parks department launched a huge fundraiser to get the additional $2 million. After months of work, the parks department had raised the additional funds and requested the $3 million from Lillian. Lillian informed the parks department that she had changed her mind and was no longer willing to donate the money. Under which of the following should the parks department file suit? A) Promissory Estoppel B) Breach of contract C) Breach of quasi-contract D) The parks department has no grounds for suit.

A) Promissory Estoppel

Rebecca voluntarily goes for a motorcycle ride with Steve, who is obviously drunk. Steve drives the motorcycle off the road and crashes. Rebecca's leg is broken and she sues Steve for her medical expenses totally $20,000. If Rebecca and Steve live in a mixed comparative negligence state and the jury determines that Rebecca is 60% liable for her own injuries, A) Rebecca will recover nothing. B) Rebecca will recover $20,000 from Steve. C) Rebecca will recover $12,000 from Steve. D) Rebecca will recover $8,000 from Steve.

A) Rebecca will recover nothing.

An illegal non-compete clause found in an employment contract is an example of: A) Restraint of trade B) an exculpatory clause C) unequal bargaining power D) a contract injurious to public service

A) Restraint of trade

If Ronald argues that a real estate contract was not valid because it was not reduced to written form, the Statute of Frauds is satisfied if: A) Ronald admits to the existence of the real estate contract in court testimony. B) Ronald does not submit compelling evidence in court C) neither (a) nor (b) D) both (a) and (b).

A) Ronald admits to the existence of the real estate contract in court testimony.

When a minor reaches the age of majority: A) She may disaffirm a contract for a reasonable time after reaching majority. B) She can no longer disaffirm. C) She may disaffirm only under the supervision of an adult. D) none of the above.

A) She may disaffirm a contract for a reasonable time after reaching majority.

Sloan and Tracey enter into an oral contract that states Sloan will mow Tracey's grass every Friday for "as long as he is able" and Tracey will pay Sloan $50 each Friday. Which of the following statements is true? A) The contract is enforceable. B) The contract is unenforceable. C) The contract is only enforceable for one year. D) The contract is only enforceable on a week by week basis.

A) The contract is enforceable.

Which of the following is registered for a ten year term but may be filed repeatedly upon expiration? A) Trademark B) Patent C) Copyright D) Trade Secret

A) Trademark

Which of the following is used by a business to distinguish it's product from competitor products? A) Trademark B) Patent C) Copyright D) Trade Secret

A) Trademark

Fraud may arise through making reckless statements. A) True B) False

A) True

Under the UCC, acceptance is effective upon: A) dispatch by authorized means. B) upon the formation of subjective intent. C) upon receipt. D) none of the above.

A) dispatch by authorized means.

Generally, when the defendant does not owe a duty to the public and when the agreement was fairly entered, exculpatory clauses pertaining to hazardous recreational activities are: A) enforceable. B) unenforceable. C) unconscionable. D) void.

A) enforceable.

When Beatrice turns back the odometer on the van she is trying to sell, she is guilty of: A) fraud. B) misrepresentation. C) silent inducement. D) caveat emptor.

A) fraud.

Mikela contracted to sell Will her house for $1. If Mikela wants to rescind the contract based on undue influence, she must prove that Will: A) induced her to sell her house by unfair persuasion. B) misrepresented material facts. C) made wrongful threats. D) all of the above.

A) induced her to sell her house by unfair persuasion.

Substantial performance: A) is performance that falls short of complete performance in minor respects but does not deprive the promise of a material part of the consideration that was bargained for. B) requires an honest attempt to perform. C) allows the promisor to be compensated for his performance. D) all of the above.

A) is performance that falls short of complete performance in minor respects but does not deprive the promise of a material part of the consideration that was bargained for.

When a person contracts to do an act for which he is not licensed, the contract is enforeceable if the licensing statute is: A) revenue raising. B) regulatory. C) administrative. D) a resolution.

A) revenue raising.

Minors must pay the reasonable value of: A) shelter. B) music lessons. C) language classes. D) driving classes.

A) shelter.

An illusory promise is one that is worded: A) so vaguely as to be elusive. B) in a way that allows the promisor to decide whether or not to perform the promise. C) in such arcane language as to be meaningless. D) none of the above

A) so vaguely as to be elusive.

Which of the following is not an example of duress? A) taking advantage of someone's financial condition B) withholding someone's property without justification C) threatening economic harm D) threatening to breach a contract

A) taking advantage of someone's financial condition

If a contract is divisible: A) the legal parts can be separated from the illegal parts. B) the court will not enforce any part of the contract. C) neither (a) nor (b). D) both (a) and (b).

A) the legal parts can be separated from the illegal parts.

Which of the following would probably require specific performance? A) the sale of a one-of-a-kind vintage necklace. B) a contract for Amy to paint Bill's house. C) a contract for Amy to sing at Bill's party. D) none of the above.

A) the sale of a one-of-a-kind vintage necklace.

When a contract is partly written and party printed: A) the written terms control. B) the printed terms control. C) the contract is unenforceable. D) none of the above.

A) the written terms control.

In many States, intoxicated persons are treated like people who lack mental capacity if: A) they were so intoxicated that they were unable to understand the nature of the business at hand when they entered into the agreement. B) they were so drunk as to be considered less-than-ordinary-intelligence. C) they cannot pass a field sobriety test. D) all of the above.

A) they were so intoxicated that they were unable to understand the nature of the business at hand when they entered into the agreement.

A liquidated debt is: A) undisputed. B) disputed. C) a debt incurred in the sale of alcohol. D) none of the above.

A) undisputed.

The following are examples of "ultrahazardous" activity: A) using explosives. B) investing in high-risk stocks. C) negligent supervision of staff. D) all of the above

A) using explosives.

What is true of limited partnerships?

Limited partnership must file a certificate with the secretary of state

______ authority can either be express or implied.

Actual

Which of the following statement about agencies is true? a. Agencies are created by the voting public b. Agencies are created by Congress c. Agencies only have enough power to interpret legislation d. Agency heads are elected officials

Agencies are created by Congress

Which of the following is NOT nontestimionial evidence? a. Fingerprints b. Hair samples c. Saliva d. All of above

All of the above

Under RUPA, when a partnership that has suffered losses winds up, ....

All partnership creditors are paid first.

Suppose an assignor assigns a contract to an assignee and later wrongfully assigns the contract to a second assignee, who pays for it without notice of the first assignment. According to the ______ rule, the first assignee has priority.

American

Regarding the management of an LLP, which of the following are true? (Check all that apply)

An agreement can alter management responsibilities No partner can join the LLP without unanimous consent

Which of the following is correct regarding the rights an assignee has under an assigned contract?

An assignee is entitled to all the rights her assignor had under the assigned contract. If the promisor does not perform, the assignee can sue for nonperformance.

The following is false regarding the bona fide occupational qualification (BFOQ) permitted by Title VII.

An employer may refuse to hire a man with an Asian heritage as a bouncer in a bar because he believes people with such a heritage are not aggressive enough.

Anne and Mike were winding up their partnership. Mike was approached by a person who wanted the partnership to do some work for him. Mike agreed that the partnership would do the work. Generally speaking, in such a situation

Anne is liable unless she filed a statement of dissolution with the Secretary of State within 90 days of when Mike entered the contract

With an open listing agreement, who other than the broker is also entitled to find a buyer for the property? (Check all that apply)

Another broker The seller A third party

RUPA holds that property belongs to the partnership if it was transferred to:

Any partner by transfer document indicating the partner's status as a partner or otherwise indicating that a partnership exists

__________ authority may arise from customs in the trade.

Apparent

Ed and Phil want to buy some land together and own it as co-owners, but they each want the right to dispose of his interest in the property at death as he sees fit. Which of the following is the way that they should own the property?

As tenants in common

The following is/are true of the Affordable Care Act: A) employers are required to increase their current mental health insurance coverage. B) Congress has passed and the President signed the act. C) extends insurance to all people living within the United States. D) all of the above.

B) Congress has passed and the President signed the act.

Deb's doctor has diagnosed her as medically insane because she suffers from periodic paranoid delusions. A) Deb does not have the capacity to contract. B) Deb may have the capacity to contract if, despite her delusions, she has sufficient capacity to understand the nature of effect of the contract. C) Deb has the capacity to contract if she is literate. D) none of the above.

B) Deb may have the capacity to contract if, despite her delusions, she has sufficient capacity to understand the nature of effect of the contract.

Freddy's strongest competitor ran a radio advertisement fraudulently stating that Freddy uses horse meat in his hamburgers to cut costs. Freddy's business has dropped by 50% since the advertisement began running on the local station. Freddy wants to sue his competitor but is unsure as to which tort has been committed. Which of the following torts is most applicable to Freddy's situation? A) Assault B) Disparagement C) Slander D) Conversion

B) Disparagement

The common defenses to negligence are based on which of the following concepts? A) Each person owes a duty to society to conduct them self in a way that avoids harm to others. B) Each person owes a duty to them self to exercise reasonable care to avoid harm to them self. C) Each person owes a duty to society to exercise reasonable care to avoid harm to them self. D) All of the above

B) Each person owes a duty to them self to exercise reasonable care to avoid harm to them self.

Preston offered to pay Derrick $2,000 if Derrick will build Preston a new porch on his house. Before Derrick can accept or reject the offer, Derrick unexpectedly dies from a heart attack. Preston sues Derrick's father, Jacob, stating that Jacob must now build the porch or pay someone else to fulfill Derrick's obligations. Which of the following statements best describes this situation? A) Jacob wins. Preston had not paid Derrick before his death. B) Jacob wins. The offer was terminated when Derrick died. C) Jacob wins. Preston cannot prove Derrick had an obligation. D) Preston wins.

B) Jacob wins. The offer was terminated when Derrick died.

Jess is 17 years old and bought a new computer from Wallie. Three days after he urned 18, Jess sold the computer to his sister. A) Jess may disaffirm the contract with Wallie. B) Jess has indicated his intent to be bound by the contract by selling the computer and can not longer disaffirm. C) Jess may recover the cost of the computer from Wallie. D) all of the above.

B) Jess has indicated his intent to be bound by the contract by selling the computer and can not longer disaffirm.

John, the promisor, has contracted with Marla to paint Marla's house by October 15th. John contacts Marla on October 10th to state that he will not complete the job by the specified date. Which of the following statements is true? A) John has committed an anticipatory breach. Marla must wait until after October 15th to sue John for breach of contract. B) John has committed an anticipatory breach. Marla may sue John immediately for breach of contract. C) John has not breached the contract until October 15th. D) John has not breached the contract until October 15th and still may be able to fulfill his obligation.

B) John has committed an anticipatory breach. Marla may sue John immediately for breach of contract.

Paul sends Kristy an order for 200 china plates for his restaurant. Since her supplier is late and her stock is low, Kristy sends Paul 100 china plates and 100 china bowls. A) Paul must accept the shipment. B) Kristy's offer is considered a counteroffer. C) Paul must accept the shipment, but Kristy must give him a discount. D) none of the above.

B) Kristy's offer is considered a counteroffer.

Lori purchased a used car for $5,000. After purchasing the car, Lori felt as though she had made a mistake and had overpaid for the car. Which of the following statements is true? A) Lori may rescind the contract based on a unilateral mistake. B) Lori may not rescind the contract based on a unilateral mistake. C) Lori may rescind the contract within a reasonable period of time. D) Lori may not rescind the contract based on a mutual mistake.

B) Lori may not rescind the contract based on a unilateral mistake.

Una believes that her next door neighbor is physically abusing her young children. She often hears the children screaming and has noticed large bruises on their arms and legs. Una does not personally know the children's mother or father but is genuinely concerned for the children's welfare and places a call to the police. After a thorough investigation, the parents are found to not be abusing the children. Is Una liable to the parents for defamation? A) No, the parents cannot prove Una called the police B) No, Una is protected by absolute privilege C) Yes, Una committed the tort of slander D) Yes, Una committed the tort of libel

B) No, Una is protected by absolute privilege

Which of the following creates a temporary monopoly to encourage the development of new technologies? A) Trademark B) Patent C) Copyright D) Trade Secret

B) Patent

Sherita was stopped at a traffic light when Ronald ran into the back of her car with his truck. Ronald's insurance agency sent Sherita a check for $2,000. The following statement was printed on the memo portion of the check "The receiver of these monies waives all rights to file future legal action against Ronald." Which of the following statements is true? A) The contract lacks consideration. B) Sherita's agreement to forbearance is consideration. C) Sherita may cash the check and sue Ronald anyway. D) Sherita may cash the check and sue Ronald later if she incurs any future medical expenses.

B) Sherita's agreement to forbearance is consideration.

Which of the following statements about the UCC is NOT true? A) One purpose of the UCC is to promote commerce across state lines. B) The UCC was developed to protect merchants from consumers. C) The UCC has not been adopted by all 50 states within the U.S. D) Individual states may choose from several options when considering adopting sections of the UCC.

B) The UCC was developed to protect merchants from consumers.

Peter hired Alicia to burn his house down so that Peter could collect the insurance money. He paid Alicia but Alicia never set the fire. If Peter sues Alicia for breach of contract, what is the likely outcome? A) The court will force Alicia to return Peter's money B) The court will not force Alicia to return Peter's money. C) The court will find the contract to be unconscionable and order Alicia to return half of Peter's money. D) The court will find the contract to be unconscionable and order Alicia to return all of Peter's money.

B) The court will not force Alicia to return Peter's money.

Jamison, the owner of "J Books", agrees to personally guarantee a $20,000 loan from the bank to "J Books". Which of the following statements is true? A) The principal objective rule applies. B) The leading object rule applies. C) The partial performance rule applies. D) All of the above

B) The leading object rule applies.

Fred asked his neighbor Madeline to care for his cat while he was on vacation. Madeline agreed and Fred brought the cat to Madeline and left for the beach. Upon returning home, Fred thought that the cat would be happier at Madeline's house and never retrieved the cat. If Madeline asks Fred to retrieve the cat and Fred's does not, Madeline may use Fred for the tort of: A) Illegal dumping B) Trespassing C) Intentional interference with personal property D) Assault

B) Trespassing

When a suit is brought for a primary purpose other than the one for which such proceeding are designed, one can bring the following type of suit: A) malicious prosecution. B) abuse of process. C) invasion of privacy. D) none of the above.

B) abuse of process.

Shrinkwrap contracts: A) are inherently void. B) are usually enforced by courts. C) state that a buyer must be aware of the terms of the contract for the contract to be binding. D) none of the above.

B) are usually enforced by courts.

Under the UCC "battle of the forms," a timely expression of acceptance that includes terms that are different from those stated in the offer: A) does not create a contract. B) creates a contract. C) creates a quasi-contract. D) is barred by promissory estoppel.

B) creates a contract.

Ratification of a contract which is voidable for lack of capacity: A) must be in writing. B) cuts off the right to disaffirm. C) does not cut off the right to disaffirm. D) both (a) and (c).

B) cuts off the right to disaffirm.

When Kate threatens to break Bob's arm if he doesn't sign a contract to give Kate a kidney, Kate is guilty of: A) undue influence. B) duress. C) unilateral mistake. D) fraud.

B) duress.

The following is/are true of the Fair Labor Standards Act: A) professional staff are paid time and a half. B) employees must be paid a minimum hourly wage. C) all employees are paid double their pay for any overtime. D) all of the above.

B) employees must be paid a minimum hourly wage.

When someone promises not to file a law suit in exchange for a promise, it is called: A) promissory estoppel. B) forbearance. C) litigious conditional consideration. D) none of the above.

B) forbearance.

A revenue-raising statute: A) is designed to protect the public. B) if violated, will usually not result in a contract being unenforceable. C) if violated, will usually result in a contract being unenforceable. D) none of the above.

B) if violated, will usually not result in a contract being unenforceable.

Equitable remedies include: A) punishment damages. B) injunctions. C) nominal damages. D) liquidated damages.

B) injunctions.

For consideration to be valid: A) the promises exchanged must be of equal value. B) it must have legal value. C) it must have monetary value. D) all of the above.

B) it must have legal value.

A minor may NOT disaffirm a contract made for: A) goods. B) medical care. C) services. D) education.

B) medical care.

Lee pays Wanda $100 to obey the speed limit on their trip to the Rockies. Lee's promise to pay is: A) supported by consideration. B) not supported by consideration. C) supported by conditional consideration. D) wholly enforceable by Wanda

B) not supported by consideration.

Todd promises to buy Raj's smartphone for $500. After Todd delivers the smartphone to Raj, Raj refuses to pay. Todd may recover under the doctrine of: A) quasi-contract. B) promissory estoppel. C) unilateral contract. D) none of the above.

B) promissory estoppel.

Donald pays Julie $1,000 to paint his barn. Halfway through her painting, Donald tells her that he wants to revoke the offer. Donald may: A) not revoke because the contract is unilateral. B) revoke, but is liable to Julie for the reasonable value of her work. C) not revoke because the contract is an option contract. D) may revoke because the contract is a quasi-contract.

B) revoke, but is liable to Julie for the reasonable value of her work.

Title VII encompasses: A) discrimination based on age. B) sexual harassment. C) discrimination based on disability. D) all of the above.

B) sexual harassment.

Tina makes an oral agreement to purchase Gene's stereo for $800. Under the UCC: A) the agreement is barred by promissory estoppel. B) the agreement is barred by the Statute of Frauds. C) the agreement can be disclaimed. D) none of the above.

B) the agreement is barred by the Statute of Frauds

The duty to mitigate damages falls on the: A) breaching party. B) the non-breaching party. C) the courts. D) none of the above.

B) the non-breaching party.

Oral contracts that are covered by the Statute of Frauds are: A) enforceable. B) unenforceable. C) barred by promissory estoppel. D) none of the above.

B) unenforceable.

Generally, when a minor lies about his age in making a contract, the contract is: A) a quasi-contract. B) voidable. C) unenforceable. D) none of the above.

B) voidable.

Lori purchased a used car for $5,000. After purchasing the car, Lori felt as though she had made a mistake and had overpaid for the car. Which of the following statements is true?

Lori may not rescind the contract based on a unilateral mistake.

A partner who wrongfully dissociates:

Loses the right to demand a dissolution.

Belinda and Franco are partners in a jewelry business. Without Franco's knowledge, Belinda buys a ring from Janice for $2,200. Janice has no reason to question the transaction since she is a regular customer of the store and assumes Belinda has authority to buy her ring. When Franco finds out he is furious and does not want to honor the agreement. Which of the following is TRUE?

Belinda acted with apparent authority and the partnership must honor the transaction

What is the time range for adverse possession, with the actual time period depending on state law?

Between 5 and 20 years

Which of the following laws prohibit the performance of certain work and the transaction of certain business on Sunday?

Blue laws

Bruce has personal liability, but the other members of the limited liability partnership do not.

Which of the following is NOT an example of a revenue raising license? A) A local business license issued by the city. B) A permit to conduct a yard sale. C) A license to practice law. D) All of the above are revenue raising licenses.

C) A license to practice law.

Which of the following is NOT an example of a public figure? A) President Obama B) A current city mayor C) A professor D) An Oscar winning actress

C) A professor

Which of the following torts does not require the wrongful suit end in the plaintiff's favor? A) Malicious prosecution B) Wrongful use of civil proceedings C) Abuse of process D) All of the above

C) Abuse of process

The local newspaper printed an article about the mayor. The author of the article claimed the mayor cheated on a test in college and was expelled. If the accusation is false, in order to sue for defamation the mayor must prove which of the following? A) Absolute privilege B) Conditional privilege C) Actual malice D) Conditional malice

C) Actual malice

The Thompson family has a trampoline in their backyard and the neighborhood children frequently play on with the Thompson's permission. To protect themselves from liability, the Thompsons' require the parents of the children to sign a release form before the children may enjoy the trampoline. Unfortunately, one day a child broke his leg when he fell off the trampoline. The child's parents, having signed the release form, sued the Thompsons for the medical bills. Which of the following is the Thompsons' best defense? A) Contributory negligence B) Comparative negligence C) Assumption of risk D) The parents signed the release form.

C) Assumption of risk

Which of the following is an example of a quasi-contract? A) Accepting a free sample in a retail store B) Accepting a donation of money C) Having your car towed when parked in a tow-away zone D) None of the above

C) Having your car towed when parked in a tow-away zone

Lilly hired Sherri to sell her house and agreed to pay her a 6% commission rate. Sherri failed the real estate licensing test but was able to find a buyer for the Lilly's house. Which of the following statements is true? A) Lilly must pay Sherri the agreed upon commission rate. B) Lilly must reimburse Sherri for expenses but is not required to pay the commission. C) Lilly will not be required to pay Sherri any money. D) Lilly must pay Sherri the agreed upon commission rate after Sherri earns her realtor's license.

C) Lilly will not be required to pay Sherri any money.

Which of the following statements most accurately describes the case Bragg v. Linden Research, Inc. from your text? A) Bragg lost the case because avatars cannot own property. B) Bragg lost the case because he hacked into the land auction website. C) Linden cannot enforce the arbitration clause as it was found to be unconscionable. D) Linden can enforce the arbitration clause.

C) Linden cannot enforce the arbitration clause as it was found to be unconscionable.

Which of the following statements best describes the case Morales v. Sun Constructors, Inc. found in your text? A) The terms of the offer were not communicated to Morales. He only speaks Spanish and the contract was in English. B) Morales passed a written English exam when he was hired so the court deemed he spoke English well enough to understand the terms of the offer. C) Morales had an opportunity to ask for clarification before signing the offer which he did not do therefore he is bound by the terms. D) Morales is bound by the terms simply because he signed the document.

C) Morales had an opportunity to ask for clarification before signing the offer which he did not do therefore he is bound by the terms.

Connor contracts with Sean to rent the rooftop of Sean's two story commercial building for a party. Connor tells Sean that the building is along the route of the annual Thanksgiving Day Parade and he wants to have a party to watch the parade. Due to inclement weather, the parade is cancelled. Will Connor be forced to pay Sean if he is unable to use the rooftop? A) No, Connor may discharge the contract by waiver. B) No, Connor may discharge the contract due to destruction of subject matter. C) No, Connor may discharge the contract due to commercial frustration. D) Yes, Connor must pay the contracted price to Sean.

C) No, Connor may discharge the contract due to commercial frustration.

Zoe offered to sell Ron her apple orchard. The offer stated that an acceptance via express mail was required. Ron telephoned Zoe to accept. A) Ron has used an implicit means of communication to accept. B) Ron has used an authorized means of communication to accept. C) Ron has not accepted. D) none of the above.

C) Ron has not accepted.

An elementary age boy is walking along the sidewalk in his neighborhood and comes to a chain link fence. A sign on the fence states, "Beware of Dog." A vicious dog is on the other side of the fence. Teasing the dog, the young boy puts his hand inside the fence and is severely injured by the dog. The young boy's parents should sue the dog owner under: A) Contributory negligence B) Comparative negligence C) Strict liability D) The boy's parents can not sue the dog owner. The "Beware of Dog" sign protects the owners from liability.

C) Strict liability

The Thompson family has a trampoline in their backyard and the neighborhood children frequently play on with the Thompson's permission. To protect themselves from liability, the Thompsons' require the parents of the children to sign a release form before the children may enjoy the trampoline. Unfortunately, one day a child broke his leg when he fell off the trampoline. The child's parents, having signed the release form, sued the Thompsons for the medical bills. Which of the following will most likely be the outcome of this case? A) The Thompsons win because the parents signed the release form. B) The Thompsons win because the child's parents were negligent for letting him play on the trampoline. C) The Thompsons lose. Trampolines are deemed in many courts as ultrahazardous. D) The Thompsons lose. They should have had the release form notarized. Feedback: Page 128

C) The Thompsons lose. Trampolines are deemed in many courts as ultrahazardous.

After being seated in the restaurant, Myra stated to the waitress, "I would like a hamburger, onion rings, and chocolate shake." The waitress then delivered the food to Myra and Myra ate the entire meal. Which of the following best describes this situation? A) There is no contract because Myra never agreed to pay for the meal. B) This is an express, bilateral contract. C) This is an implied, unilateral contract. D) This is an agreement but not a contract.

C) This is an implied, unilateral contract.

The Age Discrimination in Employment Act does NOT apply to the following: A) an eighty-year old person. B) a sixty year-old person. C) a twenty-five year-old person. D) a forty-five year-old person

C) a twenty-five year-old person.

When interpreting ambiguous language the court: A) considers which party wrote the contract B) determines the principal objective of the contract C) both (A) and (B) D) neither (A) nor (B)

C) both (A) and (B)

Ted negligently imperils Dylan. Sasha comes to the aid of Dylan and, in the process, breaks her leg. Ted is liable for the harm to: A) only Dylan. B) only Sasha. C) both Dylan and Sasha. D) none of the above.

C) both Dylan and Sasha.

Mandatory arbitration agreements: A) are not enforceable against a claim of discrimination under Title VII. B) are strongly supported by the U.S. Supreme Court. C) deny employees the right to bring Title VII discrimination claims in court. D) all of the above.

C) deny employees the right to bring Title VII

Mario bought a laptop computer from Mark for $400. Mark said he had never had a problem with the laptop, knowing it had a virus. Mario may: A) rescind the contract, return the laptop and get back his $400. B) keep the laptop and sue for $200 (the cost to fix the laptop.) C) either (A) or (B) D) neither (A) nor (B)

C) either (A) or (B)

Jim offered to sell Janelle his comic book collection and she accepted. However, the parties did not state a price. Under the UCC, the agreement would be: A) void for vagueness. B) unenforceable. C) enforceable as long as Jim and Janelle intended to form an agreement. D) none of the above.

C) enforceable as long as Jim and Janelle intended to form an agreement.

If Tex contracts with Prudence to clean her house every week and Tex dies, the contract is governed by the doctrine of: A) commercial frustration. B) impracticability. C) impossibility. D) none of the above.

C) impossibility.

Both crimes and intentional torts require: A) proof of guilt "beyond a reasonable doubt." B) punishment by way of imprisonment. C) intent. D) all of the above.

C) intent.

A collateral contract does NOT have to be in writing in cases involving: A) undue influence. B) past performance C) leading object doctrine. D) all of the above.

C) leading object doctrine.

Under the UCC, agreements to modify a contract for the sale of goods: A) must be put in writing. B) are void until parties terminate their original agreement. C) need no new consideration to be binding. D) none of the above.

C) need no new consideration to be binding.

If the court grants $1.00 to Chris for Annette's purely technical breach of their contract, the award is: A) punitive. B) liquidated. C) nominal. D) none of the above.

C) nominal.

Phillip sends Saul a letter via certified mail, but does not specify a means of response. Neither Phillip nor Saul is a merchant. Saul sends Phillip an e-mail, accepting his offer. Saul's means of acceptance is: A) unauthorized. B) authorized. C) reasonable. D) none of the above.

C) reasonable.

A mistake may involve which of the following? A) error in judgment about a material fact B) ignorance of a material fact C) untrue belief about a material fact D) none of the above

C) untrue belief about a material fact

Undue influence: A) requires force. B) requires misrepresentation of a material fact. C) usually involves relatives, friends, or longtime advisors of the elderly, the timid, or the physically or mentally impaired. D) all of the above.

C) usually involves relatives, friends, or longtime advisors of the elderly, the timid, or the physically or mentally impaired.

Kent University does not have enough parking space to accommodate the vehicles of all of its students, staff, and faculty. Cesario owns a sizable plot of land just north of the campus and has given many students oral permission to park on his land. Which of the following statements is true in this case?

Cesario has created a license.

Which of the following is correct regarding public policy?

Changing social conditions may make what was acceptable in the past acceptable today.

Andrew, Betty, and Charles form a partnership to produce five independent films. After they complete their third film, Charles decides that he would like to go back to school full-time, and tells Andrew and Betty that he will not produce the remaining two films with them. What will happen to the partnership?

Charles will be wrongfully dissociated and Andrew and Betty must decide whether or not to continue the partnership without Charles

Which of the following is correct regarding the assignment of contracts?

Contracts involving personal rights are generally nonassignable.

The most common kind of regulatory statute requires which of the following to get a license before engaging in any regulated activity? (Check all that apply)

Corporations Persons Partnerships

While shopping around for a new couch, Patricia begins to haggle the price down with a store salesperson. When the salesperson finally gets to a price she likes. Patricia asks the salesperson to write down the terms of the sale on the back of his business card. Patricia does not purchase the couch at that time, but takes the business card with her when she leaves. Which of the following statements best describes this situation? A) The store is not bound in a contract. B) Patricia can now force the store's competitor to meet the price. C) The store may revoke the offer to sell the couch. D) A firm offer has been created.

D) A firm offer has been created.

Driving on the highway, Dr. Good witnesses a car accident. Dr. Good stops to administer aid to Jose, an unconscious victim. Two weeks later Jose receives a bill from Dr. Good for $300, the fair value of services Dr. Good provided. Which of the following statements is true? A) Jose never agreed to pay Dr. Good and therefore does not have to pay him. B) Doctors are required by law to render medical treatment when necessary and may not request compensation. C) Because Jose did not refuse Dr. Good's assistance, Jose must pay the bill. D) A quasi contract was formed and Jose must pay the bill.

D) A quasi contract was formed and Jose must pay the bill.

Alex, a teenage babysitter, is witness to Carson being mauled through a chain link fence by a vicious dog as stated in the previous question. Alex sues the dog owners for emotional distress. The likely outcome of Alex's suit will be: A) Alex will lose. Third parties may never sue for emotional distress. B) Alex will lose. Only family members of victims may use for emotional distress. C) Alex will lose. The "Beware of Dog" sign protects the owners from liability. D) Alex will win.

D) Alex will win.

Which of the following are generally accepted means of communication of an acceptance? A) Hand carried letter B) Telephone C) Email D) All of the above

D) All of the above

Which of the following is an example of silence as acceptance? A) Failing to cash in a certificate of deposit B) Joining a "Book of the Month" club C) Failing to terminate a cell phone contract when it expires. D) All of the above

D) All of the above

Jack and Will are both high school freshman. Jack promised to drive Will to school and Will promised to pay for gas. Which of the following best describes this agreement? A) Jack and Will have an agreement but not a contract. B) Jack and Will have a contract that may be voided by Jack only. C) Jack and Will have a contract that may be voided by Will only. D) Jack and Will have a contract that either party may void.

D) Jack and Will have a contract that either party may void.

Jack, a minor, purchased a video game at the Game Place, which has a sign posted above the cash register stating "NO RETURNS OR EXCHANGES." After opening the game and trying it out, Jack decided he wanted to return the game. Which of the following is a true statement? A) Because he opened the game, Jack can not return the game to the store. B) Because the sign clearly stated no returns, Jack can not return the game to the store. C) Because video games are now considered a necessary, Jack can not return the game to the store. D) Jack may return the game and receive a full refund.

D) Jack may return the game and receive a full refund.

Upon entering English class, your professor hands you a photocopy of an article found in the local paper. Your professor is guilty of: A) Direct copyright infringement B) Vicarious copyright infringement C) Both direct and vicarious copyright infringement D) Neither direct nor vicarious copyright infringement

D) Neither direct nor vicarious copyright infringement

When leaving class, John states to the other students in the class, "This is the most boring class I have ever taken!" Upon hearing this, what action may the professor take? A) File suit for libel B) File suit for slander C) File suit for defamation D) No action may be taken in court

D) No action may be taken in court

Rebecca voluntarily goes for a motorcycle ride with Steve, who is obviously drunk. Steve drives the motorcycle off the road and crashes. Rebecca's leg is broken and she sues Steve for her medical expenses totaling $20,000. If Rebecca and Steve live in a pure comparative negligence state and the jury determines that Rebecca is 40% liable for her own injuries, A) Rebecca will recover nothing. B) Rebecca will recover $20,000 from Steve. C) Rebecca will recover $12,000 from Steve. D) Rebecca will recover $8,000 from Steve.

D) Rebecca will recover $8,000 from Steve.

Steven was in his front yard raking leaves when his neighbor ran up and said, "I'll give you $200 if you will hide me in your house." Steven agreed to hide the neighbor and took the $200. Ten minutes later the police came by looking for Steven's neighbor. Steven told the police where he was hiding. Which of the following statements is true? A) Steven breached the contract with his neighbor and must return the $200. B) Steven breached the contract with his neighbor and must return half of the money. C) Steven breached the contract with his neighbor but may keep the money. D) Steven did not breach the contract with his neighbor.

D) Steven did not breach the contract with his neighbor.

Julian sees an advertisement in the newspaper stating his favorite soft drink is 50% off the retail price at the local grocery store for one day only. Which of the following statements is true? A) The advertisement is an offer and Julian is the offeree. B) The advertisement is an offer and Julian is the offeror. C) The advertisement is an offer because an expiration date is included. D) The advertisement is not a valid offer.

D) The advertisement is not a valid offer.

Matt agrees to purchase Troy's house for $100,000 over lunch. Not having any paper handy, Matt writes the terms of the contract on a cloth napkin with his pen. Only Troy signs the napkin. Upon returning to work, Troy is having second thoughts about selling his house and calls Matt to call off the deal. Which of the following statements is true? A) The contract is unenforceable based on the Statute of Frauds. B) The contract is unenforceable based on the UCC. C) The contract is enforceable against both Matt and Troy D) The contract is enforceable against Troy.

D) The contract is enforceable against Troy.

Which of the following never expires? A) Trademark B) Patent C) Copyright D) Trade Secret

D) Trade Secret

The following is/are true of the Lilly Ledbetter Act: A) is concerned with pay differentials. B) addresses the time limit an employee has to file suit. C) is applied in the Lewis v. Chicago case. D) all of the above

D) all of the above

A minor may ratify a contract after reaching majority by: A) so stating. B) partial performance of the contract. C) the sale of the consideration received under the agreement. D) all of the above.

D) all of the above.

The following is/are true of the employment-at-will doctrine: A) statutes have eroded the doctrine over the last 50 years. B) the majority of employees are still unprotected against unfair firing. C) courts have created several exceptions to the doctrine in an effort to stem abuse. D) all of the above.

D) all of the above.

The following promises do not need consideration to be enforceable. A) a composition agreement. B) a promise in which promissory estoppel applies. C) a promise to make a charitable gift. D) all of the above.

D) all of the above.

To rescind a contract on the basis of mistake, the mistake must be of an: A) existing fact. B) past fact. C) future fact. D) both (a) and (b)

D) both (a) and (b)

Unconscionability involves: A) unequal bargaining power. B) use of bargaining power to unfair advantage C) neither (a) nor (b) D) both (a) and (b)

D) both (a) and (b)

Sexual harassment may occur through: A) quid pro quo harassment. B) a harassing work environment. C) neither (a) nor (b). D) both (a) and (b).

D) both (a) and (b).

The court ruled that the contract between X and Y was unenforceable. Yet, X has already partially performed the contract and conferred a benefit upon Y. X can: A) recover the reasonable value of her performance. B) recover under quasi-contract. C) neither (a) nor (b). D) both (a) and (b).

D) both (a) and (b).

The promise to "buy all the tea I want" is: A) unliquidated. B) void for duress. C) consideration. D) illusory.

D) illusory.

If Roger sells Jan an old motorcycle and tells her it is in "great shape" without bothering to check out the statement of the previous owner, Jan could probably show: A) mutual mistake. B) fraud. C) undue influence. D) none of the above

D) none of the above

A click-wrap agreement requires a user to assent to the terms of a contract by: A) visiting a website. B) breaking the shrinkwrap of a software package. C) using express mail. D) none of the above.

D) none of the above.

Fran sees a flyer in the park for $500 for the return of Bill's lost parrot. She spends the next three days, and twenty dollars, searching for the bird. Eventually, the bird flies home on its own. Fran is entitled to: A) $500 for her acceptance of the bilateral contract. B) reimbursement of $20 for her acceptance of the unilateral contract. C) $500 for her acceptance of the unilateral contract. D) nothing.

D) nothing.

Deb's doctor has diagnosed her as medically insane because she suffers from periodic paranoid delusions

Deb may have the capacity to contract if, despite her delusions, she has sufficient capacity to understand the nature and effect of the contract.

To determine if the criminal conduct of a third party should be actionable against the property owner, courts look at which of the following factors to determine foreseeability? (Check all that apply)

Did the property owner or possessor know or should they have known of prior crimes? Have previous crimes occurred on or near the property?

According to RUPA, if partner retires before the completion of a partnership, it is called a ______.

Dissociation

An agent owes a principal all of the following duties: ______. (Check all that apply

Duty of Loyalty Duty of Care Duty to Communicate

With regard to donee beneficiaries contracts, which of the following is correct?

Either the promisee or the donee beneficiary can sue the promisor for not performing the promise.

Click all of the following that would generally apply to an independent contractor.

Employers control the results but not the means Contractors work according to their own methods. Contractors are paid by the job, not by the hour.

Suppose an assignor assigns a contract to an assignee and later wrongfully assigns the contract to a second assignee who pays for it without notice of the first assignment. According to the ______ rule, the first assignee to give notice of the assignment receives priority.

English

Which of the following arises through the sale of ownership interests in the business in the form of shares of corporate stock?

Equity securities

Which branch of the government enforces statutes?

Executive

Although agencies perform many acts, they are considered to be part of which branch of government?

Executive branch

A fee simple is a property interest that gives a person the right to use property only for his own lifetime or for a time that is measured by the lifetime of somebody else.

An employee entitled to workers' compensation payments from an employer may still sue the employer in a negligence action if the employer's negligence caused the employee's injury.

An item of personal property may be attached to or used in conjunction with real property in such a way that it ceases being personal property and instead becomes part of the real property. This type of property is called a debenture.

Directors and officers may usurp a corporate opportunity.

Generally, affirmative action plans must be permanent, may restrict the job opportunities of those not included in the plan, and should involve the hiring or promotion of unqualified workers (since such workers can be trained after their hiring or promotion).

In a general partnership, a partner is automatically entitled to salary and wages.

In a tenancy at will, the landlord and tenant have agreed on a specific duration of the lease and have fixed the date on which the tenancy will terminate.

Sometimes a value is assigned to the shares in the articles of incorporation. This arbitrary amount is known as projected value.

The Americans with Disability Act (ADA) covers physical, but not mental, impairments that substantially limit one or more of a person's major life activities.

The National Labor Relations Board (NLRB) and the Consumer Financial Protection Bureau (CFPB) share responsibility in enforcing the Employee Retirement Income Security Act (ERISA).

The property interest conveyed to the tenant is called the fee simple estate.

Workers' compensation laws put liability for injuries occurring within the scope of employment on the employer based on the degree of fault.

(T/F) The doctrine of res ipsa loquitur imposes liability on the partnership for torts committed by an partner or employee of the firm.

FALSE (respondeat superior)

(T/F) RUPA does not permit partnerships or corporations to qualify as "persons" that can form a partnership

FALSE (they can)

Violations of federal franchise rules can include a(n) ______. (Check all that apply)

FTC lawsuit $10,000-per-day fine

A party to an illegal contract who is aware of the agreement's illegality may still recover damages.

False

A person lacking mental capacity may never ratify a contract. T/F

False

A promise not to sue is not sufficient consideration. T/F

False

Abstract ideas may be protected by patents. A) True B) False

False

All agreements are contracts. T/F

False

All workers are covered under Worker's Compensation. A) True B) False

False

An executed contract for necessaries is voidable. T/F

False

Anticipatory repudiation must always be express, not implied. A) True B) False

False

Any incremental patent changes used by a business will increase the time of protection awarded by a patent. A) True B) False

False

Anyone who hears about an offer can accept that offer. T/F

False

Charles, a U.S. business owner, owns the trademark for "Squish" a hot new line of toys. Upon entering the foreign market, Charles discovers that a local store in London also owns the trademark for "Squish." The London store does not have a legal right to the term "Squish." A) True B) False

False

Consequential damages are recoverable even if the defendant could not foresee injury at the time of the breach. A) True B) False

False

Contracting parties may protect themselves against their own negligence with exculpatory clauses. T/F

False

Contracts made by minors are void. T/F

False

Copyrighted works are protected only as long as the author is alive. A) True B) False

False

Courts will always enforce illegal contracts when valuable consideration is involved. T/F

False

Defendants must first be found guilty of a crime before being sued for a tort. T/F

False

Duress requires threat of physical injury. T/F

False

If an owner of intellectual property allows another to use that property, all protection is forfeited. A) True B) False

False

If one party to a contract lacks capacity, either party may void the contract. T/F

False

If part of a divisible contract becomes illegal, the whole contract is illegal. T/F

False

If the offeree rejects the offer, the offeror may counter offer. T/F

False

In general, no infringement occurs under U.S. law when a product patented in the United States is made and sold in another country. A) True B) False

False

Legal value is the same thing as monetary value. T/F

False

News publications are always protected from liability in defamation cases. T/F

False

Persons may protect themselves from liability due to their own negligence. T/F

False

Persons may protect themselves from strict liability by acting with the "utmost care and caution." T/F

False

Silence cannot create an acceptance. T/F

False

T/F: A defendant of a civil law suit may be sentenced to jail

False

T/F: A mediator is used when participating in arbitration

False

T/F: Cases appealed at the state level are heard in the US District Courts

False

T/F: Commercial speech enjoys greater protection than non-commercial speech

False

T/F: Mitzi, while at home in FL, entered into a contract to purchase a faux diamond ring valued at $100 from Nancy who also lives in FL. If Mitzi breaches the contract, Nancy may choose to sue Mitzi in fed court

False

T/F: Property owners have unlimited rights to use their property as they desire.

False

T/F: Substantive due process means that the government must achieve its goals by using fair procedures

False

T/F: The Federal Sentencing Guideline dictates judges must use a formula to determine a defendant's sentence

False

T/F: The US Constitution established a national government

False

T/F: Treaties made by the President with foreign governments must be ratified by 51% of the Senate

False

The Fair Labor Standards Act applies to all employers. A) True B) False

False

The United States follows the "first to file" rule with regards to patents. A) True B) False

False

The contracts student enter into with a college to take courses is governed by the U.C.C. T/F

False

The parole evidence rule prohibits use of any oral evidence to alter written contracts. T/F

False

The plaintiff in a contract action has no duty to mitigate damages. A) True B) False

False

The terms "co-signer" and "guarantor" are interchangeable. A) True B) False

False

Title VII of the Civil Rights Act of 1964 covers only intentional acts of discrimination. A) True B) False

False

To obtain a copyright, the author must register the protected work with the appropriate government office. A) True B) False

False

True or false: An agent may not make a contract in her own name while being employed as an agent.

False

True or false: Generally, the agent rather than the principal is liable on the contract.

False

True or false: Historically, it has been relatively easy to convict a principal for the crimes committed by her agent within the scope of employment.

False

Under the UCC, acceptances must be identical to the terms of the offer. T/F

False

True or false: Only a few states have statutes that either prohibit or regulate gambling.

False Reason: All states have statutes that either prohibit or regulate gambling.

True or false: An agreement that tends to induce a fiduciary to breach his or her fiduciary duties is not necessarily illegal.

False Reason: Any agreement that tends to induce a fiduciary to breach his fiduciary duties is illegal.

The terms "co-obligor" and "guarantor" are interchangeable.

False,

The statute of frauds in the UCC applies to contracts for the sale of goods for $300 or more.

False, $500 or more

Fraud may arise through making reckless statements.

False, Making statements without sufficient information to believe they are true (recklessness) is sufficient to constitute fraud

Courts today require a threat of physical injury for a finding of duress.

False, Modern courts require only that the threat be a wrongful one.

A person lacking mental capacity when a contract was entered into may never ratify a contract.

False, People who regain their capacity can ratify their contracts just like a minor who attains major�ity

An executed contract for necessaries is enforceable according to the terms of the contract.

False, Since minors are liable for only the reasonable value of necessaries they actually receive, they do not have to pay the contract price of necessaries if it is greater than their reasonable value.

Contracts made by minors are void.

False, The idea behind minors' incapacity is that a minor may not be able to bargain effectively with older, more experienced persons. The courts responded to this idea by making minors' contracts voidable.

The ______ has issued rules designed to give prospective franchisees more information about termination, cancellation and renewals of franchise.

Federal Trade Commission

The ______ has issued rules designed to give prospective franchisees more information about termination, cancellation and renewals of franchise. Multiple choice question.

Federal Trade Commission

Which of the following statements is true concerning franchises?

Federal and state governments regulate the franchise relationship.

Which amendment prevents defendants from being tried twice for the same crime?

Fifth Amendment

Which of the following statements is true of fixtures?

Fixtures associated with a real property belong to the owner of the real property.

Which amendment prohibits the use of illegal evidence from unreasonable searches and seizure?

Fourth Amendment

Which of the following has become the most common arrangement in the United States for providing food, hotel, gasoline, and real estate brokerage services?

Franchising

A car dealership sells a used car to Mary without checking out the car in regard to the previous owner's statement that "it just was not running right." The salesperson tells Mary that the car is in excellent running order. Unfortunately, a few weeks after purchasing the car, Mary discovers that it has significant mechanical problems. Which of the following is likely true regarding any cause of action Mary may assert, if any

Fraud

Which of the following is correct regarding third parties and contracts?

Generally, those who are not parties to a contract have no rights in the contract even though they may benefit from its performance.

Andrew, age 15, made a significant amount of money mowing lawns. He bought a vacant lot at age 16 and wanted to disaffirm the contract at age 17. Which of the following is the most likely result of his attempt to disaffirm

He would be required to wait until reaching the age of majority to disaffirm.

Sarah and Mark formed MCS as partners years ago, which they have now dissolved and are in the process of winding up. Without Mark's knowledge, Sarah cancels MCS's insurance policy covering the MCS van. Two months later, while making a delivery for MCS, Mark runs a stop light and hits a pedestrian. Who will be liable for the damages caused by the accident?

Mark, Sarah, and MCS

Mary may be able to establish liability on the part of Big Franchise Co. if she can show that because of the control exercised on the part of Big Franchise Co., ABC Franchise Co. was not an independent contractor.

Maurice, a creditor of ABC Corp., believes that the corporation, has defrauded him. It appears that the corporation is undercapitalized; that money is being funneled to the three shareholders of the corporation who actively manage the corporation; and that the shareholders intend to defraud suppliers. Which of the following is true regarding options, if any, that Maurice has in this situation?

Maurice should seek to reach assets of the individual shareholders through piercing the corporate veil.

Megan retired from partnership, but started visiting the office again. Other partners introduced her to prospective customers as "my partner, Megan."

Megan will be liable because she failed to correct the statement when she was being introduced as a partner.

Limited liability and the tendency of investors to relate corporate securities to ______ companies make corporations appear safer for financing.

"blue chip"

Which of the following is not a primary factor in deciding what type of business organization to choose?

If the federal government will approve of the choice

A mistake may involve which of the following?

Ignorance of a material fact

In order to form a corporation or a limited partnership, ______.

Which of the following are exceptions to the community property rule that all property is part of the marriage? (Check all that apply)

Inheritance by one spouse Separate property owned before marriage

Which of the following would a court not award in a Fair Housing Act case if the aggrieved individual wins?

Insurance proceeds

Which of the following is true of the liability to creditors in the process of continuation of a partnership?

New partners are liable for prior obligations only to the extent of contribution unless they agree to greater liabilty

Regarding the management of an LLP, which of the following are true? (Check all that apply)

No partner can join the LLP without unanimous consent An agreement can alter management responsibilities

Which of the following is correct regarding a delegation?

Not all duties are delegable.

An employee hired by an organization is called a(n): a) mediator b) arbitrator c) ombudsman d) vector

Ombudsman

In many states, intoxicated persons are treated like people who lack mental capacity:

Only if they were so intoxicated that they were unable to understand the nature of the business at hand when they entered into the agreement.

Which of the following are disadvantages of the adversarial court system: a) It is difficult for dishonest or biased judge to control the outcome b) The truth is most effectively determined c) Cross-examination will expose deception and misperception d) Opposing lawyers of unequal skill can give unfair advantages to the wealthy

Opposing lawyers of unequal skill can give unfair advantages to the wealthy

Unless stated explicitly in the agency agreement, an agent has a duty to exercise ______ care and the skills used in the kind of work she has agreed to do

Ordinary

Which of the following is not a factor courts will consider when determining whether to pierce the corporate veil?

Overcapitalization

Which of the following are not valid restraints on the use of real property? (Check all that apply)

Owning more than one piece of property at a time Selling the property

Which of the following is true regarding the effect of part performance of a contract in regard to the sale of land as far as the statute of frauds is concerned?

Part performance may take the sale of land out of the coverage of the statute of frauds if it clearly indicates the existence of a contract of sale and is not consistent with any other interpretation.

A few months after Paul moved into his new apartment that he rented from ABC Rentals, he discovered significant problems with the plumbing and electrical systems in his apartment. Which of the following is the best advice to Paul in this situation?

Paul should claim that ABC Rentals breached the implied warranty of habitability.

A few months after Paul moved into his new apartment that he rented from ABC Rentals, he discovered that a resident of the apartment next to his played loud music at all hours of the night. Which of the following is true regarding any argument he would have that ABC Rentals breached an obligation owed to him?

Paul should claim that ABC Rentals breached the implied warranty of quiet enjoyment.

Allowing emergency vehicles, such as police cruisers & ambulances, to violate traffic laws by exceeding the speed limit is an example of which type of legal interpretation? a) The Plain Meaning Rule b) Legislative history c) Legal Purposes d) Public Policy

Public policy

Which of the following types of corporations sells shares to people who often have little interest in it except as investors?

Publicly held corporations

Which of the following is not a common way for financing the purchase of real property?

Purchaser self-financing

______ releases a partner from liability for having exceeded his or her authority & binds the partnership to the contract as it had been authorized all along.

Ratification

Government action will be upheld as long as it has a reasonable relationship to the achievement of a legitimate government purpose is a test of a) strict scrutiny analysis b) rational basis analysis c) intermediate scrutiny analysis d) none of the above

Rational basis analysis

Which of the following statements is true of the transfer of a property by sale?

Real estate sales contracts must be evidenced by a suitable writing signed by the party to be charged in order to be enforceable.

Which of the following include(s) not only land but also things firmly attached to or embedded in the land?

Real property

Sashes is a partnership firm dealing in the manufacture of casual cloths. Rahul, one of the partners of Sashes, thinks that they should clear the old stock during Thanksgiving. For this purpose, Rahul ______.

Requires unanimous agreement of the general partners only (outside of the daily business operations)

The Real Estate Settlement Procedures Act (RESPA) prohibits which of the following practices? (Check all that apply)

Requiring title insurance from a particular company Kickbacks for referral business

Which of the following is not a way that a person can acquire title to real property?

Reverse possession

Which of the following is correct regarding an assignment?

Rights can be given away or sold.

Sandy, Ramon, and Bonnie were partners. Sandy dissociated from the partnership. Bonnie and Ramon decided to continue the business. When Sandy dissociated, there was a $50,000 debt owed to Great State Bank. Which statement is correct?

Sandy remains liable on the $50,000 debt owed to Great State Bank

Which of the following refers to the mental state of the defendant?

Scienter

In Jefferson Insurance Co. v. Curle _______ was the liquidating partner, and _________ was a partner working on _________ partnership business to help complete _________ process.

Shelley Curle unfinished winding-up

Minors must pay the reasonable value of:

Shelter but not music lessons, cell phones, or driving classes.

Many cities have courts designed to handle civil matters involving a limited amount of money. These courts are called: a) Municipal Courts b) Courts of Record c) Small Claims Courts d) Court of Appeals

Small Claims Court

When a law discriminates based on race, the following analysis will be used: a. rational basis b. intermediate scrutiny c. strict scrutiny d. none of the above

Strict scrutiny

Cheryl and Ron rent a house from Sue, with both Cheryl and Ron signing a one-year lease. If Ron moves out after six months, which of the following statements is true?

Sue may hold Cheryl responsible for the entire rent.

A corporation domiciled in another country but doing business in the United States is called an alien corporation.

A corporation is liable for all torts committed by its employees while acting in the course of and within the scope of their employment.

A corporation must issue some common stock.

A partner may assign her right to profits to a creditor.

A property use that unreasonably interferes with another person's ability to use or enjoy her own property may lead to an action for nuisance against the landowner or possessor engaged in the objectionable use.

An easement can be created by adverse possession.

Directors and officers may be liable to the corporation for failure to act with due care and diligence.

If damage to leased property arises through no fault of the tenant, that tenant still has a duty to take interim steps in order to prevent further damage from the elements.

Most incorporated businesses are close corporations.

Officers and directors are not liable to the corporation if they act with the common sense, practical wisdom, and informed judgement that could be expected of an ordinarily prudent person.

Promoters are not agents of the corporation prior to its incorporation.

The duty of care requires directors and officers to make a reasonable investigation before making any corporate decisions.

The tenant has the right to exclusive possession and quiet enjoyment of the property during the term of the lease.

(T/F) A court may find 2 persons to be partners even though neither had the specific intent to create a partnership.

TRUE

(T/F) A partner is not ordinarily entitled to salary or wages

TRUE

(T/F) Dissociation refers to any change in the relationships among partners, such as one of their deaths.

TRUE

(T/F) Limited liability partnerships have 1 or more general partners & 1 or more limited partners.

TRUE

(T/F) Partners have a duty to account for any expenditure of partnership funds they make

TRUE

(T/F) RUPA defines a partnership as an association of 2 or more persons to carry on as co-owners of a business for profit.

TRUE

(T/F) The final act of winding up a dissolved partnership is the distribution of assets.

TRUE

Which of the following is not an example of duress?

Taking advantage of someone's financial condition

Ted took out an insurance policy on his home when he purchased it. He continued paying premiums on the home even after he sold the home to Helen and received full payment. Ted knew Helen smoked late at night and thought that she might burn the house down. Sure enough, Helen's smoking resulted in a serious fire destroying the home although Helen escaped safely. Which of the following is true regarding Ted's entitlement to the insurance proceeds on the policy he purchased?

Ted is not entitled to recover because he had no insurable interest in the home. Correct

Which of the following was the result in Wethington v. Swainson, the case in the text involving a minor injured during skydiving lessons and the attempted disaffirmance of a release of liability in favor of the provider signed by the minor and the minor's parents?

That parents of a minor may not release a minor's prospective claims for negligence, and that the minor could disaffirm.

Which of the following was the result in David D. Murray v. Dianne E. Murray, the case in the text in which the defendant expressed dissatisfaction with the terms of an agreement entered into after significant time spent in mediation and court hearings and sought a determination that she was subjected to duress?

That remorse about an agreement is insufficient to establish duress and that the agreement would be enforced.

Which of the following was the result in Alatriste v. Ceasar's Exterior Designs, Inc., the case in the text in which a landscaping company quit after the owner refused to continue to pay, and it was established that for four of the five months the landscaping company did work, the landscaping company lacked an appropriate license, although it obtained the license four months into the project?

That the company was not entitled to be paid for any of its work because it did not have the appropriate license for the whole term of the work.

Which of the following was the result in Hi-Tec Properties, LLC v. Murphy, the case in the text in which tenants sued for damages after being exposed to mold in an apartment, and the landlord defended on the basis of an exculpatory clause in the lease stating that the lessor had no injury for liability based on mold?

That the exculpatory clause was void as against public policy.

Which amendment to the United States Constitution provides that private property shall not be taken for public use without just compensation?

The Fifth Amendment

Which act makes it a crime for any American firm to offer gifts of value to foreign officials? a. The Foreign Business Practices Act b. The Foreign Corrupt Practices Act c. US Constitution d. The Treaty of the US

The Foreign Corrupt Practices Act

Which of the following requires that a buyer receive advance disclosure of the settlement costs that will be incurred at the settlement?

The Real Estate Settlement Procedures Act

If a franchisor mandate sets prices and prohibits sales to customers outside an assigned sales territory, this could violate which of the following laws?

The Sherman Act

Which of the following has the legal authority to institute a civil action for violation of Title III of the Americans with Disabilities Act (ADA)?

The U.S. Attorney General

Suppose that in an assignment, the assignor purports to transfer "all my rights under the contract" to the assignee. Which of the following is correct?

The Uniform Commercial Code would interpret this as creating both an assignment and a delegation.

The required reports under the Interstate Land Sales Full Disclosure Act must be filed with which of the following organizations?

The United States Department of Housing and Urban Development

Mike orally hires Vonda to defame a local politician. Vonda does so and requests payment. Mike refuses to pay. Which of the following is true regarding the situation of the parties

The agreement is unenforceable because a contract that cannot be performed without committing a tort is illegal.

Which of the following is an implied guarantee that an assigned claim is valid?

The contract is not voidable for any reason known to the assignor

Which of the following is true regarding the situation of a party to a contract who is the victim of misrepresentation?

The contract is voidable by the victim.

Without a signed writing, merchant A accepted a partial shipment of goods ordered under an oral contract for the sale of goods totaling $1,000 in amount. Under the UCC, what is the effect of partial performance in regard to the requirement of a signed writing?

The contract will be enforced to the extent of the goods accepted.

Which of the following was the result in Lopez v. Kmart, the case in the text involving whether the plaintiff, an employee who while a minor signed an arbitration clause in connection with employment, could disaffirm the clause once attaining the age of 18?

The court ruled that the plaintiff could disaffirm the contract because he did so within a reasonable time after turning 18

Mary and Perry entered into a written, signed contract by which Mary agreed to buy Perry's home for $150,000. Mary and Perry orally agreed, but did not put into writing, that a condition precedent to the purchase was that Mary would be approved for financing. Unfortunately, although she put forth a good faith effort, Mary could not get a loan and refused to go through with the sale. Which of the following would be the most likely result if Perry sued Mary for breach of contract?

The court will likely rule in Mary's favor because oral testimony may be used to prove the existence of a condition precedent

Which of the following generally happens when a minor lies about his or her age in order to convince an adult to enter into a contract?

The court will not allow the minor to defraud the adult.

Peter hired Alicia to burn his house down so that Peter could collect the insurance money. He paid Alicia, but Alicia never set the fire. If Peter sues Alicia for breach of contract, what is the likely outcome?

The court will not force Alicia to return Peter's money.

Todd is the executor of his grandfather's estate. Sam, who had loaned the grandfather $500, claimed that Todd orally agreed to pay out of Todd's own funds the amounts remaining due on the debt. Which of the following is the most likely result should Sam sue Todd personally for the amounts due?

The court, based on the statute of frauds, would refuse to allow oral evidence of any alleged oral agreement of Todd to pay.

Which of the following is correct regarding creditor beneficiary contracts?

The duty owed can be any kind of legal duty.

What is true of a partner's right to compensation?

The partners may agree that one or more of them is to be paid a salary in addition to sharing profits.

When a minor reaches the age of majority:

The person may disaffirm a contract for a reasonable time after reaching majority.

Which of the following is more important than the right of individuals to bargain freely?

The public welfare

In a commercial lease, what rights might the lease give the tenant? (Check all that apply)

The right to make improvements The right to remove fixtures

Kate orally agreed with Sally on April 1 that she would pick up Sally's children after school beginning on September 1 of the current year and running through May 31 of the next year, a period of nine months, for the sum of $30 per day. On May 1, Kate got a better job offer and told Sally that she would not pick up the children after all. Which of the following is true regarding the effect of the statute of frauds on the agreement, if any?

The statute of frauds applies because bilateral contracts not capable of being performed within one year come within its terms, and the one-year period is computed from the time the contract comes into existence.

Jamison, the owner of a shoe store, received a written confirmation from ABC Wholesaler in regard to his purchase of 100 pairs of shoes. Jamison threw the confirmation in the trash because he knew he had not ordered any shoes. He had encountered problems with sellers from ABC before and was tired of dealing with them. Which of the following is true should ABC sue alleging a valid contract between the parties for the sale of the shoes?

The statute of frauds does not bar the admission into evidence of the written confirmation, but ABC would still be required to convince the court that the parties had a contract.

What limits are there to the tenant's removal of trade fixtures? (Check all that apply)

The tenant cannot remove the fixture if it would cause substantial damage The tenant must remove the fixture by the end of the lease

Which of the following is correct regarding the definition of nuisance?

The term nuisance has no set legal definition.

Which of the following is false regarding the attributes of a limited liability company?

There are restrictions on the number of members a limited liability company may have.

Which of the following is correct regarding incidental beneficiaries?

They acquire no rights under the contract and cannot sue for performance.

Which of the following is correct regarding taxation of sole proprietorships?

They are not required to pay corporate franchise taxes.

Which section of the Americans with Disabilities Act (ADA) focuses on places of public accommodation?

Title III

The major piece of legislation outlawing discrimination in employment prohibiting discrimination on the basis of race, color, religion, sex, or national origin is:

Title VII of the Civil Rights Act of 1964.

Under the ______, the person who owns the land in fee simple obtains a certificate of title.

Torrens system

Which of the following is an exception to the usual fixture rules?

Trade fixtures

A common tort reform measure includes limiting the amount of non-economic damages that may be recovered. T/F

True

A guarantor's promise must be evidenced by a writing

True

A guarantor's promise must be evidenced by a writing. A) True B) False

True

A minor must petition the court to receive emancipation. T/F

True

A mutual mistake is grounds for rescission

True

A mutual mistake is grounds for rescission. T/F

True

A negligent person is liable for only the proximate results of his negligence. T/F

True

A party to an illegal contract who is aware of the agreement's illegality may still recover damages. T/F

True

A party who enters an illegal contract may rescind the contract if done so before the illegal act is performed. T/F

True

A seller may sometimes accept an offer by shipping the goods. T/F

True

Affirmative Action is voluntary. A) True B) False

True

An agreement to steal a car is a void contract. T/F

True

An injured party must prove a detriment (injury) to cancel a contract due to misrepresentation

True

An injured party must prove a detriment to cancel a contract due to misrepresentation. A) True B) False

True

Ann has been treated off and on for mental illness. In regard to Ann, capacity to contract is presumed

True

Bidders at auctions are generally held to be the offeror. T/F

True

Contract conditions may be expressly or impliedly created. A) True B) False

True

Digital signatures are given the same effect as written ink on paper.

True

Digital signatures are given the same effect as written ink on paper. A) True B) False

True

Each party to a contract is both a promisor and a promisee. T/F

True

Electronic signatures on cyber contracts are legally binding. T/F

True

Exculpatory clauses that seek to avoid liability for willful misconduct or fraud are generally unenforceable.

True

False imprisonment charges are a concern for shop keepers attempting to detain shop lifters. T/F

True

Fraud in the execution may result if a party to a contract prevented another party to the contract from reading the contrac

True

Fraud in the execution may result if a signer was prevented from reading the contract. A) True B) False

True

If Peggy pays her husband $50 to quit smoking and he does, he has exchanged something of legal value. T/F

True

If an offeree uses a means of acceptance that is slower than that used by the offeror to communicate the offer, the acceptance is not effective until it is received. T/F

True

If the trademark becomes used as a generic term by the public, a business may lose its trademark protection. A) True B) False

True

Most contracts involving a minor are voidable by the minor only. T/F

True

Negligence requires injury. T/F

True

Offer + Acceptance = Agreement T/F

True

People are free to make bad bargains. T/F

True

Rejection may only be performed by an offer. T/F

True

Some online service companies have been willing to reveal an author's true identity in cyber defamation cases. T/F

True

Specific performance is usually not granted in personal service contracts. A) True B) False

True

T/F: Agency decisions are rarely overturned by the courts if the agency has acted reasonably

True

T/F: Each state within the United States has its own Constiution

True

T/F: It is crime to use money from a racketeering activity to purchase a legitimate business

True

T/F: Nancy, while at home in Florida, entered into a contract to purchase a diamond ring valued at $100,000 from Erik, who lives in NY. If Erick breaches the contract, Nancy may choose to sue Erik in federal court

True

T/F: New evidence may not be introduced in an appellate court

True

T/F: Substantive law established rights, duties and privileges for citizens

True

T/F: Tenancy by the entirety is essentially a joint tenancy with the added requirement that the parties be married.

True

T/F: Treble damages translates to three times actual loss

True

T/F: Under Title III of the Americans with Disabilities Act of 1990, only places of public accommodation are required to comply with the statute.

True

The Family Medical Leave Act does not apply to all employers. A) True B) False

True

The difference between conversion and trespass to personal property is based on the degree of interference with another's property rights. T/F

True

True or false: A conflict of interest occurs when an agent colludes with the third person to withhold knowledge or money from the principal.

True

True or false: If an agent intends to act for a principal and not be held personally liable, she should fully disclose the identity of the principal

True

When a computer used orders goods he finds advertised on a website, the user is the offeror. T/F

True

Your personal identification number, or PIN, for your debit card is an example of a valid electronic signature. A) True B) False

True

True or false: A contract that cannot be performed without committing a tort is illegal.

True Reason: Yes, a contract that cannot be performed without committing a tort is illegal.

Which of the following types of contracts are often described as so unfair that they "shock the conscience of the court?"

Unconscionable

In most states, oral contracts that are covered by the statute of frauds are:

Unenforceable

Which of the following is true regarding a claim of unconscionability in relation to contract law under common law?

Unequal bargaining power standing alone is insufficient to justify a refusal to enforce a contract on the basis of unconscionability.

A guaranty contract is treated as an original contract outside the scope of the statute of frauds under which of the following circumstances?

When the leading object doctrine applies.

Xavier and William are both architects. They have formed a partnership, but have not signed a partnership agreement. Xavier landed a big contract with a major real estate developer and did all the work for the project, which generated $50,000 in profits. Under the Uniform Partnership Act (UPA), how will the profits from this project be divided?

William and Xavier will each receive $25,000

Suppose Barbara is the owner of a hardware and lumber business and she is away for an extended vacation. During a torrential downpour the roof begins to leak and threatens to dump water on inventory and bags of concrete in the warehouse. Mark, the assistant manager, cannot get a hold of Barbara and instead calls Sam at Roofers-R-Us, to fix the roof, who estimates the repairs will cost $2,500 which Mark accepts. Sam completes the work and saves the inventory. Did Mark have the authority call Sam and have the roof repaired?

Yes, Mark had the implied inherent agency power to call Sam and pay for fixing the roof.

Under the Affordable Care Act:

Young adults up to age 26 may stay on their parents' insurance plans, people cannot be excluded from coverage because of preexisting conditions, and states may mandate certain types of coverage.

Which of the following are a government exercise of power to regulate the health, safety, morals, and general welfare of the community?

Zoning ordinances

The Age Discrimination in Employment Act does NOT apply to the following:

a 25 year old person.

When a lawyer agrees to _______, she is paid a percentage of the financial settlement or the jury award if she wins.

a contingent fee

In a cooperative, a building is owned by ______. (Check all that apply)

a corporation a group of persons

A deed states ______. (Check all that apply)

a description of the property a recitation of consideration the name of grantee

Real estate brokers owe ______ to their clients.

a fiduciary duty

In order to form a corporation or a limited partnership, ______.

a filing with a state government official is needed

A garage door installed on a house is an example of ______.

a fixture

The action to abate a public nuisance must usually be brought by ______.

a government entity

Special rules apply to personal property subject to ______ at the time it is attached to real property. (Check all that apply)

a lien a security interest

The business of a partnership may continue when _________, however, the law treats the partnership as dissolved.

a partner dies a partner retires a partner becomes insolvent

A life estate is measured by ______.

a person's own lifetime or the lifetime of somebody else

If property taxes are not paid, the lien created has ______ all other claims to the land.

a priority claim over

If a member withdraws from an LLC, they can receive

a return on capital investment made the value of her interest

Legally, an limited liability company is a

a separate entity apart from its owner

A sole proprietorship is a business operated by ______ as their own personal property.

a single person

A franchisor can conduct business as ______. (Check all that apply)

a sole proprietorship corporation partnership

A party who is ignorant of a contract's illegality due to ________ that regulate(s) the other party's business may recover for performance rendered ______ the party learned of the illegality,

a special statute; before

A trade name in a sole proprietorship must be registered with __

a state or local official

A trade name in a sole proprietorship must be registered with ______.

a state or local official

When courts are looking at the negligent failure of a property owner to take precautions in restricting such wrongdoer's access to the premises, the key question is whether the wrongdoer's access was ______ leading to the injuries.

a substantial factor in

If a sole proprietorship or partnership is sold, this is usually ______.

a taxable transaction

If a new person comes to the joint tenancy through a sale of the property. the new tenant is considered ______.

a tenant in common

When a court makes a decision based on the rulings of previous cases that have similar facts, the court is the following: a) Precedent b) Ex post facto laws c) Public Policy d) the plain meaning rule

a) Precendent

Jurisdiction is: a) the authority of a court to hear a case and render a binding decision on it b) the geographic site where the case must be heard c) neither A or B d) both A and B

a) The authority of a court to hear a case and render a binding decision on it

Which of the following is most likely a fixture? a) a stereo system built into, and wired throughout a house b) a moveable bookshelf c) a television d) none of the above

a) a stereo system built into, and wired throughout a house

Tiffany has the right to drive across Chad's land in order to reach her property at the lake. Tiffany's right to drive across Chad's land is called a(n): a) affirmative easement b) easement in gross c) easement by way of necessity c) none of the above

a) affirmative easement

The basic landownership interest in the US is: a) fee simple b) life estate c) affirmative easement d) license

a) fee simple

Both LLC's and corporations must: a) file with the secretary of state b) pay income taxes c) ensure that they are publicly held d) all of the above

a) file with the secretary of state

The problem with looking to "values that find wide acceptance" as guide to ethical corporate behavior is that: a) modern life holds a diversity of conflicting ethical views b) values that find wide acceptance usually make bad business sense c) firms should look to profit maximization over anything else d) all of the above

a) modern life holds a diversity of conflicting ethical vies

Which of the following is subject to unlimited personal liability? a) partners in a general partnership b) partners in a limited partnership c) corporate shareholders d) all of the above

a) partners in a general partnership

The 'Sarbanes-Oxley Act' does the following: a) substantially increases the penalties for corporate wrongdoing b) gives corporations greater freedom from government control. c) both a & b d) none of the above

a) substantially increases the penalties for corporate wrongdoing

Courts look at which of the following when determining a franchisor's liability for torts committed by the franchisee? a) the amount of control the franchisor exhibits over the franchisees. b) the franchisee agreement both parties signed c) the applicable state statute d) the franchisor is never liable for torts committed by the franchisee.

a) the amount of control the franchisor exhibits over the franchisees.

"Risky Shift" refers to a group of people that when forced to reach a consensus on an acceptable level of risk will: a) usually agree on a higher level of risk as a group that each would accept as individuals b) never agree on a higher level of risk as a group than each would accept as individuals c) usually not able to reach a consensus on an acceptable level of risk d) both B and C

a) usually agree on a higher level of risk as a group that each would accept as individuals

If a partnership is established for a term of 20 years, which of the following is true regarding the authority of a partner to continue the business beyond that time? a. An individual partner has no right to continue the partnership, and there must be unanimous agreement of all partners in order for the partnership to continue. b. An individual partner has the right to continue the partnership only if a majority of the partners agree to do so. c. An individual partner has the right to continue the partnership if a minority of the partners agree to do so. d. Partnerships are perpetual entities, so an agreement establishing a term is disregarded in the law as superfluous, and it would continue past the term as a matter of law.

a. An individual partner has no right to continue the partnership, and there must be unanimous agreement of all partners in order for the partnership to continue.

Which of the following allows for a partner to sell her partnership interest to another, thus making the purchaser a substitute partner? a. Buyout agreement b. Purchase clause c. Substitution agreement d. Acceptance clause

a. Buyout agreement

Which of the following is true regarding making a choice as to the appropriate form of business organization? a. Once it is formed a partnership may later be changed to a corporate form of business. b. It is unlikely that there would be adverse tax consequences involved in liquidating a corporation. c. Factors generally point to a corporation as the best form of business. d. In starting a small business, financing a corporation will be easier than financing a partnership or an individual proprietorship.

a. Once it is formed a partnership may later be changed to a corporate form of business.

Which of the following has is indicative of owners who are family or small group of people who know one another? a. Privately held corporation b. Personally held corporation c. Publicly held corporation d. Individually held corporation

a. Privately held corporation

Which of the following allows for liability to be imposed upon the partnership for torts committed by any partner or employee of the partnership while engaged in partnership business? a. Respondeat superior b. Howey test c. Caveat emptor d. Fellow servant rule

a. Respondeat superior

All the partners in a limited liability partnership have equal say in its management, but this maybe altered by agreement. a. True b. False

a. True

An LLC may be sued in its own name. a. True b. False

a. True

In a general partnership, a partner is not automatically entitled to salary and wages. a. True b. False

a. True

A partner in a general partnership may not generally engage in activities that are in competition with the partnership. a. True b. False

a. True.

Which of the following is typically NOT subject to unlimited personal liability? a. corporate shareholders. b. sole proprietors. c. general partners in a limited partnership. d. partners in a general partnership.

a. corporate shareholders.

A(n) ______ is a history of the passage of title of the property according to the records, but is not a guarantee of title.

abstract of title

An agent has a duty to _________ for any secret profits, bribes, or kickbacks that she received from third persons during and within the scope of the agency

account for funds and property

An agent owes her principal a duty of ______ of all the property and funds received or within the agent's care

accounting

An agent owes her principal a duty of ______ of all the property and funds received or within the agent's care.

accounting

In addition to giving a principal a record of receipts and expenditures, a(n) ________ is an agreement, ________, between the agent and the principal that the records are accurate.

accounting, express or implied

A real estate broker ______ in the process of buying and selling real estate.

acts as the seller's agent

An agent acting within her ______ authority is not in violation of her agency duty to the principal.

actual

An agent's ______ authority may be either express or implied.

actual

For adverse possession, there must be ______ that is hostile to the real owner's title.

actual occupancy

Even though an agent may not have ______ authority, she may have _______ authority if the principal does - or fails to do - something that causes a third party to reasonably believe the agent can do business for the principal.

actual, apparent

In order ensure there are no adverse claims or unrecorded encumbrances, property buyers should ______.

actually inspect the property

The degree to which the item's use is necessary or beneficial to the use of the real property s known as ______.

adaptation

A court may refuse to enforce a contract of as contrary to public policy.

adhesion

A person can obtain ownership of real property by ______. (Check all that apply)

adverse possession inheritance purchase

An easement created by _____________ is when someone uses your land without permission openly and continuously for a period of time.

adverse possession prescription

A(n) ______ is the right to certain uses of the land of another person.

affirmative easement

An easement can be a(n) ______. (Check all that apply)

affirmative easement negative easement

Tiffany has the right to drive across Chad's land in order to reach his property at the lake. Tiffany's right to drive across Chad's land is called a(n):

affirmative easement.

The doctrine of ______ stems from courts' reluctance to force people to continue business relationships against their will

agency at will

Generally, a person can do anything through a(n) ______ she could legally do personally.

agent

The words or actions of a(n) Blank 1 of 1 alone cannot create apparent authority.

agent

As a(n) _______, a partner has a _________ to pass all _______ to the partnership. The partnership is treated as if it had been notified ________ the partner fulfills this obligation. Under the Uniform Partnership Act (UPA), the partnership is _______ to know whatever __________ knows.

agent duty relevant information whether or not deemed one partner

Agency law focuses on the relations between principals and a(n) ______ and ______ persons.

agent, third

A violation of the Fair Housing Act can result in a civil action brought by the ______. (Check all that apply)

aggrieved party government

If dissolution is caused by death, retirement, bankruptcy or dissolution by a member, the remaining members can avoid liquidation by ______.

agreeing to continue the business operations

Tenants in common can sever the co-tenancy by ______. (Check all that apply)

agreement sale partition

_______ partners have ______ liability for the partnership obligations. This means that _______ and the partners are all individually liable for the full amount of debt. However, a creditor cannot recover from _______ until _______ are exhausted.

all joint and several the partnership a partner's assets the partnership's assets

If a transferee under and LLC does not become a member they are entitled to ___________________

all of the transferee's share of profits

One of the primary elements of ratification is that the principal must have had knowledge of: __________.

all the material facts, although it is not necessary that she fully understand the legal significance of those facts to ratify the action

If a transferee under and LLC does not become a member they are entitled to ___________________

all transfer

When interpreting ambiguous language the court:

allows oral testimony to aid in interpretation.

Avoiding exclusion or other discrimination that violates the Americans with Disabilities Act (ADA) may require ______. (Check all that apply)

alteration of the enterprise's practices alteration of the enterprise's procedures

General partners usually take ____________ in management of day-to-day operations and can delegate their authority to one or more partners

an active role

When parties create a new risk for the sole purpose of bearing it, that is ______.

an illegal wager

Traditionally, sellers of property did not have to supply ______ to the buyer.

an implied warranty of habitability

A license is similar to an easement but is not considered ______.

an interest in land

Some states require LLCs to file ________ with the secretary of state

annual reports

In assigning liability in an Americans with Disabilities Act (ADA) case, the court must consider whether the owner or possessor could have reasonably ______.

anticipated the need to accommodate disabled persons

Courts allow parties to recover ______ if they ______ an illegal agreement ______ anyone performs an illegal act.

any consideration they have given; rescind; before

Today, many courts put a duty on the seller to disclose ______ that materially alters the value of the property and is not easily observed by the buyer

any known defect

In terms of a partnership at will, the partnership can be dissolved:

any time by any partner by notification to other partners

An gent has ________ authority to receive payment on an instrument she negotiates for a loan and has been permitted by the principal to keep.

apparent

Even if an agent does not have actual authority, she can have _______ authority if the principal fails to inform third persons that the relationship is not what it appears to be.

apparent

A person can become a(n) _________ from the principal's failure to inform third persons that the relationship is not what it appears to be.

apparent agent

A principal may be bound on a contract by an agent with _________ who appeared to have been given authority by a principal to enter into the contract.

apparent authority

In order to avoid ________ authority, a principal should impose limitations on an agent's authority that are not ________ and clearly communicate those limitations to third parties.

apparent, customary in the trade

A principal who is bound to a contract with a third person based on an agent's _____ authority ______.

apparent, may sue the agent for damages

An agent has _____ authority when the principal does something that causes a third party to ______ the agent has authority to conduct business for the principal.

apparent, reasonably believe

If a corporation wants to operate in a state other than its home state of incorporation, usually the corporation must ______. (Check all that apply)

appoint a local representative for service file articles of incorporation pay annual privilege or franchise taxes

If a corporation wants to operate in a state other than its home state of incorporation, usually the corporation must ______.

appoint a local representative for service pay annual privilege or franchise taxes file articles of incorporation

The Fair Housing Act prohibits discrimination in connection with ______. (Check all that apply)

appraisals brokerage services financing

The rules governing liability of the partnership under the Uniform Partnership Act (UPA)

are mandatory, as opposed to the rules governing the relationship among partners, which are default rules

State statutes generally require that LLCs ______. (Check all that apply)

are set up for a limited duration can be easily dissolved

Employees of the sole proprietor's business ______.

are the personal employees of the owner

Limited liability companies must file ___________ with the secretary of state before they can do business within the state

articles of organization

Some courts allow a builder to limit the implied warranty of habitability through a contract provision ______. (Check all that apply)

as long as it does not violate public policy as long as it does not violate the unconscionability doctrine

In order for an easement by adverse possession to not occur, the rightful owner of the property must ______.

assert his right during the period of time

Mirabella owes Christina $500. Christina transfers her right to receive the $500 to Jonathan. Christina has ______ her right to Jonathan.

assigned

The person who receives an assignment is the ______.

assignee

When rights are transferred under a contract, this is called a(n) ______.

assignment

When tenants transfer all of their remaining rights under a lease to a third party, a(n) _____ occurs.

assignment

The person who makes an assignment is the ______.

assignor

Real property is considered anything ______. (Check all that apply)

attached to something immovable immovable

A person who is subjected to disability based-discrimination in violation of the Americans with Disabilities Act can recover ______. (Check all that apply)

attorney's fees injunctive relief

A(n) ______ is an agent whose authority is in writing.

attorney-in-fact

Generally, people who deal with an agent or a purported agent have a duty to determine the extent, if any, of the agent's _____.

authority

f no time or event of termination is specified, the agency _______ the result for which the agency was created has been accomplished.

automatically ends when

If a spouse dies in a tenancy by the entirety, the surviving spouse ______.

automatically receives the property

Termination occurs

automatically upon completion of winding-up

Fred and Jim own adjoining lots, Fred erected a fence between the two lots but inadvertently built the fence five feet onto Jim's land. Jim did nothing about having the fence moved off of his land. That was 20 years ago. Which of the following statements is true? a) the fence now belongs to Jim because it was built on his property b) Fred now owns the five feet of property between his property line and the fence c) Jim may still force Fred to remove the fence d) Jim may have the fence removed and sue Fred for the cost.

b) Fred now owns the five feet of property between his property line and the fence

Bill discovers that the new product his organization is prone to defect. Bill is also aware that his manager is committed to getting the product to the marketplace in the next 30 days. Bill has decided not to inform his manager of the problems with the product for fear the news will anger his manager. This is an example of: a) groupthink b) bad news not rising to the top c) sound decision making d) kantianism

b) bad news not rising to the top

For a gift of real property to be valid, the donor must: a) ensure that the donee takes possession of the property b) deliver the deed to the donee c) neither a/b d) both a/b

b) deliver the deed to the donee

A S corporation may not have: a) more than 75 shareholders b) more than 100 shareholders c) more than 1500 shareholders d) more than 7500 shareholders

b) more than 100 shareholders

"Groupthink" tends to: a) lead to rational corporate decision making b) suppresses critical thought c) fosters a team spirit leading to a greater social good d) all of the above

b) suppresses critical thought

When a partnership is dissolved, and the partnership has been profitable, after all assets are sold, what is the order of distribution? a. Proceeds from the sale of assets are used to pay partners any profit to which they are entitled; partners who loaned money are paid; partnership outside creditors are paid; and any other amounts are distributed pro rata among the partners based on the net amounts in their capital accounts. b. All partnership outside creditors are paid; partners who loaned money are paid; any remaining proceeds from the sale of assets are distributed pro rata among the partners based on the net amounts in their capital accounts. c. Proceeds from the sale of assets are used to pay partners any profit to which they are entitled; partnership outside creditors are paid; partners who loaned money are paid; and any other amounts are distributed among the partners on an equal basis. d. Partners who loaned money are paid; all partnership outside creditors are paid; any remaining proceeds from the sale of assets are distributed pro rata among the partners based on the net amounts in their capital accounts.

b. All partnership outside creditors are paid; partners who loaned money are paid; any remaining proceeds from the sale of assets are distributed pro rata among the partners based on the net amounts in their capital accounts.

Bruce, a lawyer and member of a limited liability partnership consisting of other lawyers, committed legal malpractice. Which of the following is true regarding the liability of Bruce and the other members of the limited partnership? a. Bruce has primary personal liability, and the other members of the limited liability partnership only have personal liability once Bruce's assets are extinguished. b. Bruce has personal liability, but the other members of the limited liability partnership do not. c. All members of the limited liability partnership have personal liability, but only to the extent of the profits made in the previous two tax years. d. All members of the limited liability partnership have personal liability for Bruce's actions.

b. Bruce has personal liability, but the other members of the limited liability partnership do not.

Which of the following is a taxable entity? a. Partnership b. Corporation c. Limited Partnership d. Sole Proprietorship

b. Corporation

Which of the following demands that a partner exercise reasonable skill and care when conducting partnership business? a. Duty of Loyalty b. Duty of Care c. Duty of Reasonableness d. Duty to Inform

b. Duty of Care

Jennifer, a limited partner in "Raingear to Go," was dissatisfied with the performance of the business. She began attending staff meetings, working in the store, and participating in the day-to-day operations. Which of the following statements is true? a.Jennifer's actions caused the limited partnership to become a corporation. b. Jennifer's actions changed her status from a limited partner to a general partner. c. Jennifer's actions created increased liability for the other limited partners. d. Jennifer's actions have no relevance because it was agreed between both the general partners and other limited partners that she was classified as a limited partner.

b. Jennifer's actions changed her status from a limited partner to a general partner.

Which of the following allows for limited liability for both limited partners and general partners? a. General partnership b. Limited liability limited partnership c. Limited partnership d. Liability partnership

b. Limited liability limited partnership

Mary eats at ABC Franchise Co., a fast food restaurant, and gets food poisoning. Once she recovers, she wants to sue. She discovers, however, that ABC Franchise Co., has very few assets and little money. She really wants to sue Big Franchise Co., the company that granted the franchise to ABC Franchise Co. Which of the following is true regarding her position in regard to Big Franchise Co.? a. Big Franchise Co. is automatically liable for the torts of the entity to whom it sold a franchise, so Mary merely needs to sue Big Franchise Co. along with ABC Franchise Co. b. Mary may be able to establish liability on the part of Big Franchise Co. if she can show that because of the control exercised on the part of Big Franchise Co., ABC Franchise Co. was not an independent contractor. c. Mary may be able to establish strict liability on the part of Big Franchise Co. if she can show that many of the franchises sold by Big Franchise Co. had problems with food poisoning in regard to consumers. d. Big Franchise Co. cannot be held liable for the torts of the entity to whom it sold a franchise, so Mary should abandon the idea of holding Big Franchise Co. liable.

b. Mary may be able to establish liability on the part of Big Franchise Co. if she can show that because of the control exercised on the part of Big Franchise Co., ABC Franchise Co. was not an independent contractor.

Which of the following is false regarding the attributes of a limited liability company? a. All 50 states have statutes that permit businesses to operate limited liability companies. b. There are restrictions on the number of members a limited liability company may have. c. They require the filing of articles of organization with the secretary of state. d. Members have limited liability unless the corporate veil is pierced.

b. There are restrictions on the number of members a limited liability company may have.

Generally, if a limited partnership failed to file the proper certificate, it would be treated as a: a. sole proprietorship. b. general partnership. c. limited liability company. d. de facto limited partnership.

b. general partnership.

The Revised Uniform Partnership Act (RUPA) gives every partner: a. the right to expel partners at will. b. implied authority to bind the partnership on contracts that are usually appropriate to that business. c. the right to add more partners at will. d. the right to use the partnership's property for personal business.

b. implied authority to bind the partnership on contracts that are usually appropriate to that business.

Nuisance actions involve ______ the various interests and rights involved.

balancing

If someone is a shareholder they are often given ownership rights but does not include an automatic right to

be an employee

When an item would be of little value except for use with certain real property, the item would likely ______.

be considered a fixture

In order to acquire title by adverse possession, a person must ______. (Check all that apply)

be hostile to the real owner's title put the true owner on notice that he has a cause of action against him actually occupy the land

Any act that the principal could have authorized at the time the act was done may ______.

be ratified

Once an LLP is formed and has adequate professional liability insurance, partners not involved in wrongdoing by other members of the firm will ______.

be sheltered from malpractice claims against the firm

The purpose of a franchise is to ______.

become an outlet for a national or international chain

If a corporation wants to transact business in a state other than the state in which it is incorporated, it must ______.

become qualified in the state

If the purchase price of the property is ______, the lender often requires that the policy of title insurance be obtained to protect the lender.

being financed by a third party

Easements may be acquired through ______ (Check all that apply).

being held back when property is sold implication purchase from the landowner

Limited liability and the tendency of investors to relate corporate securities to ______ companies make corporations appear safer for financing.

blue chip"

Long-term, secured debt securities are called _____.

bonds

Once a principal ratifies the agent's action, the principal is: ______.

bound in the same manner as if the agent had been fully authorized from the beginning.

In addition to a lien, an agent who has suffered legal injuries as a result of a principal's ______ can bring a(n) ______ for compensation owed the agent for her performance

breach;lawsuit

When an agent's breach of duty causes harm to the principal, and no compensation is due the agent, the principal can:______.

bring an action in court

A person who owns land in fee simple can grant right in his property to others ______.

but keep his ownership interest

Gabe owns a property in fee simple and conveys the property to Amy. Amy may use the property for the remainder of her life by may not sell the property. Gabe has conveyed: a) a reverter b) a fee simple defeasible c) a life estate d) none of the above

c) a life estate

Which of the following is NOT a flaw in the theory of changing the composition of a corporation's board to achieve corporate governance? a) an unwieldy corporate board b) an unlimited amount of times directors are given to make decisions c) a limited amount of information directors are given concerning decisions d) all of the above

c) a limited amount of information directors are given concerning decisions

In the business world, the goal of preventative law is to increase profits by: a) avoiding losses through fines and damage judgments b) business goals through enforceable contracts while avoiding government prohibitions c) both A&B d) neither A or B

c) both a &b: avoiding losses through fines and damage judgments & business goals through enforceable contracts while avoiding government prohibitions

The following form of business organization limits personal liability the most: a) sole proprietorship b) general partnership c) corporation d) all limit liability equally

c) corporation

The "categorical imperative" requires that individuals: a) do whatever maximizes their own personal comfort and minimizes personal pain b) treat others as a means to achieve their own personal goals c) judge to their actions by applying it to everyone in society d) do whatever it takes to sabotage a corrupt business

c) judge to their actions by applying it to everyone in society

A freeze-out: a) occurs when majority shareholders are excluded from key management functions b) can be reversed in court c) results in the minority shareholder having little or no influence in important corporate issues such as reduction or elimination of dividends or loss of employment. d) none of the above

c) results in the minority shareholder having little or no influence in important corporate issues such as reduction or elimination of dividends or loss of employment.

Under the First Amendment, regulation of commercial speech is: a) not protected b) protected only if reduced to writing c) subject to intermediate scrutiny d) subject to rational basis scrutiny

c) subject to intermediate scrutiny

Which of the following is false regarding dissociation of a partnership under the Revised Uniform Partnership Act? a. In general, each partner has the power to dissociate from the partnership at any time. b. Dissociation is a change in the relation of the partners caused by any partner ceasing to be associated with the carrying on of the business. c. A partner who wrongfully dissociates nevertheless retains the right to demand a dissolution. d. Dissociation may be triggered by a partner's death, retirement, or expulsion.

c. A partner who wrongfully dissociates nevertheless retains the right to demand a dissolution.

Which of the following federal administrative agencies has created rules requiring more information to be turned over to a franchisee regarding the franchise deal? a. SEC b. IRS c. FTC d. FCC

c. FTC

The following are liable for all prior obligations of a continuing partnership: a. only partners who continue and who were also responsible for incurring the obligations at issue. b. new partners. c. continuing partners. d. withdrawing partners (if released by novation).

c. continuing partners.

One advantage of the corporate form over that of a partnership is that: a. partnerships are subject to double taxation. b. partnerships are usually less profitable. c. corporations can more easily hold property over long periods of time. d. corporations do not have to worry about legal compliance issues.

c. corporations can more easily hold property over long periods of time.

A limited partnership must have: a. one or more limited partners and at least two limited partners. b. at least two general partners and at least two limited partners. c. one or more general partners and one or more limited partners. d. at least two general partners and one or more limited partners.

c. one or more general partners and one or more limited partners.

A freeze-out: a. occurs when majority shareholders are excluded from key management decisions. b. can be reversed in court. c. results in the minority shareholder having little or no influence in important corporate issues such as reduction or elimination of dividends or loss of employment. d. None of these choices are correct.

c. results in the minority shareholder having little or no influence in important corporate issues such as reduction or elimination of dividends or loss of employment.

State statutes generally require that LLCs ______. (Check all that apply)

can be easily dissolved are set up for a limited duration

In a sole proprietorship, the name of the business ______. (Check all that apply)

can be the sole proprietor's name can be a trade name can be an assumed name

Generally, if a general building scheme restriction is contained in a subdivision plat, other property owners in the subdivision ______.

can enforce it

When a tenant in common dies, his interest ______. (Check all that apply)

can pass through a will passes to his heirs with no will

Unlike limited partnerships, investors in limited liability companies ______.

can share in management

If a corporation or limited partnership plans to terminate the business formation, it needs to ______.

cancel its certificate

In a tenancy by the entirety, the tenancy ______ be severed by the act of only one of the parties.

cannot

A contract that ______ without committing a tort is illegal.

cannot be performed

If a general partner sells their interest, the purchaser ______.

cannot force liquidation of the business does not become a partner unless all other general partners agree

The hands off approach means that a party to an illegal agreement generally ______. (Check all that apply)

cannot recover consideration given to the other party cannot recover damages for breach of contract

In a tenancy by the entirety, a spouse ______.

cannot transfer the property by will if the other spouse is still living

The principal must have had legal ______ to do the act - both at the time it was done by the agent in the principal's name, and when the principal ______.

capacity, ratified the agency

When a corporation is acquired by another corporation, shareholders do not have to pay ____

capital gains tax

When a corporation is acquired by another corporation, shareholders do not have to pay ______.

capital gains tax

Traditionally, contract law provided that the seller had no duty to disclose to the buyer defects on the property being sold. This traditional rule of non-disclosure was another expression of the prevailing ______ notion.

caveat emptor

Traditionally, sellers had no duty to disclose defects; now, however, the law has substantially changed the traditional rule of ______.

caveat emptor

Even after a deposit/agent dies, banks continue to have the authority to act as the depositor's agent for ______ for a limited period of time

check-cashing purposes

Remedies for public nuisance generally include ______. (Check all that apply)

civil penalties injunctive relief

Shareholders in ______ are often restricted in the sale of their stock making investments in these business organizations less liquid and marketable.

close corporations

Corporations are divided between ______. (Check all that apply)

close corporations publicly-held corporations

A tenancy in partnership is a form of ______.

co-ownership

Some states use a system of ______ property that recognizes co-ownership of property by married couples.

community

The purpose of the settlement statement is to help buyers be able to ______ terms that are most favorable to them.

comparison shop

Ratification gives both: (1) the agent the same right to ________ that she would have had if there had been prior authorization, and (2) the principal to ________ of the contract.

compensation, the full benefits

When the governmental institutes a formal legal action to exercise its eminent domain power, this is known as an action to ______ property.

condemn

A close physical connection between an item of personal property and certain real property may lead a court to believe the item is ______.

constructively annexed

Items such as heavy machinery can actually be ______ even if they are not physically attached to the real property.

constructively annexed

Courts are especially likely to find inequality in bargaining power in cases involving ______.

consumer contracts with businesses

If a partnership _________ after a partner is dissociated, it must pay the ex-partner ________ of the partnership, which is equal to the _______ of her share of the proceeds if (1) the partnership were sold as ________ or (2) ______. If the partner's dissociation was wrongful, the partnership may deduct ________ from this mount.

continues the value of her share greater an ongoing business the partnership's assets were liquidated any damages she caused

The following are liable for all prior obligations of a continuing partnership:

continuing partners.

Generally it is easier to preserve good will in a corporation as owners change due to __________ of the business.

continuity

Generally it is easier to preserve good will in a corporation as owners change due to __________ of the business. Multiple choice question.

continuity

A(n) ______ is a contract in which the only choice for one of the parties is between adhering to the terms dictated by the other party or not contracting at all.

contract of adhesion

Most franchise contracts are typically ______.

contracts of adhesion

The phrase(s) ______ is/are common usage in conveying a deed. (Check all that apply)

convey and warrant bargain grant

A(n) ______ of real property transfers fixtures with the property even if the fixtures are not specifically mentioned.

conveyance

A deed is an instrument that ______.

conveys property from a grantor to a grantee

Generally it is easier to preserve good will in a _____ as owners change due to continuity of the business.

corporation

Typically, a franchisor is a ______.

corporation

When the maximum corporate tax rate was less than the maximum individual rate, a shareholder's interest in the retained earnings was not taxed until the ______.

corporation was dissolved stock was sold

When the maximum corporate tax rate was less than the maximum individual rate, a shareholder's interest in the retained earnings was not taxed until the ______. (Check all that apply)

corporation was dissolved stock was sold

Banks who lend money to corporations often require one or more of the shareholders to ______.

cosign corporate notes

If the promisor's performance will satisfy a legal duty that the promisee owes a third party, the third party is a(n) ______ beneficiary.

creditor

Premises liability has expanded to protect ______ on property from harmful actions by third parties. (Check all that apply)

customers tenants guests

The Fair Housing Act prohibits discrimination on the basis of race, color, religion, sex, and: a) national origin b) handicap c)familial status d) all of the above

d) all of the above

The advantages of franchising include: a) the franchisee may use a trademark owned by the franchisor b) the franchisor may provide advertising c) the franchisor may benefit from the possibility of rapid expansion by using the financial resources of the franchisees d) all of the above

d) all of the above

Which of the following statements is true concerning franchises? a. Under federal law, the franchise contract must contain an assurance of the right to renew. b. Franchising is limited to the continental U.S. c. The term of the franchise contract must be at least 5 years. d. Federal and state governments regulate the franchise relationship.

d. Federal and state governments regulate the franchise relationship.

A partner's ownership of partnership property is called: a. Partnership allowance b. Partnership property c. Partnership chattel d. Partnership interest

d. Partnership interest

The following form of business organization exposes the owner to personal liability the most: a. Corporation. b. Limited Liability Partnerships. c. LLCs. d. Sole proprietorship.

d. Sole proprietorship.

An S corporation may not have: a. more than 1,500 shareholders. b. more than 7,500 shareholders. c. more than 75 shareholders. d. more than 100 shareholders.

d. more than 100 shareholders.

Because partners seldom give up their right to participate in management, decisions of the corporation can be

deadlocked delayed by consultations

Because partners seldom giver up their right to participate in management, decisions of the corporation can be

deadlocked delayed by consultations

Generally a corporation is not affected by the ___________ of a shareholder if they are no longer a part of the corporation

death insolvency

Generally, ______ does not affect the ownership of property in a corporation because corporate existence is not affected by the event. (Check all that apply)

death retirement bankruptcy

State laws regarding franchises generally address ______. (Check all that apply)

deceptive advertising the franchisor's power to terminate the franchise

The owner of real estate may by ______ impose restrictions on the use of the property. (Check all that apply)

declaration of trust agreement

For federal income tax purposes, a condominium owner is treated as if she owns a single family home and can ______. (Check all that apply)

deduct her property taxes deduct her interest expense

Various arrangements can be made for financing the purchase of real property, including ______. (Check all that apply)

deeds of trust mortgages land contracts

When a promisor appoints another to perform his duties under a contract, this called a(n) ______.

delegation

When duties are transferred under a contract, this is called a(n) ______.

delegation

A deed must be ______ to be valid.

delivered

To be valid, a deed must be ______.

delivered in the lifetime of the grantor

Employees are also called _______ throughout much of the world.

dependent agents

An agency is automatically terminated by law if the subject matter of the agency is lost or: ______

destroyed

The Interstate Land Sales Full Disclosure Act applies to ______.

developers who subdivide property into fifty (50) or more lots

Trade fixture law recognizes that a commercial tenant who affixes personal property for the purpose of carrying on her trade or business ______.

did not intend a permanent improvement of the leased premises

Under ______ liability the principal basically is liable because of her own tortious conduct.

direct

A principal can be ______ liable when she is ______ in the hiring and/or the supervision of the agent.

directly, negligent

When an agent's breach of duty is serious enough, the principal may even ______ in spite of an unexpired contract.

discharge the agent without liability

A debt of $10,000 owing to the principal is ______ if the agent has authority to collect the debt and is paid the $10,000.

discharged

A debt owed to the principal is ______ if the agent has authority to collect the debt, and steals the $10,000 without paying the principal.

discharged

If a salesman comes to your door offering to sell products from ABC Corp, legally that principal is: ______.

disclosed

Usually, a person who is dealing with an agent of a(n) ______ is aware of the fact and knows for whom the agent is acting.

disclosed principal

With a few exceptions, agents for: ________ on contracts they make for principals.

disclosed principals cannot bring suit

If an agent wishes to not confuse a third party and avoid personal liability the agent should sign all documents by fully __________ and clearly ______.

disclosing the identify of the principal, indicating her capacity as an agent

An important aspect of the duty of loyalty requires the agent to avoid: ______. (Check all that apply

disclosing the principal's secrets using secrets for their own benefit disclosing customer lists

To protect herself from a charge of ________, an agent's ________ to pursue a second source of income alerts the principal to potential problems

disloyalty, disclosure of her intention

Ending a partnership involves which of the following three steps?

dissolution, winding up, and termination

Shareholders of a corporation pay taxes on ______.

dividends from the corporation

If a contract is ______ —that is, if the legal parts can be separated from the illegal parts—the courts will enforce the legal parts of the contract.

divisible

A tenancy by the entirety ends and transforms into a tenancy in common upon the ______ of the parties.

divorce

Shareholders in an S corporation ______. (Check all that apply)

do not pay corporate tax directly report their share of the corporation's losses or earnings on tax return

Shareholders in an S corporation ______. (Check all that apply)

do not pay corporate tax directly report their share of the corporation's losses or earnings on tax returns

If a general partner sells their interest, the purchaser ______.

does not become a partner unless all other general partners agree cannot force liquidation of the business

A person who represents that she is making a contract on behalf of a principal but who has no authority to do so: ______.

does not bind the principal

If an agent acts outside her scope of authority and makes unauthorized advances of her own funds, which in turn causes the principal to suffer a loss, the principal: ______

does not have a duty to indemnify the agent

A person can have the capacity to act as an agent, even though she: _______

does not have the legal capacity to contract

Generally, if a tenant in common is in sole possession of the property, she ______.

does not have to pay rent unless her possession is adverse

The fact that a use was in existence before the complaining neighbors acquired their property ______.

does not mean it cannot be found to be a nuisance

Generally, If a condominium owner wants to sell her unit, she ______.

does not need the permission of the other owners

A third person is a(n) ______ beneficiary if the promisee's primary reason for contracting was to make a gift of the contracted performance to the third party.

donee

There are two classes of third-party beneficiaries: ______ beneficiaries and ______ beneficiaries.

donee; creditor

At what stage are the partnership debts paid and the proceeds distributed to the partners?

during winding-up

__________ has/have a right to __________ the partnership's books and records __________ purpose or motive.

each partner copy and inspect regardless of the partner's

One of the major advantages of a publicly held corporation is the ______

ease of selling one's investment

One of the major advantages of a publicly held corporation is the ______.

ease of selling one's investment

A person may have the right to use the land of another person but not to actually occupy it on a long-term basis. The property interest that grants a person this particular right is known as a(n) _____.

easement

If a landowner can only access his land through land owned by another person, he is entitled to a(n) ______.

easement by necessity

Easements that are not granted expressly such as ______ are enforceable even though they are not in writing. (Check all that apply)

easements by necessity prescriptive easements prior-use easements

Today, revised criminal codes have made it ______ to impose criminal liability on principals if the agent's criminal behavior occurred: ______.

easier, within the scope of employment

A tenant in common can dispose of her share of the property ______.

either during her lifetime or upon her death

The power of a government to take private property for public use is known ______.

eminent domain

In an effort to maintain the value of its trademark, the franchisor may exert considerable control over the franchisee. This control may be enough control for a court to determine that the franchisee is the franchisor's ______.

employee agent

A(n) ______ is a known defect in a title.

encumbrance

Restrictions on property can be

ended on their own terms lost by abandonment waived

If the main purpose of a contract can be achieved without enforcing an illegal part of the contract, a court will ______.

enforce the main part of the agreement

Limited partners generally do not ______.

engage in the day-to-day business of the partnership

Each partner has _______ in the management of the partnership's business ________ the partners agree otherwise. Large partnerships often designate _________ to run the business operations.

equal rights unless managing partners

Tenants in common have ______. (Check all that apply)

equal rights to possess the property undivided interests in the property

The bylaws of a corporation:

establish rules for the conduct of internal affairs.

Each partner is personally liable for any losses suffered by the partnership ______. (Check all that apply)

even if the losses are not attributed to the partner even if the losses exceed the individual partner's contributions

In 1988, for the first time in history, the maximum corporate tax rate ______.

exceeded the maximum individual tax rate

If an agent ______ her authority and contracts with ABC Corp. on behalf of the principal, the principal can avoid liability to ABC if: ______.

exceeds, he gives actual notice to ABC Corp about the agents exceeding her authority.

A tax-free transaction is possible when shares of a corporation are ______.

exchanged for another corporation

If the broker earns a commission if he or any other agent finds a ready, able and willing buyer in the time specified by contract, this is a(n) ______.

exclusive agency listing

Under the ______, the seller has a right to sell the property himself without being obligated to pay the broker a commission.

exclusive agency listing

In a(n) ______ contract, the broker has the exclusive right to sell the property for a specified period of time and receives a commission no matter who finds the buyer.

exclusive right to sell

Under an ______ listing, a seller must pay the broker her commission even if the seller or another broker found the buyer during the duration of the listing contract.

exclusive right to sell

A(n) ______ clause gives third parties notice that the agent lacks authority to make binding contracts.

exculpatory

A(n) _______ is a provision in a contract that attempts to relieve one party to the contract from liability for the consequences of his negligence.

exculpatory clause

For a gift to be valid, the donor must deliver a/an ___________ to the property to the donee or a third party

executed deed

Salaries and wages paid to employees of a sole proprietorships are considered ______.

expenses and deductible on taxes

Shareholder-emplyees may be paid salaries that are taxable as personal income to the shareholder but are deductible as ______.

expenses for the corporation

If an agent incurs substantial ________ courts will ________ the agent has had a reasonable time to earn the expected commission.

expenses, not allow a principal to terminate the agency until

If a buyer and seller of a house agree to permit the seller to remove a fence that would otherwise would be a fixture, they have a(n) ______ agreement.

express

If the parties to a(n) ______ agreement have clearly stated their intent about a particular item, the court will enforce the agreement

express

An agent has ______ authority when the principal either ______ or by a writing, specifically describes the extent of the agent's powers.

express, orally

Many courts today hold that an implied warranty made by a builder-vendor or developer would ______.

extend to subsequent purchasers

Many inexperienced people have been ruined financially by believing ______ claims of the ______ of franchises.

extravagant; wealth-building potential

Even though it is often said that ignorance of the law is no excuse, courts have sometimes allowed recovery if one or both parties to an illegal bargain are ignorant of the ______.

facts that made the bargain illegal

A principal's intent to ratify an agency may be inferred if the principal ________. (Check the two correct answers)

fails to repudiate the unauthorized contract after becoming aware of it accepted the benefits of the unauthorized contract

The property owner in an eminent domain case is entitled to receive ______ for the property.

fair market value

A partner always has the right, though not the power, to leave a partnership.

false

A partner's liability for the partnership's obligations includes full liability for any debts incurred by the partnership prior to the partner joining the partnership.

false

A partner's rights is to profits is protected from the reach of creditors, and may only be used to pay a partner's personal debt if she chooses to transfer the right to creditors.

false

A partnership can be held liable for the negligence of a partner in the ordinary course of the partnership's business, but not for any intentional torts of a partner.

false

A partnership is liable for the ordinary negligence of a partner that occurs in the ordinary course of business only if the partner assumes liability to the partnership for such conduct in the partnership agreement.

false

A partnership must make a formal filing with the Secretary of State containing basic information about the entity.

false

Basic UCC requirements in regard to the statute of frauds include a requirement that the writing sets forth the price agreed upon between the parties.

false

Brock and Heidi agree to jointly run a fundraiser for the nonprofit children's hospital. Even if they don't have a formal, written agreement, they have formed a partnership.

false

Doyle contributed $10,000 when he became a general partner in the existing partnership of R & Z Heating. If Albert wins a judgment for $25,000 against R & Z on a claim that was incurred before Doyle became a partner, Doyle shares joint and several liability with his new partners for the whole obligation.

false

If part of a divisible contract becomes illegal, the whole contract is illegal.

false

T/F: If a general partner sells her partnership interest to an outside party, that party automatically becomes a general partner in the partnership

false

T/F: Only corporations may be accused of conscious lawbreaking.

false

T/F: The term "risky shift" refers to the minimum amount of risk decision-makers are willing to take.

false

The Uniform Partnership Act (UPA) provides default rules regarding the liability of partnerships to outsiders.

false

The dissolution of a partnership means the same as its termination.

false

The rules set out in the UPA defining the liability of partners to outsiders can be modified by the partnership agreement.

false

True or false: Agency relationships may only be formed by a contractual agreement

false

True or false: Most of the world shares the United States' notions and traditions of agency at will

false

Voting rights are divided among partners based on their initial contributions to the partnership.

false

When a partner dissociates, the partnership terminates.

false

The Fair Housing Act prohibits discrimination by ______. (Check all that apply)

false representations that housing is not available for sale or rental refusal to sell or rent property

A minor must petition the court to receive emancipation.

false. Emancipation can occur, for example, when a minor marries or gets a job and moves away from home and the parent does not object. No formalities are required.

The 1988 Amendments to the Fair Housing Act added ______ to the original Fair Housing Act's prohibited discrimination against protected classes. (Check all that apply)

familial status handicap

Many cities and towns have attempted to "zone out" groups living together such as religious cults, unrelated adults, students, and communes by redefining which of the following terms?

family

A property interest that allows a person who owns real property to dispose of it either during his lifetime or on his death is a(n) _____ property interest.

fee simple

A(n) ______ is a person in a position of trust or confidence, such as a trustee, an agent, or a partner.

fiduciary

A(n) ______ is one who is trusted to act in the best interests of another, rather than pursuing his own interests

fiduciary

Dusty dissociated from a partnership. To protect himself from debts of the partnership after he leaves, Dusty should

file a statement of dissociation with the Secretary of State

From a franchisee's standpoint the most important things a franchisor can offer is ______. (Check all that apply)

financing advertising business training

If personal property becomes integrated with real property, it is known as a(n) ______.

fixture

In a commercial lease, the lease might give the landlord the right to ______.

fixtures installed by the tenant upon termination of the lease

Many state laws have been enacted to help with ______.

franchisee-franchisor business relationships

One of the most common ways to do business in the United States is through ______.

franchising

Although many franchisees have been successful, there are still issues associated with franchising including ______. (Check all that apply)

franchisors not giving the assistance to run the franchise as promised franchisors misrepresenting their opportunities

When Beatrice turns back the odometer on the van she is trying to sell, she is guilty of:

fraud

The seller's failure to disclose known defects effectively amounts to the assertion that the defects do not exist and courts may find this to be ______. (Check all that apply)

fraud misrepresentation

A basic assumption underlying our economic system is that as a general rule, the public interest is best served by ______.

free competition

A basic assumption underlying our economic system is that the public interest is generally best served by ______.

free competition

A court will generally not enforce an illegal agreement, and it will not grant any relief to the parties involved. The reason for this rule is to ______.

further the public interest

A(n) __________ agent is a person who acts for the principal in a number of transactions over a period of time.

general

LLPs are taxed as ______.

general partnerships

A(n) ______ agent acts for the principal in a number of transactions over a period of time while a(n) ______ agent is authorized to do a specific transaction.

general, special

Ownership of a family or other close corporation can be shifted gradually by __________ to those who will succeed the present managers

gift sale

An ordinary seller of a home ______.

gives no implied warranty of habitability

If a joint tenant dies, his interest ______.

goes to the other joint tenants

The ______, ______, and ______ of the agent are immaterial in deciding whether the implied warranty of authority applies. (Check the three correct answers)

good faith knowledge intent

The implied warranty of ______ amounts to a guarantee that the house is free of latent defects that would render the property unsafe or unsuitable for human habitation.

habitability

The extension of the implied warranty of ______ to subsequent purchasers greatly ______ the legal vulnerability of builders and developers.

habitability; increases

Courts generally have a(n) _____ approach to illegal agreements and leave the parties where it finds them.

hands off

If an agent acting within her scope of authority makes advances of her own funds on a principal's behalf, the principal: ______

has a duty to reimburse the agent

In community property states, each spouse ______.

has an equal interest in all the property brought into the estate

Unlike the rest of the world, the United States ______ what terms may be included in an agency agreement

has few restrictions on

If a partner terminates the partnership in violation of their agreement, that partner _____________ for damages

has full liability

If a grantor gives a quitclaim deed and does not in fact have title, the grantee ______.

has no rights to sue the grantor

Limited partners who do not participate in management and shareholders in a corporation may lose their investment if the business fails, but ______. (Check all that apply

have no liability to creditors of the business have no liability to victims of torts

Limited partners who do not participate in management and shareholders in a corporation may lose their investment if the business fails, but ______. (Check all that apply)

have no liability to victims of torts have no liability to creditors of the business

Costs of ______ can be provided to shareholder-employees and deducted by the corporation with no immediate taxation to the employees if the other employees receive these benefits. (Check all that apply)

health insurance pension plans

Traditionally, sellers had no duty to disclose ______ defects.

hidden

Generally, the first step in buying or selling property is ______.

hiring a real estate broker

A publicly held corporation sells shares to people

ho generally are interested as investors

A corporation can ______. (Check all that apply)

hold, acquire and convey property sue and be sued in its own name

Franchisors must disclose to potential franchisees ______. (Check all that apply)

how many francises were terminated why a franchise was terminated

Jill, as a promoter, entered into contracts with third parties as part of her duties in bringing ABC Corp. into existence. Her liability to third parties on preincorporation contracts ends:

if, and when, the corporation, the promoter, and the third party all agree that the corporation will be substituted for the promoter.

Even if a bargain is illegal, if it involves ________ the contract will be enforced if the illegality does not involve ______ or a serious threat to the public welfare.

ignorance of the law, immoral behavior

An agreement that induces or compensates a public servant to deviate from her duties is ______.

illegal

An agreement to pay a public servant to influence his decisions is ______.

illegal

Any agreement that tends to induce a fiduciary to breach her duties is _______.

illegal

If Carol and Mark sign a contract for acts that are individually lawful, the contract may still be _______ if the net effect of the contract is criminal.

illegal

If Mirabella hires Mason, her co-worker, to throw a pie in her supervisor's face, their agreement is ______.

illegal

In some states, contracts for surrogacy are ______ and contrary to public policy.

illegal

An agent possesses the Blank 1 of 1 authority to do whatever else is reasonably necessary to accomplish the objectives of the agency.

implied

An easement can be ______ even though a party did not specifically grant or purchase it.

implied

If express authority does not cover contingency that may arise, an agent also possesses the ______ authority to do whatever else is reasonably necessary to accomplish the objectives of the agency.

implied

An agent has a(n) _______ to exercise her own judgment and act contrary to the principal's instructions without incurring liability in situations where the principal would have suffered financial loss or damages to her property.

implied authority

Courts often use the justifiable belief test to determine the extent of an agent's ________.

implied authority

One can assume that general agents to have a broader range of _________ than special agents.

implied authority

The Revised Uniform Partnership Act (RUPA) gives every partner:

implied authority to bind the partnership on contracts that are usually appropriate to that business.

Assignors who are paid for making an assignment are potentially liable to assignees for certain ______.

implied guarantees

If a principal has been judged insane or is a minor, the law imposes a(n) ______ by the agent that the principal has the capacity to be bound by the transaction.

implied warranty

Liability is imposed on an agent who has exceeded his authority on the basis of a(n) ______ and the agent is treated as if he had guaranteed to the third party that he had authority to make the contract.

implied warranty of authority

Eli rents an old farmhouse from Kathy for a term to begin on July 31, 2006 and end on August 1, 2007. When Eli attempts to move in, he finds that Rose, the previous tenant, is still living in the house. Here, Kathy has breached the:

implied warranty of possession.

If an agent justifiably believed she had authority, her authority would be _____, not ______.

implied, apparent

If a corporation is an agent, it always has ______ authority to hire ______.

implied, subagents

The ______ doctrine means that notice to the agent is notice to the principal if it relates to the business of the agency.

imputation

Under the _______ doctrine, an agent has a duty to inform the principal of knowledge the agent gains: ______.

imputation, in the course of her responsibilities

A partnership agreement:

in written form is needed if it creates a partnership in excess of 1 year

Occasionally, the performance of a contract intended solely for the benefit of the promisee will also incidentally benefit a third person. In this situation, the third party is known as a(n) ______ beneficiary.

incidental

Unless an assignment agreement clearly indicates to the contrary, courts generally interpret it to implicitly ______.

include a delegation of the assignor's duties under the contract

The wealth-increasing potential of an investment in a business is greatly affected by ______.

income tax laws

The wealth-increasing potential of an investment in a business is greatly affected by ______. Multiple choice question.

income tax laws

Franchise contracts usually declare that the franchisee is a(n) ______.

independent contractor

Agents also have implied power, also called _________ power, to act for a principal in emergencies.

inherent agency

If a partnership has been dissolved in violation of the partnership agreement, the ____.

innocent partners have the right to liquidate the partnership assets

Settlement charges that must be disclosed under the Real Estate Settlement Procedures Act include the ______. (Check all that apply)

insurance premiums broker's commission appraisal fees

Generally, ratification is basically a question of the principal's ______, which may be _______ by his acts or failure to act.

intent, express or implied

The EEOC has interpreted Title VII to prohibit:

intentional discrimination and acts that have a discriminatory impact.

Courts have recognized the right of property owners to institute litigation seeking compensation from the government whose actions effectively amounted to a physical taking of their land. This is known as a(n) ______ condemnation case.

inverse

In a(n) ______ condemnation case, the property owner sends the following message to the government: "You have taken my land; now pay for it."

inverse

If a partner __________ from the partnership, the partners ________ to continue the business. The ex-partner may take part only if _________.

is dissociated must vote on whether her dissociation was rightful

An agreement that calls for the commission of a crime ______.

is illegal

Generally, an agreement with an unlicensed person to perform regulated services ______.

is illegal and unenforceable

The liability of partners for torts committed by the partnership:

is joint & several, permitted the injured person to sue any partner individually or all of them together.

An agent who, without authority, represents to a third party that she is making a contract on behalf of a principal: _______.

is liable to the third person for damages if the principal refuses to perform the contract

If a new partner joins the LLP without unanimous consent of the LLP partners, the new partner ______.

is not considered a partner in the LLP

Unless the partners otherwise agree, a partner ______. (Check all that apply)

is not considered an employee is not entitled to wages

A revenue-raising statute:

is not designed to protect the public; and, if violated, will not result in a finding of illegality.

Unless the partners otherwise agree, a partner ______. (Check all that apply)

is not entitled to wages is not considered an employee

In a situation involving an undisclosed principal, if the third person elects to recover from the agent, the principal _____ required to _____ the agent.

is; indemnify

Even if the parties have formed an otherwise binding contract, the agreement is unenforceable if ______. (Check all that apply)

its formation is illegal its performance is illegal it is contrary to the public interest

For an S corporation to keep its tax status, ______. (Check all that apply)

its shareholders must all be individuals or estates the can be no more than 100 shareholders its shareholders must consent in writing to have the corporation taxed as a partnership

If an agent becomes a party to a contract along with the principal, she will assume: ______.

joint liability

Determining ______ in an eminent domain case often causes problems for individuals because they think their property is worth more.

just compensation

To determine the extent of an agent's implied authority, courts often use the ______.

justifiable belief test.

Courts often use the ______ test for determining the extent of an agent's apparent authority based on the _______ who is dealing with the agent.

justifiable belief, third party

When a corporation is involved in a type of business that has wide swings in income from year to year, it can reduce sharholder tax burden by ______.

keeping the dividend rate constant

The land of the thirteen (13) original colonies was granted to the colonies or to certain individuals by the ______.

king of England

A disparity of ______ often exists between a buyer of a house and builder-vendor. (Check all that apply)

knowledge bargaining power

The implied warranty of habitability in lease situations requires the:

landlord to ensure that the property is suitable for living.

In the recent years, ______ have begun joining the accounting profession and switching from general partnerships and professional corporations to limited liability partnerships.

law firms

Facing the growing cost of ______, accountants sought a new business formation known as the limited liability partnership.

lawsuits

In order to limit liability, it is wise to consult a ______ before choosing a particular form of business organization. (Choose all that apply)

lawyer public accountant

A ______ gives a tenant the right to occupy and use a particular piece of land

lease

If contracting parties agree who shall bear an existing risk, that is a(n) ______ agreement.

legal risk-shifting

Property insurance contracts are classic examples of ______ agreements.

legal risk-shifting

A commodity market transaction is a good example of a(n) ________ bargain.

legal speculative

A stock market transaction is a good example of a(n) ______ bargain.

legal speculative

When determining the ______ of an agreement, the courts presume the parties ______ a legal result.

legality; intended

The Fair Housing Act's non-discrimination provisions apply to several groups, including ______. (Check all that apply)

lenders appraisers real estate brokers

The main issue that distinguishes between an employee and an independent contractor is the: ______

level of control

A principal is _______ by representations made within the agent's ______ authority that are customarily made in the kind of business being transacted by the agent.

liable, apparent

A principal is ______ for representations that are within her agent's ______ authority to make and are reasonably necessary to accomplish the purpose of the agency.

liable, implied

A(n) ______ is usually a temporary right to use another person's land for a limited and specific purpose.

license

Citizens of a ______ state are generally allowed to _______ an unlicensed foreign corporation.

licensing; enforce their contracts with

If the taxes assessed on real property are not paid, they become a(n) ______ on the property.

lien

In general, recording statutes provide for the recording of all ______. (Check all that apply)

liens mortgages deeds

In some states, certain encumbrances such as ______ are good against the purchaser even if they do not appear on the certificate of title. (Check all that apply)

liens for taxes short-term leases highway rights

A ______ is a property interest that give right for only a person's lifetime.

life estate

Which type of contract generally allows the right of the insured to change the beneficiary without consent

life insurance

The principal reason to incorporate a business is to ______.

limit personal liability for business debt

Statutes that grant limited liability companies' power often grant ______. (Check all that apply)

limited liability of corporations tax benefits of partnerships

In terms of interests in real property, a _____ is not an interest in land but a temporary right to use another person's land for a limited and specific purpose.

liscense

A ______ empowers the broker to act as the seller's agent in selling the property.

listing contract

Without power to terminate the corporation in a close corporation, the minority share holder is ________ to the investment they made

locked in

In most urban areas, when property is sold, the property is laid out in the deed by ______.

lot, block and plat

There are several ways that property can be identified in a deed, including ______. (Check all that apply)

lot, block and plat metes and bounds government survey

In order to have an LLP, partners need ______. (Check all that apply)

maintain appropriate professional liability insurance to file an LLP form

The fact that an agent may have some implied or apparent authority does not end the inquiry regarding a third party's duty to determine the extent, if any, of the agent's authority. The specific question is whether the agent or purported agent had implied or apparent authority to _____.

make the particular agreement

Some state automobile franchise laws require ______.

manufacturers to only use independent dealerships

A deed ______ even though it does not follow the statutory form.

may be valid

A breach of the implied warranty of habitability subjects the defendant to damages ______. (Check all that apply)

measure by the loss in value of the house measured by the cost of repairs to the house

Generally, state statutes allow LLCs to transfer the interests in an LLC based on

member's consent

A ______ title is one that is readily salable and not subject to objections because of defects in the title.

merchantable

There are several interests in land which can include ______. (Check all that apply)

mineral rights life estates easements

A principal is normally not bound by the ________ acts of employees of agents unless these employees are also subagents whose appointment by the agent has been authorized.

ministerial

On behalf of the principal, an agent can delegate _______ acts to employees that involve no judgment or discretion.

ministerial

Shareholders of a corporation have little incentive to buy out ______ because of the freeze out option

minority shareholders

An agent can ______ without violating a duty of loyalty if the principal agrees to the second source of income

moonlight

An S corporation may not have:

more than 100 shareholders.

Gary and Herman are partners in a lawn mower repair business in Ohio. While Gary is on vacation, visiting his sister in Georgia, his sister's neighbor has trouble with her mower and Gary fixes it for her. She insists on paying him. Gary

must turn the money over to the partnership because he earned it doing the kind of work that the partnership does

Because an agency agreement is based on _______, each party has the right to terminate the agency event if there is no contractual right to do so.

mutual consent

If Bob has 200 acres of land but sells his back undeveloped 40 acres to Jill. The only way to access the back 40 acres is through the property Bob still owns. Jill will get an easement by ______ to be able to get to her property.

necessity

A(n) ______ is the right to have someone who owns property on an adjoining land to refrain from making certain uses of the land.

negative easement

The right to have your neighbor not erect a three-story building on her property is a(n) ______.

negative easement

Traditionally, premises liability dealt with ______ by the property owner or possessor.

negligence

Traditionally, a property owner or possessor had ______ to implement security measures to protect people on their property from wrongful acts by third parties.

no duty

Traditionally, contract law provided that the seller had ______ to disclose to the buyer defects on the property being sold.

no duty

In order to have a general partnership

no express agreement is needed the parties intend to have a partnership agreement

Sole proprietorships or general partnerships require ______ in order to be formed

no formalities

Sole proprietorships or general partnerships require ______ in order to be formed.

no formalities

partnership property

no individual rights (only for partnership benefit

A spouse in a community property state has ______ interest in the other spouse's separate property.

no legal

Generally, in an LLC, a member has ______ for the wrongdoing of other members.

no liability

If Roger sells Jan his home and tells her it is in "a great neighborhood," Jan could probably show which of the following should she be burglarized a short time later:

no offense

Sports Destination is a sporting goods store owned by four partners: Jerry, Kevin, Lisa, and Marcy. They have a partnership agreement, but it does not state anything about voting rights. Gear Head, a competing sporting goods store, has made an offer to merge with Sports Destination. Jerry, Lisa, and Marcy vote in favor of accepting Gear Head's offer, but Kevin does not. Has the merger been approved by Sports Destination?

no, because a merger requires unanimous approval from the partners

RRamon and Martin sign a written agreement stating that they will co-manage a hardware store together. Martin agrees to provide 75 percent of the start-up capital for the store and cover 75 percent of any losses suffered during the first year. Ramon is entitled to all of the profits. Ramon manages and operates the store while Martin handles the book-keeping and other administrative functions. Will a court find that Ramon and Martin formed a partnership?

no, because they do not share profits

Jasmine and Joanna run a bakery as partners. Joanna's sister asks her to provide all of the desserts for her company's annual New Year's party, and Joanna agrees. Joanna's desserts are such a hit with the partygoers that the company sends Joanna a check for $500. Joanna would have provided the food for free, but happily accepts the check. When Joanna tells Jasmine about the party and the check, Jasmine insists that Joanna must give Jasmine half of the money. Is Jasmine correct?

no, but Joanna must turn the earnings over to the bakery

What formalities are needed to create an assignment?

none

If a personal property item is able to be easily removed from the real property with little or no damage, the item is ______.

not a fixture

A principal will ________ to a third party if an agent _____ with the third person to withhold knowledge or money from the principal.

not be bound, colludes

If a restraint on property is so great that it effectively prevents the sale or transfer of the property to anyone else, the restraint is ______.

not enforceable

Short-term debt instruments are called _____.

notes

Generally, if someone installs a fixture to real property without the owner's consent, the installer can receive ______.

nothing

payment for work

nothing beyond share of profits

A(n) ______ is a new, separate agreement by the promisee to release the original promisor from liability in exchange for a third party's agreement to assume the promisor's duties.

novation

A property use that unreasonablely interferes with another person's ability to use or enjoy their own property is a(n) ______.

nuisance

Any property-related use or activity that unreasonablely interferes with the rights of others usually constitutes a(n) ______.

nuisance

Employees are under the control of their employer as to both the ______ of their work, and the ______ to achieve it

objective, means

In a well-drafted agency agreement, the relationship terminates at the time of completion or _______

on the happening of an event

Day-to-day operating management in a corporation is generally conducted by ______.

one or more officers

A dissociated partner is liable to outsiders for the debts incurred by the partnership

only for two years after leaving the partnership and only if the creditor reasonably believes he still is a partner

A partner may sell her share in a partnership

only with the unanimous approval of the other partners

Under a(n) ______ contract, the broker receives a nonexclusive right to sell the property.

open listing

A franchisor usually maintains a high degree of control over ______.

operations to standardized quality

If a court must partition tenancy in common property, it will try to divide the property. If the property cannot be partitioned, the court will ______.

order the property sold, then split the proceeds so that each tenant will receive her proportionate share

Franchising's biggest growth has come ______.

over the past quarter century

In a general partnership, each partner is considered a(n) ______ with a right to share in the profits of the business.

owner

In a general partnership, each partner is considered a(n) ______ with a right to share in the profits of the business. Multiple choice question.

owner

The success of a sole proprietorship usually depends upon the ______.

owner

In some cases, developers may be required under a zoning ordinance to dedicate land to the city for ______. (Check all that apply)

parks streets schools

An owner of real property who improves it by attaching an item of personal properly presumably intended that item to become ______.

part of the real estate

A principal is _______ when an agent signs a negotiable instrument indicating her status as an agent, but forgets to identify the principal to the third party.

partially disclosed

A principal is ________ when the third person knows he is dealing with an agent but does not know the identity of the principal.

partially disclosed

The rights and duties of the parties when the principal is _______ basically are the same as when the principal is undisclosed.

partially disclosed

A _________ is a voluntary association that carries on a business for profit

partnership

In a _________, the partners are free to leave the partnership at any time, whereas in a _________, the partnership lasts for a specified period of time set by the partners.

partnership at will; term partnership

When two parties incur the liability of a partnership without actually being partners, it is referred to as

partnership by estoppel

__________ applies when the parties ________, in fact, ________ but are ___________ as if they were.

partnership by estoppel are not partners held liable

If losses are anticipated in the early years of a business and the owners have other income, ______ will save taxes during that period.

partnerships sole proprietors

If losses are anticipated in the early years of a business and the owners have other income, ______ will save taxes during that period. (Check all that apply)

partnerships sole proprietors

Partners in a general partnership may not only lose their investment, they may also have to ______.

pay for partnership debts from personal asset

Partners in a general partnership may not only lose their investment, they may also have to ______.

pay for partnership debts from personal assets

pension plans health insurance

To protect itself, an appliance store that has sold a refrigerator that is subject to a security agreement and has installed it on real property will ______ by filing a financing statement in the appropriate government records office.

perfect its interest

If a landlord and a tenant agree that the tenant will pay rent at regular successive intervals but do not agree on a specific lease duration, the agreement is a _____.

periodic tenancy

Contracts involving ______ rights are generally ______. These are contracts in which some element of individual skill, credit, character, or judgment is an essential part of the agreement.

personal; nonassignable

An agent who acts for a corporation that is not yet formed, or for an entity that has no legal existence, such as an unincorporated association, is: ______.

personally liable on the contract

An agent who is signs a contract for a principal who is non-existent at the time, is: ______.

personally liable on the contract

Courts can sometimes strip corporate shareholders of their limited liability to prevent unfairness. This is known as ______.

piercing the corporate veil

Under the Americans with Disabilities Act (ADA), the owner of a ______ cannot exclude a disabled person from the premises or otherwise ______ them in terms of the ability to enjoy the property.

place of public accommodation; discriminate against

Cities and towns are allowing ______ that mix uses of living, working, shopping, and entertainment as long as the plans are approved pursuant to general guidelines.

planned unit developments OR new towns

State legislatures commonly delegate to counties, cities, towns, and other local governments the ______ power to impose reasonable regulations designed to promote the public health, safety, morals, and general welfare of the community.

police

If Joe plans to be on a business trip and leaves his minor child Marla with a trusted family, he would be wise to give his friend Bob a written ______ for any emergency issues that may arise with Marla while he is away.

power of attorney

Many agents use a(n) ________ with the words "subject to approval by the home office" usually has a(n) _________ clause limited the salespersons's authority.

preprinted form, exculpatory

The Occupational Safety and Health Act imposes on employers a general duty to:

prevent workplace hazards that may cause death or serious injury.

Since the principal rather than the agent is the intended party to the contract, the ______ has the right to: ______.

principal, enforce it

To bring a ______ nuisance action the plaintiff must be a landowner or occupier whose enjoyment of his own land is lessoned substantially.

private

A nuisance can be ______. (Check all that apply)

private public

Partnerships in general are not taxable entities; instead, income is passed ______.

pro rata to partners

The _________ rule is designed to permit agents to collect commissions on sales completed after termination of the agency relationship if the sale primarily resulted from the agent's efforts

procuring cause

If a commissioned agent was the primary factor in a purchase or sale, the ______ states that the agent is entitled to the commission regardless of who eventually completes the sale

procuring cause rule

A(n) ______ is a right to enter another person's land and remove a product or part of the land.

profit

If you have the right to cut trees from your neighbor's property, this is an example of a(n) ______.

profit

In most situations, an agent who is in lawful possession of a principal's ______ has a(n) _____ on it for compensation owed the agent for her performance.

property; lien

Each tenant in common must pay taxes and repairs ______.

proportional to their share of the property

If one buys in a cooperative, they buy stock in the corporation and hold their apartment under a long-term renewable lease called a ______ lease.

proprietary

The Employment Retirement Income Security Act established the Pension Benefit Guaranty Corporation to:

provide insurance for plans whose total assets were insufficient to pay promised benefits.

The Uniform Partnership Act (UPA)

provides many default rules that apply to a partnership unless the partners agree otherwise

A ______ nuisance occurs when it harms members of the public who need not be injured in their use of property.

public

In order to limit liability, it is wise to consult a ______ before choosing a particular form of business organization. (Choose all that apply)

public accountant lawyer

An agreement that is contrary to a general rule of _____ is considered illegal.

public policy

The ______ is simply more important than the right of individuals to ______.

public welfare, bargain freely

Corporations are divided between ______. (Check all that apply)

publicly-held corporations close corporations

Most people who own real property acquire title through ______.

purchasing it from someone else

A _____ is a majority of the number of directors fixed by the articles or bylaws.

quorum

Title VII encompasses discrimination based on:

race, color, religion, sex, or national origin.

Where the sole purpose of a licensing statute is to ______, the failure to obtain a license ______ the agreement.

raise revenue; does not affect the legality of

Changes in ______ may shift the tax advantages between a partnership and corporations in certain circumstances.

rates of taxation

A principal may be bound on a contract by an agent with which of the following types of authority? (Check all that apply)

ratification Actual authority Apparent authority

For a(n) ______ to be effective, the agent or purported agent must have acted on behalf ofthe principal who must ________.

ratification, be disclosed to the third party

If a principal ______ the act of her agent who has exceeded her given authority, or even an act by someone who has not been appointed an agent at all - she may become liable.

ratifies

If an owner is building new construction that accommodates the public, the building must be ______.

readily accessible to disabled persons

If an owner is building on to an existing structure that accommodates the public, the addition must be ______.

readily accessible to disabled persons

Before a fixture becomes part of the ______ property, it is first ______ property.

real; personal

In determining foreseeabilty in cases where criminal activity has injured a property owner's guest or tenant, courts look to what is generally ______.

reasonable

Property owners can be liable when their failure to exercise ______ to keep their property reasonably safe results in injuries to other persons lawfully on the property.

reasonable care

The Americans with Disabilities Act (ADA) requires certain property owners to take ______ to make their property accessible to disabled persons.

reasonable steps

When analyzing a contract that appears to restrain trade, courts look very closely to determine whether the restraint imposed is _______ or should be struck down for violating ______.

reasonable; public policy

When real property is sold under the Torrens system, once the grantee receives title to the property and delivers the deed and certificate of title to the appropriate agency, they ______.

receive a new certificate of title

If partner assigns his or her partnership interest to a creditor, the creditor is entitled to:

receive that partner's share of profits

Each state has ______ statutes that establish a system of recording all transactions that affect the ownership of property.

recording

Generally, the last step in buying real estate is ______.

recording the deed

Franchisors take advantage of setting up franchises because they can ______. (Check all that apply)

reduce competition gain control over the distribution of their product

By controlling the number of locations of outlets of their franchise, a franchisor can ______. (Check all that apply)

reduce competition among franchisees encourage the franchisee not to carry competitive products

If losses are anticipated in the early years of a partnership and the partners have other income, the owners can ______ their tax liability on their other income by ______.

reduce; the amount of the partnership losses

Real estate brokers are ______. (Check all that apply)

regulated by federal laws regulated by state laws

Title insurance is designed to ______ if the title turns out to be defective.

reimburse the buyer for loss

Once a principal ratifies the agent's action, the agent is: ______.

released from liability to both the principal and the third person for any and all damages

A third party's knowledge that the agent is not authorized to make the guaranty: ________.

relieves the agent of liability

Federal rules require franchiors to explain ______ of franchise agreements. (Check all that apply)

renewals terminations cancellations

Under an LLP, no income taxes are paid, but partners must ______.

report

Under an LLP, no income taxes are paid, but partners must ______.

report their profits and losses on personal tax returns

Undue influence:

requires a confidential relationship.

If a party has legally performed on an illegal contract, courts may allow that party to the contract and recover any consideration given.

rescind

Many courts permit a third party to ______ a contract when the third party has relied on an agent's misrepresentation by the agent even though the contract contains a(n) ______ clause.

rescind, exculpatory

Principals often are liable for the torts of their agents under the doctrine of ______, which means "let the master answer."

respondeat superior

The principal may also be liable for the torts and crimes committed by his agent under the doctrine of ______.

respondeat superior liability

Generally, ______ does not affect the ownership of property in a corporation because corporate existence is not affected by the event. (Check all that apply)

retirement death bankruptcy

Statutes that impose a license fee but allow anyone who pays the fee to obtain a license are classified as ______.

revenue-raising

One of the most important advantages a franchisee receives is the ______.

right to use a trademark owned by the franchisor

Original ownership of much of the land in Florida and in the Southwest came by grants from the ______.

rulers of Spain

Perhaps the biggest concern that investors have in investing in a business organization in which they are not a major participant is ______.

safety

The validity and enforceability of private restrictions on the use of land depend upon the ______ of the restriction. (Check all that apply)

scope purpose nature

A joint tenant may ______ his interest in the property. If so, the new tenant becomes a tenant in common. (Check all that apply)

sell mortgage give away

Automobile manufactures are challenging state franchising laws in order to ______. (Check all that apply)

sell directly to customers sell online

A corporation is treated as an entity that is ______.

separate and distinct from its owners

Like corporations, LLCs are ______ their members. (Check all that apply)

separate from distinct from

If corporate taxes are reinvested in expanding the business rather than paid out in dividends, the corporation could ______

serve as a tax shelter

Publicly-offered partnership interests are generally designed to ______.

serve as tax shelters

There are ______ types of co-ownership recognized in the United States.

seven (7)

Interests in land can be divided among ______.

several people

losses

shared according to share of profits

profits

shared equally

Employees of a publicly held corporation often times become

shareholders

Who are the owners of the corporation?

shareholders

Co-owners do not have separate rights to any portion of the property; instead, each ______.

shares in the whole property

Limited liability partnerships developed from accounting firms looking to ______.

shield partners' personal assets from malpractice claims

The reason courts will allow an exception to the 'hands off' rule and allow an ignorant person to recover is that public policy ______.

should not seek to punish the person a statute seeks to protect

A deed does not need specific language to convey the property; however, the language must ______.

show intent to transfer the property

If an LLC is not set up so that it can be easily dissolved, it loses its ability to have ______ under federal tax laws.

single tax treatment

Under a _________ the proprietor is free within the law to run the organization as they see fit

sole proprietorship

Under a _________ the proprietor is free within the law to run the organization as they see fit.

sole proprietorship

Successful continuation of a ______ is less likely than in a ______.

sole proprietorship; partnership

Quid pro quo harassment involves:

some express or implied connection between the employee's submission to sexually oriented behavior and job benefits.

Owners of property who wish to sell their property have ______ to limit its use.

some rights

In a partnership, if a partner dies, becomes insolvent, or wishes to retire, a(n) ____________ made in advance of these events is needed to keep the business operating

special agreement

In a ______ deed, the grantor warrants against only those defects in the title or those encumbrances that arose after he acquired the property.

special warranty

The two types of warranty deeds are: ______. (Check the two correct answers)

special warranty deed general warranty deed

Due to unfair terminations and extravagant claims of wealth-building potential, ______ now generally regulate(s) the franchise relationship. (Check all that apply)

state governments the federal government

For larger business, the corporate form is easiest for financing because ______.

stock can be used as collateral

Cities can implement zoning ordinances that set subdivision ______. (Check all that apply)

street and sidewalk layout lot sizes

Between the agent and the principal, the agent is ultimately liable for the acts of its _______, although the agent can limit her liable through the use of a(n) _______ clause.

subagent, exculpatory

When a corporation is appointed an agent, of necessity it must act through its officers who then become _______ of the principal, because a corporation can act only through its own agents.

subagents

A corporation can ______. (Check all that apply)

sue and be sued in its own name hold, acquire and convey property

Private parties can sue for a public nuisance only when they ______.

suffer unique harm different from the general public

Heather leased an apartment for one year from Juanita. At the end of one year, Heather holds over and does not move out. Heather is a tenant at:

sufferance.

The partners' rights in partnership entitle them to:

take possession of any item of the partnership property for partnership purposes only

For a gift to be valid, it is not necessary that the donee or third party

take possession of the property

The government's ______ of property triggers its just compensation obligation.

taking

Statutes that grant limited liability companies' power often grant ______. (Check all that apply)

tax benefits of partnerships limited liability of corporations

Gradual sale or gifting of shares of a family or other close corporation may minimize _________ at death that would otherwise result from the selling of the business

tax consequences

A principals duty to keep the agent's records is reinforced by ______ that require such recordkeeping

tax laws

If no time period is set in a lease, it is known as a ______.

tenancy at will

If a landlord and a tenant agree on a specific duration of the lease and fix the date on which the tenancy will end, it is a _____.

tenancy for a term

Susan, who is running for mayor, leased a building for her campaign headquarters from January 1 to August 31. This is a:

tenancy for a term.

If a person sells her share of a joint tenancy to someone else, the share sold is a ______.

tenancy in common

If no specification is made about the co-ownership of a piece of property upon its sale, it is presumed to be a ______.

tenancy in common

When a partnership takes title to property in the partnership's name, the co-ownership is known as a ______.

tenancy in partnership

In condominium ownership, each person takes title to their own individual unit and becomes a ______ with all the other condominium owners.

tenant in common

The individual unit owners own the common spaces of a condominium as:

tenants in common.

If a third party is unaware that an agency has terminated: ______.

the agent may still be able to bind the principal

Primary factors in determining what type of organization a person might chose when deciding on a business organization often include ______. (Choose all that apply)

the amount of personal liability a person would have the amount and availability of tax breaks the right to control the day-to-day affairs

In the context of the management of a corporation, generally policy control is with ______.

the board of directors

A limited partnership combines ______ and ______.

the capital-raising advantages of a corporation the informalities of a partnership

If an agency agreement is poorly drafted, courts will look to _______ for guidance

the common law of agency

If an agency agreement is poorly drafted, courts will look to _______ for guidance.

the common law of agency

the contract is enforceable

Generally, because management is left to a chief executive officers under this business organization there are generally less conflicts

the corporation

If Kay, a partner in an auction business, has a personal creditor who is aggressive about collecting the debt,

the creditor can attach partnership profits by obtaining a charging order

Under workers' compensation, _____.

the employer is liable for injuries occurring within the scope of employment without regard to fault

Acme Chemical Partnership discharges a pollutants prohibited by an agency that aims to protect the environment. In this case,

the firm is liable for the resulting fines

With an open listing agreement, the broker, the seller, and other parties are entitled to find a buyer for the property, and the commission is paid to ______.

the first one to secure a buyer

A limited partnership combines ______ and ______.

the informalities of a partnership the capital-raising advantages of a corporation

If a court has any doubts about the legality of an agreement, the doubts are resolved in favor of _______.

the legality of the agreement

The condominium owner pays for ______.

the monthly maintenance fees of the common areas property taxes on his own unit

If the partnership ratifies an unauthorized partner action,

the partner's action is valid as if it had been authorized from the beginning

Kayla and Marshall formed a partnership. Marshall incurred a debt in the ordinary course of the partnership business. If the debt is not paid, the creditor may sue:

the partnership and the partners together, or in separate lawsuits, or in any combination

Randy, Joan, and Arnie are partners. Their agreement did not address dissociation nor how long the partnership would last. Randy decided to leave the partnership. What happens when Randy serves notice he intends to withdraw?

the partnership can either buy him out and continue in business or wind up the business and terminate the partnership

Partnership property is owned by

the partnership itself

Anything of value that comes to the agent because of the agency relationship belongs to: ______

the principal

When the principal is disclosed, all parties intend the contract to be between: __________.

the principal and the third party

To avoid being bound to a third party after an agency has terminated ______

the principal must give actual notice to the third party who has had business dealings with the principal

Upon the death of a person who does not have a will and owns property in fee simple, ______.

the property goes to their heirs

Contracts for real property generally indicate ______. (Check all that apply)

the purchase price what personal property will stay with the real property the type of deed the purchaser will receive

The legal powers an LLC has include

the right develop contracts and incur debts in its own name the right to buy an sell property in its own name

The distinguishing feature of a joint tenancy is ______.

the right of survivorship

Primary factors in determining what type of organization a person might chose when deciding on a business organization often include ______. (Choose all that apply)

the right to control the day-to-day affairs the amount and availability of tax breaks the amount of personal liability a person would have

Courts in different states may differ in their views on what constitutes good public policy. As a result, ______.

the same contract can be legal in one state and illegal in another.

In a sole proprietorship, agents and employees may be hired and ______ is(are) responsible for all liabilities along with all profits and losses.

the sole proprietor

The business organization that offers the easiest management style is

the sole proprietorship

If a person dies without making a valid will, the property will go to his heirs as determined by ______.

the state in which the property is located

Transfer requirements for real property are set by ______.

the states

Agreements for property should be evidenced by a writing enforceable under ______.

the statute of frauds

Because easements are a type of land interest they are covered under __________________

the statute of frauds

In terms of third-party beneficiary contracts, after a donee or creditor beneficiary has accepted the contract, or relied on it, the original parties cannot cancel or modify the contract without ______.

the third party's consent, unless the original contract gives them the right to do so

If zoning laws allow for property to be used in a way that neighbors are complaining, ______.

the use may be legal, but can still be a nuisance

A party to an illegal contract who has already performed would not have much incentive to recover ______ if courts did not have an exception to the _______ approach to illegal contracts.

the value of her performance; hands off

In a corporation, the loss of a shareholder is limited to ______.

their personal investment

For smaller corporations, the continuity factor makes it easier for a bank to loan money because shareholders can put up ______ as collateral for the loan

their stock

For smaller corporations, the continuity factor makes it easier for a bank to loan money because shareholders can put up ______ as collateral for the loan.

their stock

If a general partnership or a sole proprietorship wants to operate in a state other than its home state of incorporation, usually ______.

there are no specific formal requirements

Limited partnership interests can be sold without the potential negative effects of a general partnership, but ______.

there is seldom a market to sell their interest

Limited partnership interests can be sold without the potential negative effects of a general partnership, but ______. Multiple choice question.

there is seldom a market to sell their interest

If trade fixtures are not removed within a reasonable time, ______.

they become the landlord's property

One factor a court can use to determine if an item is a fixture is ______.

to what degree the item is attached or annexed to the real property

When an agent commits a _____ or crime while working for the principal, the agent is ______ for the consequences of his actions.

tort, personally liable

If considerable control has been exerted over the franchisee through control of operations and use of trademark, the courts can determine that this control is sufficient enough to hold the franchisor liable for ______.

torts committed by the franchisee's employees

If a person moves onto your land, acts as if he is the owner, and remains on the land for the statutorily-prescribe period, he will be ______. (Check all that apply)

treated as the owner the owner through adverse possession

A partner must receive permission from the partnership to seize a business opportunity that the partnership could take itself.

true

A partnership must indemnify a dissociated partner for any obligations to outsiders incurred during her term.

true

A party who enters an illegal contract may rescind the contract if done so before the illegal act is performed and may recover any consideration given.

true

Alicia and Ted have a written agreement wherein they will share the losses of their joint business. This agreement is strong evidence they are partners.

true

Although a partner cannot transfer his share in a partnership without approval of the other partners, a partner may freely transfer his right to receive the partnership's profits and losses.

true

Common law plays an important role in regulating partnerships.

true

Every partner is an agent of the partnership for the purpose of its business.

true

Historically, partnerships were the only form of organization available to professionals, such as accountants, lawyers, and doctors, but that is no longer the case today.

true

Jeremiah was a partner in a partnership, but he quit unexpectedly when he got his feelings hurt over an internal decision. Dissociation has occurred.

true

Kyle, Pedro, and Madeline form a partnership. There is no agreement as to the duration of the partnership. The partnership is a partnership at will.

true

Nicholas and Holly are partners in a toymaking shop. If Rudolph obtains a judgment against Nicholas for injuring Rudolph while Nicholas was on partnership business, Rudolph must try to collect from the partnership before going after Nicholas' personal assets.

true

T/F: A corporation is not affected by the death of a shareholder.

true

T/F: Limited Liability Partnership offers limited liability to both limited and general partners

true

T/F: There are limits on law's ability to control irresponsible corporate behavior

true

The Uniform Partnership Act (UPA) rules governing the relationship among partners are default rules that may be modified by partners if they expressly agree.

true

The court in Marsh v. Gentry found that transactions between two partners require a higher degree of good faith than transactions between a partnership and a third party.

true

True or false: A distributor typically purchases her products directly from the manufacturer and bears the risk of no sale or nonpayment by the ultimate purchaser

true

When determining the legality of an agreement, the courts presume the parties intended a legal result.

true

Actual authority is the ______ authority granted to the agent by the principal. (Check all that apply)

true proper implied

If a franchisor builds and equips a business and leases it to the franchisee this is called a ______.

turnkey operation

According to the UPA, the association of _______ persons to carry on as __________ a business ________ forms a partnership __________ the persons intend to form a partnership.

two or more co-owners for profit whether or not

To act contrary to a partnership agreement ______.

unanimous agreement is required.

In which of the special situations below may an agent become personally liable for a contract with the third person? (Check all that apply)

unauthorized actions by the agent an undisclosed principal nonexistent or incompetent principals

The Uniform Commercial Code (UCC) does not define ______, leaving it instead for the courts to define.

unconscionable

When a principal instructs her agent to commit a crime, the agent is: ______.

under no legal obligation to do so

If a large and well-known company wishes to purchase land to develop for a new manufacturing plant, it could approach the transaction as a(n) ______ to keep costs down.

undisclosed principal

The identity of a(n) _____ would be known only to the agent.

undisclosed principal

If an agent represents a(n) _______, the agent is personally liable for any contract she signs on the principal's behalf.

undisclosed principal partially disclosed principal

Because an agent is liable on contracts entered into on behalf of a(n) ________, the agent is also _________ on such a contract as a party to it.

undisclosed principal, permitted to sue

A(n) _______ principal may enforce a contract, and if the the third party to the contract discovers the principal's true identity, she may elect to: ______.

undisclosed, sue the principal instead of the agent

When the principal is _______, the third party who deals with the agent believes the agent is acting personally and accordingly expects: ______.

undisclosed, the agent to be a party to the contract

An exculpatory clause that seeks to avoid liability for willful misconduct or fraud is generally ______.

unenforceable

If Mark pays Bruce to burn down Frank's place of business, the agreement would be ______ and ______ and Mark ______ recoup the money he paid to Bruce.

unenforceable; illegal; cannot

Many states have statutes that prohibit a(n) _______ from enforcing contracts it enters into with citizens of the state.

unlicensed foreign corporation

Many states allow for professional LLCs that have ______ liability for their own malpractice.

unlimited

If a partner in an LLP commits malpractice, they will have ______ liability.

unlimited personal

In a limited liability company, the number of members allowed is ______.

unrestricted

Beatriz and James are married and own real property under a tenancy by the entirety. This means that _____.

upon the death of either, the property passes automatically to the surviving spouse

Today, property owner's or possessor's duty to use reasonable care includes the obligation to ______ for persons on the premises lawfully.

use reasonable security precautions

One of the most important restraints placed on real property owners is that they cannot

use their property in a way that would injure others

Examples of nuisance might include ______. (Check all that apply)

using the lot you own next to your house as a dump keeping several barking dogs in your back yard

A law which prohibits charging more than a stated amount of interest for the use of money is called a(n) ________ law.

usury

A(n) ______ is an exception to a zoning ordinance on the grounds that the ordinance creates an undue hardship for the property owner and deprives the owner of a reasonable opportunity to use the land.

variance

If a property owner wants to use the property for a different use than what a zoning ordinance allows, she must request a(n) ______.

variance

The test for determining the presence or absence of a nuisance ______.

varies depending on the facts of each case

State laws regarding franchisor-franchisee relationships ______.

vary widely

State laws regarding franchisor-franchisee relationships ______. Multiple choice question.

vary widely

Shareholders who are not directors of a corporation have ______ of day-to-day operations.

very limited control

Courts construe attempted disclaimers ______ against the builder-vendor or developer and reject disclaimers that are not specific.

very strictly

When an agreement calls for behavior that ______, the agreement is illegal

violates a statute

In many instances shareholders in a small corporation may be induced to ______ waive their limited liability.

voluntarily

A partnership is a:

voluntary & consensual association involving 2 or more persons

If a person has a ______ deed, it contains covenants of warranty and guarantees to make good on any defects that the title has.

warranty

There are generally two types of deeds: ______ (Check the two correct answers)

warranty deed quitclaim deed

In Banker v. Estate of Banker, the court found that Arnold, who was the only partner to actually operate the partnership's campground business.

was not entitled to compensation, pursuant to the default rule, even though the business' earnings were attributable to his efforts

Intent is judged not by what a person subjectively intended but by ______.

what the circumstances actually indicate

After an assignment, the assignee is entitled to ______.

whatever performance the assignor had a right to under the original contract

When the grantor conveys property by quitclaim deed, they convey ______.

whatever title they have in the property

Ideally, the agency compensation agreement should specify: ________

when it is earned the amount of compensation due the agent

A publicly held corporation sells shares to people

who generally are interested as investors

Generally, the owner of real property has the right to dispose of that property by ______.

will

Essentially, a principal ____________ if the agent had performed the act herself.

will be liable for the acts of an agent's employees only

When continuing partners agree to relieve the withdrawing partners liability on the debts of the old partnership, the act of novation can take place, which involves an agreement by the credit:

with both the withdrawing partners and the continuing partners

If the agent has signed the contract __________, the agent has no liability on the contract.

within her authority

An agency may be either ______ and either ______.

written or oral, compensated or uncompensated

An agent has no duty to comply with a principal's orders that are ______, because his duty to ______ is greater than the duty to the principal.

wrongful, society

Herman rightfully dissociated from Oak Tavern, a partnership, 18 months ago. Neither Herman nor the remaining Oak Tavern partners notified anyone with whom Oak Tavern does business that Herman had left the partnership. Oak Tavern has not paid one of its suppliers, Great Grains, for its purchases over the past 10 months. Can Great Grains recover the money it is owed by Oak Tavern from Herman?

yes, but Herman can recover whatever he pays to Great Grains from Oak Tavern

Percy and Yolanda are partners in a business that provides financial advisory services. Percy steals $50,000 from a client's account and immediately disappears with the money. Is Yolanda liable to the client for the $50,000?

yes, if the theft occurred through the ordinary course of business

Lori and Dan own a small restaurant as partners. Dan works several hours a day cooking, waiting on tables, doing the books, and so forth. Dan believes he is entitled to be paid at least a standard wage for all his work since, at the present time, the part-time kitchen helpers earn more than he does! Lori claims Dan is not entitled to anything other than one-half the net profits. Is Lori right?

yes, if there is no agreement between Lori and Dan allowing for either of them to be paid wages for work done at the restaurant.

Joel owns a construction business. His brother-in-law, Barry, works for Joel on several of his large projects. At the grand opening of one of Joel's buildings, a client introduces Joel and Barry to Marie, referring to the pair as partners. Neither Joel nor Barry corrects the client. Impressed with the building, Marie asks Joel and Barry to manage her real estate development firm's next project. Joel does not want to take the job, but Barry wants to try to run his own project, so he accepts. The project is a disaster, and Marie loses $2 million due to Barry's mismanagement. May Marie hold Joel liable?

yes, under a theory of partnership by estoppel

Nancy was a partner of a small business. She could see that the business was beginning to fail and that it was very unlikely it would recover. Not wanting to lose her investment, she asked that the court require the partnership to dissolve since she did not have a legal right to withdraw at that time. Does a court have the authority to order a partnership to dissolve?

yes. a court can dissolve a partnership when it is convinced that the partnership is unlikely to succeed

Judy believed that Ray and Don were partners in an automotive repair business. Ray and Don were not partners. Ray owned the business as a sole proprietor. Ray, however, allowed Don, his unemployed brother-in-law, to be around the business. When Judy was having her car repaired, Ray told her "my partner here, Don, will give you a ride to work this morning so you can leave your car here. He will give you a ride back here after work and your car will be done." Judy allowed Don to drive her to work. While riding with Don, Don accidentally ran a stop light and caused an accident. Judy was hurt and claims that both Don and Ray are liable to her. Is she right?

yes. this illustrates a partnership by estoppel

Many cities and towns have attempted to ______ groups living together such as religious cults, unrelated adults, students, and communes by redefining the word "family" that excludes these groups.

Blaw - Everything

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