Question 21

On May 6, Robbie entered into a signed contract with Ed, whereby Robbie was to sell Ed a painting having a fair market value of $350,000 for $130,000. Robbie believed the painting was worth only $130,000. Unknown to either party, the painting had been destroyed by fire on May 4. If Ed sues Robbie for breach of contract, Robbie's best defense is:

Question 21 options:

1)

risk of loss had passed to Ed.

2)

lack of adequate consideration.

3)

mutual mistake.

4)

unconscionability.

Question 22

A contract to commit a serious crime is a legal contract.

Question 22 options:

1) True2) False

Question 23

The Statute of Frauds requires that:

Question 23 options:

1)

some contracts be evidenced by a writing.

2)

all contracts involving fraud must be void.

3)

all three-party contracts be collateral ones.

4)

there can be no secondary debts in a contract.

Question 24

Which form of damages is intended to give the victim of the breach of contract the "benefit of the bargain"?

Question 24 options:

1)

Compensatory

2)

Punitive

3)

Nominal

4)

Liquidated

Question 25

Michael and William contracted for Michael to mow William's lawn once a week for 20 weeks, at a price of $20 per week. Later, without terminating the first contract, the parties modify the contract as follows: Michael will mow William's lawn in exactly the same way for exactly the same time period, in exchange for William's promise to pay Michael $22 per week. There is no consideration for William's promise.

Question 25 options:

1) True2) False

Question 26

James owns Great Expectations, a trendy restaurant in Manhattan. He enters into a contract with Mary, who makes and sells pastries. The contract states that Mary will "supply all of Great Expectation's needs" for pastries for the next year. Is this contract enforceable?

Question 26 options:

1)

Yes, because this is a requirements contract.

2)

Yes, but only if James buys all of the pastries produced by Mary in the next year.

3)

No, because the promise fails to specify the quantity of goods to be purchased.

4)

No, because James might not need any pastries in the next year.

Question 27

Todd is a licensed real estate broker in Ohio. One of Todd's largest clients, Sun Corp., contracted in writing with Todd to find a purchaser for its plant in New York and agreed to pay him a 6% commission if he were successful. Todd located a buyer who purchased the plant. Unknown to Todd, New York has a real estate broker's licensing statute which is regulatory in nature, intended to protect the public against unqualified persons. Todd violated the licensing statute by failing to obtain a New York license. If Sun refuses to pay Todd any commission and Todd brings an action against Sun, he will be entitled to recover:

Question 27 options:

1)

nothing.

2)

a fee based on the actual hours spent.

3)

the commission agreed upon.

4)

out of pocket expenses only.

Question 28

A _____ is a contract, usually on a standardized form, offered by a party who is in a superior bargaining position on a "take-it-or-leave-it" basis.

Question 28 options:

1)

quasi-contract

2)

contract of adhesion

3)

executory contract

4)

bilateral contract

Question 29

Which of the following is most true regarding noncompetition clauses in contracts?

Question 29 options:

1)

Such clauses are not used during employment contracts.

2)

If they have a legitimate business purpose, such clauses will be enforced.

3)

Such clauses are enforced only for protecting the environment and conserving resources.

4)

Such clauses help in promoting free trade.

Question 30

Which of the following constrains the employee from divulging or using certain information gained during his employment?

Question 30 options:

1)

nonsolicitation agreement

2)

nondisclosure agreement

3)

noncompetition clause

4)

deed of trust

Question 31

Helga owns an insurance business in Idaho. Her clients are all Idaho residents. She later sells her business to Carlos. As part of the deal, the contract contains a non-compete clause that prevents Helga from operating an insurance business anywhere in Idaho, Washington or Oregon for a period of five years. Six months after this sale, Helga opens an insurance business in Oregon. If Carlos seeks to enforce the non-compete agreement against Helga, will he probably be successful?

Question 31 options:

1)

Yes, because this agreement is reasonable.

2)

Yes, because the clause is not imposing an undue hardship.

3)

No, because this agreement is not reasonable.

4)

No, because the agreements is not yet converted into a treaty.

Question 32

Article 2 of the UCC mandates that the parties to a sales contract state in specific and unambiguous language the exact terms of the contract. Otherwise, courts will declare the contract unenforceable.

Question 32 options:

1) True2) False

Question 33

In the case of a merchant, _____ means honesty in fact as well as the observance of reasonable commercial standards of fair dealing in the trade.

Question 33 options:

1)

course of dealing

2)

usage of trade

3)

good faith

4)

caveat emptor

Question 34

The owner of Caf Coffee Day declaring that his restaurant makes the world's best cup of coffee is an example of an express warranty.

Question 34 options:

1) True2) False

Question 35

Which of the following is an express or implied promise about the nature of the product sold?

Question 35 options:

1)

Warranty

2)

Caveat

3)

Advertisement

4)

License

Question 36

Under the principle of "respondeat superior," an employer is not liable for torts committed by employees.

Question 36 options:

1) True2) False

Question 37

_____ is the failure to use reasonable care, with harm to another party occurring as a result.

Question 37 options:

1)

Assault

2)

Recklessness

3)

Negligence

4)

Liability

Question 38

Melissa hurls a rock with the intention to hit Dave, with whom she has just fought. The rock hits Stacey, instead, who is sitting next to Dave. Melissa is liable for battery under the clause of:

Question 38 options:

1)

conversion.

2)

private nuisance.

3)

actual malice.

4)

transferred intent.

Question 39

Which of the following is true of 'invasion of privacy'?

Question 39 options:

1)

Public figures do not enjoy any right to privacy.

2)

There are four distinct torts related to it.

3)

It is a subject of the Second Amendment of the U.S. Constitution.

4)

Examining a person's public records amounts to an invasion of privacy.

Question 40

Dave tells Dora that Phil, a financial advisor, has been stealing money from his clients. Dora then repeats Dave's statement to Tom, telling Tom that the information comes from Dave. All these statements are oral, defamatory, and false. Phil sues Dave and Dora for defamation. Which of the following is true? (Don't consider defenses and privileges).

Question 40 options:

1)

Phil can recover against Dave and Dora without proving special damages.

2)

Because Dora only repeated Dave's statement and identified Dave as its author, she can't be liable to Phil.

3)

Because Dave only communicated his statement to Dora, and not to an appreciable number of people, he can't be liable to Phil.

4)

Phil must prove special damages in order to recover against Dave and Dora.

Question 41

Under many "mixed" comparative negligence systems, a plaintiff recovers nothing where the plaintiff's own negligence is 50% or more.

Question 41 options:

1) True2) False

Question 42

The courts exercise the greatest control over agency behavior because all agency actions are subject to judicial review.

Question 42 options:

1) True2) False

Question 43

Which of the following is an accurate statement about powers delegated to and possessed by administrative agencies?

Question 43 options:

1)

The most important administrative agencies typically possess rulemaking powers but lack adjudicatory powers.

2)

An agency's rulemaking power would be classified as discretionary power rather than ministerial.

3)

Modern courts tend not to uphold the validity of broad delegations of power by Congress to administrative agencies.

4)

Most administrative agencies are given restricted powers to comply with the constitutional principle of separation of powers.

Question 44

The Family and Medical Leave Act requires employers to pay employees while they take leave for one of the reasons stated in the act.

Question 44 options:

1) True2) False

Question 45

In general, which of the following statements is correct with respect to unemployment compensation?

Question 45 options:

1)

An employee who voluntarily quits work without a reasonable cause is entitled to unemployment compensation.

2)

An individual who has been discharged from employment because of work-connected misconduct is ineligible for unemployment compensation.

3)

The maximum period during which unemployment compensation may be collected is uniform throughout the United States.

4)

The maximum amount of unemployment compensation paid by a state is determined by federal law.

Question 46

Ann had gone hiking into the woods. On the way, one of the tires of her new car failed. Her vehicle was rendered inoperable. The road was deserted. Rick, a co-hiker was passing on the way. He abducted her and sexually assaulted her. Ann wants to sue the car company for negligence. Will she succeed?

Question 46 options:

1)

No, because she had voluntarily assumed the risk while passing through the deserted road.

2)

No, because Rick's sexual assault is an unforeseeable intervening cause.

3)

Yes, because the company has breached its duty.

4)

Yes, because the tire's failure only resulted in her injury.

Question 47

Many courts have adopted a test in resolving the proximate cause question, under which a defendant who has breached a duty of care is liable:

Question 47 options:

1)

only for the "natural and probable consequences" of his actions.

2)

for all injuries sustained by the plaintiff.

3)

even for injuries caused by the plaintiff's negligence

4)

at least 50 percent of the damages.

Question 48

The "fourth branch" of government is not bound by basic constitutional guarantees such as due process, equal protection, and freedom of speech, just as the three traditional branches are.

Question 48 options:

1) True2) False

Question 49

Cases in administrative proceedings are heard by an:

Question 49 options:

1)

adjudicating chairperson.

2)

administrative law judge.

3)

executive judge.

4)

judicial commissioner.

Question 50

The Internal Revenue Service (IRS) has recently issued a subpoena duces tecum to Values Corp. The IRS wants access to the last five year's tax returns and related documents of Values to ensure that Values has met all its tax liabilities. Values claims that all its tax papers are in order and IRS's motive is to harass political opponents of the incumbent administration (Values was one of the top 100 donors during the last election year). The strongest argument that Values may make concerning the subpoena is that the subpoena:

Question 50 options:

1)

is invalid because the IRS investigation is not being conducted for a legitimate purpose.

2)

need not be obeyed because it violates Values' Fifth Amendment privilege against compulsory testimonial self-incrimination.

3)

need not be obeyed to its fullest extent because it is not sufficiently specific and is unreasonably burdensome.

4)

is invalid unless the IRS satisfies the "probable cause" standard required by the Fourth Amendment for the issuance of a search warrant.