Law Final Practice Questions

Which of the following statements is true of the tort of assault?

A) Physical contact is the only requirement for the tort of assault.

B) An attack is considered an assault only if the defendant was provoked to attack the plaintiff.

C) An attack is not considered an assault if the defendant was provoked to attack the plaintiff.

D) Actual physical contact between the plaintiff and the defendant is not necessary.

D) Actual physical contact between the plaintiff and the defendant is not necessary.

Harvey was at his college reunion where he met Raymond, his former roommate. Harvey and Raymond did not get along well at the reunion. Offended by something Raymond said, Harvey punched him in the face, breaking Raymond's jaw as a result. Harvey is liable for ________.

C) battery

Libel and slander constitute ________.

A) the tort of outrage

B) defamation of character

C) misappropriation of the right to publicity

D) invasion of the right to privacy

B) defamation of character

Which of the following is true about the duty of care?

A) Breach of the duty of care is not actionable unless the plaintiff suffers personal injury or injury to his or her property.

B) The reasonable person standard is used to determine the amount of damages a defendant owes a plaintiff.

C) A firefighter who refuses to put out a fire when his safety is not at stake does not breach his duty of care.

D) The damages recoverable for breach of the duty of care are independent of the effect of the injury on the plaintiff's life or profession.

A) Breach of the duty of care is not actionable unless the plaintiff suffers personal injury or injury to his or her property.

What is meant by "causation in fact"?

A) the facts stated by a plaintiff during trial

B) a defendant's negligent act that caused the plaintiff's injuries

C) a defendant's defense against a case of negligence

D) a defendant's plea of guilt due to negligence

B) a defendant's negligent act that caused the plaintiff's injuries

Which of the following refers to a doctrine that says a plaintiff who is partially at fault for his or her own injury cannot recover against the negligent defendant?

 

A) contributory negligence

B) comparative negligence

C) comparative fault

D) assumption of risk

A) contributory negligence

Martin wins a car in a lottery. As he already owns a car, he decides to sell the new one to his friend Ted. While driving the car, Ted gets into a head-on collision with another car. Due to a defective Supplemental Restraint System (SRS) in the vehicle, the airbag does not deploy and Ted is seriously injured. Which of the following is correct in this situation?

A) Martin can be held strictly liable because he sold the car to Ted.

B) The car manufacturer cannot be held strictly liable as Ted had not bought the car from it.

C) Martin cannot be held strictly liable as the sale of the car counts as a casual transaction.

D) The driver of the other car can be held strictly liable due to his or her involvement in the accident.

C) Martin cannot be held strictly liable as the sale of the car counts as a casual transaction.

Which of the following is correct regarding the strict liability doctrine?

A) Privity of contract between the injured party and the defendant is mandatory.

B) Injured bystanders cannot recover damages under the strict liability doctrine.

C) Parties in the chain of distribution are strictly liable only to the customer who buys the product.

D) Injured bystanders are entitled to the same protection as the consumer or user.

D) Injured bystanders are entitled to the same protection as the consumer or user.

A defect in manufacture occurs when a manufacturer fails to ________.

 

A) design a product that is safe for users

B) adequately check the quality of a product

C) warn customers about the possible dangers of the product

D) provide proper packaging for the products

B) adequately check the quality of a product

Kicker's Inc. has produced a new kind of candy bar, but it fails to mention on the packaging that the bar contains gluten and nuts. Consequently, many consumers who eat the bars suffer from severe allergic reactions. Which of the following can the injured customers cite as a defect in a strict liability lawsuit against Kicker's?

C) failure to warn

In a draft transaction, the drawee is the party who ________.

A) demands the draft

B) pays the money stated in the draft

C) writes an order for the draft

D) receives the money from the draft

B) pays the money stated in the draft

A ________ is a two-party negotiable instrument that is an unconditional written pledge by one party to pay money to another party.

A) bill of exchange

B) check

C) certificate of deposit

D) promissory note

D) promissory note

Roger, an attorney, borrowed money from Alejandro to start a business. He gave a promissory note to Alejandro promising to pay the money back anytime within the next five (5) years. In order to accept the note, Alejandro demanded a security deposit. Roger gave the gold that he owned as security. Roger in turn demanded that a specific clause be added to the promissory note to allow faster repayment of the loan in case he inherited money within the next five (5) years. But even after five years, Roger was unable to complete payment. He made a new promissory note promising to finish payment within the next year, and promised to provide free legal service to Alejandro for the next two (2) years.

 

Which of the following is correct regarding the validity of the new promissory note made by Roger?

 

A) It must contain interest on the old principal to become a valid instrument.

B) It must contain a specific date or time to be considered valid.

C) It is not a negotiable instrument.

D) It is a negotiable instrument if Alejandro accepts it.

C) It is not a negotiable instrument.

The signature of the maker or drawer of a negotiable instrument ________.

A) can be located anywhere on the face of the instrument

B) must be located in the lower-right corner of the instrument

C) must be notarized by a notary public

D) can be located anywhere on the face or back of the instrument

A) can be located anywhere on the face of the instrument

Which of the following is payable to anyone in physical possession of the instrument and presents it for payment when it is due?

A) a certificate of deposit (CD)

B) order paper

C) bearer paper

D) a check

C) bearer paper

If a transferred negotiable instrument fails to qualify under Article 3 of the Uniform Commercial Code (UCC), it is known as a(n) ________.

A) assignment

B) nonnegotiable contract

C) indorsement

D) restrictive indorsement

A) assignment

Which of the following is a similarity between bearer paper and order paper?

A) both require a specific payee to be named

B) both require indorsements to be considered negotiable

C) both require delivery to be considered negotiable

D) both can be claimed by whoever presents the instrument for payment

C) both require delivery to be considered negotiable

Which of the following is a nonrestrictive indorsement?

A) pay to the order of Jane Doe

B) pay to Jane Doe only

C) for deposit only

D) pay to Jane Doe, trustee

A) pay to the order of Jane Doe

Lisa buys a used car from Kelly. She pays ten (10) percent of the cost as a down payment and signs a negotiable promissory note promising to pay Kelly the remainder of the purchase price, with interest, in twelve (12) equal monthly installments. At the time of sale, Kelly lied about the mileage on the automobile. Later, Kelly negotiated the note to Frances, who had no notice of Kelly's misrepresentation. Frances, a holder in due course (HDC), negotiated the note to Zoe, who is not an HDC. Which of the following is Zoe with regard to the promissory note?

A) an HDC

B) a holder

C) an assignee

D) an assignor

A) an HDC

A ________ of a ________ has primary liability for the instrument.

A) payee; promissory note

B) maker; promissory note

C) drawee; draft

D) drawer; draft

B) maker; promissory note

Rhodes, a college student, wants to purchase a motorcycle on credit from Reckmore Motors, L.L.C. (Reckmore). He does not have sufficient income or the credit history to justify an extension of credit to him alone. Rhodes asks his father to cosign a note to Reckmore. Reluctantly, Rhodes' father complies with his son's request and guarantees collection of the note. What kind of liability does Rhodes' father have in this case?

A) secondary

B) primary

C) tertiary

D) third-party beneficiary

A) secondary

Martha draws a check payable to the order of Stella. Stella indorses the check to Karen. Leslie steals the check from Karen, forges Karen's indorsement, and cashes the check at a liquor store. Who is liable on the check?

A) the liquor store

B) Martha

C) Stella

D) Leslie

A) the liquor store

A(n) ________ defense is a type of defense that can be raised against the enforcement of a negotiable instrument by an ordinary holder, but not against a holder in due course (HDC).

A) discharge in bankruptcy

B) extreme duress

C) personal

D) universal

C) personal

Credit that does not require any collateral to protect the payment of the debt is referred to as which of the following?

A) unsecured credit

B) secured credit

C) a guaranty arrangement

D) a lien release

A) unsecured credit

Roundwell Motors, Inc. (Roundwell) purchases a manufacturing plant for $15 million, pays $5 million in cash as down payment, and borrows the remaining $10 million from Home Providence Bank (Home Providence). To secure the loan, Roundwell gives the plant as collateral to Home Providence. If Roundwell defaults on their payment, what is the recourse available to Home Providence to recover the loan?

A) buy the plant from Roundwell

B) return it to Roundwell

C) foreclose on it

D) transfer it to the government

C) foreclose on it

Which of the following requires a mortgage or deed of trust to be recorded in the county recorder's office of the county in which the real property is located?

A) a recording statute

B) a real property statute

C) a mortgage statute

D) a compilation statute

A) a recording statute

Which of the following is correct regarding the right of redemption for mortgages?

A) The mortgagor has to pay the full amount of the debt incurred by the mortgagee.

B) The title of possession is passed on to the mortgagee upon completion of redemption.

C) The mortgagee is allowed to pay back partial interest until the statutory period of redemption.

D) The right to redemption is enacted after the foreclosure is complete.

A) The mortgagor has to pay the full amount of the debt incurred by the mortgagee.

Stanley lost a court case and was ordered to pay $50,000 to Wade. The day after the judgment, Stanley went missing, leaving Wade with no direct contact to recover the money. Wade then obtained a writ ordering the bank with Stanley's savings account to pay Wade. Which of the following writs did Wade use?

A) a writ of garnishment

B) a writ of attachment

C) a writ of prohibition

D) a writ of certiorari

A) a writ of garnishment

John buys a new car with the assistance of a loan. He permits the creditor to take possession of the car if he cannot repay the loan in time. In this case, the car is the ________.

A) after-acquired property

B) collateral

C) intangible personal property

D) floating lien

B) collateral

A business purchases an airplane from an airplane manufacturer. The business obtains a loan to purchase the airplane from a bank, which obtains a security interest in the airplane. The airplane manufacturer is paid for the airplane out of the proceeds of the loan. This is a(n) ________ secured transaction.

A) two-party

B) three-party

C) after-acquired

D) redeemed

B) three-party

Kimberly borrows $50,000 from a bank. She gives the bank a security interest in her ________ inventory. This implies that if Kimberly does not repay the loan in the stipulated period, the bank can claim any assets she purchased after signing the security agreement.

A) floating lien

B) future advance

C) attached

D) after-acquired

D) after-acquired

Which of the following is correct regarding a financing statement?

A) It cannot be electronically filed.

B) It is effective for one (1) year from the date of its filing.

C) It cannot be extended once it expires.

D) It is available for review by the public.

D) It is available for review by the public.

Which of the following permits a secured lender to recover other property or income from a defaulting debtor if the collateral is insufficient to repay the unpaid loan?

A) the redemption right

B) a deficiency judgment

C) disposition of collateral

D) retention of collateral

B) a deficiency judgment

If a person employs an architect to design the layout of her own home, this would constitute a(n) ________ relationship. 

A) employer-employee

B) principal-independent contractor

C) principal-agent

D) agent-independent contractor

B) principal-independent contractor

Marlon intends to sell a piece of real estate he owns and contracts Nita, a real estate broker, to make the sale. In the contract, Marlon authorizes Nita to make the sale at or above a minimum price he wants and the date by which he wants the sale to be completed. The contract also stipulates that Marlon will not hire another broker to sell that piece of land until the contract period expires. Nita finds a suitable buyer, makes the sale in time, and is paid by Marlon for her services. Which of the following types of agency existed between Marlon and Nita in this case?

A) an apparent agency

B) an agency by ratification

C) an implied agency

D) an express agency

D) an express agency

A power of attorney is an example of which of the following?

A) an agency by ratification

B) an apparent agency

C) an express agency

D) an implied agency

C) an express agency

Which of the following qualifies as the termination of an agency by impossibility of performance?

A) the loss of a required qualification

B) the bankruptcy of the principal

C) the insanity of either the principal or the agent

D) the conviction of either the principal or the agent

A) the loss of a required qualification

Martin, who wants to sell a house he owns, authorizes his concierge, Wilhelm, to find a potential buyer and finalize a deal above a stipulated price. Wilhelm contracts Chris, a real estate broker, and instructs him to only find a potential buyer and send them over to Wilhelm for the sale. Martin then contracts ReNowait Goodhouses, a home improvement company, to renovate the house. ReNowait completes its work and Martin pays the company. Chris then searches for a suitable buyer and finds one in George. George buys the house and Chris is paid for his services. What role does Martin perform in this case?

A) an agent

B) an independent contractor

C) a principal

D) a trustee

C) a principal

Which of the following is correct regarding an agent's undisclosed self-dealing?

A) It does not violate the duty of loyalty.

B) The principal cannot rescind purchases made.

C) The principal can ratify the purchase.

D) The principal must accept liability.

C) The principal can ratify the purchase.

Dan asks his agent Jude to drop off some medicines at his mother's house. On his way back, Jude decides to have lunch at a diner two (2) blocks from his workplace. While walking back to work he jaywalks at a green signal on the road, causing a motorcyclist to hit the curb and injure himself while attempting to avoid hitting Jude. Under which of the following concepts is Dan liable for the injuries caused to the motorcyclist?

A) coming and going

B) intentional tort

C) frolic and detour

D) dual-purpose mission

C) frolic and detour

According to the coming and going rule, what is the liability of the principal for injuries caused by its agents and employees while they are on their way to or from work?

A) complete liability

B) vicarious liability

C) limited liability

D) no liability

D) no liability

Fiona works for Open Heart Hospital and lives ten (10) miles away from her place of work. The hospital has provided her with a car to commute and pays for its upkeep. If she accidentally injures a person while driving to work in the morning, which of the following is correct?

A) Open Heart Hospital is completely liable for the injury caused.

B) The injured person can sue Open Heart Hospital but can only recover reimbursement for his or her medical expenses due to the injury.

C) Both Fiona and Open Heart Hospital are liable to the injured person.

D) Only Fiona is liable for her negligence.

D) Only Fiona is liable for her negligence.

An employee finds out that one of his colleagues dated his girlfriend. The employee acts on this information by assaulting his colleague at work during work hours. Based on which of the following is the principal liable?

A) the motivation test

B) the premises-based test

C) the work-related test

D) the promotional test

C) the work-related test

Which of the following is correct regarding a sole proprietorship?

A) A business operated as a sole proprietorship cannot be transferred.

B) Large businesses cannot operate as a sole proprietorship.

C) A business operated as a sole proprietorship must be owned by one (1) or more persons of the same family.

D) Creditors can recover claims against the business from the sole proprietor's personal assets.

D) Creditors can recover claims against the business from the sole proprietor's personal assets.

Which of the following is correct regarding the creation of a sole proprietorship? 

A) No government approval is required to create a sole proprietorship.

B) Federal taxation is levied upon the sole proprietorship as a business entity.

C) No licenses are required to do business within a city or state.

D) Approval by the attorney general in the state where the business plans to conduct the majority of its business is required to create a sole proprietorship.

A) No government approval is required to create a sole proprietorship.

Which of the following is correct regarding the management of a general partnership?

A) The number of votes a general partner has depends on the proportion of her capital investment.

B) Partnership matters are decided by unanimous agreement only.

C) Only members of the board of directors have the authority to participate in its management.

D) If the vote is tied, the action being voted on is considered to be defeated.

D) If the vote is tied, the action being voted on is considered to be defeated.

Which of the following is correct regarding profits and losses in a general partnership?

A) The proportion of profit shared is equal to the general partner's initial investment.

B) Losses are shared equally by all general partners.

C) The general partner who proposed the idea of the business receives the most profit.

D) The proportion of investment governs only the proportion of loss shared and not profit obtained.

B) Losses are shared equally by all general partners.

Which of the following is the obligation partners owe to use the same level of care and skill that a reasonable person in the same position would use in the same circumstances?

A) the duty to perform

B) the duty of care

C) the duty to inform

D) the duty of obedience

B) the duty of care

A limited partnership has which of the following types of partners?

A) professional partners and para-professional partners

B) general partners and limited partners

C) primary partners and secondary partners

D) special partners and limited partners

B) general partners and limited partners

Which of the following information must be included in a certificate of limited partnership?

A) the name, street, and mailing address of each general partner

B) a clause indicating that general partner membership is closed

C) the mission and vision statement of the limited partnership

D) the scope of nature of potential business opportunities available to the general partnership

A) the name, street, and mailing address of each general partner

Which of the following documents does a domestic limited partnership require to be allowed to operate in another state? 

A) a trade name certificate

B) a certificate of authority

C) a limited trade affidavit

D) an application for limited partnership reciprocity

B) a certificate of authority

Which of the following types of liability do limited partners of a limited partnership have for the debts and obligations of the limited partnership?

A) unlimited personal liability

B) liability restricted to debts up to their capital contributions

C) liability restricted to their current personal net worth

D) liability restricted to the current value of their real property holdings

B) liability restricted to debts up to their capital contributions

Which of the following is incorrect regarding the management authority and permissive activities of limited partners in a limited partnership?

A) Limited partners do not have the right to engage in management and control activities of the limited partnership unless the partnership agreement or the general partners grant them this authority.

B) Under most state limited partnership laws, limited partners who are permitted to and do engage in the management and control activities of a limited partnership do not lose their limited liability status.

C) Under limited partnership law, limited partners do not have the legal right to vote to amend the limited partnership agreement.

D) Under limited partnership law, limited partners have the legal right to vote to expulse a general or a limited partner.

C) Under limited partnership law, limited partners do not have the legal right to vote to amend the limited partnership agreement.

In states where a limited liability company (LLC) may be organized by only one (1) member, which of the following can obtain the benefit of the limited liability shield of an LLC?

A) corporations

B) sole proprietors

C) limited liability partnerships (LLPs)

D) general partnerships

B) sole proprietors

A limited liability company (LLC) that is organized in Alabama and is operating in Texas with no operations outside the United States is considered which of the following in Texas?

A) a foreign LLC

B) a limited liability partnership (LLP)

C) a domestic LLC

D) a general partnership

A) a foreign LLC

Sam Muller and Toby Richardson organize a limited liability company (LLC) in Delaware. In the articles of organization, they specify the duration of the LLC as 25 years from the date of filing the articles of organization. Which of the following is correct in this case?

A) The LLC is invalid, since it does not specify a date of termination.

B) The LLC may be dissolved at will any time after twenty-five (25) years from the date of filing the articles of organization.

C) Muller and Richardson have organized a valid term LLC.

D) Muller and Richardson have organized an at-will LLC.

C) Muller and Richardson have organized a valid term LLC.

Which of the following is correct regarding the liabilities of limited liability companies (LLCs), their managers, and their members? 

A) LLC members are liable to the extent of their capital contribution.

B) LLC managers are personally liable for the debts, obligations, and liabilities of the LLCs.

C) LLCs are not liable for any loss or injury caused by their employees.

D) LLCs are not liable for losses caused due to negligence of their managers during the ordinary course of business.

A) LLC members are liable to the extent of their capital contribution.

Mary, Harold, Harvey, and William form a limited liability company (LLC) by contributing $20,000, $50,000, $55,000, and $150,000 in financial capital, respectively. The LLC is designated as member-managed. When the resolution of a certain issue is put to vote, Mary, Harvey, and Harold vote "yes," whereas William votes "no." Which of the following is correct in this case?

A) William's decision prevails, since he has invested the most capital.

B) No decision results, since the vote was not unanimous.

C) Mary, Harvey, and Harold's decision prevails as a simple majority.

D) The decision must be made by company employees.

C) Mary, Harvey, and Harold's decision prevails as a simple majority.

Which of the following is correct regarding the liability of shareholders for a corporation's debts and obligations? 

A) Generally, shareholders have joint and several liability.

B) Generally, shareholders have only limited liability.

C) Generally, shareholders have unlimited liability.

D) Generally, shareholders are not liable to the extent of their capital contributions.

B) Generally, shareholders have only limited liability.

Which of the following is the basic governing document of a corporation?

A) the articles of incorporation

B) the Uniform Commercial Code (UCC)

C) the articles of organization

D) the partnership agreement

A) the articles of incorporation

Issued shares that have been repurchased by the corporation are referred to as which of the following?

A) outstanding shares

B) liquidated shares

C) unissued shares

D) treasury shares

D) treasury shares

Stock for which any missed dividend payments must be paid in the future to the preferred shareholders before the common shareholders can receive any dividends are known as which of the following? 

A) cumulative preferred

B) noncumulative preferred

C) common

D) participating preferred

A) cumulative preferred

Which of the following is a long-term unsecured debt instrument that is based on a corporation's general credit standing?

A) a debenture

B) a bond

C) a note

D) a treasury share

A) a debenture

A shareholder's authorization of another person to vote the shareholder's shares at the shareholders' meetings in the event of the shareholder's absence is called ________.

A) straight voting

B) an accommodation

C) voting by proxy

D) an insider director

C) voting by proxy

Illini Corporation has 30,000 outstanding shares. A shareholders' meeting is duly called to amend the articles of incorporation, and 17,501 shares are represented at the meeting. According to the Revised Model Business Corporations Act (RMBCA), what is the minimum number of outstanding shares that must be represented in this case to have a quorum?

A) 8,751

B) 18,501

C) 15,001

D) 17,501

C) 15,001

Blitz Brands has 100,000 outstanding shares with four shareholders. Ester owns 45,000 shares, Mendez owns 20,000 shares, Judy owns 20,000 shares, and Aaron owns 15,000 shares. Assume that two directors of the corporation are to be elected from a potential pool of five candidates. Ester is in favor of Candidates 2 and 3, Mendez is in favor of Candidates 1 and 5, Judy is in favor of Candidates 1 and 4, and Aaron is in favor of Candidates 1 and 2. If the voting is done by straight voting, which two candidates are likely to win?

A) Candidate 1 and Candidate 2

B) Candidate 1 and Candidate 4

C) Candidate 2 and Candidate 3

D) Candidate 2 and Candidate 4

A) Candidate 1 and Candidate 2

An agreement that requires selling shareholders to sell their shares to the other shareholders or to the corporation at the price specified in the agreement is referred to as which of the following?

A) a preemptive sale

B) a right of first refusal

C) a buy-and-sell agreement

D) a shareholder voting agreement

C) a buy-and-sell agreement

Which of the following is a doctrine that says if a shareholder dominates a corporation and uses it for improper purposes, a court can disregard the corporate entity and hold the shareholder personally liable for the corporation's debts and obligations?

A) piercing the corporate veil

B) fruit of the poisonous tree

C) right of first refusal

D) self-dealing

A) piercing the corporate veil

A director or corporate officer who does not attend board meetings regularly would be ________.

 A) self-dealing

B) in violation of the duty of care

C) in violation of the duty of loyalty

D) in violation of the duty of obedience

B) in violation of the duty of care

 

Shareholders elect a panel of decision makers known as the ________.

A) registered agents

B) corporate officers

C) stakeholders

D) board of directors

D) board of directors

Personal property that is permanently affixed to land or buildings is called which of the following?

A) chattel

B) a fixture

C) an attachment

D) a lien

B) a fixture

The voluntary transfer of title to property without payment of consideration by the donee is known as which of the following?

A) adverse possession

B) a future interest

C) a gift

D) purchase

C) a gift

When John Lacey's car was stolen, he filed a complaint with the police. The police were able to trace the car to a professional automobile thief and returned it to John. When John got his car back, he realized that the thief had installed a new engine, changed the upholstery, and put a new stereo player in his car. The value of John's car is said to have undergone a(n) ________.

A) accession

B) arraignment

C) bailment

D) lien

A) accession

A transaction in which an owner transfers his or her personal property to another to be held, stored, or delivered or for some other purpose is known as which of the following?

A) an arraignment

B) an easement

C) a bailment

D) an accession

C) a bailment