QUESTION 1
Samir, a legal resident of the U.S., applies for a job position with an employer as a word processor. The position requires that a person type into Word documents various old books, many of which have "fine" print, so that they can be converted into electronic editions. Which of the following is NOT a violation of U.S. civil rights laws?
A. Samir does not get the job because he is dark-skinned.
B. Samir does not get the job because he is from Pakistan.
C. Samir does not get the job because his eyesight is very, very poor and not sufficiently correctable.
D. Samir does not get the job because he is a Muslim.
QUESTION 2
Adam invests in a franchise with Best Gas Stations, Inc. Best requires Adam to exclusively buy Best products for every phase of the operation. Adam's best argument to challenge this requirement is that it violates
A. an implied covenant of good faith and fair dealing.
B. antitrust laws.
C. the Federal Trade Commission's Franchise Disclosure Rule.
D. the U.S. Franchise Agency's Purchase and Sale Regulations.
QUESTION 3
Paul makes an offer to Lynn in a letter, saying nothing about how her acceptance should be sent. Lynn's acceptance is sent via the mail. This acceptance is effective when
A. Lynn decides to accept.
B. Lynn sends the letter.
C. Paul receives the letter.
D. the letter is midway between the parties.
QUESTION 4
Alpha Properties, Inc., makes an offer in a letter to Bob to sell a certain lot for $5,000, with the offer to stay open for thirty days. Bob would prefer to pay $4,000, if Alpha would sell at that price. To leave room for negotiation without reject¬ing the offer, Bob should reply
A. "I will not pay $5,000."
B. "Will you take $4,000?"
C. "I will pay $4,000."
D. "I will pay $4,500."
QUESTION 5
Marcus, an entrepreneur, has developed an excellent business plan for a proposed business. He wants to show it to some venture capitalists with the hope that they will invest in the venture, but he is concerned about protecting his business plan from appropriation and wants to protect it as a legal trade secret. Can the business plan be protected as a trade secret?
A. No, because it cannot be kept secret since Marcus obviously has to show it to people.
B. No, because it does not have actual worth, rather only potential worth since it is a proposed business.
C. No, because it contains only "soft" information, such as ideas, concepts, strategies, and plans, and not "hard" scientific information, such as formulas.
D. Yes if Marcus takes reasonable efforts to keep the plan secret such as putting a confidentiality notice and warning on the plan.
QUESTION 6
The four shareholders of Delta, Inc., want to prevent each other from selling the shares to third parties without first being given the opportunity to buy them. The shareholders can provide for this in
A. a buy-sell agreement that includes a "take-along" clause.
B. a buy-sell agreement that includes a right of first refusal.
C. a key-person clause that specifies who can sell what to whom.
D. none of the above.
QUESTION 7
Fran is in Green's Grocery Store when a bottle of Hi Cola on a nearby shelf explodes, injuring her. She can recover from the manufacturer of Hi Cola if she can show that
A. she did not assume the risk of the explosive bottle of Hi Cola.
B. she intended to buy the explosive bottle of Hi Cola.
C. she was injured due to a defect in the product.
D. the manufacturer failed to use the highest degree of care in making the bottle of Hi Cola.
QUESTION 8
Jacques is the CEO if a public company traded on the New York Stock Exchange, called XYZ Corp., which is regulated by the SEC. Jacques buys 100 shares of stock of XYZ Corp. (using NO insider trading whatsoever) on March 1, 2009. Then on March 30, 2009 Jacques is in need of money due to his spouse being laid-off, so he sells his stock (using no insider trading whatsoever), and makes $10,000 in profits. Jacques:
A. Must forfeit the profit back to XYX Corp. due to the "short swing profits" rule.
B. Legally can keep the profits since there was no insider trading whatsoever.
C. Is in breach of his fiduciary duties to XYZ Corp. and can be sued for fraud.
D. Can never trade stock in the XYZ Corporation under any circumstances.
QUESTION 9
Alvaro and Franco are forming a corporation and preparing the articles of incorporation. What provision must be in the articles?
A. A corporate name with an indication of "corporateness," such as "Inc."
B. The names and addresses of majority or controlling shareholders.
C. Evidence of U.S. citizenship for the directors.
D. All must be in the articles.
QUESTION 10
Carla Contractor Company contracts to build a house for Lisa for $500,000. The house is completed on time and is in conformity with contract specifications except that Carla's workers forgot to put in Kohler plumbing fixtures in the master bathroom and instead mistakenly put in another slightly less expensive and not as prestigious brand. Otherwise the house is fine and is in conformity with the contract, but now Lisa refuses to pay for the construction of the house, saying the performance was defective due to the mistaken fixtures. What is the likely legal result of this dispute?
A. Lisa is discharged from any and all contract responsibility and does not have to pay anything and can successfully sue Carla for breach of contract.
B. Lisa can sue and prevail since under the Uniform Commercial Code Carla's performance was not perfect.
C. Lisa must pay Carla the agreed upon contract price minus an amount to correct the defect since the "substantial performance" doctrine of the common law prevails.
D. Lisa can sue for "pain and suffering" damages since she was stressed out by the "inferior" plumbing fixtures.
QUESTION 11
Jughead Construction Company puts in a bid to build the new town library. Its bid is $1 million. The other bids range from $2 to $4 million, and the town's architect estimated to town officials that the library would cost about $3 million. The town accepts Jughead's bid offer. Jughead's best defense to any lawsuit for breach of contract under these circumstances would be:
A. Unilateral mistake
B. Fraud by the town for keeping the architect's estimate secret.
C. Bilateral mistake.
D. Unilateral palpable mistake.
QUESTION 12
Victor properly assigns his contract right with Seller to receive goods at his place of business to Amiee, whose place of business is out of the country. Both Victor and Seller live and do business in the same state. Victor has paid for the goods and notifies Seller of the assignment. But Seller refuses to ship the goods to Aimee since the shipping and insurance charges will be much more for an out-of-country shipment. When Aimee does not receive the goods, she sues Seller for breach of contract. The likely result of such a lawsuit will be:
A. Seller will prevail since assignees like Aimee cannot sue in their own name since the assignor must join the lawsuit.
B. Seller will prevail since the assignment will result in a material increase in the obligor's performance duties.
C. Aimee will win if the assignment was written and Aimee paid a fair price for the assignment.
D. Aimee will lose since contract assignments are typically prohibited by state statute.
QUESTION 13
The U.S. Fish and Wildlife Service orders Ed to stop using a certain type of fishing net from his boat. To appeal this order to a court, Ed must
A. appeal simultaneously to the agency and the court.
B. bypass all administrative remedies and appeal directly to the court.
C. exhaust all administrative remedies.
D. ignore the agency and continue using the net.
QUESTION 14
Tech, Inc., sells its brand-name computer equipment directly to its franchised retailers. Depending on how existing franchisees do, Tech may limit the number of franchisees in a given area to reduce intrabrand competition. Tech's restriction on the number of dealers likely is
A. a per se violation of the Sherman Act.
B. exempt from the antitrust laws.
C. subject to continuing review by the appropriate federal agency.
D. subject to the rule of reason.
QUESTION 15
Kay, who is hearing impaired, applies for a position with Local Company. Kay is qualified but is re¬fused the job and sues Local. To succeed under the Americans with Disabilities Act, Kay must show that
A. Kay was willing to make a "reasonable accommodation" for Local.
B. Kay would not have to accept "significant additional costs" to work for Local.
C. Local refused to make a "reasonable accommodation" for Kay.
D. Local would not have to accept "significant additional costs" to hire Kay.
QUESTION 16
Danielle is the sales agent representing her company in a Caribbean country. She has negotiated the sale of a large amount of perishable goods to a buyer in that country. The goods have arrived at the local port but only can be off-loaded when the appropriate custom forms are stamped by the customs inspector. The inspector is taking his time; and Danielle is beginning to worry about the condition of the goods. Consequently, Danielle makes a "good will" tip of $200 to the inspector who then promptly processes the forms, thereby releasing the goods for shipment to the buyer. Under the Foreign Corrupt Practices Act, Danielle likely will be deemed to be acting:
A. Illegally by paying a bribe to a foreign government official.
B. Illegally since the amount of the tip was too much for such a lower level foreign government official.
C. Legally since all payments to foreign government officials are legal so long as they are not high level officials.
D. Legally since she made a "facilitating and expediting" payment.
QUESTION 17
Bernstein owns a lot and wants to build a house according to a specific set of plans and specifications. She solicits bids from building contractors and receives the following three bids: one from Chavez for $60,000, one from Freda for $58,000, and one from Samir for $55,000. She accepts Samir's bid. One month after construction of the house begun, Samir contacts Bernstein and informs her that because of inflation and a recent price hike in materials, he will not finish the house unless Bernstein agrees to pay an extra $2,000. Bernstein reluctantly agrees to pay the additional sum. After the house is finished, however, Bernstein refuses to pay the additional $2000. Whereupon Samir brings a lawsuit in order to require Bernstein to pay the additional amount. What is the best answer regarding the resolution of the lawsuit?
A. Samir prevails and Bernstein must pay because Bernstein agreed to pay the additional amount.
B. Bernstein prevails and need not pay the additional amount due to the pre-existing duty rule of consideration law.
C. Bernstein prevails and need not pay the additional amount due to the "impossibility of performance" doctrine.
D. Samir prevails since he made a mistake in his bid.
QUESTION 18
Jiffy Corporation uses cumulative voting in its elections of directors. Kay owns 3,000 Jiffy shares. At an annual meeting at which three directors are to be elected, Mary may cast for any one candidate
A. 1,000 votes.
B. 3,000 votes.
C. 9,000 votes.
D. 27,000 votes.
QUESTION 19
Under the employment at will doctrine as a general rule:
A. The employer may discharge an employee for an immoral and unethical reason.
B. Neither party may terminate the employment relationship at any time and for any reason.
C. Only the employee may terminate the employment relationship at any time and for any reason.
D. Only the employer may terminate the employment relationship at any time and for any reason.
QUESTION 20
Professor Olivia has her contract with her university wrongfully breached by the university. The university claims they "had to let her go" for economic reasons. She brings a lawsuit against the university and then goes off to the Cayman Islands, telling her attorney to "let the damages build up" and to "contact me on the Seven Mile Beach." What contract law damage rules are applicable to this situation?
A. Liquidated Damages
B. Compensatory Damages
C. Mitigation of Damages
D. B and C