Business law complaint and damages

timer Asked: Jul 1st, 2013

Question Description

I’m trying to learn for my Business class and I’m stuck. Can you help?

PART (1) : 

1.   Doug's complaint asks for an injunction. Which of the following is true? 


A. Doug has suffered great harm.

B. Doug seeks an equitable remedy.

C. Doug seeks money damages.

D. Money would be an adequate remedy.

2.   Phillip and Lori have a two-car accident in Tennessee. Both of them reside in Tennessee. Phillip will be able to sue Lori in Tennessee federal court 


A. if his damages exceed $75,000.

B. if the case involves application of federal law.

C. if his damages are extraordinary.

D. under no circumstances.

3.   Rachel's lawyer tells her that to resolve her case, the court will have to engage in judicial review. This means that the case involves 


A. an appellate court.

B. constitutionality of a statute, administrative regulation, or executive action.

C. common law.

D. judicial interpretation of a statute with ambiguous and unclear language.

4.   Will, an Idaho resident, was driving in Tennessee and struck Vicki, a Tennessee resident. Which of the following is true? 


A. Vicki may sue Will in Tennessee federal court only if the case involves violation of a federal law.

B. Vicki can't sue Will in Tennessee federal court because Will isn't a resident.

C. Vicki may sue Will in Tennessee federal court, no matter the amount of her damages.

D. Vicki may sue Will in Tennessee federal court if her damages are greater than $75,000.

5.   If a writ of certiorari is issued by the U.S. Supreme Court, which of the following is true? 


A. The case will be reversed.

B. The case involves the U.S. Constitution.

C. The lower courts haven't been able to agree on issues involved in the case.

D. The U.S. Supreme Court has agreed to hear the case.

6.   Which type of ADR involves time limits on presentations? 


A. Summary jury trials

B. Med-arb

C. Mediation

D. Early neutral evaluation

7.   An advantage of ADR is that it 


A. saves time and money.

B. improves the discovery process.

C. effectively handles constitutional law.

D. promotes the development of the law.

8.   Miguel, an Idaho resident, sues Kurt, an Alabama resident, in Idaho state court. Miguel's lawyer warns Miguel that the Idaho court may be unable to exercise authority over Kurt. This suggests that there may be a problem obtaining __________ jurisdiction. 


A. original

B. general

C. subject matter

D. personal

9.   Vera runs a cosmetics company. A federal agency is considering adopting a rule that would adversely affect Vera's business. Vera may have input on the agency's decision if the agency uses the ADR technique called 


A. negotiated rule making.

B. science court.

C. arbitration.

D. med-arb.

10.   George and Tanya are in a legal dispute. However, they're friends, and they would like to control the outcome of the case rather than letting a judge or other third-party decide it. What is their best ADR option? 


A. Mediation

B. ADR contract clause

C. Private civil trial

D. Binding arbitration

11.   Gary sues Dennis, relying on a state law. Dennis defends himself based on a federal law involving the same subject. If Dennis wins, it will be because of 


A. preemption.

B. devolution.

C. judicial review.

D. the federal register.

12.   Carl was arrested under a New Jersey statute that made it a crime to be persistently unemployed. Carl argues that a similar statute was declared unconstitutional by the California state court, so the New Jersey state court is required to declare New Jersey's statute unconstitutional. Carl is wrong because 


A. more than one court has to rule a certain way before precedent is established.

B. state courts aren't bound by precedent.

C. only federal courts can create binding precedent.

D. out-of-state cases aren't binding precedent in state courts.

13.   Donovan, like thousands of other people, was injured by an over-the-counter cold medicine that caused his hair to fall out. Even though his hair has grown back, he wants to sue. His lawyer advises that doing so would be expensive and not cost-effective, given the small amount of damage that temporary hair loss caused Donovan and other people like him. Donovan and others in his situation can make a lawsuit cost-effective by filing 


A. a small-claims lawsuit.

B. in state court.

C. in federal court.

D. a class action lawsuit.

14.   John sues Sally under a statute that has ambiguous language. Which of the following is true? 


A. John will have to find a different legal basis for his claim.

B. A legislative body will have to clarify the statute before the court can apply it to John's case.

C. The statute is invalid because of the ambiguous language.

D. The court will interpret the statute to resolve the ambiguity.

15.   Big Factory, Inc., and Save the Environment, an environmental group, have a dispute over whether making Big Factory, Inc., use certain expensive antipollution devices would contribute significantly to improving air quality. A type of ADR especially suited to this dispute is 


A. partnering.

B. summary jury trial.

C. private civil trial.

D. science court.

16.   The National Conference of Commissioners on Uniform State Laws developed a revised version of the UCC. Joe learned of this and, relying on one of the changes, acted in a way that was prohibited under the former version but permitted under the revised version. As a result, Joe was sued for his action. Both parties live in Joe's state, which is also where the transaction took place. Whether Joe wins or loses depends on 


A. which version of the UCC has been adopted by the legislature in Joe's state.

B. whether members of the commission that drafted the revision were from Joe's state.

C. which party stands to gain the most from the lawsuit.

D. which version of the UCC the judge thinks is most equitable.

17.   Antonio's attorney proves that there's no issue of any material fact, and the attorney would like to ask the court for an immediate judgment favorable to Antonio. Antonio's attorney should file a/an 


A. summary judgment motion.

B. injunction.

C. writ of execution.

D. answer.

18.   What does a process server do? 


A. Gives the complaint and summons to the defendant

B. Causes a summons to be issued to the defendant

C. Files the complaint with the court

D. Commences an action involving a criminal matter

19.   April's attorney informs her that they've been served with interrogatories. Which of the following is true? 


A. April will be required to submit to a physical examination.

B. April will have to answer questions under oath about the case.

C. April will be required to make oral statements in front of a court stenographer.

D. April's attorney will have to answer questions under oath about the case.

20.   Ben sues Fiona. The court that initially tries the case necessarily will not have __________ jurisdiction. 


A. personal

B. appellate

C. subject matter

D. original

PART (2) : 

1.   Company A, Inc., and Company B, Inc., are merging. Which of the following statements regarding this merger is true? 


A. Neither company will exist after the merger.

B. One of the two companies will exist after the merger.

C. A newly created third company will exist after the merger.

D. Both companies will exist after the merger.

2.   A shareholder's preemptive rights refers to a right to 


A. purchase a proportionate share of every new share offering by the company.

B. share in any profits insiders made from insider trading.

C. preempt the board of director's decisions if they're not supported by a majority of shareholders.

D. receive dividends out of profits before profits are used for any other purpose.

3.   Stuart and Cole enter a business venture in which they both agree to contribute funds, money, and time to a sporting goods store. Furthermore, the two agree to equally split all profits. Stuart and Cole have entered into a 


A. partnership.

B. limited liability company.

C. sole proprietorship.

D. corporation.

4.   Tricia purchases securities from a company from which she is ensured ownership and priority as to payment of dividends and distribution of assets on dissolution. What type of securities did Tricia purchase? 


A. Debenture bonds

B. Preferred stock

C. Common stock

D. Convertible bonds

5.   Brenda is on the board of directors for Money Company. Brenda rarely attends board meetings and doesn't pay attention when she does attend. Brenda usually votes like her friend Sadie, who is also on the board. Brenda voted for some proposals that harmed the company. Brenda likely violated 


A. her duty of obedience.

B. the actual authority rule.

C. the fairness rule.

D. her duty of due diligence.

6.   The primary difference between general partnerships and limited partnerships is the limiting of the 


A. number of partners.

B. number of agents.

C. partners' liability.

D. partners' profit.

7.   Company I, Inc., and Company II, Inc., are consolidating. Which of the following statements regarding this consolidation is true? 


A. Both companies disappear and stop carrying on business.

B. Both companies continue and carry on business as usual.

C. One company disappears, and the other company carries on with both businesses.

D. Both companies join and carry on business under a new name.

8.   Crawford, Inc., wants to acquire the assets of Toxic Waste, Inc., but Toxic Waste won't sell. Toxic Waste is a publicly held company with widely dispersed share ownership. What technique can Crawford use to accomplish its goal? 


A. Asset acquisition

B. Consolidation

C. Merger

D. Takeover bid

9.   Sidney and Nikki are law partners in a general partnership. Nikki decides to take a position at another law firm. Nikki notifies Sidney that she's leaving the partnership. This set of facts constitutes a dissociation and dissolution by 


A. operation of law.

B. judicial decree.

C. consent.

D. act of a partner.

10.   Herbie owns a pizza parlor in New York. Herbie didn't file any documents to create the business entity, he makes all the business decisions, and he retains all profit after overhead is paid. Herbie owns a 


A. corporation

B. partnership.

C. limited liability company.

D. sole proprietorship.

11.   Steve decides to incorporate his business, but he thinks it's too expensive to hire an attorney to advise him of the requirements. Steve merely changes the name on the sign outside from Steve's to Steve, Inc. One of Steve's customers brings suit against Steve, Inc., based on an allegedly defective product sold through his business. Steve defends on the basis that Steve, Inc., doesn't exist. Which of the following statements about this set of facts is true? 


A. Steve is wrong; a corporation by estoppel exists.

B. Steve is wrong; a de facto corporation exists.

C. Steve is wrong; a de jure corporation exists.

D. Steve is correct; no corporation exists.

12.   Ken is the president of a large energy company. Company executives approached Ken about purchasing some smaller companies to expand the business. Ken read the reports explaining the potential risk and return of the investment, and he decided the purchase appeared to be a good investment. Unfortunately, Ken was wrong, and the purchase caused the company to lose millions of dollars. Based on these facts, Ken 


A. should benefit from the fairness rule.

B. violated his duty of due diligence to the corporation.

C. violated his duty of loyalty to the corporation.

D. should benefit from the business judgment rule.

13.   Sal is a shareholder in XYZ Corporation. XYZ Corporation made defective products, and many individuals have filed lawsuits due to the defects. As a shareholder, Sal may 


A. be held personally liable only if the plaintiffs name Sal as a defendant.

B. be held personally liable only if the corporation was aware of the defects.

C. not be held personally liable for the defects.

D. be held personally liable for the defects.

14.   Bob is the CEO of Realty, Inc., a company that purchases and develops property for shopping centers. Bob learns that certain real estate, which would be excellent for a shopping center, is about to go up for sale. Bob purchases the property himself without telling anyone at the corporation. Bob has violated the 


A. business judgment rule.

B. insider trading rule.

C. corporate opportunity doctrine.

D. fairness rule.

15.   Which of the following types of company offers protection for personal liability? 


A. Limited liability partnership

B. Term partnership

C. General partnership

D. Sole proprietorship

16.   Tom is president of Big Drug, Inc. Tom receives a phone call from a federal agency informing him that a new drug owned by Big Drug will be approved for sale to the public. Tom knows that this drug will be very popular and will cause a significant increase in the company's profits. Tom quickly purchases as much Big Drug stock as he can afford. Then, when the federal agency formally announces approval of the drug, Big Drug stock triples in value, and Tom becomes rich. Tom has violated the 


A. insider trading rule.

B. corporate opportunity doctrine.

C. fairness rule.

D. business judgment rule.

17.   In a general partnership, management decisions are made by 


A. majority vote, with partners votes weighted in proportion to the interest owned.

B. majority vote, with each partner having an equal vote.

C. unanimous vote in all business decisions.

D. two-thirds votes of the partners.

18.   If a regulation affecting corporations is federal, the authority for that regulation likely derives from 


A. the Supremacy Clause.

B. police power.

C. executive orders.

D. the Commerce Clause.

19.   Todd wants to start a business, but he wants to make sure that he has absolute control. Which business form would you recommend? 


A. Limited liability company

B. General partnership

C. Sole proprietorship

D. Limited partnership

20.   Adam is president of Well, Inc. The board of directors instructs Bob not to borrow any money on behalf of the corporation. Bob does so anyway, and the corporation lacks income and assets to pay the debt. Bob will be personally liable for the debt under the 


A. actual authority rule.

B. fairness rule.

C. business judgment rule.

D. corporate opportunity doctrine

PART (3) : 

1.   Ed contracts with Nathan to kill Nathan's mother-in-law for $1,000. Which element of consideration is missing from this contract? 


A. All the elements of consideration are present

B. Legality of consideration

C. Consideration wasn't a bargained-for exchange

D. Adequacy of consideration

2.   At his 80th birthday party, Graham declares that Elsie is his favorite grandchild and that he will leave Elsie $100,000 on his death. Sadly, Graham dies just three days later. No provision of his will leaves Elsie the $100,000. Elsie files a breach of contract claim against Graham's estate. The most likely result is that Elsie will lose because no contract existed due to lack of 


A. agreement and consideration.

B. contractual capacity and form.

C. contractual capacity and consideration.

D. form and agreement.

3.   Juan thinks he would like to purchase Tara's house, but doesn't know whether he will be able to save enough money for a down payment on a loan. Juan agrees to give Tara $5,000 for the option to purchase her house for $150,000 sometime within the next five years. Juan and Tara reduce their agreement to writing, sign it, and Juan gives Tara $5,000. Two years later, Juan wins the lottery and now is financially able to purchase Tara's house. However, that same day Juan receives a letter from Tara revoking her offer to sell for $50,000. Which of the following is true? 


A. Tara's revocation is effective as long as she refunds the $5,000.

B. Juan can't complain because he failed to accept Tara's offer before it was revoked.

C. Tara's revocation is effective.

D. Tara's revocation isn't effective.

4.   Esther lives with a caregiver on whom she is greatly dependent and trusts. The caregiver persuades Esther to sign a contract with the caregiver that greatly favors the caregiver. If the contract is set aside, it will likely be on what grounds? 


A. Mistake

B. Duress

C. Fraud

D. Undue influence

5.   Tom is selling his motorcycle to Carl. Tom tells Carl that the motorcycle runs perfectly, though he knows that the motorcycle leaks oil. Carl purchases the motorcycle and discovers the problem. Which of the following is true? 


A. Tom committed active fraud.

B. Tom committed passive fraud.

C. Tom committed fraud in the inception.

D. Tom hasn't committed fraud.

6.   Carlos promises to pay $100 for someone to paint his house. Timothy hears about the offer and paints Carlos's house on 123 Oak Street. However, Carlos intended that his other house, at 456 Maple Street, be the one to be painted and refuses to pay Timothy, claiming that there's no contract because they never discussed which house would be painted. If Carlos has a legal right to payment, it's most likely based on 


A. implied-in-law contract.

B. implied-in-fact contract.

C. express contract.

D. fraud.

7.   Delivery of unordered merchandize is considered 


A. a contract to purchase unless the recipient contacts the sender to reject the merchandize.

B. a contract to purchase if the items aren't returned.

C. performance of a contract.

D. an offer to sell.

8.   Carrie decides to offer Shelley the opportunity to purchase her motorcycle for just $500. Carrie told Jim, a mutual friend of Shelley and her, that she intended to make the offer. Later, Carrie changes her mind. Shelley approaches Carrie and says she accepts the offer. No contract was formed most likely because 


A. Carrie never communicated the offer to Shelley.

B. Jim was acting as an agent for Shelley without telling Carrie.

C. the terms of the offer weren't definite enough to form a contract.

D. Carrie didn't possess a serious, objective intention.

9.   On the Internet, Sara came across a software package she wanted to download. To download the software, she had to read a disclaimer and click an "I Agree" button. Sara didn't bother to read the contents of the "Agreement and Warranties" disclaimer, but she clicked "I Agree." The software caused her computer to crash. Sara filed suit against the company that ran the Web site, and the company's defense is that the "Agreement and Warranties" disclaimer to which Sara agreed disclaimed any responsibility for such occurrences. The most likely result is that Sara will 


A. win her lawsuit because she didn't the read disclaimer.

B. lose her lawsuit because she didn't read the disclaimer, which isn't enforceable.

C. lose her lawsuit because the disclaimer will be enforced.

D. win her lawsuit because disclaimers aren't enforceable.

10.   Daisy contracts with Mike that in exchange for $50 Daisy won't whistle for a week. This contract is 


A. unenforceable due to fraud.

B. not enforceable due to lack of consideration.

C. enforceable only if Daisy is a musician who whistles for a living and would suffer significant income loss by not whistling for a week.

D. enforceable.

11.   Eric, a 17-year-old, signs a contract with the armed services to enlist. Later, Eric changes his mind and wants out of the contract. Can he void the contract based on incapacity to contract? 


A. Yes, after he turns 18

B. Yes

C. No

D. In some states

12.   Which of the following is a necessary element both for fraud and for misrepresentation? 


A. A false statement

B. A fiduciary relationship

C. A hidden problem

D. The intent to deceive

13.   Regan marries at age 17. Then, she enters into a contract with Art to purchase an automobile for $10,000. She later changes her mind and wants to void the contract. Which of the following is true? 


A. Regan can't void the contract because she is over 15.

B. Regan can void the contract because she is married.

C. Regan can't void the contract because she is married.

D. Regan can void the contract because she is a minor.

14.   Dave is declared insane and committed to an asylum. Dave escapes and goes to a car dealership, where he enters into a contract with Larry to buy a sports car. Which of the following statements is true? 


A. Only Larry can void the contract.

B. Because Dave is legally insane, the contract is void.

C. To void the contract, Dave must prove he is insane.

D. Only Dave can void the contract.

15.   Jacques offers to paint Alisha's house for $100. Before Alisha responds, Jacques dies. Which of the following statements is true? 


A. A representative of Jacques's estate must find someone to paint Alisha's house.

B. A representative of Jacques's estate must paint Alisha's house for $100.

C. There's no contract because Alisha failed to accept Jacques's offer before he died.

D. Jacques's offer has been revoked.

16.   Jackie tells a group of friends that she plans to sell her home. Meg asks how much Jackie hopes to get for the house, and Jackie replies, "$50,000." Meg says, "I accept your offer. I'll purchase your house for $50,000." No contract exists because 


A. the terms of the offer aren't reasonably certain.

B. Jackie doesn't seriously intend to enter a contract.

C. Jackie's statements are merely preliminary negotiations.

D. the offer isn't properly communicated.

17.   Josh runs over Barbara's dog. Barbara promises not to sue Josh if he pays her $200. Josh pays $200. Then Barbara sues, claiming an agreement not to sue doesn't constitute consideration. Which of the following is true? 


A. Such contracts violate public policy and therefore are unenforceable.

B. Agreement not to sue is consideration only if it approximates what a court would have awarded.

C. Agreement not to sue isn't consideration.

D. Agreement not to sue is consideration.

18.   Lance e-mails Fred, offering to buy his motorcycle for $750. Fred replies, agreeing. Later, Fred declines to honor the agreement, claiming that e-mail agreements aren't enforceable. In both the initial e-mail and the reply Lance and Fred typed their names. Which of the following is true? 


A. There's no contract because the e-mails weren't witnessed.

B. There's no contract because contracts must have hand-written signatures to be enforceable.

C. There's no contract because e-mail agreements aren't enforceable.

D. The e-mails constitute a contract if Lance and Fred have agreed that electronic signatures can be used to create the agreement.

19.   Tyler offers to dance naked on Main Street if Corey will mow Tyler's yard. Corey mows Tyler's yard. Which of the following statements is not potential grounds for setting aside the contract? 


A. Illegality of consideration

B. Lack of serious intent to contract

C. Inadequacy of consideration

D. All of the above are potential grounds for setting aside the contract

20.   Jack is a mature-looking 17-year-old who lives at home with his parents. Jack wants to purchase an automobile. Jack goes to Discount Car Sales, where Bud, the car salesman, never considers that Jack may be a minor. Bud sells Jack a car, with the agreement that Jack will pay Bud $100 per month over the next five years for the car. Which of the following is true? 


A. Bud can hold Jack's parents liable for Jack's contract, because Jack was a minor living in their home at the time the contract was formed.

B. Bud can disaffirm the contract because of Jack's status as a minor at the time the contract was formed.

C. Jack can disaffirm the contract because of his status as a minor at the time the contract was formed.

D. Despite Jack's status as a minor, Bud can prohibit Jack from disaffirming a contract for a necessary (or basic) need.

PART (4) : 

1.   Danielle purchases life insurance on her own life with Big Life Insurance and makes her husband, Walter, the beneficiary. Which of the following statements is true? 


A. Danielle is a donee beneficiary.

B. Danielle is an intended third-party beneficiary.

C. Big Life Insurance is a creditor beneficiary.

D. Walter is a donee beneficiary.

2.   Jessica orally agrees that she will sell 400 pairs of flip-flops to a customer for $600. This agreement is 


A. unenforceable because of the statute of frauds.

B. unenforceable because all necessary elements aren't met.

C. enforceable because all necessary elements are met.

D. unenforceable because of the parol evidence rule.

3.   James leases an apartment to Kyle for $900 per month rent. The written lease contains no prohibition against assignment, nor does it expressly permit assignment. Kyle assigns his rights to Harley without any consideration. James finds out and objects. The assignment is 


A. invalid because James didn't consent to the assignment.

B. valid because the written lease didn't prohibit it.

C. invalid because the lease didn't expressly permit assignment.

D. valid because there's no consideration for the assignment.

4.   Warren agrees to paint Abby's restaurant for $1,000. Warren fails to paint. Abby may be entitled to punitive damages if 


A. Warren doesn't know how to paint, misrepresented himself as a painter, and never intended to paint.

B. Abby loses profits as a result of the breach.

C. Abby has to pay substantially more than $1,000 for someone else to perform the job.

D. the contract breached was both written and witnessed.

5.   Paul enters into a contract with Harry. Paul agrees to put a new roof on Harry's house, and Harry agrees to pay Paul $5,000. Paul is late on a payment to Sam's Supply House and tells Sam's Supply House that he will pay when he receives money from Harry. Sam's Supply House has heard this from Paul before and didn't receive money. To ensure Paul pays his payment from the money Harry pays him, Sam's Supply House can 


A. tell Harry that Paul is indebted to Sam's Supply House, which automatically makes them a creditor beneficiary entitled to the payment.

B. have Paul assign his interests under the contract with Harry to Sam's Supply House.

C. require an accord and satisfaction be entered into.

D. have Harry assign his interests under the contract with Paul to Sam's Supply House.

6.   Coretta and Mary find a property to purchase. They sign a written agreement that states the agreed-on price, closing date, and items that are to stay in the house. They forget to include the washer and dryer in the agreement, but the seller tells them he will leave them if they want them. Right before closing, they walk through the property and find that the washer and dryer have been removed. They purchase the property and sue the seller for not leaving the washer and dryer. Coretta and Mary most likely 


A. won't win based on the statute of limitations.

B. won't win based on the statute of frauds.

C. will win based on the seller's representation when they looked at the property.

D. won't win based on the parol evidence rule.

7.   Collin purchases a house, using a loan from Big Bank. As a condition of the loan, Big Bank requires that Collin purchase life insurance payable to Big Bank, to the extent of the outstanding mortgage, if Collin dies before fully paying the mortgage. Big Bank is 


A. an incidental beneficiary but not a donee beneficiary.

B. both a creditor beneficiary and a donee beneficiary.

C. a creditor beneficiary but not a donee beneficiary.

D. an intended beneficiary but not a donee beneficiary.

8.   Which of the following is an example of discharge by operation of law? 


A. Xavier agrees to paint Rita's house for $1,000. Before Xavier can paint, Rita's house burns down.

B. Xavier agrees to paint Rita's house for $1,000. Rita later tells Xavier that she won't pay him. As a result, Xavier decides not to paint.

C. Xavier agrees to paint Rita's house for $1,000. Rita changes her mind and asks Xavier not to paint. Xavier agrees.

D. Xavier agrees to paint Rita's house for $1,000. Xavier paints, but before Rita pays him, she files bankruptcy. As a result, Xavier doesn't get paid.

9.   Sara purchases life insurance on her own life and makes her husband, Dean, the beneficiary. Sara dies. Dean applies to the insurance company for payment of the proceeds. The insurance company denies payment, pointing out that Dean didn't sign the contract and therefore doesn't have privity of contract. Dean is 


A. entitled to the proceeds as an incidental beneficiary.

B. entitled to the proceeds because he was married to Sara.

C. not entitled to the proceeds because he doesn't have privity of contract.

D. entitled to the proceeds as an intended beneficiary.

10.   Robert contracts to paint Jake's house for $500. Robert then asks Elmer to perform the painting work for him. Elmer does a bad job, and Jake wants to sue for breach of contact. Which of the following is true? 


A. Robert isn't responsible if he gave Jake notice of the delegation.

B. Robert is responsible for the breach of the contract only if there has been a novation.

C. Robert is responsible for the breach of the contract.

D. Elmer, but not Robert, is responsible for the breach.

11.   Candice hires Otto to work as a tax preparer in Candice's tax return business. The employment contract restricts the ability of Otto to set up a competing business or engage in tax preparation services if Otto leaves Candice's employ. Otto discovers he likes this kind of work and wants to set up his own tax return business. He asks you whether the restrictions in his contract with Candice will be enforceable. You should tell him that 


A. restrictive covenants regarding future employment will be enforceable if the value of the consideration given for the covenant equals the value of the income loss that would be caused by enforcing the agreement.

B. any restriction regarding employment will be enforceable as long as there was adequate consideration.

C. restrictive covenants regarding future employment will be enforceable if they're reasonable.

D. any restriction regarding employment is unenforceable as against public policy

12.   Under tenant Lester's lease contract with landlord Mary, Lester must pay an extra $25 if his rent is more than five days late. This is an example of __________ damages. 


A. punitive

B. consequential

C. liquidated

D. nominal

13.   Denise orally authorizes Shaun to sell her house. Shaun enters into a written agreement with Eric to sell him the house for $140,000. Both Shaun and Eric sign the contract. Denise learns of the agreement after the fact and decides she doesn't want to sell. If the contract is ruled unenforceable, the most likely reason is the __________ rule. 


A. fairness

B. parol evidence

C. equal dignities

D. best evidence

14.   Jack and Jane formed a contract in which Jack agreed to sell Jane a large amount of apples. Jack knew that Jane planned to resell the apples at the farmers' market the following weekend. Jack failed to deliver the apples as promised. Jane will most likely be able to recover 


A. both nominal and punitive damages.

B. compensatory damages only.

C. punitive damages only.

D. both compensatory and consequential damages

15.   Jordan is charged with a crime, and Jeff is chosen to be on the jury. Jordan offers to pay Jeff $500 if he votes not guilty. Jeff does so, but Jordan refuses to pay. Jeff sues Jordan for breach of contract. Jeff will 


A. win because of the statute of frauds.

B. lose because the contract is usurious.

C. lose because the contract is against public policy.

D. win because Jordan materially breached.

16.   Tom and Zeke enter into a contract for Tom to paint Zeke's house for $1,000. The contract doesn't specify a time for performance by Tom. Six years later, Tom shows up with a bucket of paint, paints the house, and demands payment. Which of the following is true? 


A. Tom couldn't have breached the contract because the contract didn't specify a time for performance, and he did do the painting work.

B. The contract violates the statute of frauds.

C. Tom breached the contract because he didn't perform within a reasonable time.

D. The contract was unenforceable because it didn't specify a time for performance.

17.   Bella and Connie are struggling to find jobs. They decide they want to open a child daycare center together. They see a house in the perfect neighborhood with a "For Sale by Owner." They talk to the owner, reach an agreement, and shake hands. Just before the closing on the house, at which they'll take ownership of the house, the owner decides not to sell to Bella and Connie. They tell the owner they're going to sue him for breach of contract. Bella and Connie most likely 


A. will win because the owner shouldn't have entered into a contract with them if he wasn't sure he wanted to sell the house.

B. will win because the owner breached his agreement to sell them the house.

C. won't win because they can find another house that will work just as well.

D. won't win because they shouldn't have entered into an oral contract to buy the house.

18.   Which of the following is an example of discharge by impossibility? 


A. Jason agrees to paint Sheila's house for $1,000. Sheila changes her mind and asks Jason not to paint. Jason agrees.

B. Jason agrees to paint Sheila's house for $1,000. Sheila later tells Jason that she won't pay him. As a result, Jason decides not to paint.

C. Jason agrees to paint Sheila's house for $1,000. Before Jason can paint, Sheila's house burns down.

D. Jason agrees to paint Sheila's house for $1,000. Jason paints, but before Sheila pays him, she files bankruptcy. As a result, Jason doesn't get paid.

19.   Tom and Zeke go out to a restaurant for dinner. Tom orders a steak, and Zeke orders lasagna. After they've finished eating, they pay their bill. Assuming all parties performed in the order they were required to under this contract, which of the following is true? 


A. Service and payment were conditions concurrent.

B. Payment was a condition precedent to service.

C. Service was a condition precedent to payment.

D. There was no contract.

20.   Tom and Zeke enter into a contract for Tom to paint Zeke's house for $1,000 by August 5th. Tom paints half of the house on August 6th, then demands pay. Which of the following is false? 


A. Tom may not be in breach if the contract doesn't make time of the essence.

B. Tom's duties are discharged under the doctrine of substantial performance.

C. The contract doesn't violate the statute of frauds.

D. Zeke may have to pay if payment is a condition precedent to the duty to paint.

PART (5) : 

1.   David gives Ethel power of attorney. David then has a nervous breakdown and becomes insane. Ethel has the authority to act on David's behalf 


A. if the power of attorney is a durable power of attorney.

B. with regard to personal property but not real property.

C. by necessity.

D. only until Tom regains his sanity.

2.   Phil receives a job offer from Big Tech, Inc., in a letter that states, "If you leave your current position and join us, we will employ you for the next five years as our company expands." Phil takes the job, and he is fired after six months even though his work was satisfactory. If Phil sues and wins, the most likely reason is 


A. the employment at-will doctrine.

B. promissory estoppels.

C. the state's right-to-work law.

D. express contract.

3.   Lee hires Zeke to sell her house. She tells Zeke to ask for $200,000, but says she will take $175,000. Zeke's friend Victor asks Zeke about the house, and Zeke tells him that Lee will take $175,000. Victor offers $175,000, and Zeke accepts. Zeke violated his duty of 


A. due diligence.

B. loyalty.

C. obedience.

D. account.

4.   Steve is Jason's agent, and it's within Steve's authority as Jason's agent to purchase homes on Jason's behalf. Steve contracts with Albert to buy Albert's house for Jason. Steve, however, doesn't tell Albert that he's buying the house on Jason's behalf or that he's acting for another individual. Under the terms of the contract, which of the following statements is true? 


A. Only Jason can be held liable.

B. Only Steve can be held liable.

C. Neither Steve nor Jason can be held liable.

D. Both Steve and Jason can be held liable.

5.   Billy works as a freelance writer for Big Books. Billy works in his own home and has contact with Big Books only to receive and return writing projects. Billy is a/an __________ for Big Books. 


A. fiduciary

B. employee

C. independent contractor

D. agent

6.   Irene hires Mark to do work for her. In the course of performing that work, Mark causes injury to a third party. Which of the following statements is true? 


A. Irene is liable for the injury whether Mark is an employee or an independent contractor.

B. If Mark is an employee, Irene is liable for the injury.

C. If Mark is an independent contractor, Irene is liable for the injury.

D. Irene isn't liable for the injury whether Mark is an employee or an independent contractor.

7.   Polly hires Nick to sell her house and gives him power of attorney that authorizes him to do, but the power of attorney says nothing about price. Polly tells Nick to take nothing less than $200,000. Lola offers Nick $195,000 for the house, and Nick accepts. Zeke violated his duty of 


A. loyalty.

B. account.

C. due diligence.

D. obedience.

8.   Samantha hires Zack, a real estate agent, to sell her home. Samantha then goes sailing. While she is gone, the pipes in her house burst. The agent discovers this, is unable to reach Samantha, and hires a plumber to fix the pipes. The plumber sends the bill to Samantha. If Samantha has to pay, it's most likely based on agency by 


A. necessity.

B. estoppels.

C. implication.

D. appointment.

9.   Bob's company was found in violation of OSHA. The violation likely relates to 


A. racial discrimination.

B. failure to pay overtime.

C. workers' compensation.

D. workplace safety.

10.   Ted is a janitor at Big Deal, Inc. One night, Ted is cleaning the boss's office and sits in the boss's chair. At that moment, a salesman walks in, thinks Ted is a manager, and offers to sell Big Deal, Inc., 700 widgets for $100 each. Ted thinks this sounds like a good deal, assumes the boss will be pleased, and signs the contract as an agent for Big Deal, Inc. The boss discovers this deal the next day and is angry because widgets cost $27 each. If Big Deal is obligated under the agreement, it's based on __________ authority. 


A. implied

B. apparent

C. actual

D. express

11.   Carl, a little person with dwarfism, applies for a job. He is told he won't be hired because he is a little person. Carl sues, claiming discrimination under the Civil Rights Act. Which of the following statements is true? 


A. Unless Carl can show that the height requirement has a disparate impact on short people, he has no claim.

B. Carl has a good claim.

C. Carl has no claim.

D. Unless the employer can show that being of a certain height is a bona fide job qualification, Carl has a good claim.

12.   State right-to-work laws prohibit 


A. employees from forming labor unions and bargaining units.

B. closed shops, but not union shops.

C. agreements requiring union membership to get or keep a job.

D. union shops, but not closed shops.

13.   Shauna creates a Web site that sells shoes. Meagan chooses shoes, enters her credit card information, and purchases the shoes. She then receive an e-mail confirming the purchase. The Web site is programmed to perform these functions, and Shauna has no personal knowledge of the transaction. Shauna was on vacation at the time of the transaction and didn't personally approve it. She returns from vacation, checks the site, and discovers the transaction. Was a contract created? 


A. No, because the computer isn't an agent for Shauna.

B. No, because Shauna never confirmed the purchase.

C. Yes, because agency by necessity applies.

D. Yes, because the computer is an agent for Shauna.

14.   Sam gives Dennis a written power of attorney to sell his house. Though the power of attorney doesn't expressly authorize Dennis to do so, Dennis purchases an ad in the newspaper to advertise sale of the house. The newspaper sends a bill to Sam. If Sam is liable for the bill, it's most likely based on agency by 


A. operation of law.

B. implication.

C. estoppels.

D. appointment.

15.   Molly borrowed $5,000 from Larry and, as collateral, gave him jewelry and authority to sell the jewelry if she defaulted. Afterward, Molly had second thoughts and revoked the agency. Which of the following statements is true? 


A. Molly can't terminate the agency unless she claims bankruptcy.

B. Molly can terminate the agency if she paid the loan.

C. Molly can't terminate the agency unless Larry sold the jewelry.

D. Molly can terminate the agency based on impossibility of performance.

16.   Bob's company was found in violation of ERISA. The violation likely relates to 


A. workers' compensation.

B. workplace safety.

C. failure to pay overtime.

D. Bob's pension plan.

17.   Bob works for the government and belongs to a union. Bob's union goes on strike. Which of the following statements is true? 


A. If the strike is lawful, Bob must be a federal employee.

B. The strike is unlawful because only nongovernment employees can strike.

C. The strike is lawful because only government employees can strike.

D. If the strike is lawful, Bob must not be a federal employee.

18.   Jane works for Big Business, Inc., as a sales representative. The boss decides to fire her because she isn't a Mets fan. The boss can 


A. not fire Jane because of the Civil Rights Act of 1964.

B. fire Jane.

C. not fire Jane if she agrees to become a Mets fan.

D. not fire Jane if here work was satisfactory.

19.   Norma has worked for Big Factory for 15 years, has never missed a day of work, and has always been an excellent worker. One day, without warning, Norma's supervisor fires her without any explanation. Norma knows of no reason for the termination. Which of the following statements is true? 


A. Norma can't do anything as long as the reasons were nondiscriminatory.

B. Norma may file a bad faith action against her supervisor.

C. Norma can't do anything unless she lives in an employment-at-will jurisdiction.

D. Norma may file a bad faith action against Big Factory.

20.   Javier gives written authorization to Tamara to sell his house. Javier dies on the October 4. On October 8, Tamara enters into a written contract on behalf of Javier to sell the house to Trudy for $100,000. Before Tamara entered into the contract, she showed the written authorization to Trudy. Javier's estate is 


A. not liable.

B. obligated to sell for $100,000 because Tamara had express authority.

C. liable if Tamara knew Javier was deceased at the time of the contract.

D. liable if the price is fair.

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