Business Law Practice Exam (Intermediate Level) Part- II

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  • 1/61 Questions

    1. Which of the following is NOT considered evidence?

    • Documents admitted for consideration by the jury
    • Testimony of plaintiff’s witnesses
    • Objects admitted for consideration by the jury
    • Testimony of defendant’s witnesses
    • All of the above are considered evidence
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About This Quiz

This intermediate-level Business Law Practice Exam Part-II assesses knowledge in various aspects of business law, including contract law, property rights, and federal jurisdiction. It is designed to enhance understanding of case law, equitable remedies, and legal procedures relevant to business practices.

Business Law Practice Exam (Intermediate Level) Part- II - Quiz

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  • 2. 

    1. Which of the following is an enforceable contract?

    • A contract to commit burglary.

    • A contract to defame a political opponent of the person who hired you.

    • A contract to gamble with the neighborhood bookie.

    • 2 and 3

    • None of the above are enforceable.

    Correct Answer
    A. None of the above are enforceable.
    Explanation
    The given options describe contracts that involve illegal activities or actions that are against the law. Contracts that involve illegal activities are not enforceable by law. Therefore, none of the options provided are enforceable contracts.

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  • 3. 

    1. Which of the following is not required with regard to a valid deed?

    • A description of what property is being transferred

    • Signature of grantor

    • Notarization

    • Delivered during grantor’s life

    • All of the above are required

    Correct Answer
    A. All of the above are required
    Explanation
    A valid deed requires a description of the property being transferred, the signature of the grantor, notarization, and delivery during the grantor's life. All of these elements are necessary for a deed to be considered valid and legally binding.

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  • 4. 

    1. Which of the following terms refers to “personal property permanently attached to real estate”.

    • Fixtures.

    • Collateral.

    • Quasi-tangibles.

    • Proceeds.

    • Execution.

    Correct Answer
    A. Fixtures.
    Explanation
    Fixtures refers to personal property that is permanently attached to real estate. This means that the item, such as a light fixture or built-in cabinet, is considered part of the property and cannot be easily removed. Collateral refers to property that is pledged as security for a loan, quasi-tangibles is not a term related to real estate, proceeds refers to the money or assets gained from a sale, and execution refers to the process of carrying out a legal document or judgment.

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  • 5. 

    1. Mr. Acme rents Joe an apartment on the second floor of his apartment building.  One day, when Joe is going up to his apartment, Joe trips on badly frayed carpet on a stair and hurts his ankle.  Joe sues Mr. Acme for negligence.  What is the likely result?

    • Mr. Acme wins because under the common law, landlords have no duty to repair.

    • Joe wins because Mr. Acme has a duty to use due care in maintaining common areas.

    • Mr. Acme wins, because under the modern rule, the tenants share in the duty of maintaining common areas

    • Joe wins because Mr. Acme violated the Explicit Guarantee of Occupation

    • Mr. Acme wins because the area was in the tenant’s control

    Correct Answer
    A. Joe wins because Mr. Acme has a duty to use due care in maintaining common areas.
    Explanation
    Joe wins because Mr. Acme has a duty to use due care in maintaining common areas. Under the common law, landlords have a duty to maintain common areas in a safe condition for tenants. In this case, the badly frayed carpet on the stair is a hazard that Mr. Acme should have repaired. Joe's injury occurred due to Mr. Acme's negligence in failing to maintain the common area, which is why Joe is likely to win the lawsuit.

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  • 6. 

    1. When a trail court makes a judgment, they are making which kind of law?

    • 1. Statutory Law

    • 2. Constitutional Law

    • 3. Case Law

    • 4. Administrative Law

    • 5. Natural Law

    Correct Answer
    A. 3. Case Law
    Explanation
    When a trial court makes a judgment, they are creating case law. Case law refers to the body of law that is based on previous court decisions, rather than statutes or constitutional provisions. Trial courts create case law by interpreting and applying existing laws to specific cases. This helps to establish legal principles and precedents that can be used in future cases.

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  • 7. 

    1. This school of thought can be embodied by the declaration of independence and the ideas of God-given rights to “life liberty and the pursuit of happiness.”

    • Natural Law school

    • Positivist school

    • Traditional school

    • Legal realism

    • Precedent school

    Correct Answer
    A. Natural Law school
    Explanation
    The correct answer is Natural Law school. This school of thought believes in the existence of natural laws that are inherent in human nature and can be discovered through reason. These laws are universal and apply to all individuals, regardless of societal or legal norms. The declaration of independence and the idea of God-given rights to "life, liberty, and the pursuit of happiness" align with the principles of the Natural Law school, as they emphasize the belief in inherent rights that are not dependent on any man-made laws or institutions.

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  • 8. 

    1. In the lawsuit, Hurt Guy vs. Bob’s Bouncer Service, the jury is so mad that Bob exceeded viciously injured Hurt Guy that it decides to assess extra damages against Bob in order to punish the him. The extra damages are called

    • Incidental damages

    • Punitive damages

    • Nominal damages

    • Liquidated damages

    • Consequential damages

    Correct Answer
    A. Punitive damages
    Explanation
    The correct answer is punitive damages. In this scenario, the jury is angry at Bob for causing severe injury to Hurt Guy and wants to punish him further. Punitive damages are awarded in addition to compensatory damages and are meant to punish the defendant for their actions and deter others from similar behavior.

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  • 9. 

    1. Jen’s father, who wishes he lived in the 18th century, orally promises to pay his daughter Jen’s boyfriend, Ryan, $10,000 dollars on the day Ryan marries Jen.  Which of the following is true?

    • 1. This is called a dowry and it is not enforceable in this case.

    • 2. This is called a dowry and it is enforceable in this case.

    • 3. This is called a prenuptial agreement and it is not enforceable in this case.

    • 4. This is called a prenuptial agreement and it is enforceable in this case.

    • 5. Marriage is never sufficient consideration.

    Correct Answer
    A. 1. This is called a dowry and it is not enforceable in this case.
    Explanation
    In this scenario, Jen's father promises to pay Ryan $10,000 on the day he marries Jen. This is referred to as a dowry, which is a payment made by the bride's family to the groom or his family. However, in this case, the dowry is not enforceable because dowries are generally not legally binding agreements. Therefore, the correct answer is that this is called a dowry and it is not enforceable in this case.

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  • 10. 

    A charge filed by a grand jury is:

    • An indictment.

    • An information.

    • An arraignment.

    • A plea.

    • None of the above.

    Correct Answer
    A. An indictment.
    Explanation
    An indictment is a charge filed by a grand jury. It is a formal accusation that a person has committed a crime, based on the evidence presented by the prosecutor. This is different from an information, which is a charge filed by a prosecutor without the involvement of a grand jury. An arraignment is a court hearing where the defendant is informed of the charges against them and enters a plea. A plea is the defendant's response to the charges, either guilty or not guilty. Therefore, the correct answer is "An indictment."

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  • 11. 

    1. Which of the following is admissible to alter a written contract despite the parol evidence rule?

    • Evidence of prior written agreements

    • Evidence of contemporaneous oral statements

    • Evidence of modifications occurring after the written contract was made

    • Evidence prior oral statements

    • Evidence of contemporaneous oral agreements

    Correct Answer
    A. Evidence of modifications occurring after the written contract was made
    Explanation
    The parol evidence rule generally prohibits the introduction of evidence of prior or contemporaneous oral or written agreements that contradict or vary the terms of a written contract. However, an exception to this rule allows for the admission of evidence of modifications made after the written contract was created. This means that evidence of any changes or amendments made to the contract after it was initially written can be considered admissible and may alter the terms of the contract.

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  • 12. 

    While at a drive in movie theater, Jane gets mad at Frank for being more interested in the movie than in talking with her. She pulls out a gun and tells Frank that he can’t leave the car until she says so.  Frank is shaking with fear because this is their first date and doesn’t know what Jane will do next.  After a minute or two Jane laughs and shows Frank that the gun is a toy.  If Frank sues Jane for false imprisonment:

    • Frank will lose because Jane only “detained” him for a minute

    • Frank will win even if he knew the gun was a fake all along

    • Frank will lose because the gun was fake

    • Frank will win because he reasonably felt threatened by Jane if he left the car.

    • Frank will lose because the doors were unlocked and he could easily have jumped out

    Correct Answer
    A. Frank will win because he reasonably felt threatened by Jane if he left the car.
    Explanation
    Frank will win because he reasonably felt threatened by Jane if he left the car. Despite the gun being a toy, Jane's actions of pulling out the gun and telling Frank he can't leave created a reasonable fear in Frank's mind. False imprisonment refers to the unlawful restraint of a person's freedom of movement, and in this case, Frank felt compelled to stay in the car due to the perceived threat. The fact that the doors were unlocked or that Frank could have jumped out does not negate the emotional distress and fear he experienced.

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  • 13. 

    1. Which of the following is/are sufficient in order to establish Federal subject matter jurisdiction?

    • Federal Question

    • Diversity of Citizenship

    • Minimum contacts of the defendant with the state in which the court sits

    • All of the above

    • 1 and 2 only

    Correct Answer
    A. 1 and 2 only
    Explanation
    To establish Federal subject matter jurisdiction, two conditions must be met: Federal Question and Diversity of Citizenship. Federal Question refers to cases that involve a federal law or constitutional issue. Diversity of Citizenship means that the parties in the case are from different states and the amount in controversy exceeds a certain threshold. The third option, Minimum contacts of the defendant with the state in which the court sits, is not sufficient to establish Federal subject matter jurisdiction. Therefore, the correct answer is 1 and 2 only.

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  • 14. 

    1. A contract that is so unfair that it “shocks the conscience” or is “devoid of conscience” is unenforceable under the doctrine of...

    • Fairness

    • Sufficiency

    • Adequacy

    • Unconscionability

    • Exculpation

    Correct Answer
    A. Unconscionability
    Explanation
    Unconscionability refers to a contract that is extremely unfair and unjust, to the point where it shocks the conscience or lacks any sense of fairness. Such contracts are considered unenforceable under the doctrine of unconscionability.

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  • 15. 

    1. Which of the following is/are true with regard to Equitable remedies?

    • Allowed only when money damages alone are inadequate

    • Judge decides the facts

    • Quasi-contract, Injunction, liquidated damages, and punitive damages are examples

    • All of the above

    • 1 & 2

    Correct Answer
    A. 1 & 2
    Explanation
    Equitable remedies are a form of relief granted by a court when money damages alone are not sufficient to provide a fair resolution. This means that they are only allowed when money damages are inadequate, which is stated in option 1. Option 2, "Judge decides the facts," is also true because in equitable remedies, the judge has the authority to determine the facts of the case and make decisions accordingly. Therefore, options 1 and 2 are both correct statements.

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  • 16. 

    1. If a repossession sale of collateral is completed, list the order in which the proceeds are distributed:

    • Debt, Second Priority lien, Debtor, Expenses of the sale.

    • First Priority Lien holder expenses of sale, lower priority lien holders, Debtor.

    • Expenses of sale, First Priority Lien holder, lower priority lien holders, Debtor.

    • Expenses of Sale, First Priority lien holder, Debtor, Lower priority lien holders.

    • First Priority Lien holder, Expenses of Sale, Debtor, Second Priority Lien holder.

    Correct Answer
    A. Expenses of sale, First Priority Lien holder, lower priority lien holders, Debtor.
    Explanation
    After a repossession sale of collateral, the proceeds are distributed in the following order: first, the expenses of the sale are deducted. Then, the first priority lien holder receives their share. After that, any lower priority lien holders receive their share. Finally, the remaining proceeds are given to the debtor.

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  • 17. 

    1. Which of the following is true?

    • Under Title Theory, title and possession reside with mortgagee

    • Under Title Theory, title and possession reside with mortgagor

    • Under Lien Theory, title and possession reside with lender

    • Under Lien Theory, title and possession reside with mortgagee

    • Under Lien Theory, mortgagor’s baby resides with mortgagee

    Correct Answer
    A. Under Title Theory, title and possession reside with mortgagee
    Explanation
    Under Title Theory, the mortgagee (the lender) holds both the title and possession of the property until the mortgage is fully paid off. This means that the mortgagee has the legal right to take possession of the property if the mortgagor (the borrower) fails to make the required payments. This is in contrast to Lien Theory, where the title and possession of the property remain with the mortgagor, and the lender only holds a lien on the property as security for the loan.

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  • 18. 

    1. Yael is questioned in person and under oath prior to trial as a witness in a lawsuit. This procedure is called:

    • Interrogatory

    • Request for admission

    • Direct examination

    • Deposition

    • Voir dire

    Correct Answer
    A. Deposition
    Explanation
    A deposition is a procedure where a witness is questioned in person and under oath prior to trial. It is a formal process where attorneys from both sides have the opportunity to ask questions and gather information from the witness. The purpose of a deposition is to discover and preserve evidence and testimonies that can be used during the trial. It allows both parties to assess the credibility and reliability of the witness and their testimony.

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  • 19. 

    Which of the following were discussed as floating liens in class?

    • Security interests in fixtures.

    • Security interests in proceeds

    • Security interest in after-acquired property.

    • 1 & 2

    • 2 & 3.

    Correct Answer
    A. 2 & 3.
    Explanation
    In class, the discussion revolved around floating liens, specifically security interests in proceeds and security interests in after-acquired property. These types of liens were explored and explained, making options 2 and 3 the correct answer.

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  • 20. 

    1. You are the attorney for Alex.  Alex signed a promissory note for $100,000 to Michelle in order to receive 1,000 boxes of girl scout cookies.  Michelle then sold the promissory note to Bob, a holder in due course, for $90,000.  Now, Bob has come to collect from Alex.  What defense(s) are not successful against the HDC?

    • The defense that the cookies were never delivered.

    • Fraud in the inducement.

    • Fraud in the execution.

    • All of the above

    • 1 & 2.

    Correct Answer
    A. 1 & 2.
    Explanation
    The defense that the cookies were never delivered is not successful against the HDC because the delivery of the cookies is unrelated to the validity of the promissory note. Fraud in the inducement is also not successful as it refers to a misrepresentation that caused the party to enter into the contract, but it does not affect the validity of the promissory note. Therefore, both defenses 1 and 2 are not successful against the HDC.

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  • 21. 

    Joe rents an apartment above Mr. Acme’s store in NYC.  The lease reads “For as long as Joe wishes to live here”.  Assuming this type of agreement is unchanged by New York Law, this lease creates the following property interest:

    • Tenancy for Years

    • Periodic Tenancy

    • Tenancy at Will

    • Tenancy at Sufferance

    • No property interest has been created

    Correct Answer
    A. Tenancy at Will
    Explanation
    The lease stating "For as long as Joe wishes to live here" indicates that Joe has a tenancy at will. This means that Joe can stay in the apartment for as long as he wants, but the landlord can also terminate the lease at any time. It is a flexible arrangement that can be ended by either party without a specific notice period.

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  • 22. 

    1. Mr. Acme rents an apartment to John to live in while he is attending school at MU.  When John shows up to move in, he finds that Joe has not yet moved out, even though John’s lease has become effective.

    • Since this is Missouri, the American rule prevails, and under it the landlord must evict Joe or be in breach of lease.

    • Since this is Missouri, the English rule prevails, and under it the landlord must evict Joe or be in breach of lease.

    • Since this is Missouri, the American rule prevails, and under it the John must evict Joe

    • Since this is Missouri, the English rule prevails, and under it the John must evict Joe

    Correct Answer
    A. Since this is Missouri, the English rule prevails, and under it the landlord must evict Joe or be in breach of lease.
    Explanation
    In this scenario, the correct answer is that the English rule prevails in Missouri. The English rule states that the landlord must evict the current tenant, Joe, before the new tenant, John, can move in. If the landlord fails to do so, they would be in breach of the lease agreement with John. This rule prioritizes the rights of the current tenant over the new tenant.

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  • 23. 

    1. When a seller finances a real estate sale and will give the buyer a deed on payment of the purchase price in full, the contract is called:

    • An Installment Land Contract

    • A Due on Sale Contract

    • A Power of Sale provision

    • An Acceleration contract

    • None of the above

    Correct Answer
    A. An Installment Land Contract
    Explanation
    An installment land contract refers to a type of contract where the seller finances the sale of real estate and will transfer the deed to the buyer once the full purchase price is paid. This type of contract allows the buyer to make payments over a period of time, typically in installments, until the full purchase price is satisfied. It is a common arrangement used when the buyer does not have sufficient funds to pay the full purchase price upfront and the seller agrees to finance the sale.

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  • 24. 

    1. Jack grants Missouri Telephone Company the non-revocable right to put a tower and some phone lines on his property, while Jack still owns the property. This is called:

    • A profit

    • An easement

    • A license

    • A fee simple defeasible

    • A lien

    Correct Answer
    A. An easement
    Explanation
    Jack granting Missouri Telephone Company the non-revocable right to put a tower and phone lines on his property while still owning the property is an example of an easement. An easement is a legal right that allows someone to use another person's property for a specific purpose, without transferring ownership. In this case, Jack is granting Missouri Telephone Company the right to use his property for the purpose of installing a tower and phone lines. This right is non-revocable, meaning Jack cannot take it back once it is granted.

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  • 25. 

    A nonbinding ADR process where someone aids parties in negotiating a dispute:

    • Mini trial

    • Arbitration

    • Summary Jury Trial

    • Mediation

    • UN resolution

    Correct Answer
    A. Mediation
    Explanation
    Mediation is a nonbinding ADR process where a neutral third party assists parties in negotiating a dispute. The mediator helps facilitate communication and encourages the parties to find a mutually acceptable resolution. Unlike arbitration or a summary jury trial, the mediator does not make a decision or impose a solution on the parties. Mediation is a voluntary process that allows the parties to maintain control over the outcome and can be a more cost-effective and efficient way to resolve conflicts. UN resolution is not relevant to this context.

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  • 26. 

    1. Which of the following ways allows you to convert bearer paper to order paper:

    • Indorse with “Without Recourse” and sign the indorsement.

    • Indorse with “Pay to Britney Spears” and sign the indorsement.

    • Indorse with signature only.

    • All of the Above.

    • 1 & 2.

    Correct Answer
    A. Indorse with “Pay to Britney Spears” and sign the indorsement.
  • 27. 

    1. Failure to perfect a security interest in a piece of collateral leads to the following groups having priority over the unperfected party:

    • Buyers in the ordinary course of business

    • Judgment lien holders.

    • Creditors with a perfected security interest.

    • All of the above

    • 1 and 2 only

    Correct Answer
    A. All of the above
    Explanation
    Failure to perfect a security interest means that the party who holds the security interest has not taken the necessary steps to establish their priority over other parties. In this case, the unperfected party would have lower priority than buyers in the ordinary course of business, judgment lien holders, and creditors with a perfected security interest. This means that if any of these groups were to claim the collateral, they would have priority over the unperfected party. Therefore, the correct answer is "All of the above."

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  • 28. 

    1. Henderson Construction orally contracts to build a gas station for Shell for a million dollars.  Henderson says that it will probably take two years, but that it is possible that construction will be done much faster.  Which of the following is true?

    • This contract is not enforceable

    • This contract is enforceable by either party

    • This contract falls under the statute of frauds

    • This contract lacks sufficient consideration

    • 1 & 3

    Correct Answer
    A. This contract is enforceable by either party
    Explanation
    This contract is enforceable by either party because it is an oral contract. While it is recommended to have written contracts for clarity and to avoid disputes, oral contracts can still be legally binding in certain situations. In this case, Henderson Construction and Shell have agreed to the terms of the contract orally, and both parties can enforce it if necessary. The fact that the contract may take longer or shorter than initially estimated does not invalidate its enforceability. The contract does not fall under the statute of frauds, which requires certain contracts to be in writing to be enforceable.

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  • 29. 

    Slippery Slim accosts Joe in a dark alley with a knife to Joe’s neck and hands him a contract that states “Your wallet or your life”.  Joe thinks this over and “bargains” with Slim to the effect that Slim will let Joe keep the wallet and credit cards and Slim gets the money.  Both parties sign the revised agreement.  Slim then takes the knife away from Joe’s throat.  Later Joe thinks that he got a bum deal and sues Slim for return of the money.  The likely outcome is:

    • Slim can enforce the contract due to bargained for exchange of valuable consideration

    • Slim will only have to return a portion of the money, as determined by the court

    • Joe could have recovered if he had signed the first agreement but once he offered his own terms he is bound to the agreement

    • Joe can rescind the contract due to duress; Joe gets his money back

    • Slim may retain the money specified in the contract, but will have to pay damages for any “emotional distress” suffered by Joe

    Correct Answer
    A. Joe can rescind the contract due to duress; Joe gets his money back
    Explanation
    Joe can rescind the contract due to duress because Slippery Slim accosted him with a knife to his neck, creating a situation of extreme pressure and coercion. This invalidates the contract, allowing Joe to get his money back.

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  • 30. 

    Joe aims an “empty” gun at his arch enemy, Frank, and tells him that he is about to die.  Joe is 100% positive that the gun is empty as he pulls the trigger, he simply wants to scare Frank.  The gun goes off, and Frank is wounded in the arm.  If Frank sues Joe for battery:

    • Joe will win because he never intended on really hurting Frank

    • Joe will loose because his intent was not important and does not obviate the fact of the injury

    • Joe will lose because the intent to assault is enough to prove battery.

    • Joe will win because his intent was simply to scare and not to hurt

    • Joe will win because this is a criminal case and does not belong in civil court

    Correct Answer
    A. Joe will lose because the intent to assault is enough to prove battery.
    Explanation
    Joe will lose because the intent to assault is enough to prove battery. In a battery case, the intent to cause harm or offensive contact is sufficient, regardless of whether the person intended to cause serious injury or not. Even though Joe claimed that he did not intend to hurt Frank, the fact that he aimed an "empty" gun at him with the intent to scare him is still considered an intentional act of assault, which satisfies the requirements for a battery claim.

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  • 31. 

    1. Which of the following is a right which was listed in lecture as a typical right of a mortgagee on default?

    • Equity of Redemption

    • Statutory Redemption (in some states)

    • Statutory notice of foreclosure sale

    • All of the above

    • Acceleration

    Correct Answer
    A. Acceleration
    Explanation
    Acceleration is a right that is typically listed as a right of a mortgagee on default. It allows the mortgagee to demand immediate payment of the entire outstanding loan balance if the borrower defaults on their mortgage payments. This right gives the mortgagee the ability to speed up the repayment process and potentially initiate foreclosure proceedings if the borrower fails to comply with the acceleration demand.

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  • 32. 

    1. Mr. Acme rents an apartment to John for 2 years.  John stays in the apartment for 6 months and lets it out to Joe for the entire remainder of the lease.  This is an example of a:

    • Lease

    • Sublease

    • Tenancy at Sufferance

    • Assignment

    • Subassignment

    Correct Answer
    A. Assignment
    Explanation
    This scenario is an example of an assignment. An assignment occurs when the original tenant transfers their entire interest in the lease to a new tenant. In this case, John, the original tenant, transfers his right to occupy the apartment for the remaining 18 months of the lease to Joe. John no longer has any rights or obligations under the lease, and Joe becomes the new tenant with all the rights and responsibilities that come with it.

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  • 33. 

    1. Barry defaulted on a loan to Bank A.  Barry put up the car he’d had for about a year as collateral, and the bank perfected its security interest with the Department of Revenue.  Who gets paid prior to Bank A?

    • The attorney who was hired to sell the car to pay Barry’s debt.

    • A creditor who had perfected a security interest in the car before Bank A.

    • Any creditor who was owed more than Bank A.

    • All of the above.

    • 1 & 2.

    Correct Answer
    A. 1 & 2.
    Explanation
    The attorney who was hired to sell the car to pay Barry's debt and the creditor who had perfected a security interest in the car before Bank A both get paid prior to Bank A. This is because when the bank perfected its security interest with the Department of Revenue, it means that Bank A has a priority claim on the car. However, the attorney and the creditor with a prior security interest have superior claims and will be paid first from the proceeds of the sale of the car.

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  • 34. 

    Norm was asked by Sam to tend the cash register of his bar “Cheers” for a few hours, then close the bar.  Norm falls asleep and wakes up the next morning still in the bar.  On the way out, Norm helps himself to $100 from the cash register.  What crimes could we charge Norm with?

    • Burglary, Robbery, Larceny and Embezzlement

    • Robbery and Larceny

    • Embezzlement

    • None of the above.

    Correct Answer
    A. Embezzlement
    Explanation
    Norm could be charged with embezzlement. Embezzlement is the act of dishonestly appropriating or misappropriating funds entrusted to one's care, typically by an employee. In this scenario, Norm was entrusted with tending the cash register and closing the bar, but instead, he helped himself to $100 from the cash register without permission. This action constitutes embezzlement as he misused the funds entrusted to him.

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  • 35. 

    Lauren signs an exclusive listing agreement with Hoboken Realty to sell her house.  Hoboken finds a lady who is ready, willing, and able to buy Lauren’s house.  But then Lauren decides not to sell the house after all. Which is true?

    • Hoboken still owes Lauren a commission

    • Lauren still owes Hoboken a commission

    • Lauren doesn’t have to pay any commission because the house wasn’t sold

    • Lauren is Hoboken Realty’s agent

    • None of the above

    Correct Answer
    A. Lauren still owes Hoboken a commission
    Explanation
    Lauren signed an exclusive listing agreement with Hoboken Realty, which means that she agreed to pay a commission to Hoboken if they found a buyer for her house. Even though Lauren decided not to sell the house, she is still obligated to pay Hoboken the agreed-upon commission because they fulfilled their part of the agreement by finding a buyer who was ready, willing, and able to purchase the house. Therefore, the correct answer is that Lauren still owes Hoboken a commission.

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  • 36. 

    Joe leases an apartment to John to continue for six month periods which automatically renew until either he or John give one month’s notice to terminate.  The lease says nothing about when it shall end.  What kind of property interest does John have:

    • Tenancy for Years

    • Periodic Tenancy

    • Tenancy at Will

    • Tenancy at Sufferance

    • No property interest has been created

    Correct Answer
    A. Periodic Tenancy
    Explanation
    Based on the information provided, John has a periodic tenancy. This is because the lease automatically renews every six months until either party gives one month's notice to terminate. A periodic tenancy is a type of lease that continues for a specific period of time (in this case, six months) and automatically renews for the same period unless terminated by either party. It is characterized by its recurring nature and the ability to terminate it with proper notice.

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  • 37. 

    1. If one party substantially performs on a contract, which of the following is true?

    • Any breach he has committed was minor

    • He has probably committed a material breach

    • He cannot enforce any part of the contract against the other party because he hasn’t fully performed.

    • He will receive full payment for his performance under the terms of the contract.

    • 1 and 4

    Correct Answer
    A. Any breach he has committed was minor
    Explanation
    If one party substantially performs on a contract, it means that they have fulfilled a significant portion of their obligations under the contract. In this case, any breach they may have committed would be considered minor because they have made a substantial effort to perform. This means that the other party cannot use this minor breach as a reason to void the contract or refuse to fulfill their own obligations. However, it does not guarantee that the party will receive full payment for their performance, as this would depend on the specific terms of the contract.

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  • 38. 

    1. The rules of construction require that ambiguous terms in a contract will be:

    • Interpreted according to their plain meaning.

    • Interpreted against the drafter of the document.

    • Deleted from the contract.

    • Subject to clarification with appropriate extrinsic evidence.

    • 2 & 4.

    Correct Answer
    A. 2 & 4.
    Explanation
    Ambiguous terms in a contract are interpreted according to their plain meaning and subject to clarification with appropriate extrinsic evidence. This means that when a term in a contract is unclear or can have multiple interpretations, it should be understood based on its ordinary and common meaning. Additionally, if further clarification is needed, external evidence such as the parties' intentions or industry customs can be considered to determine the intended meaning of the ambiguous term. The answer choice 2 & 4 correctly reflects these principles of interpreting ambiguous terms in a contract.

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  • 39. 

    Which option(s) are unavailable for the secured party to pursue when debtor defaults?

    • Threaten legal action even when not serious about it.

    • Follow debtors onto their property, threaten the debtors with a knife, then take the collateral.

    • Auction off collateral to pay off debt and keep any extra over the amount owed as profit.

    • Take possession of collateral when debtor is not around.

    • All of the above options are available to the secured party.

    Correct Answer
    A. Follow debtors onto their property, threaten the debtors with a knife, then take the collateral.
  • 40. 

    Which of the following statements are true about a criminal proceeding?

    • A warrant must be issued in order to have a valid arrest.

    • A criminal proceeding always includes a trial and appeal.

    • An indictment must precede the arrest.

    • None of the above.

    • 1 & 3.

    Correct Answer
    A. None of the above.
    Explanation
    The given answer states that none of the statements are true about a criminal proceeding. This means that a warrant is not always required for a valid arrest, a criminal proceeding does not always include a trial and appeal, and an indictment does not necessarily have to precede an arrest.

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  • 41. 

    1. Harry mortgages his house so that he may receive a secured line of future credit. This is called:

    • An abstract

    • A second Mortgage

    • An open-end mortgage

    • Refinancing a mortgage

    • Non-deductible interest

    Correct Answer
    A. Refinancing a mortgage
    Explanation
    Refinancing a mortgage refers to the process of replacing an existing mortgage with a new one, typically to obtain better terms or lower interest rates. In this scenario, Harry mortgages his house to secure a line of credit in the future. This implies that he is replacing his current mortgage with a new one, which aligns with the concept of refinancing a mortgage.

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  • 42. 

    John runs a factory and really needs a delivery of aluminum to arrive by Friday. He contracts with Sarah to buy the aluminum, and inserts a time is of the essence clause into the document, which Sarah agrees to. Unfortunately, Sarah’s delivery is postponed until the following Monday because of a clerical error. Which of the following is true?

    • Sarah’s failure to deliver is a minor breach because it was in a reasonable amount of time.

    • If the clerical error was not her fault, Sarah cannot be penalized for the late delivery.

    • The failure to deliver on time was a material breach of contract.

    • Even without the time is of the essence clause, 3 days is probably not a “reasonable” amount of time to delay.

    • 1 & 2 are true.

    Correct Answer
    A. The failure to deliver on time was a material breach of contract.
    Explanation
    The failure to deliver on time was a material breach of contract because John had inserted a time is of the essence clause into the document, which Sarah agreed to. This clause makes timely delivery a crucial aspect of the contract, and any delay beyond the agreed-upon deadline constitutes a material breach. The fact that the delay was caused by a clerical error does not absolve Sarah of responsibility, as she agreed to the time is of the essence clause. Therefore, options 1, 2, and 4 are not true.

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  • 43. 

    Under Article 9 of the UCC, accounts receivable are considered what kind of collateral?

    • Quasi-intangibles.

    • Intangibles

    • Quasi-tangibles

    • Goods

    • None of the above.

    Correct Answer
    A. Intangibles
    Explanation
    Under Article 9 of the UCC, accounts receivable are considered intangibles. This means that they are assets that do not have a physical form but still hold value, such as patents, copyrights, and trademarks. In the context of collateral, accounts receivable can be used to secure a loan or other financial obligation.

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  • 44. 

    1. John knows his kindhearted cousin, Ed, is worthless and will never amount to anything.  So John decides to grant Ed the right to exclusive possession of John’s country cabin until John’s death, at which time all interest in the cabin will transfer to John’s heirs. This is called:

    • Life Estate

    • Fee simple defeasible

    • Life tenancy

    • All of the above

    • 1 and 3

    Correct Answer
    A. 1 and 3
    Explanation
    The correct answer is "1 and 3". The scenario described in the question involves two concepts: life estate and life tenancy. A life estate refers to the granting of exclusive possession of a property to someone for the duration of their life, after which the property transfers to someone else (in this case, John's heirs). Life tenancy is another term for a life estate, so both options 1 and 3 are correct. The term "fee simple defeasible" does not apply to this scenario, so option 2 is incorrect. Therefore, the correct answer is options 1 and 3.

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  • 45. 

    1. Joe and Frank enter into an agreement to fix prices on lobster tails for three years.  This contract is:

    • Enforceable

    • Voidable

    • Void

    • Competitive

    • Discriminatory

    Correct Answer
    A. Void
    Explanation
    This contract is void because it involves an illegal activity, which is price fixing. Price fixing is an antitrust violation and is prohibited by law. Therefore, any contract that involves price fixing is considered void and unenforceable.

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  • 46. 

    Joe signs a contract with Al”s Used Cars for the purchase of a red Mustang for $10,000, with no warranty.  The car is delivered and the full $10,000 is given to Al’s used car.  This is an example of an:

    • Express contract

    • Executory contract

    • Executed Contract

    • 1 & 3.

    • 2 & 3.

    Correct Answer
    A. 1 & 3.
    Explanation
    An express contract is a contract in which the terms are explicitly stated, and both parties have agreed to those terms. In this scenario, Joe and Al's Used Cars signed a contract for the purchase of a red Mustang for $10,000. This contract is express because the terms, including the price and the item being purchased, are clearly stated.

    An executed contract is a contract that has been fully performed by both parties. In this case, the car has been delivered, and Joe has given the full $10,000 to Al's Used Cars. Therefore, the contract has been executed.

    So, the correct answer is 1 & 3, as this scenario represents both an express contract and an executed contract.

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  • 47. 

    1. In exchange for $10,000 from Paul, George promises Paul that each year for the next five years he will give Paul all of the wheat that George feels like growing on his farm.  Which of the following is true?

    • This is a valid contract with valid consideration

    • This is not a valid contract because Paul gave inadequate consideration

    • This is not a valid contract because George made an illusory promise

    • This is not a valid contract because Paul gave inadequate consideration

    • 2 & 3 are both true

    Correct Answer
    A. This is not a valid contract because George made an illusory promise
    Explanation
    This is not a valid contract because George made an illusory promise. An illusory promise is a promise that does not actually bind the promisor to do anything. In this case, George promises to give Paul all of the wheat that he feels like growing, which means he can choose to not grow any wheat at all. Therefore, George's promise is not enforceable and the contract is not valid.

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  • 48. 

    An IOU fails the test of negotiability for which reason(s):

    • The IOU in not an unconditional promise to pay.

    • IOU’s are not in writing as required.

    • The IOU always fails to be signed by the maker or drawer.

    • All of the above.

    • None of the above.

    Correct Answer
    A. The IOU in not an unconditional promise to pay.
    Explanation
    The IOU fails the test of negotiability because it is not an unconditional promise to pay. Negotiable instruments must contain an unconditional promise or order to pay a fixed amount of money, without any additional conditions or contingencies. Since the IOU does not meet this requirement, it cannot be considered negotiable.

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  • 49. 

    Money Damages are generally available in which kind of court?

    • Court of Equity

    • Appellate Court

    • Criminal Court

    • Court of Common Law

    • None of the above

    Correct Answer
    A. Court of Common Law
    Explanation
    Money damages are generally available in the Court of Common Law. This court is responsible for resolving civil disputes and enforcing legal rights. It focuses on compensating the injured party by awarding monetary damages as a remedy for the harm suffered. In contrast, the Court of Equity primarily provides equitable remedies, such as injunctions or specific performance, rather than monetary compensation. Appellate courts and criminal courts also do not typically deal with money damages in the same way as the Court of Common Law.

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Quiz Review Timeline (Updated): Mar 21, 2023 +

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  • Current Version
  • Mar 21, 2023
    Quiz Edited by
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  • Dec 15, 2011
    Quiz Created by
    Tpc43b

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