Business Law Practice Exam (Intermediate Level)

60 Questions | By Tpc43b | Last updated: Sep 21, 2020 | Total Attempts: 26

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Questions and Answers

1.
1. What are valid arguments a debtor can make to invalidate the creation of a security interest by attachment?
- A.
  
  1. The secured party has only limited rights in the collateral.
- B.
  
  2. The secured party took possession of the collateral.
- C.
  
  3. The debtor has possession of the collateral and there is no written agreement between the parties .
- D.
  
  4. The only value given by secured party was for past consideration.
- E.
  
  5. None of the Above.
2.
1. A (n) _______________ indorsement is where the indorser signs only her name on the back of the check. A (n) _______________ indorsement is where the indorser signs her name AND names an indorsee.
- A.
  
  1. Bearer; order
- B.
  
  2. Bearer; blank
- C.
  
  3. Special; restrictive
- D.
  
  4. Blank; special
- E.
  
  5. Order; bearer
3.
1. Donovan and David are driving along Interstate 70 from St. Louis to Columbia after watching a St. Louis Cardinals game. As the two are pulling onto the interstate, a car driven by Roger runs into the rear-end of David’s brand new Miata. David, a resident of Kentucky, sues Roger, an Indiana resident, for $175,000 in damages arising from the accident. Which court is NOT a proper court for David to bring suit?
- A.
  
  1. Missouri state court
- B.
  
  2. Indiana federal court
- C.
  
  3. Indiana state court
- D.
  
  4. Missouri federal court
- E.
  
  5. Kentucky state court
4.
1. Tom and Jerry are contracting for the sale of Tom’s land to Jerry. The land is a beautiful 40-acre tract south of Kansas City. When the negotiations are finished, Tom and Jerry orally agree to a contract for sale of the land. The contract is:
- A.
  
  1. Valid
- B.
  
  2. Unenforceable
- C.
  
  3. Voidable
- D.
  
  4. Void
- E.
  
  5. Illegal
5.
1. Tom and Chris have been arguing about ownership of a baseball card for the last 10 years. Each states they have a rightful claim to ownership. Having taken a business law course in college, Chris remembers that alternative dispute resolution is a less expensive way to settle a dispute. However, both parties want the final decision to be binding. Which of the following types of alternative dispute resolution provides a binding result?
- A.
  
  1. Mini-trial
- B.
  
  2. Summary jury trial
- C.
  
  3. Mediation
- D.
  
  4. Arbitration
- E.
  
  5. Specific performance
6.
1. The Constitutional protection which guards against unreasonable searches and seizures by the government on private persons is included in:
- A.
  
  1. The 1st Amendment
- B.
  
  2. The 4th Amendment
- C.
  
  3. The 5th Amendment
- D.
  
  4. The 6th Amendment
- E.
  
  5. The 11th Amendment
7.
1. A contract made in violation of gambling laws is:
- A.
  
  1. Valid.
- B.
  
  2. Void.
- C.
  
  3. Voidable.
- D.
  
  4. Unenforceable.
- E.
  
  5. None of the above.
8.

As the remedy, a buyer of services should recover:
- A.
  
  1. Contract price minus fair market value of services.
- B.
  
  2. Lost profit.
- C.
  
  3. Total contract price.
- D.
  
  4. Value of the benefit given to seller of services.
- E.
  
  5. Cover price minus contract price.
9.
1. Alex decides that he’s tired of listening to his neighbors play the drums all night long and decides to put his house up for sale. The next day, Alex talks to Samantha, the Seller’s Real Estate Agent, and signs an exclusive nine-month listing agreement authorizing Samantha to sell his house. By the end of the week Alex is thinking about whether he really wants to move. On Sunday, Samantha talks to Bob, who is very interested in Alex’s house and he makes a cash offer for the asking price. On Monday Alex and Samantha talk on the phone. Samantha tells Alex of the offer, but Alex tells her he changed his mind and never accepts the offer. What is the current legal situation?
- A.
  
  1. Alex can cancel the Listing agreement at any time.
- B.
  
  2. Because Alex wanted to cancel the listing agreement before Samantha found a buyer the agreement is terminated and Alex keeps the house.
- C.
  
  3. Alex owes Samantha the commission because Bob was “ready, willing and able” to buy Alex’s house.
- D.
  
  4. Bob is entitled to injunctive relief forcing Alex to sell his house.
- E.
  
  5. Because Alex communicated termination of the agreement after Samantha found a buyer he is bound by the listing agreement to sell his house.
10.
1. Tom and Jerry are walking through Jerry’s farmland when Tom looks up, sees a covered bridge and comments on its beauty. Upon hearing Tom’s remarks, Jerry says “You like it so much, I’ll sell it to you for $100,000". Tom is unsure (he’s heard about people buying bridges where it was all a fraud), but Jerry assures him that this is a private bridge his grandfather left it to him in a will. Tom is still unsure to which Jerry says “I guarantee that I own it”. If the bridge and the surrounding property is deeded to Tom, which of the following describes the parties and the type of deed Tom should request?
- A.
  
  1. Tom would be the grantor seeking a warrantee deed from Jerry the grantee.
- B.
  
  2. Tom would be the mortgagee seeking a warrantee deed from Jerry the mortgagor.
- C.
  
  3. Tom would be the mortgagor seeking a quitclaim deed from Jerry the mortgagee.
- D.
  
  4. Tom would be the grantee seeking a warrantee deed from Jerry the grantor.
- E.
  
  5. Tom would be the grantee seeking a quitclaim deed from Jerry the grantor.
11.
1. John decides to grant a mortgage on his property to the bank in exchange for $100,000 payable over 30 years with a Power of Sale provision. In the 11th year, John defaults on the loan and the bank sends the Statutory Notice of Foreclosure Sale. Facing the thought of being homeless, John takes his last dollar and buys a lottery ticket. If he wins the jackpot before the foreclosure, could he get his house back?
- A.
  
  1. Yes, through equity of redemption.
- B.
  
  2. No, because the power of sale clause gives the bank the power to foreclose.
- C.
  
  3. Yes, through a deficiency judgment.
- D.
  
  4. No, because they have already started the foreclosure process with notice.
- E.
  
  5. Yes, under the Title Theory.
12.

Boyd inherits 250 acres of land from his grandfather upon graduation from law school. However, Boyd cannot find a job and his student loans are piling up so he decides to sell the land. Upon having the land appraised he discovers that the land contains a massive gold vein. He decides that instead of moving, he will allow the Acme Mining Company to come onto his land and mine the gold in return for a percentage of the gold’s worth. Both parties agree to the terms and a contract and deed are prepared to transfer the mining rights to Acme. What right has Boyd conveyed to the Acme Mining Company?
- A.
  
  1. Boyd has granted a license, which allows Acme to come onto the property whenever they need to.
- B.
  
  2. Boyd has granted an easement so that Acme can enter the property and remove the gold.
- C.
  
  3. Boyd has granted a profit so that Acme can come onto the land and remove the gold.
- D.
  
  4. Boyd has granted a life estate allowing Acme to enter his land while he is alive.
- E.
  
  5. Boyd has granted an exclusive listing because Acme will be the only company allowed onto Boyd’s land.
13.
1. Alex moves to Cleveland after finishing law school to start his new career. He contacts his bank in hopes of obtaining a mortgage in order to finance his new house. The bank knows that Alex may be leaving town soon and wants to make certain that they are going to be paid back. The bank wants a clause in the note and deed of trust that states that allows acceleration if Alex sells the house before the mortgage is paid off. What type of clause is the bank requesting?
- A.
  
  1. A Power of Sale Clause
- B.
  
  2. A Due on Sale Clause
- C.
  
  3. An Acceleration Clause
- D.
  
  4. A Wraparound Clause
- E.
  
  5. Prepayment Provision
14.
1. Alex deeds property to Reno with the following language: “You shall have exclusive possession of at my home in South Beach for as long as you shall live.” What type of interest has Alex granted to Reno?
- A.
  
  1. A Future Interest
- B.
  
  2. A Life Estate
- C.
  
  3. A Tenancy in Common
- D.
  
  4. A License
- E.
  
  5. A Fee Simple Defeasible
15.
1. After doing extensive discovery, attorney for the defendant believes that there is no real argument between the parties on the material facts, and is considering his next action in the case. What is the most reasonable next step?
- A.
  
  1. Take it to trial because there is no chance a judge would grant any pre-trial motion based on these facts.
- B.
  
  2. File a Motion for Directed Verdict because no controversy as to any material fact.
- C.
  
  3. File a Motion for Summary Judgment because there is no controversy as to any material fact.
- D.
  
  4. File a Motion to Dismiss for failure to state a claim or lack of jurisdiction.
- E.
  
  5. File a Motion for Mistrial because there is no controversy as to any material fact. 5. File a Motion for Mistrial because there is no controversy as to any material fact. 5. File a Motion for Mistrial because there is no controversy as to any material fact.
16.

A fixture has which of the following attributes?
- A.
  
  1. A fixture is considered real property.
- B.
  
  2. A fixtures is classified as an intangible.
- C.
  
  3. The rules of Article 9 of the UCC apply to fixtures
- D.
  
  4. All of the above.
- E.
  
  5. None of the above.
17.
1. Tenant has a tenancy for years in an apartment. The lease term expires but Tenant does not move out. What type of tenancy does Tenant have?
- A.
  
  1. Tenancy for years.
- B.
  
  2. Ejectment tenancy.
- C.
  
  3. Term tenancy
- D.
  
  4. Tenancy at will.
- E.
  
  5. Tenancy at sufferance.
18.
1. A holder in due course is susceptible to which of the following defenses:
- A.
  
  1. Fraud in the inducement
- B.
  
  2. Breach of warranty
- C.
  
  3. Breach of contract
- D.
  
  4. Forgery
- E.
  
  5. None of the above
19.

What is the principle difference between an assignment and a sublease?
- A.
  
  1. To have a sublease it is required that only a portion of the real estate be transferred to the second tenant, while in an assignment all of the real estate must be transferred to the second tenant.
- B.
  
  2. To have an assignment it is required that only a portion of the real estate is transferred to the second tenant, while in a sublease all of the real estate must be transferred to the second tenant.
- C.
  
  3. In a sublease the original tenant transfers only a portion of the remaining term on the lease to the second tenant, while in an assignment the original tenant transfers all of the remaining term on the lease to the second tenant.
- D.
  
  4. In an assignment the original tenant transfers only a portion of the remaining term on the lease to the second tenant, while in a sublease the original tenant transfers all of the remaining term of the lease to the second tenant.
- E.
  
  5. Both 1 and 3.
20.
1. Barbara is excited about the Mid-Missouri Better Homes and Gardens Exposition coming to Columbia in only two weeks. In order to get her home into shape for the event, she plans to have her neighbor’s kids cut the lawn and rake the leaves. When she sees the two neighborhood kids, she says, “Rich and Russ, I’ll pay you each $40 if you cut my lawn and rake my leaves before May 20^th.” Rich and Russ say, “Sure Barbara, we’ll cut the lawn and rake the leaves for you.” The next day, May 14^th, the boys mow the lawn and rake every leaf in the yard. This is an example of:
- A.
  
  1. Unilateral contract
- B.
  
  2. Bilateral contract
- C.
  
  3. Implied in law contract
- D.
  
  4. Implied in fact contract
- E.
  
  5. Quasi contract
21.
1. Reno is hoping to buy a new car for his birthday. For weeks, Reno has scoured Columbia for a good used car. Finally, he believes he has found it: a yellow, 1976 Pacer. When he finds out the dealer wants $2000, he balks. Through negotiations, Reno talks the dealer down to $1800, but still is wary of purchasing the car. Finally, the used car dealer says he will buy a month’s worth of gas for Reno. The two agree to the purchase, but the extra gas is not included in the written contract. Reno’s cousin is with him when the dealer made the statement. The dealer refuses to pay for the gas, so at the end of the month, Reno sues for the $200 he spent on gas for that month. A court will find for:
- A.
  
  1. Reno, because the dealer agreed to purchase the gas
- B.
  
  2. Reno B it is against public policy to allow a commercial used car dealer to back out of an agreement
- C.
  
  3. Reno, because the testimony of Reno’s cousin proves the agreement existed
- D.
  
  4. The car dealer, since the court won’t hear testimony about the contemporaneous oral agreement
- E.
  
  5. The car dealer, since Reno did not pay any extra consideration for additional contract terms
22.
1. Landlord leases an apartment for rent to Tenant. If the tenant validly leases the property to a second tenant, who is now liable for rent payment?
- A.
  
  1. Tenant only.
- B.
  
  2. Sublessee or assignee only.
- C.
  
  3. Tenant and a sublessee would be liable, but an assignee cannot be liable on the lease.
- D.
  
  4. Tenant and any assignee or sublessee so long as there have been no releases granted.
- E.
  
  5. No one, a landlord is unable to collect rent payments if someone doesn’t pay.
23.
1. Landlord leases an apartment to Abe for 12 months. Two months into the lease, Abe validly leases the same apartment to Bob for the entire remaining 10 months. The landlord has a ___________ interest in the apartment and Abe gave Bob a(n) _____________.
- A.
  
  1. Remainder, sublease.
- B.
  
  2. Restitution, sublease.
- C.
  
  3. Restitution, assignment.
- D.
  
  4. Reversionary, assignment.
- E.
  
  5. Revocation, assignment.
24.
1. The legal philosophy that resists changes in the law based on “the way things have always been” is:
- A.
  
  1. Legal realism philosophy
- B.
  
  2. Historicism philosophy
- C.
  
  3. Naturalist philosophy
- D.
  
  4. Traditional philosophy
- E.
  
  5. Post-modernism
25.

On March 13^th, Tom transfers Blackacre Estates, a 30 acre subdivision, to Amy. Tom then fraudulently transfers Blackacre to John, who was unaware of the transfer to Amy, on the 14^th. While Amy waits until the 20^th to record John does so on the 17^th of March. Mel, who is aware that Tom has already transferred Blackacre to Amy and knows that she has not recorded yet, purchases Blackacre on the 15^th and records title on the same day. Who will actually obtain the rights to Blackacre?
- A.
  
  1. In a “notice” jurisdiction Mel will win.
- B.
  
  2. In a “race-notice” jurisdiction John will win.
- C.
  
  3. In a “race” jurisdiction Amy will win.
- D.
  
  4. In a “race-notice” jurisdiction Mel will win.
- E.
  
  5. In a “race” jurisdiction John will win.