Business Law Practice Exam (Intermediate Level)

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Business Law Practice Exam (Intermediate Level) - Quiz


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.

    Correct Answer
    C. 3. The debtor has possession of the collateral and there is no written agreement between the parties .
    Explanation
    The debtor can argue that the creation of a security interest by attachment is invalid because they have possession of the collateral and there is no written agreement between the parties. This means that there is no evidence of an agreement or consent for the security interest to be created, making it invalid. The other options do not provide valid arguments for invalidating the creation of a security interest.

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  • 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

    Correct Answer
    D. 4. Blank; special
    Explanation
    A blank endorsement is when the indorser signs only their name on the back of the check, without naming an indorsee. On the other hand, a special endorsement is when the indorser signs their name and also names an indorsee. Therefore, the correct answer is 4. Blank; special.

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  • 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

    Correct Answer
    E. 5. Kentucky state court
    Explanation
    David, a resident of Kentucky, is suing Roger, an Indiana resident, for damages arising from the accident. Since the accident occurred on Interstate 70 between St. Louis and Columbia, both of which are in Missouri, it would be most appropriate for David to bring suit in a Missouri state court. Kentucky state court would not be a proper court for David to bring suit because the accident did not occur in Kentucky. Therefore, the correct answer is 5. Kentucky state court.

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  • 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

    Correct Answer
    B. 2. Unenforceable
    Explanation
    The oral agreement between Tom and Jerry for the sale of the land is considered unenforceable. This means that even though there was an agreement between the parties, it cannot be enforced in a court of law. This could be due to a variety of reasons, such as the lack of a written contract or the absence of certain legal formalities required for the sale of land. As a result, if either party were to breach the agreement, the other party would not be able to seek legal remedies or enforce the terms of the agreement.

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  • 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

    Correct Answer
    D. 4. Arbitration
    Explanation
    Arbitration is a type of alternative dispute resolution that provides a binding result. In arbitration, both parties present their case to a neutral third party, known as an arbitrator, who then makes a decision that is legally binding on both parties. This allows for a final resolution to the dispute without the need for litigation in court.

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  • 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

    Correct Answer
    B. 2. The 4th Amendment
    Explanation
    The correct answer is the 4th Amendment. The 4th Amendment protects individuals from unreasonable searches and seizures by the government. It requires that search warrants be supported by probable cause and that they specifically describe the place to be searched and the persons or things to be seized. This amendment is an important safeguard of individual privacy rights and limits the power of law enforcement to intrude into people's lives without just cause.

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  • 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.

    Correct Answer
    B. 2. Void.
    Explanation
    A contract made in violation of gambling laws is considered void because it is illegal and against public policy. This means that the contract is not legally binding and cannot be enforced by either party. Void contracts are treated as if they never existed, and any obligations or agreements made under the contract are not enforceable in a court of law.

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  • 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.

    Correct Answer
    E. 5. Cover price minus contract price.
    Explanation
    The correct answer is 5. Cover price minus contract price. This means that the buyer should recover the difference between the cover price (the cost of obtaining substitute services) and the contract price (the original agreed-upon price). This is a common measure of damages in contract law when a party breaches the contract. It allows the buyer to be compensated for the additional costs incurred in obtaining substitute services.

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  • 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.

    Correct Answer
    C. 3. Alex owes Samantha the commission because Bob was “ready, willing and able” to buy Alex’s house.
    Explanation
    The current legal situation is that Alex owes Samantha the commission because Bob was "ready, willing and able" to buy Alex's house. Even though Alex changed his mind and never accepted the offer, Bob's cash offer for the asking price shows that he was prepared to purchase the house. Therefore, Samantha fulfilled her duty as the seller's real estate agent by finding a potential buyer, and Alex is obligated to pay the commission as per the exclusive nine-month listing agreement that he signed with Samantha.

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  • 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.

    Correct Answer
    D. 4. Tom would be the grantee seeking a warrantee deed from Jerry the grantor.
    Explanation
    In this scenario, Tom is interested in purchasing the bridge and surrounding property from Jerry. Since Tom is the one seeking to acquire the property, he would be the grantee. Jerry, on the other hand, is the one who owns the property and is willing to sell it, making him the grantor. The type of deed that Tom should request is a warrantee deed, which provides the highest level of protection for the grantee. This type of deed guarantees that the grantor has clear ownership of the property and has the right to transfer it to the grantee.

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  • 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.

    Correct Answer
    A. 1. Yes, through equity of redemption.
    Explanation
    The equity of redemption is a legal right that allows a borrower to reclaim their property by paying off the outstanding debt, even after defaulting on the loan. In this case, John can potentially get his house back if he wins the lottery and uses the winnings to pay off the mortgage before the foreclosure sale takes place. The power of sale clause mentioned in option 2 gives the bank the authority to sell the property, but it does not eliminate the borrower's right to redeem the property. Therefore, option 1 is the correct answer.

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  • 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.

    Correct Answer
    C. 3. Boyd has granted a profit so that Acme can come onto the land and remove the gold.
    Explanation
    Boyd has granted a profit to the Acme Mining Company, which means that Acme has the right to come onto the land and remove the gold. This is different from a license or an easement because a profit specifically grants the right to remove something valuable from the land, in this case, the gold. It is also different from a life estate because a profit does not depend on Boyd being alive. Additionally, it is not an exclusive listing because it does not restrict other companies from accessing the land.

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  • 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

    Correct Answer
    B. 2. A Due on Sale Clause
    Explanation
    The bank is requesting a Due on Sale Clause. This type of clause allows the bank to accelerate the mortgage if Alex sells the house before it is fully paid off. This is to ensure that the bank will be paid back even if Alex leaves town and no longer has a steady income to make mortgage payments.

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  • 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

    Correct Answer
    B. 2. A Life Estate
    Explanation
    Alex has granted Reno a life estate. A life estate is an interest in property that lasts for the duration of a person's life. In this case, Reno has exclusive possession of Alex's home in South Beach for as long as Reno lives. Once Reno passes away, the life estate ends and the property will pass to someone else according to the terms of the ownership.

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  • 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.

    Correct Answer
    C. 3. File a Motion for Summary Judgment because there is no controversy as to any material fact.
    Explanation
    The attorney should file a Motion for Summary Judgment because there is no controversy as to any material fact. This means that both parties agree on the important facts of the case, so there is no need for a trial. By filing a Motion for Summary Judgment, the attorney is asking the court to make a decision based on the undisputed facts, without going through the entire trial process. This can save time and resources for both parties involved in the case.

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  • 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.

    Correct Answer
    C. 3. The rules of Article 9 of the UCC apply to fixtures
    Explanation
    The correct answer is 3. The rules of Article 9 of the UCC apply to fixtures. This means that fixtures are subject to the rules and regulations outlined in Article 9 of the Uniform Commercial Code (UCC). The UCC governs various aspects of commercial transactions, including the creation, perfection, and enforcement of security interests in personal property, which includes fixtures. Therefore, fixtures are not considered real property or intangible assets, but rather they are subject to specific legal provisions under the UCC.

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  • 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.

    Correct Answer
    E. 5. Tenancy at sufferance.
    Explanation
    When a tenant remains in a property after their lease has expired without the landlord's consent, it is referred to as a tenancy at sufferance. This type of tenancy occurs when the tenant holds over without any legal right to do so. The landlord has the right to evict the tenant at any time and can choose to pursue legal action to regain possession of the property.

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  • 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

    Correct Answer
    D. 4. Forgery
    Explanation
    A holder in due course is susceptible to the defense of forgery because if a signature on a negotiable instrument is forged, the instrument is considered void and the holder in due course cannot enforce it against the party whose signature was forged. This defense protects individuals from being held liable for obligations they did not agree to.

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  • 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.

    Correct Answer
    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.
    Explanation
    In a sublease, the original tenant transfers only a portion of the remaining term on the lease to the second tenant. This means that the second tenant will only be responsible for a portion of the lease term. On the other hand, in an assignment, the original tenant transfers all of the remaining term on the lease to the second tenant. This means that the second tenant will be responsible for the entire duration of the lease. Therefore, the principle difference between an assignment and a sublease lies in the extent of the lease term transferred to the second tenant.

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  • 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 20th.”  Rich and Russ say, “Sure Barbara, we’ll cut the lawn and rake the leaves for you.”  The next day, May 14th, 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

    Correct Answer
    A. 1. Unilateral contract
    Explanation
    The scenario described in the question involves Barbara making an offer to Rich and Russ to cut her lawn and rake her leaves for a specified payment. Rich and Russ accept the offer and perform the requested tasks. This situation represents a unilateral contract, as it involves a promise made by Barbara (the offeror) in exchange for a specific act to be performed by Rich and Russ (the offerees). The contract is only formed once the act is completed, and the promise of payment becomes binding.

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  • 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

    Correct Answer
    D. 4. The car dealer, since the court won’t hear testimony about the contemporaneous oral agreement
    Explanation
    The court will find for the car dealer because they will not consider testimony about the oral agreement for the extra gas.

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  • 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.

    Correct Answer
    D. 4. Tenant and any assignee or sublessee so long as there have been no releases granted.
    Explanation
    If the tenant validly leases the property to a second tenant, both the tenant and the second tenant (whether an assignee or sublessee) would be liable for rent payment. This is the case as long as there have been no releases granted, meaning that the original tenant is still responsible for fulfilling the terms of the lease agreement. The landlord can collect rent payments from both the tenant and the second tenant in this situation.

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  • 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.

    Correct Answer
    D. 4. Reversionary, assignment.
    Explanation
    The correct answer is 4. Reversionary, assignment.

    In this scenario, the landlord initially leased the apartment to Abe for 12 months. However, two months into the lease, Abe validly leases the same apartment to Bob for the remaining 10 months. This means that Abe has assigned his lease to Bob, transferring all of his rights and obligations under the lease to Bob. The landlord, on the other hand, still retains a reversionary interest in the apartment, meaning that once Bob's lease expires, the apartment will revert back to the landlord.

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  • 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

    Correct Answer
    D. 4. Traditional philosophy
    Explanation
    Traditional philosophy is the correct answer because it refers to a legal philosophy that resists changes in the law based on "the way things have always been." This philosophy emphasizes the importance of precedent and the existing legal system, and is often associated with a conservative approach to interpreting and applying the law. It suggests that the law should remain consistent and stable, relying on established norms and traditions rather than adapting to changing societal values or circumstances.

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  • 25. 

    On March 13th, 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 14th.  While Amy waits until the 20th to record John does so on the 17th 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 15th 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.

    Correct Answer
    B. 2. In a “race-notice” jurisdiction John will win.
    Explanation
    In a "race-notice" jurisdiction, the person who records the title first and is without notice of any prior transfers or claims will obtain the rights to the property. In this scenario, John recorded the title on the 17th of March, before Amy recorded her transfer on the 20th. Since John was unaware of the transfer to Amy, he will be considered the rightful owner of Blackacre Estates in a "race-notice" jurisdiction. Therefore, the correct answer is option 2.

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  • 26. 

    1. Dr. Mary Juana, a professor at MU, leases the house in Columbia where she lives.  She pays $1000 per month. The lease runs through the end of August.  She has recently decided to take a job in San Diego.  The job begins on July 1st and she doesn’t want to pay the final two month’s rent on the house in Columbia.  She decides to leave and not pay the final two month’s rent.  She never paid a security deposit, so she is not concerned about losing any money and doesn’t think the landlord will actually sue her for the remaining rent. The landlord does find Dr. Juana and sues her.  The landlord doesn’t mitigate damages.  Had the landlord mitigated damages, the landlord could have found someone to rent the house for the final two months at $300 per month.  Assuming the landlord sues in Missouri, how much will the landlord likely get in damages?

    • A.

      1. The full two months rent ($2000).

    • B.

      2. Two months rent minus the amount landlord could have received in mitigation ($2000 - 600 “ 1400).

    • C.

      3. The total amount landlord could have received in mitigation ($300 x 2 months “ 600).

    • D.

      4. $0.

    • E.

      5. None of the above.

    Correct Answer
    A. 1. The full two months rent ($2000).
    Explanation
    The landlord will likely get the full two months rent ($2000) in damages. This is because the landlord did not mitigate damages by finding someone else to rent the house for the final two months at $300 per month. Since Dr. Juana decided to leave and not pay the final two months rent, the landlord is entitled to the full amount of rent owed.

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  • 27. 

    1. On May 1st David offers to sell his G.I. Joe collection to Reno for $500.  In the offer, David states that he must receive Reno’s acceptance by May 15th.  Reno mails his acceptance on May 14th, but David does not receive the acceptance until May 16th.  Can Reno enforce the contract?

    • A.

      1. Yes, because of the mailbox rule

    • B.

      2. Yes, because David cannot terminate his offer by these terms

    • C.

      3. Yes, because David did not communicate revocation before acceptance was effective

    • D.

      4. No, because Reno’s acceptance was merely a counteroffer

    • E.

      5. No, because by the terms of the offer, the acceptance was not timely

    Correct Answer
    E. 5. No, because by the terms of the offer, the acceptance was not timely
    Explanation
    The correct answer is 5. No, because by the terms of the offer, the acceptance was not timely. According to the terms of the offer, David stated that he must receive Reno's acceptance by May 15th. However, Reno's acceptance was mailed on May 14th but not received by David until May 16th. Therefore, the acceptance was not timely and Reno cannot enforce the contract.

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  • 28. 

    1. In Missouri, a landlord’s lien may only be had on what type of property?

    • A.

      1. Farm animals.

    • B.

      2. Motor vehicles.

    • C.

      3. Jewelry.

    • D.

      4. Household goods.

    • E.

      5. Crops

    Correct Answer
    E. 5. Crops
    Explanation
    In Missouri, a landlord's lien can only be placed on crops. This means that if a tenant fails to pay rent, the landlord can potentially seize and sell the crops grown on the property to recover the unpaid rent. This type of lien does not apply to other types of property such as farm animals, motor vehicles, jewelry, or household goods.

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  • 29. 

    1. Which of the following is NOT one of the four requirements for a valid contract?

    • A.

      1. Legality

    • B.

      2. Capacity

    • C.

      3. Mutual Manifestation of Assent

    • D.

      4. Consideration

    • E.

      5. Standing

    Correct Answer
    E. 5. Standing
    Explanation
    Standing is not one of the four requirements for a valid contract. The four requirements are legality, capacity, mutual manifestation of assent, and consideration. Legality refers to the contract being legal and not against public policy. Capacity means that the parties involved must have the legal ability to enter into a contract. Mutual manifestation of assent means that there must be a clear and mutual agreement between the parties. Consideration refers to something of value being exchanged between the parties. Standing, on the other hand, refers to a person's right to bring a legal action, which is not directly related to the requirements for a valid contract.

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  • 30. 

    1. Which of following is the correct order of distribution of proceeds from disposition of collateral (from first paid to last)?

    • A.

      1. Satisfaction of debt of 1st lienholder, expenses of sale, subordinate security interest holders, debtor

    • B.

      2. Expenses of sale, satisfaction of debt of 1st lienholder, debtor, subordinate security interest holders

    • C.

      3. Subordinate security interest holders, satisfaction of debt of 1st lienholder, expenses of sale debtor

    • D.

      4. Expenses of sale, satisfaction of debt of 1st lienholder, subordinate security interest holders, debtor

    • E.

      5. Satisfaction of debt of 1st lienholder, Subordinate security interest holders, expenses of sale debtor

    Correct Answer
    D. 4. Expenses of sale, satisfaction of debt of 1st lienholder, subordinate security interest holders, debtor
    Explanation
    The correct order of distribution of proceeds from disposition of collateral is as follows: first, the expenses of the sale are paid. Then, the debt of the 1st lienholder is satisfied. After that, any subordinate security interest holders are paid. Finally, any remaining proceeds are given to the debtor.

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  • 31. 

    Which of the following are list(s) show the order in which the stated activities will occur in the course of a trial?

    • A.

      1. Opening Statements, Voire Dire, Closing Arguments

    • B.

      2. Voire Dire, Opening Statements, Plaintiff’s Case, Closing Arguments

    • C.

      3. Motion for Directed Verdict, Opening Statements, Trial Motions, Plaintiff’s Case, Defendant’s Case, Rebuttal, Closing

    • D.

      4. Voire Dire, Opening Statements, Rebuttal, Plaintiff’s case

    • E.

      5. 2 & 3.

    Correct Answer
    B. 2. Voire Dire, Opening Statements, Plaintiff’s Case, Closing Arguments
    Explanation
    In a trial, the order of activities typically follows a specific sequence. The correct answer, option 2, lists the activities in the correct order. The trial begins with Voire Dire, which is the process of selecting a jury. This is followed by Opening Statements, where both sides present an overview of their case. Next comes Plaintiff's Case, where the plaintiff presents their evidence and witnesses. Finally, Closing Arguments occur, where each side summarizes their case and tries to persuade the jury. Therefore, option 2 accurately represents the order in which the stated activities will occur in a trial.

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  • 32. 

    Which of the following ways can be used to perfect a security interest in appropriate circumstances?

    • A.

      1. Possession.

    • B.

      2. Attachment.

    • C.

      3. Filing a financing statement.

    • D.

      4. All of the above.

    • E.

      5. 2 & 3.

    Correct Answer
    D. 4. All of the above.
    Explanation
    In order to perfect a security interest in appropriate circumstances, all of the above ways can be used. Possession refers to physically holding the collateral, attachment refers to creating a security interest that is enforceable against the debtor, and filing a financing statement involves submitting a public notice to establish the priority of the security interest. By utilizing all of these methods, a creditor can ensure that their security interest is perfected and has the highest level of protection.

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  • 33. 

    1. Which of the following ARE NOT examples of a valid offer?

    • A.

      1. Asked what he thinks the painting is worth, the art critic says he wouldn’t pay more than $10,000 for such a painting.

    • B.

      2. Approached by a car salesman, I was told, “I offer to sell this car for $25,000.”

    • C.

      3. Advertisement says “We have ten big screen Sony TVs Model-500 that we are selling for $1,200 each. First come, first served. When they are gone, that’s it! So come down to Lou’s TV immediately”

    • D.

      4. eBay Auction of vacation package “without reserve.”

    • E.

      5. 1 & 2.

    Correct Answer
    A. 1. Asked what he thinks the painting is worth, the art critic says he wouldn’t pay more than $10,000 for such a painting.
    Explanation
    In this scenario, the art critic is expressing his personal opinion about the value of the painting. It does not indicate an intention to enter into a contractual agreement or make an offer to buy the painting. Therefore, it is not an example of a valid offer.

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  • 34. 

    Which of following types of contracts do NOT fall “within” the Statute of Frauds?

    • A.

      1. Tom’s written agreement to sell his vacation property to Laura

    • B.

      2. Gina’s retainer contract with her lawyer for provide her with legal services for the next two years

    • C.

      3. Paul’s contract with Larry for the sale of $500 worth of office pens

    • D.

      4. Bill’s prenuptial promise not to ask Linda, in the event of a divorce, for any of the $60,000 she won in the lottery

    • E.

      5. Richard promises Pete: “I’ll repay your debt to Ron if you can’t pay.”

    Correct Answer
    E. 5. Richard promises Pete: “I’ll repay your debt to Ron if you can’t pay.”
    Explanation
    The Statute of Frauds requires certain types of contracts to be in writing in order to be enforceable. These include contracts for the sale of real estate (option 1), contracts that cannot be performed within one year (option 2), and contracts for the sale of goods over a certain value (option 3). However, option 5 is not required to be in writing because it is a promise to perform someone else's obligation, rather than a contract for the sale of goods or real estate or a contract that cannot be performed within one year.

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  • 35. 

    1. Which of the following is a valid way of terminating an offer?

    • A.

      1. By accepting in a way which is the mirror image of the offer.

    • B.

      2. Lapse of a stated time

    • C.

      3. Counter-offer

    • D.

      4. All of the above

    • E.

      5. 2 and 3 only

    Correct Answer
    E. 5. 2 and 3 only
    Explanation
    The correct answer is 5. 2 and 3 only. This means that the valid ways of terminating an offer are through the lapse of a stated time and by making a counter-offer. Accepting in a way which is the mirror image of the offer is not a valid way of terminating an offer.

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  • 36. 

    Which of the following statements are FALSE about Fraudulent Misrepresentation?

    • A.

      1. An opinion may never suffice to meet the misrepresentation requirement.

    • B.

      2. The misrepresentation must be material to the deal.

    • C.

      3. Misrepresentation must be relied up by plaintiff

    • D.

      4. All of the above.

    • E.

      5. None of the above.

    Correct Answer
    A. 1. An opinion may never suffice to meet the misrepresentation requirement.
    Explanation
    An opinion may sometimes suffice to meet the misrepresentation requirement.

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  • 37. 

    1. Which of the following is NOT a requirement to be a holder in due course?

    • A.

      1. Give value for the instrument

    • B.

      2. Take the instrument in good faith

    • C.

      3. Take the instrument from original maker

    • D.

      4. Take the instrument without notices of defenses

    • E.

      5. All of the above are requirements to be a holder in due course

    Correct Answer
    C. 3. Take the instrument from original maker
    Explanation
    To be a holder in due course, one must meet certain requirements. These include giving value for the instrument, taking the instrument in good faith, and taking the instrument without notice of any defenses. However, taking the instrument from the original maker is not a requirement to be a holder in due course. This means that someone can still be considered a holder in due course even if they did not receive the instrument directly from the original maker.

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  • 38. 

    1. Which of the following is FALSE?

    • A.

      1. In Missouri, there is no duty for the landlord to mitigate damages unless a security deposit is held.

    • B.

      2. In general, the tenant has the duty to make repairs to the premises in a commercial lease. 3. Rent is a dependent covenant. 2. In general, the tenant has the duty to make repairs to the premises in a commercial lease. 3. Rent is a dependent covenant. 2. In general, the tenant has the duty to make repairs to the premises in a commercial lease.

    • C.

      3. Rent is a dependent covenant.

    • D.

      4. Under the “English rule”, the landlord must give tenant actual possession of the premises

    • E.

      5. All of the above are true.

    Correct Answer
    E. 5. All of the above are true.
    Explanation
    The correct answer is 5. All of the above are true. This means that all of the statements given in the options are true and there is no false statement among them.

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  • 39. 

    Which of the following is NOT a requirement for a deed to be valid and have priority over subsequent purchasers?

    • A.

      1. The deed must be recorded.

    • B.

      2. The deed must be signed by the parties

    • C.

      3. The deed include the value of the property conveyed.

    • D.

      4. The deed must include a legal description of the property conveyed.

    • E.

      5. The deed must be delivered to the intended recipient

    Correct Answer
    C. 3. The deed include the value of the property conveyed.
    Explanation
    The value of the property conveyed is not a requirement for a deed to be valid and have priority over subsequent purchasers. The value of the property is typically not included in the deed itself, but rather in the sales contract or other related documents. The deed must be recorded, signed by the parties, include a legal description of the property, and be delivered to the intended recipient in order to be valid and have priority.

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  • 40. 

    1. Which of the following is TRUE?

    • A.

      1. The difference between a license and a lease is that one is a temporary right and the other is a permanent right.

    • B.

      2. The difference between a sale of a building and a leasing of that same building is that one is an exclusive right of possession while the other is not an exclusive right to possession.

    • C.

      3. A lease is an exclusive right to possession.

    • D.

      4. Leases are really sales of property with the option by the landlord to “buy back” the property and the end of the lease’s term.

    • E.

      5. Both 1 and 3.

    Correct Answer
    C. 3. A lease is an exclusive right to possession.
    Explanation
    The correct answer is option 3. A lease is an exclusive right to possession. This means that when someone leases a property, they have the exclusive right to possess and use that property for the duration of the lease agreement. This distinguishes a lease from other arrangements such as licenses, which may grant temporary rights but do not provide exclusive possession. Therefore, option 3 accurately describes the nature of a lease.

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  • 41. 

    Which of the following types of collateral are governed by Article 9 of the UCC

    • A.

      1. Goods.

    • B.

      2. Quasi-tangibles.

    • C.

      3. Real Estate.

    • D.

      4. All of the above.

    • E.

      5. 1 & 2.

    Correct Answer
    E. 5. 1 & 2.
  • 42. 

    Which of the following is NOT one of the defenses to defamation listed in lecture?

    • A.

      1. Truth

    • B.

      2. Retraction

    • C.

      3. Absolute Privilege

    • D.

      4. Conditional Privilege

    • E.

      5. Sovereign Immunity

    Correct Answer
    E. 5. Sovereign Immunity
    Explanation
    Sovereign immunity is not one of the defenses to defamation listed in the lecture. Sovereign immunity is a legal doctrine that protects the government or a government agency from being sued without its consent. It does not pertain to defamation cases specifically. The defenses to defamation listed in the lecture include truth, retraction, absolute privilege, and conditional privilege.

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  • 43. 

    Which of the following is NOT an intentional tort?

    • A.

      1. False Imprisonment

    • B.

      2. Defamation

    • C.

      3. Strict Liability

    • D.

      4. Fraudulent Misrepresentation

    • E.

      5. Nuisance

    Correct Answer
    C. 3. Strict Liability
    Explanation
    Strict liability is not considered an intentional tort because it does not require intent or fault on the part of the defendant. In strict liability cases, the defendant can be held liable for harm caused, regardless of whether they intended to cause harm or were negligent. Intentional torts, on the other hand, require the defendant to have intended to cause harm or engage in conduct that is substantially certain to cause harm. False imprisonment, defamation, fraudulent misrepresentation, and nuisance are all intentional torts because they involve intentional actions or conduct that can cause harm to others.

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  • 44. 

    1. Melanie is driving across campus and when she comes to the intersection at Hitt and Rollins she gets into a fender bender with Anthony.  She wishes to sue Anthony for damages.  If Melanie is partially at fault in the accident, which legal theory would help her still recover?

    • A.

      1. Strict Liability

    • B.

      2. Comparative Negligence

    • C.

      3. Contributory Negligence

    • D.

      4. Assumption of the Risk

    • E.

      5. Joint and Several Liability

    Correct Answer
    B. 2. Comparative Negligence
    Explanation
    Comparative Negligence is the legal theory that would help Melanie still recover damages even if she is partially at fault in the accident. Under comparative negligence, the damages awarded to Melanie would be reduced by the percentage of her own fault. This means that even if Melanie is found to be partially responsible for the accident, she can still recover a portion of the damages from Anthony. This legal theory allows for a fair allocation of fault and compensation based on the degree of negligence of each party involved.

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  • 45. 

    1. Which of the following would be supported by serve as sufficient consideration?

    • A.

      1. “I agree to buy all the computers from you that I want for $1,000 apiece.”

    • B.

      2. “In exchange for the last 20 years of service I promise to give you a retirement bonus”

    • C.

      3. “I promise to pay my taxes if you will give me $200.”

    • D.

      4. “I will consent to divorce in exchange for your $400,000 house.”

    • E.

      5. On graduation day: “I’m proud of how you’ve done in completing college. I promise to give you $1000 at your graduation party.”

    Correct Answer
    D. 4. “I will consent to divorce in exchange for your $400,000 house.”
    Explanation
    Option 4 demonstrates a clear exchange of value between the parties involved. One party is offering their consent to divorce, while the other party is offering their $400,000 house in return. This exchange constitutes sufficient consideration, as both parties are giving up something of value in the agreement. Options 1, 2, and 3 do not involve a clear exchange of value or consideration, while option 5 is a promise of a gift, which does not qualify as consideration.

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  • 46. 

    Four elements must be present for the courts to use promissory estoppel.  Which of the following is NOT one of the four elements of promissory estoppel?

    • A.

      1. It is unjust not to enforce the promise

    • B.

      2. They must have met the four requirements for a valid contract

    • C.

      3. It is reasonable that the promise is relied upon

    • D.

      4. Promisee relies upon the promise to his detriment

    • E.

      5. None of the above B all are elements of promissory estoppel

    Correct Answer
    B. 2. They must have met the four requirements for a valid contract
  • 47. 

    1. Which of the following is NOT one of ways that a duty of performance can be completely discharged?

    • A.

      1. Occurrence of an immaterial breach

    • B.

      2. Material alteration of the contract by one party

    • C.

      3. An accord and satisfaction

    • D.

      4. Occurrence of anticipatory repudiation

    • E.

      5. Occurrence of a condition precedent

    Correct Answer
    A. 1. Occurrence of an immaterial breach
    Explanation
    An immaterial breach refers to a minor or insignificant violation of the terms of a contract. This means that even though there may have been a breach, it does not have a significant impact on the overall performance of the contract. In this case, the duty of performance is still considered to be discharged because the breach is not substantial enough to affect the parties' obligations. Therefore, the occurrence of an immaterial breach is not one of the ways that a duty of performance can be completely discharged.

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  • 48. 

    Which of the following can be used to determine whether a breach of contract is material?

    • A.

      1. Satisfaction Clause

    • B.

      2. “Time is of the Essence” Clause

    • C.

      3. The importance of the breach in light of the entire contract

    • D.

      4. All of the above

    • E.

      5. 1 and 2 only

    Correct Answer
    D. 4. All of the above
    Explanation
    All of the options provided can be used to determine whether a breach of contract is material. The satisfaction clause allows for the determination of whether the breach has caused dissatisfaction or dissatisfaction to a party involved. The "Time is of the Essence" clause emphasizes the importance of timeliness in fulfilling contractual obligations. Lastly, considering the importance of the breach in relation to the entire contract helps assess the significance and impact of the breach on the overall agreement. Therefore, all of these factors together can be used to determine whether a breach of contract is material.

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  • 49. 

    1. Which of the following is TRUE:

    • A.

      1. Mistake of law is never a defense to a crime.

    • B.

      2. Mistake of law is always a defense to a crime.

    • C.

      3. Mistake of law is sometimes a defense to a crime.

    • D.

      4. Mistake of fact is never a defense to a crime.

    • E.

      5. Mistake of fact is always a defense to a crime.

    Correct Answer
    A. 1. Mistake of law is never a defense to a crime.
    Explanation
    Mistake of law is never a defense to a crime because the principle of "ignorance of the law is no excuse" applies. In general, individuals are expected to know and understand the laws that apply to them, and not knowing the law is not a valid defense for committing a crime. However, there may be certain exceptions where mistake of law can be considered as a defense, such as when there is a reasonable reliance on an official interpretation of the law or when the law itself is unclear or ambiguous.

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  • 50. 

    Which option is unacceptable for the secured party to pursue when debtor defaults?

    • A.

      1. Threaten legal action based on right to enforce security interest whether secured party is serious about doing this or not.

    • B.

      2. Hire third-party to track and then take possession of collateral when debtor is not around.

    • C.

      3. Follow debtor on to debtor’s property, then confiscate the collateral by force.

    • D.

      4. Auction off collateral to pay off debt after repossession.

    • E.

      5. None of the above B all are acceptable.

    Correct Answer
    C. 3. Follow debtor on to debtor’s property, then confiscate the collateral by force.
    Explanation
    The options provided in this question are different actions that a secured party can take when a debtor defaults. Options 1, 2, and 4 are all acceptable actions that a secured party can pursue. Option 3, however, is not acceptable as it involves forcibly confiscating the collateral from the debtor's property. This action would likely be illegal and could result in legal consequences for the secured party. Therefore, option 3 is the correct answer as it is the only option that is unacceptable for the secured party to pursue.

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  • Current Version
  • May 29, 2023
    Quiz Edited by
    ProProfs Editorial Team
  • Dec 14, 2011
    Quiz Created by
    Tpc43b
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