Multiple choice
Question 1
Positive abstractions that capture our sense of what is good or desirable are __________.
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ethical ideas |
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values |
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conscience demands |
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desirable principles |
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action goals |
4 points
Question 2
An administrative law judge’s decision may be directly appealed to:
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a state trial court. |
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the full commission or head of an agency. |
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the circuit court of appeals. |
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the Senate. |
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administrative law judge’s decisions are final and may not be appealed. |
4 points
Question 3
Which of the following was the result in Alexis Perez v. John Ashcroft, the case in the textbook in which the plaintiff claimed that—without formal rulemaking as required by law—the Immigration and Naturalization Service wrongfully imposed a rule that required visa applicants who work in a professional capacity in a religious vocation to have formal religious training?
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The court ruled that no formal rulemaking was required because the agency was merely interpreting previously-approved regulations. |
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The court ruled that no formal rulemaking was required because the Immigration and Naturalization Service was exempt from the Administrative Procedures Act. |
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The court upheld the rule on the basis that as a potential immigrant, the plaintiff lacked standing to sue. |
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The court struck the rule on the basis that the Immigration and Naturalization Service lacked the authority to pass any rules whatsoever when First Amendment freedom of religion rights were at issue. |
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The court struck the rule on the basis that all substantive rules adopted by an agency creating law must be implemented through formal rulemaking procedures. |
4 points
Question 4
Which of the following are stakeholders of a business?
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Owners and employees |
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Employees and customers |
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Customers, owners, and management |
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Management, owners, and employees |
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Customers, owners, management, and employees |
4 points
Question 5
Which of the following involves disputes between private individuals or groups?
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Public law |
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Private law |
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Governmental law |
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Public law and private law, but not governmental law |
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Public law, private law, and governmental law |
4 points
Question 6
Which of the following is true regarding federal jurisdiction?
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There is no exclusive federal jurisdiction in civil matters. |
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If a case falls within federal jurisdiction, it may not also fall within state jurisdiction. |
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Some cases fall within both federal jurisdiction and state jurisdiction, but there is no exclusive federal court jurisdiction. |
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Some cases fall within both federal jurisdiction and state jurisdiction, but that only occurs in criminal matters. |
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Some cases fall within both federal jurisdiction and state jurisdiction, but the federal court system has exclusive jurisdiction over some cases. |
4 points
Question 7
Which of the following is accurate regarding the speed and cost of alternative dispute resolution?
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It is usually faster and cheaper. |
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It is usually faster but more expensive. |
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It is usually slower and more expensive. |
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It is usually slower but cheaper. |
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No studies have known, so the answer is unknown. |
4 points
Question 8
Adult siblings, John, Sam, and Andy, are in disagreement over how to split the proceeds of a piece of land left to them by a rich uncle who recently died. The uncle was a resident of Georgia, and the land is in Georgia, but neither John, Sam, or Andy live there. Which of the following is true regarding jurisdiction over the dispute?
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A court in Georgia would not have jurisdiction. The case would have to be brought in a state in which at least one of the brothers lives. |
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A court in Georgia would have in rem jurisdiction over the dispute. |
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A court in Georgia would have in personam jurisdiction over the dispute. |
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A court in Georgia would have jurisdiction over the dispute only if all brothers signed a consent form agreeing to bring the case in Georgia. |
4 points
Question 9
Congress created federal administrative agencies through passage of what type of legislation?
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Administrative |
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Enabling |
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Statutory |
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Agency |
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Interstate |
4 points
Question 10
What type of law is created by administrative agencies involving applications, licenses, permits, available information, hearings, appeals, and decision making?
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Executive law |
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Congressional law |
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Administrative law |
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Enabling law |
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Rule law |
4 points
Question 11
When courts rely on precedent, they are obeying __________.
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common analysis |
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res judicata |
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stare decisis |
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in rem process |
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federal law |
4 points
Question 12
Which of the following is (are) positive about arbitration?
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Arbitrators are assigned so parties do not have to pick them. |
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Arbitration is generally less expensive than litigation. |
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Arbitrators are bound by the same rules as judges in applying precedent. |
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Arbitrators are assigned so parties do not have to pick them, and arbitration is generally less expensive than litigation. |
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Arbitrators are assigned so parties do not have to pick them, arbitration is generally less expensive than litigation, and arbitrators are bound by the same rules as judges in applying precedent. |
4 points
Question 13
The “public disclosure” test is also known as the __________ test.
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primary |
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golden |
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television |
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Powell |
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self-conscious |
4 points
Question 14
What do the initials ALJ represent in the administrative law arena?
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Administrative Legal Journal |
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Agency Legal Jargon |
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Administrative Law Judge |
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Agency Legal Judge |
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Agency Law Jurisprudence |
4 points
Question 15
Which of the following is the minimal standard that a business must meet in a consideration of business ethics?
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Decisions must be legal. |
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Decisions must meet the criteria of a follower of the WPH framework for business ethics. |
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Decisions must meet the requirements of the most important stakeholders. |
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Decisions must receive a majority vote of acceptance by employees. |
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Decisions must be legal, and decisions must receive a majority vote of acceptance by employees. |
4 points
Question 16
Patricia, the president of a company that makes batteries, has a new interest in the environment. She recently went to a seminar on environmental dangers and has decided to take steps to clean things up. She started at home and was also committed to change things at work. Patricia had to face the fact that her company has been cheating and is not in compliance with applicable environmental regulations due to dumping in a nearby river. Her company has never been cited, however, because it employs a very large number of people in the community, including the mayor’s wife and the chief-of-police’s brother. On her mission to clean things up, Patricia has decided to go even further than the law requires and install the very latest environmental protections. When she announced her plan, the chair of the company’s board of directors, Cindy, had a meeting with Patricia. Cindy told Patricia to analyze the situation carefully because the cost of the additional equipment would mean no dividend to shareholders and no raise for employees. Furthermore, Cindy told Patricia that installing all the new equipment would result in higher prices for the company’s batteries and could bankrupt the company because of foreign competition. Cindy hinted that Patricia could be fired if she persisted. Cindy suggested that Patricia just be concerned with a minimal standard of ethics. Which of the following is the minimal standard that a business must meet in a consideration of business ethics?
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Decisions must meet the criteria of a follower of the WPH framework for business ethics. |
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Decisions must meet the requirements of the most important stakeholders. |
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Decisions must receive a majority vote of acceptance by employees. |
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Decisions must be legal. |
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Decisions must be legal, and decisions must receive a majority vote of acceptance by employees. |
4 points
Question 17
The term __________ involves the use of past decisions to guide future decisions.
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commonality |
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precedent |
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restatement |
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uniformity |
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modeling |
4 points
Question 18
Which of the following involves disputes between private individuals or groups and their government?
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Public law |
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Private law |
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Governmental law |
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Public law and private law, but not governmental law |
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Public law, private law, and governmental law |
4 points
Question 19
Which of the following do appellate courts primarily handle?
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Questions of law |
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Questions of fact |
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Questions of law and fact |
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Cases when they initially enter the legal system |
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Questions of law and fact, and also cases when they initially enter the legal system |
4 points
Question 20
What types of powers do administrative agencies have?
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Legislative and judicial |
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Judicial and executive |
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Executive and legislative |
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Legislative, judicial, and executive |
4 points
Question 21
What usually happens to decisions of administrative law judges that are appealed to the federal court system?
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The decisions are usually upheld. |
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The decisions are usually denied. |
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The decisions are upheld approximately 50% of the time. |
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The decisions are generally upheld as a matter of law unless a jury is requested. |
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None of these since there is no right of appeal to the federal court system. |
4 points
Question 22
Business ethics:
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results in a set of correct decisions made by a company. |
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refers to a standard of business conduct. |
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can improve business decisions. |
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refers to a standard of business conduct and can improve business decisions. |
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results in a set of correct decisions made by a company and can improve business decisions. |
4 points
Question 23
Which of the following are the most common types of rulemaking done by agencies?
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Formal and hybrid |
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Informal and hybrid |
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Formal and informal |
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Judicial and informal |
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Legislative and formal |
4 points
Question 24
Billy knows that he can bring his case against Bob in a state court in Tennessee. He is unsure, however, of which county in which to proceed. Which of the following addresses the proper county?
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In personam jurisdiction |
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Venue |
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Subject-matter jurisdiction |
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Diversity jurisdiction |
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Long-arm jurisdiction |
4 points
Question 25
Which of the following are types of rule that an agency may enact?
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Procedural and interpretive |
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Interpretive and legislative |
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Legislative and judicial |
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Procedural, interpretive, and legislative |
_________________________________________________________________________________
Question 1
Constance asks Kathy if Kathy will sell her used business book for $50. What is the status of the negotiation?
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No offer has been made. |
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An offer has been made, but it may be revoked. |
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An offer has been made that may not be revoked. |
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A contract has been entered into. |
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A contract has been entered into, but it may be set-aside at the option of either party. |
4 points
Question 2
Marcy’s mother, Sue, did not want her to date until she was older. She also wanted Marcy to attend law school. Just before Marcy started her freshman year in college, Sue told Marcy that if Marcy would refrain from dating until she received her law degree, then Sue would pay off all of Marcy’s school loans and throw in an extra $50,000. Marcy agreed and stated, “Thanks, Mom; when I graduate, I’m throwing you a big party for all you have done for me!” Sue smiles and hugs Marcy.
Marcy finished law school and asked for payment of her loans, the $50,000 in cash, and for a car. Sue said, “No way—I know you went out on some dates during law school, and I never agreed on the car.” Marcy said those were just study nights and that her mother had never objected to Marcy’s frequent statements that she wanted a car upon graduation. Sue asks about the party. Marcy tells her that she is nuts because there is no way Marcy can afford a party since Sue has backed out of the deal. After some serious negotiation, Marcy and Sue settled their dispute with Sue agreeing to pay for half of Marcy’s school loans and for all of the expenses of Marcy’s upcoming wedding; Sue also agreed to forget about Marcy throwing a party for her. Was there sufficient consideration to support Marcy’s agreement to throw a party for Sue?
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Yes, sufficient consideration was present. |
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No, there was insufficient consideration because Sue did not promise anything in exchange. |
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No, there was insufficient consideration because Marcy’s agreement was illusory. |
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No, because throwing a party is not of a monetary value such as to constitute consideration. |
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No, because close relatives are involved. |
4 points
Question 3
Which of the following is FALSE regarding rights of an assignee and assignor?
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Assignees essentially fill in for the assignor as the legal recipient of contractual duties. |
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Assignees acquire the same rights as the assignor had. |
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Assignees are offered additional protection than assignors. |
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The obligor may raise any of the same defenses for nonperformance to the assignee that he or she would have been able to raise against the assignor. |
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When an assignor transfers rights to an assignee, the assignor legally gives up all rights he or she previously had to collect on the contract. |
4 points
Question 4
What are the elements of a binding contract?
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Offer, acceptance, consideration, and assent |
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Acceptance, consideration, assent, and legal object |
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Agreement, offer, acceptance, and consideration |
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Agreement, consideration, contractual capacity, and assent |
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Agreement, consideration, contractual capacity, and legal object |
4 points
Question 5
Business law teacher, Debby, needed some yard work done. She told her class that she would give $50 to the first person who mowed her yard. Max went to mow Debby’s yard. Unfortunately, just as he finished mowing, a neighborhood dog bit him, and he had to go to the emergency room for a couple of stitches. Debby refused to pay Max on the basis that the agreement was not in writing and that Max ended up being more trouble than he was worth. Max refused to pay the emergency room because he said that he did not have a binding, bilateral contract with Debby. Which of the following is an appropriate characterization of the agreement between Debby and Max?
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They had a bilateral, express contract. |
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They had a bilateral, implied contract. |
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They had a bilateral and unilateral contract. |
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They had a unilateral contract. |
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They did not have any type of enforceable agreement. |
4 points
Question 6
Which of the following occurs when a party to a contract transfers his or her rights to a contract to a third party?
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assignment |
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referral |
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disgorgement |
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privity |
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transfer |
4 points
Question 7
Which of the following are the two primary kinds of performance?
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Partial and significant |
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Partial and complete |
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Partial and substantial |
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Complete and substantial |
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Complete and significant |
4 points
Question 8
The person who agrees to the terms of an offer by another party is called the __________.
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offeree |
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offeror |
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agreeor |
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agree |
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inquirer |
4 points
Question 9
Consideration is defined as __________.
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being cordial in the negotiation of contracts |
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refraining from unethical behavior in the negotiation of contracts |
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being both cordial and refraining from unethical behavior in the negotiation of contracts |
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a bargained-for exchange |
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a contract negotiated in person as opposed to by telephone or e-mail |
4 points
Question 10
When a party’s obligations under a contract are terminated, the party is said to be __________.
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finished |
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terminated |
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completed |
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discharged |
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recoursed |
4 points
Question 11
In a bilateral contract, the consideration for each promise is __________.
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a completed act |
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the beginning of action in acceptance, even if it is not complete |
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an acknowledgement |
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a return promise |
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an agreement |
4 points
Question 12
Which of the following is TRUE regarding illusory promises?
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Illusory promises are not consideration. |
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Illusory promises are consideration. |
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Illusory promises qualify as consideration when past consideration is at issue. |
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Illusory promises qualify as consideration when promissory estoppel is at issue. |
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Illusory promises are consideration only when a sale of goods is involved. |
4 points
Question 13
A __________ is a FALSE representation of a material fact that is consciously false and intended to mislead the other party.
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negligent misrepresentation |
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fraudulent misrepresentation |
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scienter misrepresentation |
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negligent misrepresentation, fraudulent misrepresentation, and scienter misrepresentation |
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negligent or fraudulent misrepresentation, but not a scienter misrepresentation |
4 points
Question 14
Courtney, who does not keep up with the price of current technology, agrees to buy a used computer from Jake for $2,500. Later, Brice tells Courtney that she made a really bad deal and that she could get an even better new computer for no more than $1,000. Courtney tells Jake that she is not giving him any money because he was not fair with her. Which of the following is the most likely result if Jake sues Courtney alleging breach of contract?
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Jake will win only if he can establish that Brice is wrong and that the deal was actually reasonable. |
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Jake will win because the court would not weigh whether a good bargain was made. |
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Courtney will win if she can establish that she paid at least 75% more than the computer was actually worth. |
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Courtney will win if she can establish that she paid at least 50% more than the computer was actually worth. |
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Courtney will win if she can establish that she made a bad deal and that truly she was not aware of current prices of computers. |
4 points
Question 15
In a __________ contract, the offeror wants a performance to form the contract.
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trilateral |
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bilateral |
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unilateral |
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complete |
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anticipatory |
4 points
Question 16
Which of the following is necessary to establish that a mutual mistake was made involving a basic assumption about the subject matter of a contract?
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That the mistake involved the existence, quality, or quantity of the items to be exchanged |
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That the mistake involved whether a party could profit from the contract |
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That the mistake involved whether a party could profit from the contract or whether a party misunderstood the time constraints involved in regard to the contract |
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That the mistake involved the identity of parties to the contract or whether a party misunderstood the time constraints involved in regard to the contract |
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That the mistake involved a misunderstanding of law as to whether or not the UCC applied |
4 points
Question 17
Bill contracts with Judy to wash her car and then delegates the duty to Paul. Paul fails to wash the car. Which of the following is true regarding Bill’s duty to Judy, if any?
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Bill has no duty to Judy so long as she did not expressly object to the delegation. |
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Bill has no duty to Judy regardless of whether she objected to the delegation. |
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Bill continues to be bound to Judy to see that her car gets washed. |
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Bill continues to be bound to Judy to see that her car gets washed only if the contract expressly prohibited delegation. |
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Bill continues to be bound to Judy to see that her car gets washed unless he already paid Paul for the job. |
4 points
Question 18
In Hamer v. Sidway, the New York Court of Appeals found that forbearance:
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negates the enforceability of a contract. |
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is not mandatory for a contract to be binding. |
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is unconstitutional. |
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is sufficient consideration for a valid contract. |
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is insufficient consideration for a valid contract. |
4 points
Question 19
George offers to sell Penelope a ring that George found in his yard. He and Penelope look at the ring and decide that they are not sure what it is. Penelope pays George $10 for the ring. The ring turns out to be a diamond worth much more than $10. George wants the ring back, and Penelope refuses. What is the most likely result?
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The ring will be returned to George because of mutual mistake. |
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The ring will be returned to George because of unilateral mistake. |
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The ring will be returned to George because of equity. |
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The ring will remain with Penelope unless George can establish that she was negligent in not recognizing the ring’s true value. |
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The ring will remain with Penelope because the parties contracted on the assumption that they did not know the value of the ring. |
4 points
Question 20
Which of the following occurs when a party unjustifiably fails to substantially perform his or her obligations under the contract?
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Material breach |
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Substantial breach |
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Immaterial breach |
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Delineated breach |
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Crossed breach |
4 points
Question 21
Beverly decides to go on a great trip to Hawaii. She needs someone, however, to take care of her two dogs, Creaky and Toady, while she is gone. Creaky has hives, and Toady passes gas frequently because of a digestive problem.
Beverly hires Frank three months in advance, and they reach a contractual arrangement whereby Frank will be paid $200 for keeping the dogs for two weeks. Frank comes over two months before Beverly is set to leave, takes one look at Creaky and Toady, and declares that the dogs are too creepy to be around. Beverly then hires Alice who agrees to care of Creaky and Toady. Two weeks before Beverly is set to leave, however, Alice calls and tells her that she just broke both of her legs in an automobile accident, sustained other injuries, and has been put on bed rest for two months. Finally, Beverly hires Betty to care for the dogs and heads off to Hawaii, where she has a great time. Unfortunately, when Beverly returns home, she finds that Betty fell in love with Creaky and Toady and has absconded with them. It was a month before Beverly was able to get a court order, which required the dogs to be returned.
Which of the following is true regarding Frank’s refusal to keep Creaky and Toady?
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He committed an anticipatory repudiation. |
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He is not guilty of any breach because he gave Beverly sufficient warning that he was not willing to perform. |
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He is not guilty of any breach because of the frustration of purpose doctrine. |
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He is guilty of an immaterial breach because of the low value of the contract. |
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He is guilty of a nominal breach. |
4 points
Question 22
Distinguishing between unilateral and mutual mistakes is important because the classification bears on which contracts __________.
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are void |
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are voidable |
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lack consideration |
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lack legality |
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none of these because mutual mistakes are not recognized in the area of contracts |
4 points
Question 23
Which of the following are the two most important primary sources of contract law?
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Case law and the restatement of law |
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Case law and the Uniform Commercial Code |
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The Uniform Commercial Code and the Convention on Contracts for International Sales of Goods |
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Case law and the Convention on Contracts for International Sales of Goods |
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The Convention on Contracts for International Sales of Goods and the Restatement of the Law Second, Contracts |
4 points
Question 24
Stewart, the owner of ABC Construction, agreed with Joan, the owner of XYZ Hotel, that he would complete renovations on her upscale hotel on the beach in Florida by October 1. The amount due to Stewart under the contract was $250,000. The contract contained a clause by which Stewart would pay Joan $50,000
