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QUESTION 1
The International Trade Administration (ITA) of the U.S. Department of Commerce regulates import competition by:
a. Promotion of trade and investment
b. Strengthening industry competitiveness
c. Ensuring fair trade
d. All of the above.
QUESTION 2
Which corporate law doctrines are designed to give the shareholders some indirect control of the corporation?
a. Voting for the board of directors
b. Cumulative voting
c. Voting trusts and pooling agreements
d. All of the above.
QUESTION 3
Which of the following is a TRUE statement?
A. Symbolic speech, such as gestures and actions used to communicate ideas, are not protected by the First Amendment to the U.S. Constitution since only actual words are protected.
B. All regulations on firearms are illegal pursuant to the Second Amendment to the Constitution which grants the people the “right to bear arms.”
C. The Fourth Amendment does not protect businesses from warrantless searches by the police as only people’s homes are protected.
D. Corporations, although they are artificial legal persons, nonetheless possess the First Amendment right to “free speech,” according to the Supreme Court.
QUESTION 4
An output contract is typically
a. Illusory
b. Unconscionable
c.Voidable
d. None of the above
QUESTION 5
Which of the following statements is not correct?
a. Generally, a state court can exercise jurisdiction over a nonresident by showing that he or she had sufficient contacts with the state.
b. A lawsuit involving a federal question can originate in a federal court in the United States.
c.The United States Supreme Court has automatic appellate authority over all cases decided in the state courts.
d. An answer to a lawsuit can admit to allegations made in a complaint in the U.S. civil law system.
QUESTION 6
Which of the following is the most accurate statement?
a. A sole proprietorship is a separate legal entity for U.S. tax purposes and thus the entity must file its own tax return.
b.A franchise is an association of members comparable to a partnership organized to provide an information sharing exchange among the members about economic issues.
c.Franchisors that firmly set and fix the prices at which the franchisees can resell products or perform services may violate antitrust laws.
d. A franchisor can always establish an additional franchisee in a territory allotted to a franchisee if the franchisee agreement is silent as to exclusivity of the territory.
QUESTION 7
Under a typical state corporation merger statute:
a. mergers ordinarily require the approval of two-thirds of the shareholders of both corporations.
b. so-called “short mergers” of a 90% owned subsidiary into the parent corporation are permitted without shareholder approval or dissenters’ right of appraisal.
c. the shareholders of the disappearing corporation are not entitled to vote if the shares to be issued to them constitute less than 20% of the outstanding shares of the surviving corporation.
d. Dissenting shareholders are entitled to appraisal rights.
QUESTION 8
Which of the following factors can never be used as a legal bona fide occupational qualification?
a. Sex.
b. Religion.
c. Race.
d. B and C.
QUESTION 9
The tort of fraud requires the following except:
a. A false representation of material fact.
b. Knowledge of the falsity and intent to deceive.
c. Breach of the duty of strict ethical honesty in fact.
d. Justifiable reliance by the deceived party on the misrepresentation.

Alpha Inc., a U.S. firm, signs a contract with Beta, Ltd., a Russian company, to give Beta the right to sell Alpha’s products in Russia. This is usually known as:
a. a distribution agreement.
b. a joint venture.
c. direct exporting.
d. licensing.
QUESTION 11
Which of the following constitutes illegal discrimination pursuant to Title VII of the Civil Rights Act
a. A shoe store refuses to hire Hispanics as employees.
b. A sporting goods store excludes applicants over the age of 40.
c. A large department store refuses to hire anyone in a wheel chair.
d. None of the above.
QUESTION 12
When an appellate court receives a case appealed to it, it usually will:
a. Retry the case with a new jury.
b.Retry the case with the original jury.
c. Retry the case with the appellate court judge acting as the jury.
d. Review the record of the trial court to see if there were any errors of law made by the judge.
QUESTION 13
A computer retailer sells some computer games to a minor. This contract is:
a. Unenforceable.
b. Voidable.
c. Void.
d. Enforceable.
QUESTION 14
In a short form merger, which approvals are needed?
a. Votes by both boards of directors, but shareholders need not approve.
b. Vote by the board of directors of the surviving corporation, and for the corporation which does not survive, recommendation by the board of directors and vote by the shareholders.
c. Vote by the board of directors of the surviving corporation.
d. For both corporations, a vote by the shareholders, but no action by the board of directors.
QUESTION 15
A person may be discharged from his or her contractual obligations under the common law by
a. Substantial performance
b. Complete performance
c. Impossibility of performance
d. All of the above
QUESTION 16
Agents can bind principals:
a. If they have actual authority.
b. If they have implied authority.
c. If they have apparent authority.
d. All of the above.
QUESTION 17
Which of the following is FALSE regarding lawsuits pursuant to Title VII of the Civil Rights Act?
a. An employer can be liable for discrimination pursuant to Title VII based on the “disparate impact” theory even if there is no evidence of intentional discrimination.
b. Language discrimination based on an English-only policy can be grounds for a national origin discrimination lawsuit if the employer does not have a legitimate business reason for requiring its employees to speak English.
c. Discriminating against applicants for employment based on their appearance because they are not sufficiently attractive, pretty, or handsome is as a general rule a Title VII violation since the non-attractive are discriminated against.
d. Sexual stereotyping of women based on stereotypical notions of appropriate female behavior by male managers is a violation of Title VII.
QUESTION 18
Which of the following is a true statement?
A. Contractual capacity is not needed for the principal in a principal-agent relationship.
B. One characteristic of independent contractors is that they can never also be agents and thus enter into contracts on behalf of a principal.
C. Even when an employee is an employee at-will, statements made in the employer’s policy and procedure manual may give employees implied-in-fact contracts right that limit the circumstances under which the employer can discharge the employee.
D. A power of attorney requires that the agent with the power be an attorney licensed by at least one state bar association as well as the federal bar association.
QUESTION 19
Which of the following is a FALSE statement:
A. The attorney-client privilege protects communications between a lawyer and his or her client.
B. If the client is a corporation, the privilege still exists and protects communications between the company’s lawyer and company personnel so long as the nature of the communications relates to the employee’s duties.
C. If the client is a corporation, the privilege belongs to the corporation and not to the employee.
D. The attorney-client privilege forbids the attorney from revealing a communication from the client that he intends to commit a violent crime in the near future.
QUESTION 20
The typical advantages of the entrepreneur in using a large law firm are all of the following except:
A. More legal experts in specialized areas, such as securities laws.
B. The ability to accommodate an extended payment schedule.
C. More bureaucracy with lawyers, legal assistants, law clerks, and administrative personnel to deal with.
D.Easier to find, and to find information about, the large law firm.

Which of the following is a false statement?
A. In order to meet the consideration requirement, the legal detriment suffered by each party must have been given in exchange for that of the other party.
B. Death of the offeror terminates the offer even if the offer could still be accepted and carried out by the estate of the offeror.
C. A counteroffer is treated as a rejection of the offer as well as a new offer.
D. Revocation refers to the offeree communicating to the offeror that the offeree does not want to accept the offer.
QUESTION 22
Which of the following is not true regarding common law?
a. The common law of the United States originally came from England.
b. Judges must strictly follow precedent in all cases.
c. A drawback of common law is that legal decisions may be followed after they have become outdated or no longer relevant.
d. Common law is called common law because judges in England were intended to apply laws similarly is all jurisdictions, thereby making the law common to all.
QUESTION 23
When is an employer responsible for the negligent torts of its employees?
a. When there is vicarious liability and the doctrine of respondeat superior applies.
b. When the torts are committed by the employee acting in the “course and scope of employment.”
c. When the employer is directly negligent for selecting and/or supervising an incompetent and careless employee who commits the tort.
d. All of the above.
QUESTION 24
What may be included in the articles of incorporation as an optional provision?
a. The address of the corporation’s initial registered office in the state.
b. The names and addresses of the incorporators.
c. The par value of the stock or any statement that it shall have no par value.
d. The name of the corporation.
QUESTION 25
To be convicted of a crime under U.S. laws, the prosecution typically must prove the case against the defendant:
a. By a preponderance of the evidence.
b. By clear and convincing evidence.
c. Beyond a reasonable doubt.
d. None of the above.
QUESTION 26
Alpha Corporation and Beta, Inc., form a joint venture to develop and market molecular-based computer chips. A joint venture is similar to
a. a corporation.
b. a partnership.
c. a sole proprietorship.
d. a syndicate.
QUESTION 27
What, functionally, is the relationship between partners?
a. A partner is an agent of his or her fellow partners, who are his or her principals.
b. A partner is a principal of his or her fellow partners, who are his or her agents.
c. Both a and b
d. Neither a nor b
QUESTION 28
A person is charged with the commission of a crime. For a conviction, most crimes require
a. only a specified state of mind or intent on the part of the actor.
b. only the performance of a prohibited act.
c. a specified state of mind and the performance of a prohibited act.
d. none of the above.
QUESTION 29
Which of the following contracts must be in writing to satisfy the Statute of Frauds?
a. An employment contract for a five year term.
b. A contract to sell two acres of undeveloped rural land.
c. A contract for the purchase of a large flat-screen TV for a price of $2500.
d. All of the above.
QUESTION 30
Which of the following statements is false?
a. Notice-and-comment rulemaking is the most common rulemaking procedure used by administrative agencies in the United States to make law.
b. Tort law provides legal remedies for both personal injury and property damage.
c. To commit an intentional tort, a person must intend the consequences of his or her act or know with substantial certainty that certain consequences will occur.
d. To commit an intentional tort, a person always must act with an evil motive to commit physical harm.
Which of the following is a false statement?
a. The fiduciary obligations of principals and agents also apply to partners.
b. Unless the general partnership agreement states otherwise, general partners share losses in the same ratio as profits.
c. A partner does not have the right to an accounting to enforce partnership rights.
d. In a limited liability partnership, the liability of a limited partner is generally limited to the amount of capital he or she has invested in the partnership.
QUESTION 32
Which of the following is FALSE about contracts pursuant to the Uniform Commercial Code?
a. A UCC contract must have a clear and precise price term initially in the contract for it to be valid.
b. A merchant’s firm offer can be valid and enforceable even without the payment of consideration.
c. Additional terms in an acceptance will as a general rule not render the acceptance invalid.
d.The UCC requires as a general rule a writing for contracts for the sale of goods $500 or more in price.
QUESTION 33
Which of the following is FALSE about damages for a breach of contract?
a. Money damages can consist of compensatory and consequential damages.
b. Consequential damages must be reasonably foreseeable by the parties as likely damages stemming from a breach.
c. Liquidated damages must be a reasonable amount and not an excessive “penalty.”
d. The Mitigation of Damage rule does not apply when an employer breaches a contract with an employee since the employer is usually the dominant entity, and thus the wrongfully discharged employee does not have any obligation to look for other employment.
QUESTION 34
When can a customer list of an employer rise to the level of a legally protected trade secret?
a. When the list has information in it which possesses value and which the employer has made reasonable efforts to keep the list secret.
b. When the employer obtains a federal copyright or trademark on it.
c. When there is concrete evidence that all the employer’s customers on the list would be willing to continue doing business with the employer.
d. When the people on the customer list are readily obtainable from public sources.
QUESTION 35
Which statement is TRUE regarding U.S. anti-trust law?
a. All monopolies are illegal pursuant to Section 2 of the Sherman Anti-trust Act.
b. All horizontal mergers are illegal pursuant to Section 7 of the Clayton Act.
c. Vertical territorial division is a restraint of trade that is governed by the Rule of Reason of anti-trust law.
d. Evidence of predatory, abusive, and unethical conduct by a monopoly is insufficient to show intentional wrongful conduct for monopolization purposes.
QUESTION 36
Which of the following is false under the Uniform Partnership Act?
a. Each partner is personally liable for all of the debts of the partnership.
b. Any one partner may be held liable for the partnership’s entire indebtedness.
c. Title to land may be taken in the firm name.
d. The partnership must always have a written partnership agreement prepared by an attorney
QUESTION 37
Which of the following is a false statement?
A. The United States Supreme Court was created by the U.S. Constitution.
B. The United States District Court is the general jurisdiction trail court in the federal system.
C. Supreme Court decisions form legal precedents.
D. The minimum amount in controversy for a federal court to hear a case involving a federal question is $75,000.
QUESTION 38
Which of the following is a true statement?
A.Fraud by active concealment occurs when a party to a contract fails to disclose all of the known facts about the subject matter of the contract.
B. To be actionable for fraud, a misrepresentation must pertain to a future opinion.
C. The threat to bring a lawsuit to obtain an agreement can be grounds for duress if the suit is a legitimate one.
D. A mutual mistake renders a contract null and void.
QUESTION 39
Which of the following statements is false regarding the liability of partners?
a. Each partner is jointly and severally liable on all contracts made by or on behalf of the partnership.
b. Each partner is jointly and severally liable for all physical torts committed by a copartner in the course of partnership business.
c. Each partner is jointly and severally liable for frauds committed by a copartner in the course of partnership business, even though he or she does not know of or participate in the fraud.
d. Where there is joint and several liability, an action may be brought against any one or more of the partners or the partnership.
QUESTION 40
Athletic Goods, Inc. (AGI), agrees to sell sports equipment to Bob’s Sports Store. Before the time for performance, AGI clearly and firmly tells Bob that it will not deliver. This is
a. anticipatory repudiation.
b. perfect tender.
c. rejection of performance.
d. revocation of acceptance.