Question: Hughes Car sells a car to a minor for $10,000. Later, an adult offers to purchase the same motorcycle for $15,000. Hughes seeks to disaffirm the contract with the minor. Which of the following is the likely outcome?
Answer Options:
Hughes loses because only a minor can disaffirm a contract.
Hughes wins because a minor lacks contractual capacity.
Hughes wins because a motorcycle is not a necessity.
Answer: Hughes loses because only a minor can disaffirm a contract.
Question: Walking down the street, Peter finds a gas can and tosses it onto Paul’s property. Paul’s dog knocks the can over causing it to ignite and burn Paul’s lawn. What is the likely outcome of Paul’s lawsuit against Peter?
Answer Options:
Paul recovers all of his damages because Peter placing the gas can on his property is trespass.
Paul recovers nothing from Peter because Paul should have removed the can from his property.
Peter will be able to assert the affirmative defense of contributory negligence because Paul’s dog should not have been unleashed.
Paul recovers nothing from Peter because the dog knocking over the gas can was a superseding intervening event.
Answer: Paul recovers all of his damages because Peter placing the gas can on his property is trespass.
Question: Which of the following business entities is a franchisee least likely to operate as?
Sole proprietorship
S Corporation.
Corporation
LLC
Answer: Sole proprietorship
Question: The difference between a felony and misdemeanor is which of the following?
Answer Options:
There is no difference.
The penalties for a misdemeanor are usually more serious than they are for a felony.
A misdemeanor is a civil charge and a felony is a criminal charge.
The penalties for a felony are usually greater than they are for misdemeanors.
Answer: The penalties for a felony are usually greater than they are for misdemeanors.
Question: Which of the following is true with respect to stare decisis?
Answer Options:
It only applies if the same parties are involved in the case.
Whether it can be altered depends on the level of the court that rendered the decision.
It is a doctrine that is totally discretionary.
It is mandatory without exception.
Answer: Whether it can be altered depends on the level of the court that rendered the decision.
Question: In an effort to resolve a dispute without engaging in litigation, a procedure by which a neutral third party meets with both sides with the hope of arriving at a mutually agreed upon settlement is
Answer Options:
Litigation.
Mediation.
Arbitration.
Negotiation.
Answer: Mediation.
Question: If a shareholder of a corporation lacks a stock certificate, which of the following is true?
Answer Options:
The shareholder retains all rights as a shareholder.
The shareholder loses all rights as a shareholder.
The shareholder cannot vote.
The shareholder cannot sell his or her stock.
Answer: The shareholder retains all rights as a shareholder.
Question: Hy Roller is the chief operating officer of a corporation that operates casinos. One of the corporation’s floor bosses Ron Crook has been embezzling monies from a restaurant in the casino run by a charity. The charity sues Hy. Which of the following is true?
Answer Options:
Even if Hy failed to adequately supervise Ron, he would not be responsible for the embezzlement.
Only if Hy personally benefited from the embezzlement would he be personally responsible for the embezzlement.
Although Hy did not personally embezzle, he may bear some responsibility for the embezzlement for failure to adequately supervise Ron.
A corporate officer is never responsible for the wrong doing of rogue employees.
Answer: Although Hy did not personally embezzle, he may bear some responsibility for the embezzlement for failure to adequately supervise Ron.
Question: At a end of semester get together, the topic of taxes comes up. An enlightened person brings up the enactment of the 16th Amendment – authorizing Congress to impose an income tax. Fascinated you make this right on observation?
Answer Options:
The 16th Amendment is an example of amending the Constitution to allow Congress to impose income tax prior to that it was unconstitutional.
It was necessary because in all instances prior to the 16th Amendment when Congress enacted an income tax, the Supreme Court found it to be unconstitutional.
More than one of the alternatives is correct.
Answer: More than one of the alternatives is correct.
Question: Which of the following is true with respect to a mortgage?
A mortgage is not a contract.
A mortgage with respect to real estate is considered an interest in land.
A mortgage is never considered to be an interest in land.
A mortgage is required to be in writing only if it is associated with a pre or post-nuptial agreement.
Answer: A mortgage with respect to real estate is considered an interest in land.
Question: Victor E. Lapp gifts a tract of land to his daughter, Miranda Wrights. Which of the following is true?
Since the transfer is a gift, there is no need to execute a deed.
A deed would be executed; Victor would be the grantor and Miranda would be the grantee.
Only life estates in property can be gifted.
There cannot be a deed since there is no grantor or grantee.
Answer: A deed would be executed; Victor would be the grantor and Miranda would be the grantee.
Question: The difference between a direct suit against a corporation and a derivative suit against the corporation is which of the following?
In a derivative suit, a shareholder is seeking damages personal to the shareholder whereas in a direct suit, the shareholder is suing on behalf of the corporation for generalized damages.
There is no difference between the two.
In a direct suit, a shareholder is seeking damages personal to the shareholder whereas in a derivative suit, the shareholder is suing on behalf of the corporation for generalized damages.
A direct suit is the same as a derivative suit but with more plaintiffs.
Answer: In a derivative suit, a shareholder is seeking damages personal to the shareholder whereas in a direct suit, the shareholder is suing on behalf of the corporation for generalized damages.
Question: Which of the following is true with respect to a franchise relationship?
Answer Options:
It is a contract between two entities – where one entity is selling the product of another entity.
A partnership arrangement.
A shareholder corporation arrangement.
A sole proprietor relationship.
Answer: It is a contract between two entities – where one entity is selling the product of another entity.
Question: In which type of bankruptcy is a repayment plan necessary?
Repayment plans are not necessary in any bankruptcy.
Chapter 13.
Both Chapter 13 and Chapter 7.
Chapter 7.
Answer: Chapter 13.