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1. How does the doctrine of stare decisis help in creating stability in a legal system?

A) by ensuring that witnesses of a case will be protected by the state

B) by ensuring that the legal rights of a defendant are preserved

C) by allowing the use of precedence in deciding future cases

D) by allowing the use of writs

2. The state of NamNam in the United States passes a statute containing numerous requirements, some conflicting with the federal rules, covering the licensing of airplane pilots and the operation of aircraft. A pilot’s constitutional challenge to this state statute would succeed on the basis of ________.

A) the preemption doctrine

B) the substantive due process

C) the procedural due process

D) the Equal Protection Clause

3. Which of the following statements is true of the U.S. Supreme Court?

A) The U.S. Supreme Court’s decisions are appealable.

B) The U.S. Supreme Court hears appeals only from the federal circuit courts of appeals.

C) The U.S. Supreme Court does not hear any new evidence or testimony in reviewed cases.

D) The U.S. Supreme Court does not grant any oral hearings to the parties.

4. Which of the following statements is true regarding the relationship between law and ethics?

A) All ethical standards have been enacted as law.

B) Ethics establish a minimum degree of conduct while the law demands more.

C) Ethics and the law are completely unrelated to each other.

D) Law establishes a minimum degree of conduct while ethics demand more.

5. Orlando opened a hot dog stand in Brooklyn which unfortunately did not earn him a profit. He had borrowed $5,000 from the bank to set it up, which had to be repaid to the bank in two days. However, Orlando’s friend, Bob, agreed to partner with him starting the subsequent month. From which of the following sources can the bank recover its $5,000 with interest?

A) Orlando’s secondary financer

B) Orlando’s savings account

C) Orlando’s family

D) Bob, Orlando’s prospective business partner

6. ________ is a general rule of corporate law that provides that generally shareholders are liable only to the extent of their capital contributions for the debts and obligations of their corporation and are not personally liable for the debts and obligations of the corporation.

A) Limited-purpose clause

B) Limited liability of shareholders

C) Preferred shareholder rule

D) Nonparticipating shareholder rule

7. Helen works as the vice president of Gotspeed Corporation, a company that develops and sells sports shoes. Nestor, a home-based shoemaker, meets Helen privately in order to present a model for a more cost-efficient and durable shoe. Instead of taking the idea to Gotspeed’s board of directors, Helen pays Nestor’s asking price and purchases the Anklator model for herself. Helen leaves Gotspeed Corporation and forms her own company that manufactures and markets the Anklator shoe models. What breach of the duty of loyalty has Helen committed here?

A) piercing the corporate veil

B) usurping a corporate opportunity

C) breaching the business judgment rule

D) denial of right to first refusal

8. Philip and Deborah form an LLC. Philip contributes $50,000 capital, and Deborah contributes $75,000 capital. They do not have an agreement as to how profits are to be shared. If the LLC makes $100,000 profit in its first year, how will the profit be divided among the members?

A) Philip gets $30,000, and Deborah gets $70,000.

B) Philip gets $50,000, and Deborah gets $50,000.

C) Philip gets $25,000, and Deborah gets $75,000.

D) Philip gets $35,000, and Deborah gets $65,000.

9. Martin, who wants to sell a house he owns, authorizes his concierge, Wilhelm, to find a potential buyer, and finalize a deal above a stipulated price. Wilhelm contracts Chris, a real estate broker, and intends him to only find a potential buyer and send them over to Wilhelm for the sale. Martin then contracts ReNowait Goodhouses, a home improvement company to renovate the house. ReNowait completes their work and Martin pays them. Chris then searches for a suitable buyer and finds one in George. George buys the house and Chris is paid for his services. Which of the following roles does ReNowait Goodhouses perform?

A) agent

B) independent contractor

C) principal

D) trustee

10. Which of the following is true of workers’ compensation?

A) Families of workers cannot claim workers’ compensation despite the death of the worker.

B) Workers’ compensation is only awarded for injuries resulting from the job.

C) The claim for workers’ compensation must be filed with the employer.

D) Workers’ compensation is a fixed amount throughout the country.

11. Which of the following best describes quid pro quo sex discrimination?

A) employment discrimination because of pregnancy, childbirth or related medical conditions

B) discrimination where sexual favors are requested in order to obtain a job or be promoted

C) discrimination in hiring or promotion based on the gender of the employee under consideration

D) selective or partial treatment offered to an employee or a group of employees based on their gender

12. Gary Gorgeous is a famous movie star. A tabloid published an interview with his ex-girlfriend in which she falsely claimed that Gary was completely bald and had been wearing a wig for several years. Gary can sue his ex-girlfriend for ________.

A) libel

B) invasion of the right to privacy

C) tort of appropriation

D) negligence

13. Jean says to Joan, “If you promise to feed my dog each day while I am out of town next week, I’ll pay you $100.” Joan replies, “I’ll absolutely do that, I hope you have a nice trip.” Joan then feeds the dog, after which Jean paid her. At what point did a contract come into existence?

A) when Jean made the offer to Joan

B) when Joan said that she would feed Jean’s dog

C) when Joan completed the final feeding of Jean’s dog

D) when Jean paid the $100 to Joan

14. Which of the following is true for a minor under the infancy doctrine?

A) A minor is bound to the adult’s decisions in a contract between them.

B) A minor can disaffirm contracts he or she has entered into with adults.

C) A minor cannot enter into a legal contract with another minor.

D) A minor cannot choose to enforce a contract at his or her whim.

15. Jack goes to a store to purchase a fully-automatic washing machine. He browses through several models of washing machines but does not let the salesperson know that he wants a fully-automatic model. While signing the sales contract, he does not notice that the model he is purchasing is a semi-automatic machine. After purchase, which of the following options does Jack have?

A) Exchange the machine with a fully-automatic one and sue the store if it does not accept it.

B) Demand a full cash refund from the store for fraud in concealment.

C) Sue the store for its innocent misrepresentation.

D) Keep the semi-automatic washing machine as he made a unilateral mistake.

16. If a competitor reverse engineers a trade secret, then the competitor is ________.

A) allowed to use the trade secret but not the original trademark

B) rightfully allowed co-ownership to original trademark of the trade secret

C) disallowed to gain commercially from the trade secret

D) obliged by law to release the trade secret to its original owner

17. Techstate, a hardware manufacturer in the United States, has an existing contract with a client based in the Republic of Karthasia, which is going through a civil war. The resulting upheaval in that country has led to some of the shipments to the client being destroyed by warring factions. As a sanction against the country, the United States government places an embargo on all exports to that country by U.S. firms. What will be the state of the contract between Techstate and the client in Karthasia after the embargo?

A) It will be terminated due to destruction of subject matter.

B) It will be terminated due to incompetency of the offeror.

C) It will be terminated due to lapse of time.

D) It will be terminated due to supervening illegality.

18. The most common remedy for a breach of contract is an award of ________.

A) injunctions

B) substitute contracts

C) reformations

D) monetary damages

19. Which of the following constitutes insider trading?

A) An employee makes a profit by personally purchasing shares of the corporation prior to public release of favorable information.

B) A manager purchases all shares of a corporation available to the public.

C) A director purchases enough shares of a public company to gain a majority stake in its management.

D) An employee sells his shares of the company to another employee without notice to the company.

20. Utilities Ltd. decided to go public by an initial public offering. It sold securities, some of which were bought by James Jefferson. Six months later, Mr. Jefferson sold the Utilities shares he had purchased to Martha Graham and Mark Franco. Two years later, Mr. Jefferson bought back the Utilities shares from Ms. Graham and Mr. Franco and made a profit out of both transactions. Who is the issuer in this scenario?

A) Utilities Ltd.

B) James Jefferson

C) Martha Graham

D) Mark Franco

BONUS QUESTION

*Investor Protection – Why is there a need for investors to be protected? When did this concept originate in the US? Explain one legal protection that an investor gets, and the source of this protection (what law)?

*Relevant Market – Antitrust law looks at market definition to determine if there is a monopoly or if a merger should be allowed. Why? Is the definition of markets static? Can you give an example of a market that has changed over recent years that would impact a legal analysis as to whether a company has a monopoly or should be allowed to buy a competitor?