1. Farmer grows grain on his farm in Nebraska for feed for the chickens that he raises on that same farm. He later sells the chickens to meat packing companies within the state of Nebraska.  The production of grain on the farm: A. Affects interstate commerce and, therefore, can be subject to federal regulation. B. Only indirectly affects interstate commerce and, therefore, can be subject to state, but not federal, regulation. C. Only indirectly affects interstate commerce, and thus is not subject to federal regulation under the commerce clause.  D. Directly affects intrastate commerce, but more indirectly affects interstate commerce and, therefore, can be subject to federal regulation under the commerce clause. 2 . Which of the following would typically take place in an appellate court? A. Direct examination of witnesses by attorneys. B. Choosing a jury. C. Testimony of witnesses. D. None of the above. 3. Larry, an Oregon resident, inherited land in Missouri. Through a Missouri attorney, Larry sold the land to Will, a Missouri resident, under a valid written sales contract. Larry later refused to go through with the sales deal, so Will sued Larry in a Missouri court.  Larry claimed the Missouri court had no jurisdiction over him because has never been in Missouri or had any other contacts with Missouri. Assume that the Missouri court has subject matter jurisdiction in this case. Does the Missouri court otherwise have jurisdiction to hear this case? A. No, because there is diversity of citizenship in the case, only a federal court has jurisdiction to hear the case. B. Yes, because the Missouri court can claim in rem (property) jurisdiction over Larry in this case as the owner/seller of the Missouri property. C. Yes, because the Statute of Frauds applies to the sale of land, and the contract was written, the Missouri court has personal jurisdiction over Will, and Larry. D. No, because although the Missouri court has property jurisdiction over Will, the court does not have the necessary property jurisdiction over Larry in this case. 4. Jonah hired Marty, who is 16 years old, as his agent to buy up to a maximum of 50 used Dell 101 model laptops at a price of $200 each, or less. Marty bought 30 used Dell 101 model laptops for $100-200 using a written contract. Jonah was pleased with the laptops and accepted the contract and paid for the 20 laptops. Marty then bought 25 more Dell 101 model laptops for $150 each on Jonah’s behalf. Marty signed a written contract for the purchase of these 25 laptops with the seller, Used Tech, Inc. Jonah refused to accept and pay for these 25 laptops. What reason would justify Jonah’s refusal to pay for the laptops and honor the contract with Used Tech, Inc.? A. The contract with Used Tech is illegal because Marty is a minor.  B. There is no justification, the contract with Used Tech is valid because Marty signed a contract with Used Tech for the purchase of the 25 laptops.  C. ...

1. 1. Farmer grows grain on his farm in Nebraska for feed for the
chickens that he raises on that same farm. He later sells the
chickens to meat packing companies within the state of
Nebraska. The production of grain on the farm:
A.
Affects interstate commerce and, therefore, can be subject to
federal regulation.
B.
Only indirectly affects interstate commerce and, therefore, can
be subject to state, but not federal, regulation.
C.
Only indirectly affects interstate commerce, and thus is not
subject to federal regulation under the commerce clause.
D.
Directly affects intrastate commerce, but more indirectly affects
interstate commerce and, therefore, can be subject to federal
regulation under the commerce clause.
2
. Which of the following would typically take place in an
appellate court?
A.
Direct examination of witnesses by attorneys.

2. B.
Choosing a jury.
C.
Testimony of witnesses.
D.
None of the above.
3.
Larry, an Oregon resident, inherited land in Missouri. Through
a Missouri attorney, Larry sold the land to Will, a Missouri
resident, under a valid written sales contract. Larry later refused
to go through with the sales deal, so Will sued Larry in a
Missouri court.
Larry claimed the Missouri court had no jurisdiction over him
because has never been in Missouri or had any other contacts
with Missouri. Assume that the Missouri court has subject
matter jurisdiction in this case. Does the Missouri court
otherwise have jurisdiction to hear this case?
A.
No, because there is diversity of citizenship in the case, only a
federal court has jurisdiction to hear the case.
B.
Yes, because the Missouri court can claim
in rem
(property) jurisdiction over Larry in this case as the

3. owner/seller of the Missouri property.
C.
Yes, because the Statute of Frauds applies to the sale of land,
and the contract was written, the Missouri court has personal
jurisdiction over Will, and Larry.
D.
No, because although the Missouri court has property
jurisdiction over Will, the court does not have the necessary
property jurisdiction over Larry in this case.
4.
Jonah hired Marty, who is 16 years old, as his agent to buy up
to a maximum of 50 used Dell 101 model laptops at a price of
$200 each, or less. Marty bought 30 used Dell 101 model
laptops for $100-200 using a written contract. Jonah was
pleased with the laptops and accepted the contract and paid for
the 20 laptops.
Marty then bought 25 more Dell 101 model laptops for $150
each on Jonah’s behalf. Marty signed a written contract for the
purchase of these 25 laptops with the seller, Used Tech, Inc.
Jonah refused to accept and pay for these 25 laptops. What
reason would justify Jonah’s refusal to pay for the laptops and
honor the contract with Used Tech, Inc.?
A.
The contract with Used Tech is illegal because Marty is a
minor.
B.

4. There is no justification, the contract with Used Tech is valid
because Marty signed a contract with Used Tech for the
purchase of the 25 laptops.
C.
The contract with Used Tech for the 25 laptops is voidable
because Marty acted outside the scope of the agency agreement
with Jonah.
D.
This contract is voidable under the UCC because Marty is not a
merchant.
5.
Mimi took her granddaughter to Roller Coaster World theme
park often to ride the Thriller Diller roller coaster. The roller
coaster is in a fenced, gated area. Customers pay for the ride as
they board the Thriller Diller, or at the end of the ride as they
leaved the gated area.
On Saturday, Mimi and her granddaughter boarded the Thriller
Diller, and waved at the attendant as the ride began. At the end
of the ride, Mimi refused to pay for the ride.
The most likely conclusion is that:
A.
Mimi’s actions implied that she intended to pay for the ride; she
is legally bound to pay for the ride.
B.
Mimi’s actions implied that she intended to pay for the ride, but

5. she is not legally bound to pay as there was no written
agreement, or evidence of an agreement, such as a ticket for the
ride.
C.
Applying the subjective intent test, Mimi is not bound to pay
for the ride because she and the attendant did not discuss the
need for paying for a ticket for the ride.
D.
Applying the objective test, there was no clearly communicated
offer and acceptance, thus no enforceable contract; Mimi is not
bound to pay for the ride.
6.
Sandy orally agreed to sell Rolf her house for $400,000.00. Rolf
gave Sandy a check for $10,000.00 as deposit on the house.
They agreed to complete the sale on a specific day in 3 weeks
when Rolf would pay Sandy the remaining $390,000.00 and
Sandy would give the deed for the house to Rolf.
2 weeks later Sandy went to Rolf’s home, returned his
$10,000.00 check, and told Rolf she had changed her mind
about selling her house.
Rolf believes they had a binding sales contract and that Sandy
must sell him the house because he gave Sandy a deposit for the
purchase of the house. Sandy believes she and Rolf did not have
a binding contract.
What would you conclude about the agreement between Sandy
and Rolf?
A.

6. Sandy and Rolf had a binding contract; both agreed to the sale
and oral contracts can be enforceable.
B.
Sandy and Rolf had a binding contract because Rolf gave
consideration for the contract by giving Sandy the $10,000.00
deposit.
C.
Sandy and Rolf did not have a binding contract as the contract
had not been fully performed.
D.
Sandy and Rolf did not have a binding contract; the contract
needed to be written to be enforceable under the circumstances.
7.
Edgar, an independent contractor, was hired by ABC
Enterprises, Inc. (ABC) as a consultant to assist ABC in
implementing a new IT system. Edgar agreed to provide
consulting advice to ABC 10 hours per week for 6 weeks. In
exchange, ABC agreed to pay Edgar $2500 per week, payable in
a lump sum of $15,000 at the end of 6 weeks. Edgar and ABC
had a valid written contract including these terms.
After 4 weeks of consulting, Edgar told ABC he needed an
additional $500 per week for the remaining 2 weeks to cover
expenses. Edgar said ABC needed to pay him a total of $16,000
for the 6 weeks of consulting. ABC orally agreed to amend the
contract and pay the additional money.
At the end of 6 weeks, ABC was very satisfied with Edgar’s

7. consulting work. ABC gave Edgar a check for $15,000 for the
consulting but refused to pay the additional $1000 Edgar had
requested.
Edgar claims he and ABC had a valid contract to pay him an
extra $1000, for a total of $16,000.
What is true about the modified agreement, and the amount
owed to Edgar?
A.
The modified agreement is enforceable because both parties
gave legal consideration for the new contract terms:
ABC agreed to pay an extra $1000, Edgar agreed to continue to
consult for ABC.
B.
The modified agreement is enforceable because, under the UCC
rules, all contract modifications are valid if the parties consent.
C.
The modified agreement is unenforceable; ABC and Edgar
agreed orally to the extra $1000, but there was no written
contract covering the new contract terms.
D.
The modified agreement is unenforceable because both parties
did not give new consideration for the contract modification
contract.
8.

8. Alternative dispute resolution (ADR) is an important
alternative for resolving civil disputes because ADR can:
A.
Promote judicial efficiency.
B.
Promote compromise and consensus between parties.
C.
Promote quicker resolutions to disputes.
D.
All of the above.
E.
Two of the above only.
9. Park Pharmaceuticals, Inc. manufactured a headache pain
relief drug that was marketed under the trade name, Free. A
study by the federal Food and Drug Administration (FDA)
revealed that Free is likely to cause high blood pressure in
users. Consequently, the U.S. Congress enacted legislation
prohibiting the shipment and sale of Free in the U.S., pending
further testing by Park and the FDA. This law banning Free is
probably:
A. Constitutional because the U.S. Congress has the power to
regulate activity that directly affects interstate commerce and
the ban on the sale of Free is clearly an effort to regulate
commerce of pharmaceuticals.

9. B. Constitutional under the police power doctrine to protect
consumers.
C. Unconstitutional because the law violates Park’s rights under
the equal protection clause of the U.S. Constitution because the
law treats Park differently than other pharmaceutical
companies.
D. Unconstitutional because there is no conclusive evidence that
Free is unsafe for consumers.
10.
Wendell and Langdon signed a business contract with a clause
that provides that if a dispute arises they will submit to binding
arbitration to resolve the dispute. After they had been doing
business together for a year, a dispute arose under the terms of
the contract. Rather than submit to arbitration, Wendell filed a
lawsuit against Langdon. Most likely the court will:
A.
Hear the lawsuit in a trial, and then compel Wendell to submit
to arbitration, if appropriate under the circumstances.
B.
Hear the lawsuit because Wendell cannot be compelled to
submit to arbitration as that would be a violation of his
constitutional rights; he is entitled to a jury trial upon request.
C.
Require Wendell to submit to arbitration to resolve the dispute.
D.

10. Require Wendell and Langdon to enter into mediation to reach
an agreement.
11
. An increasing number of food trucks operate in the city center
of Washington near tourist attractions and government offices.
Sometimes the food trucks park on the sidewalks, curbside in
the streets, and in parking spaces and tourist bus routes, thus,
impeding pedestrians and interfering with vehicle traffic. The
city enacted an ordinance that permits food trucks to operate
only in designated, marked areas off sidewalks and off streets
within the city.
Several food truck owners are upset and believe the ordinance is
an unconstitutional interference with their rights to operate
private businesses. They also believe the ordinance
discriminates against them because brick and mortar businesses
in the area do not have similar restrictions.
Which of the following statements is true about the ordinance?
A.
The ordinance unduly discriminates against the food truck
vendors as other businesses in the area are not similarly
restricted.
B.
The ordinance is a violation of the food truck vendors’
constitutional rights to operate their private businesses without
undue interference from the government.
C.

11. The city can justify the ordinance as a constitutional exercise of
the right of governments to regulate private businesses for any
reason under the interstate commerce clause.
D.
The city can justify the ordinance as a constitutional exercise of
its police power to protect the safety and welfare of the general
public.
12
. Computers, Inc. (Computers) and Management Enterprises
Company (Management) agreed that Computers would sell
Management its computing business, including the land on
which the business was situated, for $600,000. Both Computers
and Management knew at the time the contract was formed that
the business and land were actually worth $1,000,000. Is this a
valid enforceable sales contract?
A.
No, because Computers would not have agreed to sell the
business for 40% less than its value unless it was under duress
by Management to sell.
B.
No, because $600,000 is not valid consideration for a business
worth $1,000,000.
C.
Yes, provided the contract was in accordance with state
statutory law that permits real estate sales for 40% or more
below market value.

12. D.
Yes, provided the contract was in writing, in accordance with
the Statute of Frauds, and the parties freely consented.
13.
Fay was admitted as a new partner in Charmed City
Chocolates, a general partnership, in May 2017. In June, while
delivering a chocolate order to a residence, Charmed City’s
delivery employee negligently crashed into the rear of a parked
car destroying a bicycle mounted on the back of the car and
damaging the rear of the car.
Which of the following is true about liability for the employee’s
negligence?
A.
Charmed City is not liable for the accident as it was the result
of the employee’s negligence.
B.
Charmed City is liable for the accident, but Fay is not liable as
she was admitted to the partnership only 1 month prior to the
accident.
C.
The delivery driver is an employee-agent of Charmed City, and
Charmed City is liable for the acts of its employees.
D.
The delivery driver is an employee-agent of Charmed City, but

13. Charmed City is not liable for the negligent acts of its
employees.
14.
Accounting Temps, Inc. (Temps) has 50 employees who work
in offices on two floors of Temps’ business office building.
There are no elevators in the building. Taylor, a Temps
employee for three years, has an office on the second floor.
Following a fall, Taylor has a permanent leg injury and
difficulty walking up and down stairs. Taylor requested to be
moved to a first floor office, but Temps stated there is no space
available on the first floor and that it would be unfair to move
someone else from a first floor office because all employees on
the first floor have seniority over Taylor. Temps promised to
move Taylor when a first floor office becomes available. In the
meantime, Temps offered to have another employee help Taylor
up and down the stairs to the second floor daily.
Is Temps handling the situation properly?
A.
Yes, Temps is required to make reasonable accommodation for
Taylor, and has done so by promising to move Taylor to a first
floor office as soon as possible, and by offering to help Taylor
on the stairs daily.
B.
Yes, Temps is required to make “reasonable accommodation”
for Taylor, but not at the inconvenience of other employees who
might have to move offices.
C.
No, Temps should immediately move Taylor to a first floor

14. office or find temporary first floor office space until permanent
office space is available on the first floor.
D.
No, Temps should install an elevator to the second floor if first
floor office space is available.
15.
Jan went to a truck dealership and said that she wanted to buy
a truck capable of hauling a 5000-pound load, and that she
wanted the salesperson to recommend an appropriate truck. The
salesperson selected a certain truck for Jan that he stated would
haul a 5000-pound load. Jan bought the truck the salesperson
selected. The truck was mechanically sound, but would haul
only a 2500-pound load. If Jan sues the dealership, which
product liability claim would provide Jan with the best chance
of winning?
A.
Breach of implied warranty of fitness for a particular purpose.
B.
Breach of contract.
C.
Breach of implied warranty of merchantability.
D.
Negligence, because the truck that could not handle a 5000-
pound load.

15. E.
All of the above.
16.
Uncle promised to buy his nephew, Dave, a new truck to use in
his business. Counting on having a new truck, Dave sold his old
truck. Uncle now refuses to buy Dave the truck. Dave needs the
truck to operate his business and to get to his business office.
Can Dave possibly enforce the promise and require Uncle to buy
the truck for him?
A.
Yes, because the truck is a necessity for Dave and all contracts
for necessities are binding and enforceable for all parties even
if contract formation is flawed.
B.
Yes, under promissory estoppel if Dave reasonably relied on
Uncle’s promise and sold his truck.
C.
No, because Dave was not unjustly enriched because he did not
receive the truck.
D.
No, because Uncle’s promise to Dave was a gift to Dave; Dave
gave consideration, but Uncle did not.
17.
Assume you are the owner of a small business, Greetings,

16. Inc., that sells greeting cards to retailers. Card Sensations sent a
written offer to you to buy 1,000 birthday cards for $0.60 each
for a total of $600. You can accept the Card Sensations offer
by:
A.
Sending written notice to Card Sensations promising to ship the
cards.
B.
Not communicating further with Card Sensations, but by
promptly shipping the cards.
C.
Accepting the offer by writing, “Greetings, Inc. accepts your
offer to buy 1000 birthday cards for $0.60” and sending the
written acceptance to Card Sensations.
D.
A
ll of the above could be valid acceptance.
18.
Carl parked his car on a steep hill, leaving the car in neutral
and failing to engage the emergency parking brake. The car
rolled down the hill and crashed into the garage door of Chase’s
house, damaging the door beyond repair.
Can Chase recover damages from Carl for the damage to his
garage door?
A.

17. Yes, because Carl was negligent in parking the car.
B.
Yes, if Carl is the owner of the car because he left the car
unattended and is responsible for any damage caused by the car.
C.
No, because it is not essential to engage the emergency parking
brake to safely park a car.
D.
No, because the car’s rolling down the hill was unforeseeable.
19.
Zoe operates Wood Rail Center Sports, an athletic equipment
shop, as a sole proprietorship. She is concerned about her tax
liability, and wondering whether to continue as a sole
proprietorship or to reorganize under another business structure.
Which of the following would be the best advice for Zoe?
A.
Zoe should remain a sole proprietorship; she would have the
same tax liability if she reorganizes as a LLC.
B.
Zoe should remain a sole proprietorship; there are no business
taxes on sole proprietorships.
C.
Zoe should consider reorganizing as a LLC to reduce her tax

18. liability.
D.
Zoe should consider reorganizing as a corporation to avoid
personal tax liability on business income.
20
. Linda was a guest in the Mardell Hotel. While walking across
the hotel lobby, Linda slipped and fell on the wet floor and
broke her leg. Linda required surgery to repair the broken leg.
Just prior to Linda’s fall, the hotel floor had been washed by the
maintenance staff. The staff had placed a “wet floor” sign on
the lobby floor. Linda now wants to collect damages to
compensate her for medical expenses for her broken leg.
Is it likely Linda can collect compensatory damages to cover
her medical expenses?
A.
No, there was a sign posted warning about the wet floor; Linda
assumed the risk by walking across the wet floor.
B.
No, it is reasonable the hotel staff would need to clean the floor
and after posting a warning sign, it is not foreseeable that
people would walk on the wet floor and fall.
C.
Yes, the hotel had a duty to protect guests from known harm on

19. the premises of the hotel.
D.
Yes, unless the warning sign was large and conspicuous.
21. Eagle, Inc. sells motor vehicle parts to dealers. In response
to a dealer’s order, Eagle shipped a crate with a label that read,
“Crate contains one 150-horsepower diesel engine.” This
statement is:
A.
An express warranty.
B.
An implied warranty of merchantability.
C.
An implied warranty of fitness for a particular purpose.
D.
None of the above
.
22
. In December 2016, Charlotte became the 25th partner with
International Enterprises, an existing general partnership with
24 partners. In April 2017, an International Enterprises
partnership debt came due in full in the amount of $100,000.
The debt was originally incurred in June 2016. Charlotte is:
A.

20. Only liable for the debt up to the amount of her capital
contribution to the partnership. B.
Not liable for the debt because the debt was incurred prior to
her joining the partnership.
C.
Liable for her pro-rata one-twenty fifth share of the total debt
along with the other partners.
D.
Liable for one-twenty fifth of the debt if all the other partners
default on the debt ad refuse to pay.
23.
A orally offered to sell B 100 electric toothbrushes, but
neglected to state the price. B accepted the offer via email and
requested delivery within 2 weeks. A received the acceptance
email, but immediately thereafter, A tried to get out of the deal.
Assume that A and B are both merchants, as defined under the
UCC, and have engaged in sales contracts together previously.
At this point which of the following is most likely to be true
about this agreement between A and B?
A.
There is no valid contract because the offer is too indefinite.
B.

21. There is no valid contract because any offer for the sale of
goods must be in writing and signed by both parties.
C.
There is a valid, enforceable contract.
D.
There is a valid, enforceable contract only if either A or B are
engaged in international business which makes the agreement
subject to CISG (Contract for International Sale of Goods)
rules.
24.
Someone who recovers damages for breach of contract
typically can recover:
A.
Only those compensatory damages/losses that can be proven
with reasonable certainty.
B.
For all consequences of the breach, e.g., pain and suffering,
whether or not the damages are foreseeable.
C.
Only for foreseeable damages.
D.
Punitive damages.

22. 25.
Cable Corp. contracted online to buy several TV movies from
Movies, Inc. Both parties signed the contract with electronic
signatures. This contract is probably:
A.
Valid and enforceable.
B.
Valid and enforceable only if the UCC rules apply to the
agreement.
C.
Unenforceable under UCITA because electronic signatures are
not valid in 2017.
D.
Unenforceable because it was not a click-on contract.
26
. A computer Dealer whose place of business is in Atlanta
contracts on August 12 to sell 100 personal computers to a
Retailer whose place of business is in Chicago. The contract
does not mention anything about the time or place of delivery.
What are the delivery requirements for this contract?
A.
At the Retailer’s place of business within a reasonable time
from August 12.

23. B.
At a convenient place so long as the Dealer notifies Retailer of
the place and time of delivery.
C.
At a reasonable place on August 12.
D. There is no obligation for the computer dealer to deliver the
computers as this is not a
valid enforceable contract because the terms are too vague.
27.
Johnston Paints contracted in writing with Buyer to deliver 100
one-gallon cans of exterior house paint to Buyer on or before
September 15. On August 15, Johnston informed Buyer via
email that it will be unable to deliver the paint as agreed. Buyer
demanded that Johnston perform the contract, but Johnston still
refused and stated the refusal in a letter to Buyer. Which of the
following best describes Buyer’s rights in this situation?
A.
Buyer must treat the contract as breached on August 15.
B.
Buyer must wait until September 15 to determine with certainty
if there has been a breach before entering into another contract
to purchase paint.
C.
Buyer may treat the contract as breached on August 15 and

24. enter into a contract with another paint supplier.
D.
None of the above are correct; Buyer must file a lawsuit against
Johnston so that court may determine if a breach of contract has
occurred.
28.
Which of the following statements by a salesperson would
create an express warranty for a buyer?
A.
“This refrigerator is a great value; you will not find a better
deal.”
B.
“This is the best TV we sell; I plan to buy one myself.”
C. “This car is the most reliable and safest vehicle on the road
today.”
D.
“This truck had the engine replaced last year.”
29.
Charles
r
eceived an offer from Seller that stated: "I will sell you my car
for $8,500. You have 10 days to accept." On day 4, Charles
called Seller and stated he would pay $8,000 for the car; Seller
refused to accept $8,000. Which of the following is true?

25. A.
There is no contract; Seller is free to sell the car to another
buyer.
B.
Charles has 6 more days to consider Seller’s offer to buy the car
for $8,500; Seller cannot sell the car to another buyer for 6
days.
C.
If Seller changes her mind within 6 days, she can make Charles
buy the car for $8,000.
D.
If Charles later tells Seller by day 10 that he will buy the car for
$8,500, a contract is automatically formed.
30.
Buyer and Seller orally agree to a contract for the sale of 400
shirts at $10 per shirt. Seller fails to perform and deliver the
shirts; Buyer sues. This contract is:
A.
Enforceable because the Statute of Frauds does not ever apply
to sales of shirts.
B.
Unenforceable unless both parties are merchants.
C.

26. Unenforceable because the contract is not in writing.
D.
Enforceable; the Statute of Frauds is applicable to this
agreement, but oral contracts are binding if both parties are
merchants.
Class resources:
https://www.saylor.org/site/textbooks/Advanced%20Business%2
0Law%20and%20the%20Legal%20Environment.pdf
https://www.saylor.org/site/textbooks/Advanced%20Business%2
0Law%20and%20the%20Legal%20Environment.pdf