BLAW 371 EXAM QUESTIONS AND ANSWERS 2026
Sole proprietorships compromise the majority... In a lawsuit against a sole
proprietorship for breach of contract may the owner be personally liable for the breach?
- Answers -Yes. The sole proprietorship has no existence apart from its individual
member.
Directors of a Corporation have a fiduciary relationship to the corporation. They have a
duty of ___ and ___ - Answers -loyalty and care
T/F - In a corporation, shareholder liability is generally limited to the extent of the
shareholder's contributed capital. - Answers -True
Which is NOT a right or responsibility of a shareholder of a corporation - Answers -To
act as an agent to the corporation binding the corporation in contract
The ____ is a legal presumption that in making a business decision the directors of a
corporation acted on a informed basis, in good faith.... - Answers -Business Judgement
Rule
Under state law, what must the member(s) of a limited liability company file with the
secretary of state's office in order to from an LLC? - Answers -Articles of Organization
This is the prima facie element, according to the court in Fenwick v Unemployment
Compensation Commission for determining the existence of a partnership - Answers -
Profit Sharing
Persons who are not partners as to one another can still be considered partners as to
third parties - Answers -True
WRONG WRONG WRONG T/F: A partnership agreement can be dissolved by
agreement or by count order. When the partnership is dissolved "by agreement" it
means that the dissolution must be included in the express terms of the Partnership
Agreement document - Answers -True
WRONG WRONG WRONG In order to disregard the separate legal personhood of a
corporation and "pierce the corporate veil" what requirements must be met under the
Van Dorn test? - Answers -Unity of interest, adherence to separate corporate
personhood would sanction a fraud, and criminal conduct by the individual owner
In Squish La Fish v. Thomco Specialty Products, involving an adhesive that did not work
as claimed, the appeals court held that the claim of negligent misrepresentation.. -
Answers -Could proceed because the defendant may have negligently provided false
information
, In MacPherson v. Buick Motor the New York Court of Appeals held for MacPherson for
injuries caused by defective wheels on his Buick. What legal requirement had to exist
between manufacturers and harmed consumers prior to the MacPherson decision? -
Answers -Privity of contract must exist between manufacturer and consumer
In a cause of action for tort committed negligently, the actor is liable for an invasion of a
legally recognizable interest of another if the plaintiff can show the four elements
common to all negligence claims, which are: - Answers -Duty, breach, causation, and
damages
WRONG WRONG WRONG In Palsgraf v. Long Island railroad the New York Court of
appeals did not find the railroad liable in a cause of action for negligence. Would it be
more likely that the railroad would be held liable for negligence if the Court would have
used the "substantial factor" legal test? - Answers -Yes, the substantial factor test
allows a negligent actor to be liable even when the harm to the plaintiff would have
occurred without the negligent conduct.
In Greenman v. Yuba Power Product, Greenman was injured .... The Supreme Court of
California imposed liability on Yuba Power Products based on what legal theory? -
Answers -Strict Liability of Tort
Which of the following is not required to be shown in a successful action on the theory
of strict liability tort? - Answers -The producer acted negligently in producing the item
WRONG WRONG WRONG To prove the tort of intentional misrepresentation or fruad
ome of the elements that the plaintiff must prove is that he or she ____ ______ (two
words) on a misstatement of material fact intentionally made by the defendant -
Answers -Falsified information
The tort of Libel is the publication or broadcast of defamatory matter in writing or print. -
Answers -Libel
WRONG WRONG WRONG The tort of battery is the intentional creation of an
apprehension of a harmful or offensive contact without such harmful or offensive contact
resulting. - Answers -battery
The formation of a contract requires a bargain in which there is a manifestation of
mutual assent to the exchange, AND a
_____ . The manifestation of mutual assent to an exchange ordinarily takes the form of
an _____ by one party followed by an a____ by the other party. - Answers -
consideration, offer, acceptance
Buyer enters into a contract for the sale of 10,000 LED lightbulbs from the Edison
Company. Edison promptly ships 10,000 non-conforming traditional filament lightbulbs.
Sole proprietorships compromise the majority... In a lawsuit against a sole
proprietorship for breach of contract may the owner be personally liable for the breach?
- Answers -Yes. The sole proprietorship has no existence apart from its individual
member.
Directors of a Corporation have a fiduciary relationship to the corporation. They have a
duty of ___ and ___ - Answers -loyalty and care
T/F - In a corporation, shareholder liability is generally limited to the extent of the
shareholder's contributed capital. - Answers -True
Which is NOT a right or responsibility of a shareholder of a corporation - Answers -To
act as an agent to the corporation binding the corporation in contract
The ____ is a legal presumption that in making a business decision the directors of a
corporation acted on a informed basis, in good faith.... - Answers -Business Judgement
Rule
Under state law, what must the member(s) of a limited liability company file with the
secretary of state's office in order to from an LLC? - Answers -Articles of Organization
This is the prima facie element, according to the court in Fenwick v Unemployment
Compensation Commission for determining the existence of a partnership - Answers -
Profit Sharing
Persons who are not partners as to one another can still be considered partners as to
third parties - Answers -True
WRONG WRONG WRONG T/F: A partnership agreement can be dissolved by
agreement or by count order. When the partnership is dissolved "by agreement" it
means that the dissolution must be included in the express terms of the Partnership
Agreement document - Answers -True
WRONG WRONG WRONG In order to disregard the separate legal personhood of a
corporation and "pierce the corporate veil" what requirements must be met under the
Van Dorn test? - Answers -Unity of interest, adherence to separate corporate
personhood would sanction a fraud, and criminal conduct by the individual owner
In Squish La Fish v. Thomco Specialty Products, involving an adhesive that did not work
as claimed, the appeals court held that the claim of negligent misrepresentation.. -
Answers -Could proceed because the defendant may have negligently provided false
information
, In MacPherson v. Buick Motor the New York Court of Appeals held for MacPherson for
injuries caused by defective wheels on his Buick. What legal requirement had to exist
between manufacturers and harmed consumers prior to the MacPherson decision? -
Answers -Privity of contract must exist between manufacturer and consumer
In a cause of action for tort committed negligently, the actor is liable for an invasion of a
legally recognizable interest of another if the plaintiff can show the four elements
common to all negligence claims, which are: - Answers -Duty, breach, causation, and
damages
WRONG WRONG WRONG In Palsgraf v. Long Island railroad the New York Court of
appeals did not find the railroad liable in a cause of action for negligence. Would it be
more likely that the railroad would be held liable for negligence if the Court would have
used the "substantial factor" legal test? - Answers -Yes, the substantial factor test
allows a negligent actor to be liable even when the harm to the plaintiff would have
occurred without the negligent conduct.
In Greenman v. Yuba Power Product, Greenman was injured .... The Supreme Court of
California imposed liability on Yuba Power Products based on what legal theory? -
Answers -Strict Liability of Tort
Which of the following is not required to be shown in a successful action on the theory
of strict liability tort? - Answers -The producer acted negligently in producing the item
WRONG WRONG WRONG To prove the tort of intentional misrepresentation or fruad
ome of the elements that the plaintiff must prove is that he or she ____ ______ (two
words) on a misstatement of material fact intentionally made by the defendant -
Answers -Falsified information
The tort of Libel is the publication or broadcast of defamatory matter in writing or print. -
Answers -Libel
WRONG WRONG WRONG The tort of battery is the intentional creation of an
apprehension of a harmful or offensive contact without such harmful or offensive contact
resulting. - Answers -battery
The formation of a contract requires a bargain in which there is a manifestation of
mutual assent to the exchange, AND a
_____ . The manifestation of mutual assent to an exchange ordinarily takes the form of
an _____ by one party followed by an a____ by the other party. - Answers -
consideration, offer, acceptance
Buyer enters into a contract for the sale of 10,000 LED lightbulbs from the Edison
Company. Edison promptly ships 10,000 non-conforming traditional filament lightbulbs.
