Mixed Deck — All CLA/CP Exam Topics Flashcards

Which of the following scenarios best illustrates the concept of 'promissory estoppel'?

Answer: A contractor moves across the country and quits a job in reliance on an employer's oral promise of employment

Promissory estoppel applies when a party makes a clear promise that foreseeably induces detrimental reliance by another, and injustice can only be avoided by enforcement.

In contract law, 'past consideration' is generally:

Answer: Insufficient to support a new promise

Past consideration—something already given before the new promise—cannot serve as consideration because it was not bargained for in exchange.

Which element of negligence asks whether the defendant's conduct fell below the applicable standard of care?

Answer: Breach

Breach is the element that evaluates whether the defendant's conduct fell below the standard of care owed to the plaintiff.

What is the 'stepped-up basis' rule for inherited property under current U.S. federal tax law?

Answer: The heir's cost basis is reset to the fair market value of the property at the date of death

Under IRC §1014, inherited property receives a basis equal to its fair market value on the decedent's date of death, eliminating capital gains on pre-death appreciation.

A contract that violates a licensing statute designed primarily to protect the public is generally held to be:

Answer: Void and unenforceable as against public policy

When a licensing requirement is designed to protect the public (not merely raise revenue), a contract by an unlicensed party is void as against public policy.

When does the doctrine of unconscionability apply to a contract?

Answer: When terms are unreasonably favorable to one party due to unequal bargaining power

Unconscionability applies when a contract or clause is so one-sided that it shocks the conscience, typically involving both procedural and substantive unfairness.

In a merger, what generally happens to the liabilities of the absorbed corporation?

Answer: The surviving corporation assumes the liabilities of the absorbed corporation

In a statutory merger, the surviving corporation succeeds to all rights and assumes all liabilities of the absorbed corporation by operation of law.

Under the mailbox rule, an acceptance transmitted by mail is effective at what point?

Answer: When it is properly dispatched by the offeree

The mailbox rule makes acceptance effective upon dispatch (dropping in the mailbox), not upon receipt by the offeror.

What effect does a counteroffer have on the original offer?

Answer: It terminates the original offer

A counteroffer operates as both a rejection and a new offer, thereby terminating the original offer.

A paralegal is assisting an attorney in drafting the internal rules that will govern a newly formed corporation. This document outlines procedures for holding board meetings, electing officers, and issuing stock, but it is not filed with the state. What is this document called?

Answer: Corporate Bylaws

Corporate Bylaws are the internal rules and regulations that dictate the day-to-day governance of a corporation. Unlike the Articles of Incorporation, which are filed with the state to create the corporation, bylaws are a private, internal document. An Operating Agreement serves a similar purpose but is used for an LLC.

A corporate director who approves a transaction in which she has a personal financial interest will be protected from liability if:

Answer: The director's interest is fully disclosed and the transaction is approved by disinterested directors or shareholders, or the transaction is fair to the corporation

Under the duty of loyalty, a director with a conflict of interest must disclose it fully. The transaction is then cleansed if approved by disinterested directors or shareholders after disclosure, or if the director can prove its intrinsic fairness. Mere recusal without disclosure or ratification is insufficient.

Under the mailbox rule, an acceptance sent by mail is effective:

Answer: When it is dispatched (placed in the mail)

The mailbox rule makes acceptance effective upon dispatch, meaning the contract is formed the moment the acceptance is properly mailed.

Which of the following most accurately describes the 'adequacy of consideration' standard under contract law?

Answer: Courts generally do not inquire into the adequacy of consideration as long as something of legal value is exchanged

Courts uphold the freedom of contract by not requiring equal value; as long as something of legal value (a legal detriment or benefit) is bargained for, consideration is sufficient.

How does a domestic partnership differ from marriage in terms of legal rights and recognition?

Answer: Domestic partnerships offer some legal protections but recognition and benefits vary significantly by state and do not include all federal marital rights

Domestic partnerships grant certain legal protections (hospital visitation, state benefits) but recognition varies by state, and partners do not automatically receive all federal marital benefits.

In federal civil litigation, what is the standard for granting summary judgment under FRCP Rule 56?

Answer: There is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law

Summary judgment is appropriate when no genuine issue of material fact exists and the moving party is entitled to judgment as a matter of law.

Which of the following best describes an 'illusory promise' in contract law?

Answer: A promise that appears binding but leaves performance entirely to the promisor's discretion

An illusory promise is one that gives the promisor complete discretion over whether to perform, meaning it imposes no real obligation. Because no true commitment exists, it fails as consideration, making any resulting agreement unenforceable.

What is the purpose of a writ of habeas corpus in criminal law?

Answer: To require authorities to bring a detained person before a court and justify the detention

A writ of habeas corpus directs the detaining authority to bring the prisoner before the court and demonstrate the legal basis for the detention.

Under the Statute of Frauds, which of the following contracts MUST be in writing to be enforceable?

Answer: A contract for the sale of goods worth $600

The UCC requires contracts for the sale of goods of $500 or more to be evidenced by a signed writing.

What document is used to convert a corporation into an LLC in most states?

Answer: Articles of conversion or a certificate of conversion

Most states provide a statutory conversion procedure requiring filing articles of conversion (or certificate of conversion) with the Secretary of State to change entity type.

Which of the following scenarios most clearly involves a unilateral contract?

Answer: A company offers a $500 reward to anyone who returns a lost dog

A unilateral contract is formed by a promise exchanged for an act; the reward offer invites acceptance by performance (returning the dog), not a promise.