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Kathy and Tom are filing for divorce. Their marital home, which they still live in, is worth $7.5 million and their furniture and other assets are worth more than $25 million. Kathy wants half of everything, but Tom doesn’t think […]

When Ford runs a commercial stating that Fords are better than Chevrolets and that “you’ll be happier if you buy a Ford,” Ford is committing trade libel. The sales of securities in the secondary market does not raise capital for […]

Many express warranties are made through advertisements. A book publisher suggesting a retail price for the latest best seller is an example of price-fixing. Answer: FALSE Since the price is only a suggested one, this is not price-fixing. Courts apply […]

A sole proprietorship automatically is dissolved when the owner dies. A nonprofit corporation is not permitted to make or produce revenue. Answer: FALSE Nonprofit corporations may make money, but the money is put back into the corporation or distributed as […]

Chuck is renting an apartment, and he has a problem. All night he hears the scurrying around of rodents, and each morning he finds cereal boxes and other cardboard food containers gnawed. He has also noticed droppings all over the […]

Which chapter of the Bankruptcy Code is best thought of as temporary protection from creditors while a business goes through a planning process to pay creditors while continuing to do business? A. Chapter 7 B. Chapter 11 C. Chapter 12 […]

One disadvantage of a sole proprietorship business entity is that it is restricted to the principal and the principal’s immediate family in terms of number of employees who may work for the business. Most of the common law that regulated […]

An automatic stay halts all creditors’ collection actions except for ones brought by government agencies. An agent is generally prohibited from using his or her own judgment as a substitute for the principal’s judgment unless specifically authorized by the principal. […]

George is 85 years old and Grace, his wife, is 83. They are on a fixed retirement budget and have no disposable income and no savings. Grace’s doctor informs her that she requires a particular medicine that costs $84. They […]

Most contracts require a specific format or ceremony. E-mail communications between parties in an ongoing business relationship have been found to create sufficient minimum contacts to establish personal jurisdiction without a separate physical presence, and this rule is the prevailing […]

The mandate given to the Equal Employment Opportunity Commission is that the commission is required to pursue any discrimination-based claims made by aggrieved employees. Saudi Arabia uses Islamic law for personal conduct and civil law for business transactions. Because of […]

Criminal law is designed to compensate parties for money lost as a result of another’s unlawful conduct. Amendments to the Constitution function as a protection of the citizenry from unlawful or repressive acts of the government. Answer: TRUE Amendments to […]

An ________ investor is one who has experience, business savvy, and knowledge of the market to the extent that the law imputes a certain cognizance of investment risk and the ability to protect his or her own interests. Gus owes […]

When an employee is being classified as exempt or nonexempt regarding Fair Labor Standards Act coverage, what factors are evaluated to arrive at a determination? You are the CEO of a major corporation that is suffering financially in the current […]

Eight businesswomen have formed a privately held corporation. Their stock certificates and the stock register of the corporation are public documents. A unilateral contract is formed when a promise requires acceptance by performance. Answer: TRUE A contract is unilateral when […]

Which piece of legislation prohibits denying an applicant credit on the basis of discrimination? A. Equal Credit Opportunity Act B. U.S. Constitution C. Fair Credit Act D. Truth in Lending Act Two merchant companies have entered into a contract for […]

Uncle Phil has lent you $10,000 to pay tuition and other school-related costs. You’ve now graduated, and Uncle Phil is asking about repayment terms. The loan was never evidenced in writing. This transaction falls under the UCC statute of frauds. […]

The American Arbitration Association arbitration rules permit the parties to choose an arbitrator as long as the AAA receives notification of their choice. Federal laws concerning discrimination expressly preempt state laws and prohibit states from imposing additional obligations and legal […]

Laws requiring that the police show reasonable cause and obtain a search warrant before entering a place of business to search for evidence are examples of substantive laws. Jurisprudence refers to the conducting of a trial and the rendering of […]

The CEO of a major computer technology firm wants to form an organization for computer firms in order to share data, information, and ideas. Depending on what was shared at the meetings, the organization may violate antitrust laws. What standard […]

A process or procedure is not eligible for copyright protection. Company executives taking foreign officials to dinner is not bribery under the Foreign Corrupt Practices Act. Answer: FALSE Under the FCPA, any gift of tangible or intangible value is prohibited. […]

Courts enforce fraudulent misrepresentation for intentional lies but will not enforce fraudulent misrepresentation for negligent ones. If a seller has not made a specific representation about a product, the buyer may still be protected by an express warranty. Answer: FALSE […]

Courts apply the logical-outgrowth standard when reviewing a challenge of a rule from an adversely affected party. The standard for issuance of a warrant for a search in a noncriminal administrative violation investigation is lower than that for investigating a […]

Linda’s company has a code of ethics and a separate code of conduct. If she wants to be sure that she complies with the company dress code, she would reference the code of ethics. A handyman goes to the wrong […]

The UCC permits terms to be added into a contract or filled in as gap fillers; however, the contract cannot be enforceable unless the parties have agreed to and specified a price in their agreement. According to the mailbox rule, […]

A tenancy for years will automatically renew if no notice is given by the tenant or landlord of intention to terminate the lease. If a company files bankruptcy, preferred stockholders have priority over common stockholders and will be paid from […]

If a sole proprietorship loses money, the principal may deduct the losses from her or his own personal tax liability, if any. Business ethics is a recent phenomenon not recognized or considered prior to the mid- to late 1900s. Answer: […]

The principal may be an individual or entity (such as a corporation), but the agent must be an individual. States provide an automatic right to appeal inferior court decisions, usually to the state’s trial court. Answer: TRUE Because inferior courts […]

A person with an ownership interest in a business venture is called a _______. Consideration in a small or minimal amount that is written into a contract but never actually paid is called ________ consideration. Answer: nominal When an appellate […]

General partnerships are pass-through entities regarding taxation; however, limited partnerships are not pass-through entities for taxes. Nuisance suits allow an individual to sue a polluter to protect the community from environmental damage. Answer: FALSE Nuisance suits allow protection only for […]