88) Today, the marketplace follows a policy of caveat venditor—”Let the seller beware.”
Topic: Breach of Sales Contracts
AACSB: Analytic Skills
89) An express warranty can be created by words or by actions.
Topic: Sales Warranties and Product Liability
AACSB: Analytic Skills
90) Every seller who offers goods for sale implies a warranty to title for those goods.
Topic: Sales Warranties and Product Liability
AACSB: Analytic Skills
91) A manufacturer of power saws who fails to place a safety guard on products would likely be
liable for negligence if a customer is injured.
Topic: Sales Warranties and Product Liability
AACSB: Analytic Skills
92) Patents are a grant from the federal government for the life of the inventor plus fifty years
and cannot be renewed.
Topic: Patents
AACSB: Analytic Skills
93) A device cannot be patented if it has been publicized in print anywhere in the world.
Topic: Patents
AACSB: Analytic Skills
94) Filing for a patent is a simple process the small business owner can handle himself.
Topic: Patents
AACSB: Analytic Skills
21
95) George Washington signed the first patent law in 1790.
Topic: Patents
AACSB: Analytic Skills
96) Any type word, phrase, symbol, design, name, logo, etc., may be a patent.
Topic: Trademarks
AACSB: Analytic Skills
97) A company must establish its right to a trademark by actually using it.
Topic: Trademarks
AACSB: Analytic Skills
98) An entrepreneur may lose the exclusive right to a trademark if it loses its unique character
and becomes a generic name or if the company abandons its trademark by failing to market the
brand adequately.
Topic: Trademarks
AACSB: Analytic Skills
AACSB: Analytic Skills
is protected by the federal government, which will watch for and prosecute infringements.
Topic: Protecting Intellectual Property
AACSB: Analytic Skills
101) Employees are agents of their employers when performing job-related activities.
Topic: The Law of Agency
AACSB: Analytic Skills
22
102) Employees cannot bind a company to an agreement unless the owner intended for them to
do so.
Topic: The Law of Agency
AACSB: Analytic Skills
103) An agency remains valid until the principal and the agent mutually agree to dissolve it.
Topic: The Law of Agency
AACSB: Analytic Skills
104) Liquidation bankruptcies are handled under Chapter 7 of the Bankruptcy Reform Act of
1978.
Topic: Forms of Bankruptcy
AACSB: Analytic Skills
105) Bankruptcy proceedings can be filed by the owner or his/her creditors.
Topic: Forms of Bankruptcy
AACSB: Analytic Skills
106) In a bankruptcy proceeding, all assets are subject to court attachment.
Topic: Forms of Bankruptcy
AACSB: Analytic Skills
107) When a company files for Chapter 11 bankruptcy, every creditor must approve its plan for
reorganization.
Topic: Forms of Bankruptcy
AACSB: Analytic Skills
108) Reorganization is covered by a Chapter 7 bankruptcy.
Topic: Forms of Bankruptcy
AACSB: Analytic Skills
23
109) A Chapter 11 bankruptcy provides a second chance for success.
Topic: Forms of Bankruptcy
AACSB: Analytic Skills
110) The regulations and restrictions the government imposes on businesses place a
disproportionate burden on small companies.
Topic: Government Regulation
AACSB: Analytic Skills
111) In 1996, passage of the Small Business Regulatory Enforcement Fairness Act provided
small businesses with some relief from government regulation.
Topic: Government Regulation
AACSB: Analytic Skills
112) The Sherman Anti-Trust Act outlaws the restraint of trade and any attempt to monopolize.
Topic: Trade Practices
AACSB: Analytic Skills
113) Contemporary society places great value on monopolies in the marketplace, and antitrust
laws reflect this.
Topic: Trade Practices
AACSB: Analytic Skills
114) The Clayton Act permits suppliers to charge customers different prices for the same product
based on what the market will bear.
Topic: Trade Practices
AACSB: Analytic Skills
115) The Robinson-Patman Act focuses on preventing unfair labor practices.
Topic: Trade Practices
AACSB: Analytic Skills
24
116) Recent amendments have expanded the FTC’s powers.
Topic: Trade Practices
AACSB: Analytic Skills
117) Recent consumer protection laws have reduced the required information on product labels
to relieve the financial burden on small business.
Topic: Consumer Protection
AACSB: Analytic Skills
118) The CPSC has the power to ban the production of any product it considers hazardous to
consumers.
Topic: Consumer Protection
AACSB: Analytic Skills
119) Congress has created a number of laws to establish standards pertaining to product labeling
for consumer protection.
Topic: Consumer Protection
AACSB: Analytic Skills
120) Sam’s Appliance Shop turns a past due account over to Jake’s Collection Agency. Jake calls
the customer at 4 a.m. every day and threatens him. This is illegal behavior on the part of Jake.
Topic: Consumer Credit
AACSB: Analytic Skills
121) What constitutes an agreement? What are the two key elements to agreement? Offer an
example of each.
Topic: Agreement
AACSB: Reflective Thinking
25
122) What is contractual capacity and who cannot legally enter into a contract?
Topic: Contractual Capacity
AACSB: Analytic Skills
123) What is assent in a contract and what invalidates it?
Topic: Genuineness of Assent and Form of Contracts
AACSB: Analytic Skills
124) Briefly explain the concept of breach of contract and the type of damages that can be
collected for breach of contract.
Topic: Breach of Contract
AACSB: Reflective Thinking
26
125) Outline and briefly explain the concepts of sales and sales contracts, breach of sales
contract, sales warranties, and product liability as described in the Uniform Commercial Code.
Topic: Sales and Sales Contracts
AACSB: Analytic Skills
rights?
such as literary, dramatic, musical, and artistic works (e.g. art, sculptures, literature, software,
music, videos, video games, choreography, motion pictures, recordings, and others). The
form in which an idea is expressed, not the idea itself.
entrepreneur takes action to protect those rights in the marketplace. Unfortunately, some
businesspeople do not respect others’ rights of ownership to products, processes, names, and
works and infringe on those rights with impunity.
Topic: Protection of Intellectual Property Rights
AACSB: Analytic Skills
27
127) Explain the law of agency, who is an agent, what constitutes the relationship between an
agent and a principal, and under what conditions can the relationship be terminated?
Topic: The Law of Agency
AACSB: Reflective Thinking
128) Describe the key features of bankruptcy proceedings under Chapter 7 and Chapter 11.
Topic: Bankruptcy
AACSB: Analytic Skills
129) Explain the basic prohibitions on trade practices of the Sherman Anti-Trust Act, the Clayton
Act, and the Robinson-Patman Act.
Topic: Trade Practices
AACSB: Analytic Skills
28
130) The government has created a number of laws and regulations in the area of consumer
protection. Discuss.
Topic: Consumer Protection
AACSB: Analytic Skills
131) Discuss government regulation in the area of consumer credit, identifying key legislation
and what rights it grants consumers.
Topic: Consumer Credit
AACSB: Analytic Skills
29