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.
Courts apply a subjective standard when examining the existence of offer and
acceptance by the parties when they created an agency relationship.
Courts have been very reluctant to extend reasonable expectations of privacy rights to
the workplace.
If someone successfully sues a sole proprietorship, he or she must exhaust the
businesses assets before going after the principal’s personal assets.
Most agencies do not have an enforcement division to investigate violations of the
regulations, and they rely on the Department of Justice for this function.
The UCC was written, published, and enacted by Congress.
In an assignment or delegation, any third-party rights or duties occur after the contract
is formed.
In liquidation secured creditors are paid first and in full as long as the value of the
collateral equals or exceeds the value of their security interests.
Ralph calls Alice and asks her out on a date to see a movie. Alice agrees. This is the
type of promise that the courts will enforce as a contract.
The Clayton Act was enacted to prohibit anticompetitive practices not included in the
Sherman Act.
Larry has had a few beers and is starting to get a bit drunk. He isn’t acting strange, and
in conducting conversations with others he’s slurring only an occasional word or two.
Larry, should he enter into a contract in this condition, would be considered mentally
incompetent and his contract would be void.
Courts regularly question and overturn administrative-agency decisions involving how
and when an agency enforces a regulation.
If you give a truthful answer to a question during contract negotiations, but something
then happens that makes that answer now false, you are not obligated to notify the other
party unless he or she asks the question again.
The courts have very narrowly defined whether the Fair Labor Standards Act requires
that time spent by an employee commuting to work sites when performing work during
the commute should be compensated, and no clear standard yet exists.
The final result of the AIG bonusgate scandal was that no new laws or taxes were
enacted, nor were there any additional official actions taken by Congress or the
president.
Intellectual property rights protections come from several multilateral agreements.
Physical harm or injury is required to prove a case of intentional infliction of emotional
distress.
Only written agreements are enforceable as contracts by courts.
MFK Corp. wants to raise capital and is considering an offer of bonds and debentures.
It is not sure of a particular disclosure requirement, so MFK poses its question to the
SEC and request an interpretation letter. If the SEC issues an interpretive letter
addressing MFK’s question and MFK follows the statements contained in the letter,
MFK will not be able to be penalized by the SEC should the advice be incorrect.
Law today is crucial to business by creating some degree of reliability to be used in
business planning and commercial transactions.
When a corporation issues securities under a nonpublic offering or safe-harbor
exemption from SEC regulations, it is free of the burden of supplying any disclosures to
the investor due to the investor’s experience and knowledge of the process.
Some states recognize LLCs but do not permit partnership taxation at the state level.
Creditors can force a company into bankruptcy proceedings.
If a merchant sells goods to a buyer who is not a merchant, Article 2 of the UCC will
not apply.
In Harley-Davidson Motor Co. v. PowerSports Inc., the court permitted PowerSports to
retain its Harley-Davidson franchise because PowerSports’ decision to become a
publicly owned corporation had nothing to do with its commitment to sales and service
and thus was deemed not material to the negotiations, so no fraud occurred.
Ethical misconduct not only includes illegal and unethical practices but also includes
questionable practices of managers and organizations.
The U.S. Constitution requires that all state court judges be appointed by the state’s
governor, subject to the approval of the state’s legislature.
Article 2 rules for acceptance of offers are more rigid than common law rules.
Congress’s broadest powers are derived from the Commerce Clause.
Diplomatic relations do not play a role in the creation of international law.
A rescission of a contract may occur when either party chooses to end the agreement.
Arbitration and mediation are preferred dispute resolution methods because they always
result in a satisfactory outcome for both sides of the dispute.
The courts have adopted a soft per se analysis for cases involving tying agreements.
Which of the following is not eligible for immediate trademark protection?
A. fanciful trademarks
B. descriptive trademarks
C. arbitrary trademarks
D. suggestive trademarks
Acme Rocket Company is shipping 500 toy rockets by boat to Rockets R Us. Acme is
located in Miami, and Rockets R Us is located in Boston. If goods are shipped FOB
Miami:
A. Rockets R Us bears the risk of loss if the boat sinks on its way to Boston.
B. Rockets R Us bears the risk of loss once the shipment arrives in Boston.
C. Acme bears the risk of loss if the boat sinks on its way to Boston.
D. Acme bears the risk of loss until the goods are accepted by Rockets R Us.
Voting rights of LLC principals are governed by:
A. the laws of the state in which the LLC is filed.
B. the Uniform Limited Liability Company Act.
C. IRS regulations.
D. the operating agreement.
Chris wanted to get a loan from the bank, but he had bad credit. In order to get the
money, he convinced Eric to cosign as a surety. Now Chris has stopped making the
payments. When is Eric liable for repayment of the loan?
A. at any point
B. when Chris stopped making payments
C. only after the bank attempts to recover the full amount from Chris
D. never, because Eric was not the one actually using the money
A business that exists in fact, although not formally recognized, is referred to as being:
A. de facto.
B. de jure.
C. de minimus.
D. de legal.
In a general partnership:
A. profits and losses must be split equally among the partners.
B. an unequal split of profits may be agreed to based on the partnership agreement, but
losses must be split equally.
C. profits must be split equally, but losses may be split unequally based on the
partnership agreement.
D. profits and losses may be unequally split based on the partnership agreement.
Kim, a CPA, works for a small accounting firm consisting of two managing partners,
six accountants, and four secretaries. During a skiing vacation, Kim has a serious fall
and is paralyzed from the waist down. While she cannot walk, her mind is not affected
and she is 100 percent capable of performing her accounting duties. She has asked the
firm to widen the aisles between cubicles so that she can maneuver her wheelchair and
to provide a special desk that is wheelchair friendly. These accommodations would cost
less than $1,000.
A. Under provisions of the Americans with Disability Act, her requests should be
granted because they are reasonable.
B. Under provisions of the Americans with Disability Act, her requests should not be
granted because they are not reasonable.
C. Since she can still do her job, she is not deemed to have suffered a limitation to a
major life activity.
D. The company is not required to make or offer any accommodations to Kim.
The World International Property Organization created an arbitration center in
Switzerland for the arbitration of each of the following except:
A. copyrights.
B. patents.
C. trademarks.
D. contracts.
Legal systems that are made of two or more different legal systems are known as:
A. mixed legal systems.
B. combined legal systems.
C. multiple legal systems.
D. blended legal systems.
When disputing parties submit blind bids to an automated service, stating what they are
willing to pay or receive to resolve the dispute, and the software evaluates the bids and
produces a fair price based on the parties’ input, the form of ODR being utilized is:
A. online negotiation.
B. online mediation.
C. online arbitration.
D. med-arb.
When the reason and outcome of a contract are legal, the contract has:
A. legal purpose.
B. consideration.
C. capacity.
D. mutual assent.
A professor tells a student that if she writes a 5,000-word paper on the evils of
plagiarism by May 13, he will pay the student $750.
A. The offer is for a unilateral contract.
B. If the student gives the paper to the professor on May 14, the money is owed
because the student came close and did get the paper done.
C. This contract is enforceable only if it’s in writing.
D. This contract is enforceable only if the student verbally or in writing accepts the
offer prior to beginning the paper.
Micro bonds appeal to small business ventures that wish to take advantage of bond
financing in the ________ range.
A. $50,000 to $100,000
B. $100,000 to $500,000
C. $500,000 to $1,000,000
D. $1,000,000 to $5,000,000
Creation and internal governance of corporations is governed by:
A. state laws.
B. federal laws.
C. the Revised Model Business Corporation Act.
D. common law.
Each of the following is a pretrial motion except:
A. to dismiss for mistrial.
B. to compel discovery.
C. to dismiss.
D. for summary judgment.
Which of the following is categorized as informal ADR?
A. negotiation
B. mediation
C. arbitration
D. med-arb
In Stevens v. Publicis, S.A., the courts addressed the statute of frauds issue of what
constitutes a writing in today’s cyber world and determined that:
A. technology aside, a writing must contain an original signature to create a true
contract.
B. since e-mail could be written by anyone, an e-mail must be followed by a document
with an original signature.
C. an e-mail with the sender’s typed signature shows an intent to authenticate the
contents and satisfies statute of frauds requirements.
D. the statute of frauds requires that certain contracts be in writing to be enforceable
but does not address or concern itself with signatures.
Young has just fired Kathy, who was her agent. Young places an ad in the classified
section of the local newspapers that states, “Kathy no longer works for or represents
Young in any way.” Young placed this ad to eliminate any possible liability resulting
from:
A. actual authority.
B. apparent authority.
C. ratification.
D. respondeat superior.
In American Medical Association v. United States Internal Revenue Service, the IRS
had proposed a rule that would change the way dues and memberships were allocated
and taxed, with tax liability based on a seven-factor test. After the comment period the
IRS revised the rule, changing to a three-factor test, and published it as final. The AMA
claimed that this rule was invalid because there had been no comment period for the
revision. The court held that:
A. the IRS should have given proper notice of the revision and because it had not done
so, the new rule was invalid.
B. the IRS should have given proper notice of the revision but lack of notice did not
invalidate the rule because the IRS is not required to go through formal rulemaking
procedure.
C. the IRS did not need to give public notice of the revision because the change was a
logical outgrowth of the original rule.
D. the IRS did not need to give public notice because the new test was based on the
same public policy as the original rule.
What is the purpose of the Madrid Protocol?
A. set standards for international trials
B. make the trademark process more uniform and single-sourced for multinational
companies
C. ensure copyright protection in foreign jurisdictions
D. limit abilities of multinational companies to file for trademark protections
In a products liability case, the plaintiff may pursue legal remedies against the seller
under any of the following categories except:
A. product disparagement.
B. strict liability.
C. negligence.
D. warranty.
What is the minimum amount that a product must cost to be covered by the
Magnuson-Moss Act?
A. $5
B. $10
C. $15
D. $20
A corporation formed for the purpose of maintaining a charitable operation is called a:
A. nonprofit corporation.
B. Subchapter S corporation.
C. public corporation.
D. closely held corporation.
Karl is a driver for Arnold’s Appliance Store and delivers appliances to customers. One
day, Karl negligently secures a washer and dryer in the back of his truck, and while he
is driving, the washer falls out of the truck. Jan, driving behind the truck, sees the
appliance flying at her and swerves into a telephone pole. Which of the following is
correct?
A. Karl, but not Arnold’s, is liable.
B. Both Karl and Arnold’s are liable.
C. Arnold’s, but not Karl, is liable.
D. No one is liable; it was an accident.
A car manufacturer advertises that the windshield in its cars is shatterproof and will not
break even when hit with a strong impact. While an owner of one of the cars was
driving home one day, a small rock hit the windshield and the windshield broke, cutting
the driver. What type of warranty was breached?
A. an implied warranty
B. an express warranty
C. the Magnuson-Moss warranty
D. the warranty of fitness for a particular purpose
Secondary sources of law:
A. are looked to when there is no primary source of law that applies to the facts of a
case.
B. are considered a valid independent authority.
C. apply to both federal and state legal issues.
D. have no legally binding effect.
Beth has just signed a contract to work for a bank. A clause in the contract says that
before she begins work, she must pass a drug test and should drug use be discovered,
the contract becomes void. This clause would be a:
A. condition precedent.
B. condition subsequent.
C. concurrent condition.
D. nothing of consequence since Beth has already signed the contract.
When is a monopoly illegal under the Sherman Act?
A. A monopoly is illegal when it has horizontal restraints.
B. A monopoly is illegal when it is acquired or maintained through prohibited means.
C. All monopolies are illegal under the Sherman Act.
D. The Sherman Act does not address monopolies.
Le Magasin de Vêtements Inc., is a clothing retailer incorporated in France. If it
transacts business in New York, Le Magasin de Vêtements would be characterized as:
A. a domestic corporation.
B. a foreign corporation.
C. an alien corporation.
D. a native corporation.
Which of the following is not a major source of administrative law?
A. the Constitution
B. enabling statutes
C. the Administrative Procedures Act
D. public opinion
The owners of a corporation are the:
A. promoters.
B. officers.
C. board of directors.
D. shareholders.
Dick has made a statement that the average person would realize is puffery. Dick is
guilty of:
A. fraudulent misrepresentation.
B. innocent misrepresentation.
C. undue influence.
D. nothing.
To successfully pursue a lawsuit, the plaintiff must evidence standing to sue. What must
the plaintiff prove in order to establish standing to sue?
Mackey Pharmacy Corp. orders 5,000 cases of regular-strength aspirin from MAK
Pharmaceuticals. When they are delivered, an inspection shows that while the delivery
is conforming to the contract with regard to the quantity and quality of the aspirin, none
of the aspirin are in childproof bottles. The contract was silent regarding the issue of
childproof bottles. Mackey rejects the delivery, and MAK sues for breach of contract.
How should the courts analyze and resolve this matter?
Stella, the CEO of Mega Movies Studios Inc., announces that Willa Winsome, the most
sought-after actress in Hollywood if not the entire world, has agreed to sign with Mega
to star in an upcoming movie. A movie starring Willa Winsome is a guaranteed
moneymaker. Willa, at the time that the announcement is made, is on a 30-day retreat,
spending her entire time meditating and engaging in other spiritual endeavors. She
receives no visitors and has no phone or Internet. She is totally cut off from the outside
world. Following Stella’s announcement, Stella begins soliciting funds from private
backers as well as banks in order to finance the film. They are eager to participate and
happily provide Mega with substantial funding. In truth, Stella has never spoken to
Willa about starring in the movie, and no deal has been struck. Has Stella committed a
crime?
What are the four major types of legal systems, and what is the basis of each?
A ________ has the legal power to void some transfers made before filing for
bankruptcy.
Limited liability partnerships are formed when a general partnership files a
___________.
Why is the case of Grimshaw v. Ford Motor Company looked at as an example of the
failing of the invisible hand and government’s hand approaches to corporate social
responsibility?
What are the sources of international law? Briefly discuss each.
Name the five instances in which a federal trial court may establish personal
jurisdiction over a defendant.
A question put to voters during a state election to decide a particular issue may be
called a ballot initiative, a referendum, or a _______.
The Uniting and Strengthening America by Providing Appropriate Tools Required to
Intercept and Obstruct Terrorism Act is commonly called the ________ Act.
Business owners are also known as _______.
Compensatory damages cover a broad spectrum of losses for recovery of ________
damages suffered by the nonbreaching party.
Piet, a Delaware resident, goes out to dinner at Ed’s House of Crabs, a restaurant
incorporated and operating in Maryland. As Piet walks to his table, he slips on some
crab parts that had fallen to the floor and had not been cleaned up by Ed’s staff. He
suffers a severe back injury that requires multiple operations and extensive therapy. As
Piet prepares to file a lawsuit for negligence, what are Piet’s options with regard to
jurisdiction and venue in determining which court to file the suit in?
The EPA would like to propose a new rule lowering the emissions requirements for coal
factories. The agency writes a new rule. Where is the EPA in the rulemaking process?
What is the next step?
If a jury is unable to come to a conclusion, a _______ will be declared.
LLC laws define dissolution of an LLC as a ________ process.
Name the factors looked at by the courts in applying the Polaroid test to determine
whether trademark infringement has occurred.
Name the five-step process that a manager should use for ethical decision making.