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A sole proprietorship automatically is dissolved when the owner dies.
A nonprofit corporation is not permitted to make or produce revenue.
The court order for Microsoft to break apart into multiple entities in U.S. v. Microsoft
was overturned on appeal.
Igor is a brilliant chemist and one day decides to try to find out why Whipple Iced Tea
tastes so good. Whipple advertises that it blends secret spices into its drink, and those
secret spices are a closely guarded secret. The recipe is kept in a safe that is kept in a
vault at the home office and is guarded by two former Special Forces soldiers at all
times. Igor, after weeks of analysis, has discovered the recipe. Igor is guilty of
misappropriation of the Whipple trade secret.
Alternative dispute resolution, when used to settle a business dispute, is usually not
subject to appeal to a court.
LLC members are always required to complete a certificate of membership interest,
evidencing the individual member's interest in the business entity.
A court may hear a case if it has jurisdiction over either the subject matter of the dispute
or the parties in the case.
The mailbox rule determines when a contract is considered to be deemed accepted by
the offeree, thus depriving the offeror of the right to revoke the offer.
AIG caused a major political firestorm when, after receiving taxpayer bailout money, it
distributed $165 million in performance bonuses to executive employees.
LLCs may choose to be taxed as a pass-through entity or may elect to be taxed as a
corporation.
Leasing of personal property is governed by both state property law and state
commercial law.
A wrongful act may violate civil law or criminal law but cannot violate both
simultaneously.
Disciplinary actions rarely give rise to employment discrimination claims.
The SEC has the power to suspend or revoke the licenses of brokers that violate
securities laws.
A sublease occurs when a tenant transfers the entire remaining term of a lease to a third
party.
Historically, the only legal protection a consumer had against a seller that engaged in
deceit during a sale was a common law suit for fraud.
The organizers of an LLC, who sign the certificate of organization, are required to be
residents of the state in which the LLC is being formed.
In all forms of business entities, the entity itself pays taxes on money earned by or
through the entity.
The effects test has been used by courts to establish personal jurisdiction over
out-of-state defendants for both intentional and unintentional acts that have caused
harm to in-state plaintiffs.
Adam Smith's book, The Wealth of Nations, is a source of support for some elements of
antitrust law.
In civil cases the standard of proof used by state trial courts is a preponderance of the
evidence, while in federal trial court the standard of proof is beyond a reasonable
doubt.
Pablo has entered into a contract to paint Linda's portrait. The next day, Pablo is called
by the White House to paint the official portrait of the first family. Since it will be
impossible for Pablo to do both simultaneously, Pablo calls Salvador and asks him to
substitute for him and paint Linda's portrait. Because Salvador is a world-famous artist
with paintings hanging in the New York Metropolitan Museum of Art and the Louvre in
Paris, Salvador does not have to get Linda's permission for this novation as long as
none of the contract terms and conditions are changed.
Generally, regarding employment-at-will, employees may be fired just because the boss
doesn't like them.
The mailbox rule provides that the acceptance of an offer is generally effective upon
receipt of the acceptance when sent in a commercially reasonable manner.
For a corporation to be privately held, the number of shareholders will be limited as
will the permitted total of gross revenues.
The Federal Arbitration Act enumerates specific procedures for conducting arbitration
hearings.
George has entered into a contract with Mark to supply raw materials to Mark's factory.
The contract does not contain an antidelegation clause. George then delegates his duty
to supply the raw materials to Wayne, a competitor of Mark. This is a valid delegation.
Magnuson-Moss requires that a seller offer a warranty to buyers.
A party holds title to goods when the goods have come into existence and the goods are
identified to the contract.
If the seller ships conforming goods, the buyer has a duty to accept them and may not
reject the goods.
The right to privacy is a specifically named right established in the Bill of Rights.
Jethro is having a sweet-16 birthday party for his daughter Kate in his backyard. To
make the party special, he hires Tony to put on a fireworks display. He found Tony
through a classified ad in the local newspaper. In the written contract, Jethro simply
instructs Tony to begin the display at 8 p.m., make it last 16 minutes, and make it
spectacular; no safety parameters are mentioned or discussed. During the finale, one of
the rockets malfunctions and explodes amid the party guests, injuring eight people.
Jethro has no liability because Tony was an independent contractor.
A limited partnership is formed by the limited partner's filing of a certificate of limited
partnership with the appropriate state government authority.
Jimmy is annoyed because his neighbor's dog is constantly barking. He intentionally
walks up to the dog in his neighbor's yard and viciously kicks it. Jimmy has committed
battery.
The ICC, LCIA, and AAA all use the same rules to govern their arbitrations.
Should an adult find out that he or she has entered into a contract with a minor, the adult
may disaffirm the contract if the adult does so before the minor reaches the legal age.
Under TARP provisions:
A. shareholders' approval on compensation packages recommended by the company's
compensation committee is binding.
B. if the board disregards the shareholders' vote on a recommended compensation
package, the board is automatically in breach of its fiduciary duties to the company and
the company's owners.
C. the shareholders have no right to vote on compensation, so their approval or
disapproval of the compensation committee's recommendation is not considered.
D. shareholders have a nonbinding vote on any compensation plan recommended by
the board of directors.
What is the name of the test used by the courts to analyze the validity of an agency's
statutory interpretation and action?
A. Amoco test
B. Valero test
C. Chevron test
D. Texaco test
Which of the following is not a major federal environmental law?
A. Clean Air Act
B. Clean Land Act
C. Clean Water Act
D. Safe Drinking Water Act
The Equal Protection Clause is contained in the:
A. First Amendment.
B. Fifth Amendment.
C. Sixth Amendment.
D. Fourteenth Amendment.
A gratuitous agent:
A. has no duty of care owed to the principal.
B. breaches the duty of care when ordinarily negligent.
C. breaches the duty of care when grossly negligent.
D. is held to the same standard of care as any other type of agent except the
independent contractor.
When does an automatic stay become permanent?
A. never
B. once the bankruptcy proceedings have ended
C. when the petition is determined to be valid
D. when the debtor files for bankruptcy
When Bad Frog Brewery Inc., placed a label on its product showing a frog with
unwebbed fingers with its middle finger extended, New York State sued to prohibit the
use of the label, claiming it to be obscene and claiming an interest in protecting the
state's children. The court found:
A. for Bad Frog because children cannot purchase beer, so any exposure would be
incidental.
B. for Bad Frog because the label did not concern an unlawful activity and the state did
not prove its interest in protecting children from vulgarity.
C. for New York State because once the product was purchased, the labels would be
exposed in refrigerators or in rooms while children were present.
D. for New York State because it proved a substantial effort to advance a valid state
interest amounting to more than "not merely the removal of a few grains of sand from
the beach of vulgarity."
"What if everyone took these same actions" is a question sometimes called the:
A. universalization approach.
B. utilitarian approach.
C. functionality approach.
D. morality approach.
Fly High Aviation provides maintenance for executive jets based on private contracts
with corporations that maintain airplanes for company use. Which of the following is
least likely to be a Fly High stakeholder?
A. the mechanics who work for Sky High
B. the corporations that contract with Sky High for their services
C. the citizens who live near the airports that planes maintained by Sky High fly into
D. individuals who own Sky High stock
Which of the following is true of open-price-term contracts?
A. The contract is void due to the failure to specify a required term of the contract.
B. The price becomes the reasonable price at the time the contract was entered into.
C. The price becomes the reasonable price at the time the goods are delivered.
D. The price is determined by the court's applying a reasonable price at whatever time
the court deems appropriate to fairness.
In the case of Rosenfeld v. Basquiat, Basquiat sold several paintings to Rosenfeld and
provided him with a written receipt. Unfortunately Basquiat died before delivery, and
Basquiat's heirs challenged the enforceability of the agreement. The court determined
that:
A. because the written agreement was completed in crayon on a scrap of brown
packing paper, the writing did not meet the formality of a proper contract.
B. because the written agreement did not contain the terms of delivery, the writing was
too vague to form a contract.
C. because the writing contained the names of the paintings, the price paid, and
Basquiat's signature, the paper was sufficient to evidence a contract.
D. because the writing was not signed by Rosenfeld, the paper was not sufficient to
evidence a contract.
The power of preemption is derived from:
A. the power of judicial review.
B. the Commerce Clause.
C. the Necessary and Proper Clause.
D. the Supremacy Clause.
The categorical imperative test consists of:
A. individuals making ethical decisions with an eye toward potential consequences if
everyone in society acted similarly.
B. individuals making ethical decisions with an eye toward potential consequences if
only some in society acted similarly but not all.
C. individuals making ethical decisions with an eye toward potential consequences if
no one else in society acted similarly.
D. individuals making ethical decisions with an eye toward potential consequences if
most in society benefit even if some in society are harmed.
A local real estate developer wants to build a new office park on a piece of forested land
that is home to many spotted owls, an endangered species. The office park is expected
to bring new companies and jobs to the area. You are particularly fond of the owls and
want to see them thrive. Is there anything that you can do to stop construction?
An environmental impact statement is required by the NEPA in:
A. instances in which the environmental impact is unknown.
B. instances in which the environmental impact is significant.
C. instances in which the environmental impact is little.
D. all instances.
Under Article 9 of the UCC, which of the following could not be used as collateral?
A. a car
B. a house
C. a fixture
D. cash
Bob's Department Store in New York sends a purchase order to Sam's Sweaters in
California, ordering 10,000 sweaters. The purchase order includes a breakdown of
sizes, styles, and colors, and it states that delivery is to be made to Bob's in New York at
Sam's cost. When Sam's sends an acknowledgment form accepting the offer, certain
terms are changed. Which of the following would likely not automatically become part
of the contract?
A. Sam's changes the quantity to 9,500 sweaters.
B. Sam's changes the price, raising the per-item cost by $.50 each.
C. Sam's omits the order for 1,000 purple sweaters and allocates those 1,000 sweaters
equally among the other-color sweaters ordered.
D. Sam's changes the place of delivery to its factory in California and allocates the cost
of shipping to Bob's in New York.
Once public debate and comment are concluded, an agency will publish the final rule
and its effective date in the:
A. Federal Register.
B. U.S. book of statutes.
C. Code Administrative Rules.
D. Code of Federal Regulations.
Each of the following is a key component in the creation and implementation of a
company's values management program except:
A. identifying the values that the company should promote.
B. identifying the values that the company's peer competitors promote.
C. developing written policies and procedures to align behaviors with the company's
preferred values.
D. training personnel about the policies and procedures implemented.
Arthur has attached a device to a local ATM machine that records customers' bank
account numbers and ATM passwords. He then sells these account numbers and
passwords to nefarious individuals who use the information to steal money from the
customers' accounts. Arthur is:
A. guilty of a crime under the Computer Fraud and Abuse Act as amended by the
Patriot Act.
B. guilty of a crime under the Mail Fraud Act.
C. not guilty of a crime because he isn't the one stealing the money.
D. guilty of the crime of embezzlement.
In a disparate impact case, if an employer can show that a challenged employment
practice is job-related and consistent with business necessity, the plaintiff can still win
by showing that:
A. there is an alternative practice that would have less discriminatory effects but the
employer declines to use it.
B. the employer has engaged in a pattern or practice of discrimination.
C. the difference in selection rates across protected-class groups is statistically
significant.
D. there is additional evidence of a discriminatory motive.
A general partnership may be formed by:
A. oral agreement.
B. written agreement.
C. either oral or written agreement.
D. oral, written, or implied agreement.
Black's Law Dictionary, as cited in the textbook, defines the term law as including each
of the following except:
A. law is a body of rules.
B. law is conduct prescribed by a controlling authority.
C. law has a binding force.
D. law regulates personal ethics.
Which of the following is a valid defense in a strict products liability case?
A. comparative negligence
B. contributory negligence
C. assumption of risk
D. consent
The state of Kansas has enacted a new law requiring all commercial trucks driving on
Kansas roads to have special mud flaps installed. These mud flaps have been proved to
make driving in the rain significantly safer as they reduce mist created by trucks in the
rain, although data regarding accidents and injuries have not yet been determined. Any
truck entering Kansas must have these flaps installed or will be subject to a significant
fine and delay. The cost for purchase and installation of these flaps is $1,000 per truck.
In short, trucks must have these flaps or go around the state. This Kansas law:
A. is valid because it applies only to Kansas roads and such a law is entirely intrastate.
B. is valid because Kansas' right to protect its citizens under its police powers will
override any outside challenges to this law.
C. is invalid because this law is intended to regulate interstate commerce, an
enumerated federal power.
D. is invalid because, although on its face it's an intrastate law, this statute will have a
significant economic effect on interstate commerce, causing an undue burden.
Iowa has just passed a law mandating a 30-day jail sentence for those convicted of
harassing a bicyclist on any Iowa road. This law would be best described as:
A. an ordinance.
B. a public law.
C. a common law.
D. a private law.
Jonathan's Soccer Mart (JSM) advertises a pair of boots on sale. The normal price is
$150 and the sale price should have been $135, but the advertisement says $15. Josh
walks into the store, picks up a pair of the boots, and puts $15 on the counter,
demanding to purchase the boots at the advertised price. Which of the following is
correct?
A. JSM must sell the boots at the advertised price.
B. Josh has accepted JSM's offer to sell.
C. JSM has made an ambiguous offer.
D. Josh has made an offer.
In PGA Tour Inc., v. Martin, Martin was a golfer who sought accommodation, under the
Americans with Disabilities Act, for a recognized disability that caused pain due to
restricted blood flow between his legs and heart. He asked to use a cart, which would
permit him to play full rounds of golf. The PGA responded that its rules prohibited carts
during tournament play and that allowing cart use would fundamentally change the
game. The court determined that:
A. Martin should be allowed to use the cart because it provides him with little or no
advantage under the circumstances and such an accommodation is not unreasonable and
does not fundamentally change the game.
B. Martin should be allowed to use the cart because carts are used at country clubs
where strict rules of golf are required, so the PGA ban is arbitrary and discriminatory.
C. Martin should not be allowed to use the cart because having one player using a cart
and banning all others discriminates against the other players.
D. Martin should not be allowed to use the cart because there are other
accommodations offered by the PGA that are reasonable and Martin has no right to
reject them.
What is the major difference between domestic and international arbitrations?
A. The arbitration rules differ between the arbitration organizations.
B. International arbitration awards have wide enforceability in many countries.
C. International arbitration awards have limited enforceability in many countries.
D. American courts do not recognize the validity of international arbitration.
What is the main difference between Chapters 7 and 11?
A. the order for relief
B. the automatic stay
C. the continued operation of a business
D. the manner in which the bankruptcy petition is filed
Harry sees an AK-47 automatic assault rifle in a gun shop window. He inquires about
the price and is told that it is $2,500. Harry signs a contract promising to pay the $2,500
on Friday, taking possession of the rifle when payment is made. On Thursday, a law is
enacted making the ownership, sale, or possession of an automatic rifle illegal. This
contract:
A. automatically terminates due to impossibility.
B. automatically terminates due to impracticability.
C. automatically terminates due to frustration of purpose.
D. is enforceable and not affected by the new law because it was entered into before
the law took effect.
Permission to use another's property that may be revoked at any time by the property
owner is called a ______.
Any officer, director, or shareholder who owns 10 percent or more of a company's stock
is considered an _______.
Name the three instances in which a federal court may establish subject matter
jurisdiction over a defendant.
Authority based on what the third party reasonably believes the agent to possess is
called ______ authority.
The bank is considering making a loan on a piece of property that is home to a chemical
factory. There is no evidence of any contamination, but the bank is concerned about
being liable if there is a chemical spill. Should the bank be concerned?
Name the four elements that must be proved to establish a prima facie case of disparate
treatment in hiring under the McDonnell Douglas standard.
Randy is home when a landscaping crew enters his yard and begins working on his
front garden beds and lawn. Randy did not hire the crew, but he allows them to continue
working. Explain whether Randy will have to pay for the work.
Joan is the CFO of Para Corp. and is a year from retirement. In order to guarantee
herself a very substantial bonus and to boost her retirement package, she knowingly
certifies false financial reports that make the company appear to be much more
profitable than it really is. She further takes steps to ensure that the financial report does
not get reviewed through internal controls maintained by Para Corp. Under provisions
of the Sarbanes-Oxley Act, what are the possible penalties that may be imposed when
her actions are discovered?
A court order authorizing an official to do something the official would otherwise be
prohibited from doing is called a _____.
An ________ is a professional in the securities market that agrees to facilitate the sale
of stock to the public for a fee.
Courts enforce contracts only if each party had the legal capacity to enter into a
contract. Which classes of persons have limited power to contract?
For a contract to be enforceable, it must meet the requirement of __________; that is,
both the subject matter and the performance of the contract must be legal.
A company's environmental policy and employee expectations regarding protection of
the environment would be found in the company's code of _______.
Employers are increasingly employing elaborate employee-monitoring measures
primarily to limit their risk of ________ liability in areas such as defamation and
employment discrimination.
Explain the interrelationship of agency law and contract law as they relate to the
principal and agent in an agency relationship.
Dr. Augustus is a professor at a university and is up for tenure. He is a black male of
African heritage and speaks with a very strong and very difficult-to-understand accent.
When upset or excited, his accent becomes incomprehensible. When his tenure
committee reviews his credentials, it finds that he meets and exceeds the publication
record required of a person applying for tenure. The committee also sees that his
student evaluations are consistently negative, citing an inability to communicate his
ideas to students, constant lateness to class, and unexplained essay grading that appears
to be arbitrary. The evaluations also claim that he rarely maintains appropriate office
hours and won't provide assistance to students. Peer and supervisor evaluations indicate
his unwillingness to contribute to committee work and a general lack of camaraderie.
His accent has been addressed, but he has constantly rejected any suggestions to
improve his communication skills. It is recommended that he be denied tenure.
Subsequent committees come to similar conclusions, and he is given a termination
contract. Reasons given include his inability to communicate, his refusal to work with
students, his failure to maintain office hours, and his refusal to work with other faculty.
Dr. Augustus believes that he has been denied tenure primarily due to his race and
African heritage and files a claim with the EEOC. When the EEOC investigates, it finds
numerous black faculty members of African heritage, many with pronounced accents,
both tenure track and tenured. Has Dr. Augustus been discriminated against? Why or
why not?
A(An) ___________ contract is one in which each component of the contract is
dependent on every other component.
A state family court that hears only divorce and child-related matters would be said to
have ________ jurisdiction.
In Sisco v. Quicker Recovery Inc., Sisco, enroute to tow an impounded truck, was
stopped by police for speeding. He refused to provide identification and was arrested
pursuant to state statute. He was injured while resisting arrest and filed a workers'
compensation claim. How did the courts decide the issue of his eligibility for benefits,
and what was their reasoning? How was Sisco's conduct evaluated?
Administrative law hearings are presided over by ________ judges.
