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When the seller provides the buyer with a document enabling them to pick up goods
held at an independent warehouse, the risk of loss passes to the buyer when the:
a. goods are picked up by the buyer.
b. contract of sale is signed.
c. buyer receives the document entitling it to pick up the goods.
d. buyer pays for the goods.
Answer:
Fact Pattern 18-1
Prudence wants to develop a shopping center in her town. She is very interested in
developing the center at the location of an old dump. She can purchase the property
cheaply, and it is near one of the fastest growing areas of the city. She is concerned,
however, about being held liable for all cleanup costs. She has heard about federal and
state funds that may be available; but she is concerned that if she purchases the property
knowing that contamination is likely there, she will not be eligible to participate in
government assistance programs for cleanup. She decides to discuss her problem with
Bruce, a law student studying environmental law.
Refer to Fact Pattern 18-1. What should Bruce advise Prudence regarding her plans?
a. That she should forget the project because she would be ineligible for any cleanup
assistance and, as owner, would be individually liable for the entire project.
b. That she should buy the property without any investigation and deny knowledge of
contamination if later questioned because under federal law she can only be held liable
if she had full and informed knowledge of contaminants when she made the purchase.
c. That she should incorporate because while an individual is liable for the entire costs
of cleanup, a corporation is not.
d. That by taking appropriate steps to become a bona fide prospective purchaser, she
can avoid liability for legacy contamination.
Answer:
A shareholder derivative action is a suit brought by a shareholder on behalf of the
corporation.
a. True
b. False
Answer:
The __________ officially notifies a defendant that a lawsuit is pending and that a
response to the complaint must be filed within a certain number of days.
a. subpoena
b. summons
c. complaint
d. suggestion
Answer:
Payments in the ordinary course of business made within 90 days prior to a Chapter 11
bankruptcy filing are voidable as a preference.
a. True
b. False
Answer:
In CASE 9.2 Coomer v. Kansas City Royals Baseball Corporation (2014), the
defendant argued that the spectator assumed the risk of a "flying hotdog."
a. True
b. False
Answer:
Which of the following are autonomous computer programs that can be dispatched by
the user to execute certain tasks?
a. Electronic agents
b. Software identifiers
c. Click programs
d. Fortran identifiers
Answer:
__________ is the principal U.S. statute addressing unfair foreign practices affecting
U.S. exports of goods or services.
a. Section 301 of the Trade Act of 1974
b. Section 502 of the Trade Act of 1990
c. The Unfair Export Limits Act
d. The International Control Act
Answer:
The Truth-in-Lending Act (TILA) is intended to assure a truthful loan application by the
consumer.
a. True
b. False
Answer:
Generally, employees who earn less than _____ per week are automatically considered
eligible for minimum wage and overtime as required by the Fair Labor Standards Act.
a. $240
b. $300
c. $455
d. $550
Answer:
Civil law systems are found in areas besides Europe.
a. True
b. False
Answer:
Apparent authority may be based on which of the following?
a. Only words of the principal or acts of the principal.
b. Only words of the principal or knowledge that the principal has allowed its agent to
engage in certain activities on its behalf over an extended period of time.
c. Words of the principal, acts of the principal, or knowledge that the principal has
allowed its agent to engage in certain activities on its behalf over an extended period of
time.
d. Express contractual authority only.
Answer:
Under the Magnuson-Moss Warranty Act, a seller who offers a written warranty on
goods must provide a full warranty.
a. True
b. False
Answer:
The UCC requires an obligation of good faith in the performance of every contract or
duty covered by the act.
a. True
b. False
Answer:
A manufacturer that sells its goods both wholesale and at retail is called a(n):
a. conglomerate merger.
b. dual distributor.
c. essential facility.
d. franchise.
Answer:
A(n) __________ plan is a defined contribution pension plan funded with contributions
by the participants or a combination of participant and employer contributions.
a. 630(b)
b. 401(k)
c. employee stock ownership
d. defined benefit pension
Answer:
If a manufacturer of television sets acquires a magazine publisher, it will be a:
a. vertical merger.
b. horizontal merger.
c. conglomerate merger.
d. product-line.
Answer:
The Racketeer Influenced and Corrupt Organizations Act (RICO) was originally
designed to combat corporate crime.
a. True
b. False
Answer:
Under federal law, employees may not waive their rights under the Age Discrimination
in Employment Act (ADEA).
a. True
b. False
Answer:
For a defendant to be held strictly liable, the plaintiff must prove that the defect existed
at the time the product left the defendant.
a. True
b. False
Answer:
According to the text, adequate protection of mminority shareholder rights increases
investment in new ventures.
a. True
b. False
Answer:
Negotiating business contracts with an out-of-state individual via smart phone texting is
insufficient to provide a court with personal jurisdiction over that individual.
a. True
b. False
Answer:
Fraud in the __________ occurs when a party is persuaded to sign one document
thinking that it is another.
a. acceptance
b. obligation
c. factum
d. inducement
Answer:
CASE 1 Utility Air Regulatory Group v. EPA (2014), involved a question of whether the
EPA's regulation of __________ for passenger vehicles triggered permits for
__________ that emit greenhouse gases.
a. pollution, stationary sources
b. greenhouse gas emissions, statutory sources
c. greenhouse gas emissions, commercial trucking vehicles
d. greenhouse gas emissions, stationary sources
Answer:
Susan, the CEO of ABC Company, which was involved in the production and sale of
hair care products, decided to hire new employees to develop new product lines for a
planned expansion into the dog shampoo arena. She was concerned, however, that the
employees specializing in canine products might leave at some point, taking company
secrets with them for use in competition with ABC. She, therefore, required that the
employees sign contracts containing covenants not to compete. Susan also consulted
her in-house counsel, Sam, regarding the effect of some new regulations involving the
use of certain chemicals in shampoo and conditioner. Sam told her, however, to ignore
the regulations until some type of investigation of the company was started. Sam says
that more than likely no one will ever check to see whether or not ABC is in
compliance. Susan disagrees with his advice and decides to seek other counsel.
Refer to Fact Pattern 1-1. The covenants not to compete involved which of the
following types of law?
a. Public
b. Private
c. Circumscribed
d. Tangent
Answer:
Which of the following is true regarding the Gramm-Leach-Bliley Financial
Modernization Act?
a. It requires that financial institutions provide privacy protections to consumers, that
customers be given notice before the sharing of personal information with other entities
occurs, and that customers be given the right to opt out of disclosures to third parties.
b. It requires that financial institutions provide privacy protections to consumers and
that customers be given notice before the sharing of personal information with other
entities occurs, but not that customers be given the right to opt out of disclosures to
third parties.
c. It requires that financial institutions avoid giving out specific information about the
amount of funds in customer accounts, but other customer information may be given to
third parties without providing customer notification.
d. It addresses the amount of financial reserves a bank must hold and bank lending
practices, but it does not address customer privacy concerns.
Answer:
A contract for the sale of land is governed by Article 2 of the UCC.
a. True
b. False
Answer:
Nobel Prize winner in economics Milton Friedman asserts that the only guiding
criterion for the corporation should be profitability within the confines of the law.
a. True
b. False
Answer:
Fact Pattern 21-1
Joan enjoys cross stitching, and her husband, John, makes items using a woodworking
process. They would like to make more items and open a small shop selling their
handiwork, but they need additional capital with which to purchase raw materials, rent
space, and advertise. Joan and John discuss the idea with their neighbors during the
annual neighborhood picnic. A number of the neighbors say that they would like to
invest in the project. This was entirely the initial idea of the neighbors, and Joan and
John did not coerce them in any way. Joan and John, however, quickly draw up
contracts that the neighbors signed providing that each investor would receive a certain
interest in the shop. An attorney who lived in the neighborhood and specialized in
family law asked if there were some laws that John and Joan needed to satisfy in order
to seek investors. The neighborhood consensus, however, was that, so long as no one
was misled and acted voluntarily, no problem existed. John and Joan proceeded with the
shop and made a significant amount of profit. Disagreements arose among the
neighbors, however, regarding exactly who was entitled to what.
Refer to Fact Pattern 21-1. Which of the following is true regarding the application of
state securities laws to John and Joan's situation?
a. There are no state securities laws because these have been entirely preempted by
federal law.
b. Although state securities laws, called blue sky laws, have been preempted in some
respects, they remain viable in other respects; and state law should be consulted to
ensure compliance.
c. State securities laws have not been preempted in any respect; and state securities
laws, called yellow dog laws, should be consulted to ensure compliance.
d. John and Joan may elect whether they want state securities laws rather than federal
securities laws to apply.
Answer:
In theRicci v. DeStefanocase discussed in the text, seventeen whiteandone Hispanic
firefighters sued the City of New Haven. The plaintiffs alleged the city's refusal to
certify test results of an examination, which would have made them eligible for
promotion, was a violation of Title VII's ban on disparatetreatment. How did the
U.S.Supreme Court rule?
a. That the City of New Haven had engaged in illegal disparate impact discrimination.
b. That the City of New Haven had engaged in illegal disparate treatment
discrimination.
c. That the City of New Haven had acted appropriately because there was a credible
threat of a lawsuit.
d. That the City of New Haven had acted appropriately both because there was a
credible threat of a lawsuit and because the City had established, using objective facts,
that such a lawsuit could not be afforded.
Answer:
All member states of the European Union apply a single set of tariffs, called the
__________ tariff, on goods imported from outside the European Union
a. accepted use
b. mandated application
c. common customs
d. European exaction
Answer:
In theKyllo v. United Statescasereferenced in the text, the U.S. Supreme Court
addressed the question of whether the police may use infrared thermal-image scanners
to scan homes without a warrant in order to find artificial heat sources, such as heat
being released from grow lights for hidden marijuana crops. How did the Court rule?
a. That the police may not use infrared thermal-image scanners to scan homes without a
warrant.
b. That the police may use infrared thermal-image scanners to scan homes without a
warrant.
c. That the police may use infrared thermal-image scanners to scan homes without a
warrant only if the police received a tip from an informant that the process would reveal
criminal activity.
d. That the police may use infrared thermal-image scanners to scan homes without a
warrant only if the home owner had previously been arrested for an offense involving
drug trafficking.
Answer:
Fact Pattern 21-1
Joan enjoys cross stitching, and her husband, John, makes items using a woodworking
process. They would like to make more items and open a small shop selling their
handiwork, but they need additional capital with which to purchase raw materials, rent
space, and advertise. Joan and John discuss the idea with their neighbors during the
annual neighborhood picnic. A number of the neighbors say that they would like to
invest in the project. This was entirely the initial idea of the neighbors, and Joan and
John did not coerce them in any way. Joan and John, however, quickly draw up
contracts that the neighbors signed providing that each investor would receive a certain
interest in the shop. An attorney who lived in the neighborhood and specialized in
family law asked if there were some laws that John and Joan needed to satisfy in order
to seek investors. The neighborhood consensus, however, was that, so long as no one
was misled and acted voluntarily, no problem existed. John and Joan proceeded with the
shop and made a significant amount of profit. Disagreements arose among the
neighbors, however, regarding exactly who was entitled to what.
Refer to Fact Pattern 21-1. Which of the following is true regarding the application of
federal securities laws to John and Joan's situation?
a. The arrangement with the neighbors was at the suggestion of the neighbors; and
federal security law would, therefore, not apply.
b. Contracts such as those involved with the neighbors would not be considered
securities and, therefore, federal securities law would not apply.
c. Contracts such as those involved with the neighbors appear to be securities; but state
law, not federal law, would apply.
d. Contracts such as those involved with the neighbors would be considered securities;
and, therefore, federal securities law would apply.
Answer:
Discuss when a promissory note will be considered a security including a detailed
discussion of the family resemblance test.
Answer:
Perry is a playwright. He wrote and produced an off-Broadway play about the life of
Colonel Sanders, "Just a Drop in the Bucket," that closed after the third performance.
Later that same year, on vacation in Los Angeles, he went to see a new production
called "Fry It Anyway." Perry was appalled to discover that the play was substantially
similar to his own. "Fry It Anyway" becomes a big hit. What protections are available
for Perry? What defenses are available against any claims Perry might make? What
additional protections would be available had Perry registered under the federal
Copyright Act? Discuss fully.
Answer:
Set forth four of the shareholder proposals that must be included in proxy materials
according to the Securities and Exchange Commission.
Answer:
What must a person do to acquire a parcel of land by adverse possession?
Answer:
Discuss the basic U.S. rule for evaluating whether monopolistic action under the
Sherman Act is violated by acts affecting U.S. imports where the anticompetitive
conduct occurs offshore, but the adverse impact is felt in the United States. When, if
ever, is conflicting law between a foreign country and the U.S. a defense?
Answer:
Set forth the categories of individuals classified as disabled under the Americans with
Disabilities Act.
Answer:
What is the purpose of the Truth-in-Lending Act? What does it provide regarding the
liability of credit cardholders for unauthorized charges when a card is lost or stolen?
Answer:
What is greenmail? What is a standstill agreement? When, if ever, is the process of
greenmail protected by the business judgment rule?
Answer:
Your company has grown from a national to a multi-national entity. How have your
ethical responsibilities changed? To whom do you owe these responsibilities?
Answer:
What is the principle of comity? What conditions must usually exist for the principle to
be applied?
Answer:
Discuss the purpose of the purpose of the Consumer Product Safety Commission and
the process by which it sets mandatory safety standards. Discuss fully.
Answer:
Discuss in detail common law rights, if any, in a trademark in the U.S.
Answer:
You are the CEO of a multi-billion dollar company. Your company employs over
75,000 people. The company is being sued for $100 million dollars as the result of
racial discrimination against your customers. Your investigation reveals that some of
your managers are actively violating the law. Discuss the steps you would take to
ensure your company's compliance with ethical norms and legal requirements.
Answer:
Set forth when a monopolist has a duty to deal with its rivals and the four elements
considered in determining such a duty.
Answer:
Set forth the majority rule in relation to an accountant's liability for negligence to a third
party with whom the accountant does not have a contractual relationship as well as the
source of the rule.
Answer:
The Fifth Amendment protects citizens from involuntary self-incrimination. Discuss the
application of this constitutional protection in the following areas: a statement made by
a defendant in custody prior to receiving Miranda warnings when the police
intentionally, rather than mistakenly, delayed in providing the warnings; a blood sample
given by a defendant; a handwriting sample given a defendant; required participation in
a lineup. Explain transactional and use immunity. How does each affect a person's right
not to testify under oath? Discuss fully.
Answer:
As set forth in the text, what are the seven basic steps for working successfully with an
administrative agency?
Answer:
How does U.S. business law provide worker protection?
Answer:
State Y is planning a new superhighway. The traffic in state Y does not require any new
roads. However, the state wishes to be the first in the U.S. to have a wild animal park
running down the center of its highway. This will require 40% more land than ordinary
superhighways. Claiming the power of eminent domain, the State has attempted to take
Greg's house. Greg has filed suit to prevent this. How will the court decide this case and
why?
Answer:
