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 administrative law has been codified in the
Administrative Procedures Act.
Proof of a seller’s economic power in the market is necessary to prove an antitrust
violation under the Clayton Act.
It is not market allocation if two different airlines agree to split the major travel routes
between them, rather than both fly to all the same cities.
The majority of cases filed in the U.S. are filed in state courts.
A business entity is considered a person in terms of assessing personal jurisdiction.
The only major difference between the UCC and the CISG is the lack of a writing
requirement under the CISG.
A principal has the power to terminate an agency relationship whether or not the
principal has the legal right to terminate that relationship.
Vince is a general contractor who hires Brad to install plumbing in a government
building under construction. The morning that Brad is to begin work, Vince discovers
that Brad has lost his plumbing license and is no longer eligible to do work on
government buildings. When Brad shows up ready to work, Vince informs him that he
can’t use his services and sends him away. The agency relationship terminated due to
operation of law.
An independent contractor is not considered an employee but is entitled to minimum
wage and overtime protections.
Bonds are debt instruments secured by company assets.
Disparate impact claims under the Age Discrimination in Employment Act do not
require that the employer prove a business necessity in order to defend its actions.
Each stage of litigation is separate and distinct, and each must be completed before the
next stage may be started.
The management structure of a member-managed LLC is similar to that of a general
partnership.
Sole proprietorships may sell equity in the company in order to raise funds.
Honoring ethical values and respecting communities and the environment while
recognizing the interests of shareholders are elements of corporate citizenship.
Kenneth Lay, Enron’s CEO, is currently serving a prison sentence as a result of his
fraudulent dealings that led to the Enron scandal.
Divisible contracts are often referred to as severable contracts in many states.
Void contracts are seemingly valid contracts that one party has the right to declare void.
Once a patent has been issued by the U.S. Patent and Trademark Office, the patent
cannot be challenged or revoked due to the comprehensive investigation performed by
the USPTO prior to issuance.
Publishing a new rule in the Federal Register is the first step in the rulemaking process
after research and study are performed.
Actual trade secrets of a company are exempted from discovery and need not ever be
disclosed.
Lance is an avid bicyclist and sends in a $150 fee to participate in an across-the-state
ride in the Midwest. A week before the ride, he breaks his leg. Unless the contract
specifically provides for no refunds under any conditions, he will be able to receive a
refund based on impossibility.
Lee has rented an apartment two blocks from a busy airport. After a month of hearing
planes passing by the premises at all hours, he may properly inform the landlord that he
is vacating the apartment immediately because his quiet enjoyment of the rental has
been breached.
The Celler-Kefauver Antimerger Act covers general antitrust prohibitions.
The Health Care and Education Reconciliation Act requires that employers provide
health care coverage to employees by 2014.
Only current government officials are included in the antibribery restrictions of the
Foreign Corrupt Practices Act.
If an Oregon Corporation sues the Environmental Protection Agency, a federal
administrative agency, it may sue in either an Oregon state court or a federal district
court located in Oregon.
Negligence may result from either an intentional or unintentional act.
A legal defense renders a contract unenforceable, even though it has the necessary
elements of a valid contract.
Disparagement has to do with industries, companies, and corporations but not
individuals.
The IRS has classified the LLC as a type of corporation for tax purposes.
For the last several decades, U.S. presidents have declined to exercise direct power over
the agencies.
A statute of limitations determines the maximum and minimum amounts of monetary
relief that may be granted in different types of civil lawsuits.
If a party has been delivered nonconforming goods and has rejected them and is then
forced to cover in order to maintain business operations, the party may sue the seller for
the difference in price plus consequential damages.
Affirmative action sets and requires quotas in order to meet racial and sexual equality.
What is considered an ethical practice, once established, remains constant and
acceptable unless specifically preempted by statute.
An option contract is a contract that gives one of the parties a choice of consideration to
accept.
An assignment may be of current and/or future rights.
A patent holder should mark its product as patented in order to achieve the fullest
protections. Each of the following is an acceptable means of marking the product
except:
A. writing the word patent on the item or its packaging.
B. placing the patent number on the item or its packaging.
C. writing pat. on the item or its packaging.
D. placing a P in a circle on the item or its packaging.
Products liability law arises from:
A. state statutes.
B. state common law.
C. both state statutes and state common law.
D. the Uniform Law of Product Liability as adopted by each of the states.
In Ransom v. FIA Card Services, Ransom filed for Chapter 13 bankruptcy protection
and listed among his living expenses the standard amount allowed in the Bankruptcy
Code for car ownership costs. Ransom owned his car outright and had no car payment.
FIA challenged the car deduction. The court held that Ransom could:
A. take the deduction because he met the means test.
B. take the deduction because the statutory language was ambiguous.
C. not take the deduction because it was limited to debtors who were required to make
loan or lease payments on a car.
D. take the deduction because denying it would send a message to debtors to take out
car loans rather than pay them off.
Offers that the offeree partly performed or detrimentally relied on are:
A. irrevocable offers.
B. revocable offers.
C. firm offers.
D. option offers.
Sharon has contracted with Craig to buy Craig’s car. She will pay $5,000 in cash, and he
will provide the title and registration. They agree to meet at 10 a.m. on Wednesday to
exchange their consideration. Unfortunately, Craig dies Tuesday evening.
A. The contract automatically terminates due to impossibility caused by Craig’s death.
B. The contract automatically terminates due to impracticability caused by Craig’s
death.
C. The contract is still valid and Craig’s heirs must go through with it based on the
agreed terms.
D. The contract is still enforceable; however, Craig’s heirs may renegotiate the terms
because they are now the owners of the car.
Bruno owns a French poodle that he advertises for sale. The dog has a history of
viciously biting three neighborhood kids without provocation, as well as one of Bruno’s
kids. Marge is looking for a dog to be a playmate for her children. When she comes to
Bruno’s house to see the dog, she sees it playing with Bruno’s kids and doesn’t ask about
the dog’s past behavior. She tells Bruno that she’s looking for a dog for her kids, and
Bruno says nothing. Five minutes after the dog enters her house, it bites one of Marge’s
kids.
A. Bruno has not committed a fraudulent misrepresentation because silence cannot be
considered a fraudulent misrepresentation.
B. Bruno has not committed a fraudulent misrepresentation because Marge didn’t
specifically ask if the dog bites.
C. Bruno has committed a fraudulent misrepresentation because he withheld a material
fact.
D. Bruno has committed an innocent misrepresentation because he didn’t state a lie but
only withheld all of the truth.
One criticism of the U.S.A Patriot Act is that:
A. adequate safeguards are not in place to prevent the government from using the act to
invade citizen’s privacy.
B. too much due process is being given to alleged terrorists under the act’s provisions.
C. penalties for those found guilty under the act are not harsh enough.
D. penalties for those found guilty under the act are too harsh and constitute cruel and
unusual punishment.
Which of the following will not create minimum contacts in a state sufficient to find
personal jurisdiction on an out-of-state defendant?
A. A company maintains a website that provides information about its products and
that provides an address or number that a customer can contact to obtain an order form
to purchase products directly from the company.
B. A company maintains an office in the forum state that is manned once a week by
employees.
C. A company sends sales personnel into the forum state to conduct business but does
not maintain an office within the forum state.
D. A company maintains no physical office within a state and does not send sales
personnel in to conduct business, but it target advertises in the forum state, providing
special products and discounts for the forum state’s residents.
Roger is a limited partner in a business. To retain his limited liability protection, he
must not:
A. participate in the approval of new partners.
B. participate in the removal of existing partners.
C. consult or be paid by the business.
D. assume management responsibilities.
Regarding finance charges and APR, Regulation Z requires that their disclosure:
A. is not necessary.
B. be included with the rest of the information regarding the credit transaction.
C. be more conspicuous than other disclosures.
D. need not be seen by the consumer.
Which of these is not one of the primary reasons for the creation of environmental
statutes?
A. protect wildlife
B. ensure that government agency decisions have minimal environmental impact
C. standardize environmental protections across the country
D. protect an individual’s personal property rights from environmental nuisances
In Kauffman-Harmon v. Kauffman, when Mr. Kauffman sued his children to have all
stock given to them transferred back to him, claiming their possession was only a
temporary trust, the court found that:
A. a temporary trust had indeed been created and Mr. Kauffman was the equitable
owner of the stock.
B. Mr. Kauffman was the equitable owner of the stock because the children had
participated in a fraud when accepting ownership of the stock.
C. the children owned the stock because Mr. Kauffman’s request for the return of the
stock and the subsequent lawsuit came after the statute of limitations had run, so he was
barred from recovery.
D. the children owned the stock and Mr. Kauffman’s claims were barred by the clean
hands doctrine.
Generally, the agent’s duty to keep an accounting means that the agent must:
A. keep records, receipts, and other documentation of costs or income for the principal.
B. be able to verify the exact number of hours the agent spends acting within the scope
of employment.
C. prepare tax returns for the principal pertinent to the agent’s financial activities.
D. be able to account for any and all of the principal’s funds when they are commingled
with the agent’s or anyone else’s funds.
Sophie is renting a home from Robert. There is no written lease, and the agreement is
that Sophie will pay rent on the first of every month. Either party may terminate the
agreement with 30 days’ notice. Sophie has a:
A. life estate.
B. periodic tenancy.
C. tenancy for years.
D. easement by grant.
Title VII applies to private sector employers with:
A. 10 employees or more.
B. 15 employees or more.
C. 20 employees or more.
D. 25 employees or more.
Agency law primarily exists on the:
A. state level.
B. federal level.
C. common law level.
D. constitutional level.
The National Environmental Policy Act (NEPA) process does not allow for public
notice that would enable a citizen to influence an agency’s decision.
During the pleadings stage, a third party may be brought into the trial by a defendant by
filing:
A. a supplementary answer.
B. a counterclaim.
C. a cross-claim.
D. an additional complaint.
All of the following are necessary elements of a contract except:
A. mutual assent.
B. capacity.
C. writing.
D. consideration.
In Yahoo! v. La Ligue Contre Racisme et L’Antisemitisme, Yahoo! ran an auction site
that allowed users to post and sell items to buyers around the world. Yahoo!’s policies
included prohibitions on the sale of particular illegal items. Yahoo! also told sellers that
they could not list items in jurisdictions where the sale of those items would violate the
jurisdiction’s applicable laws. La Ligue Contre Racisme et L’Antisemitisme (LICRA)
sued Yahoo! in France under a French law prohibiting the sale of Nazi- and Third
Reich-related items. The French court held that Yahoo! violated the French code with
the sale of such items. Yahoo! filed a suit in a U.S. district court, claiming that the ban
infringed impermissibly on its rights under the U.S. Constitution’s First Amendment and
asked that the court find that the French court’s holding was not enforceable under U.S.
law. The district court held that U.S. courts:
A. are bound by foreign judgments if both of the two countries recognize the
sovereignty of each other.
B. are not bound by foreign judgments if the judgment is inconsistent with the
Constitution and laws of the United States.
C. are bound by foreign judgments based on the principles set forth through comity and
the Vienna Treaty.
D. are not bound by foreign judgments based on the idea of sovereign immunity.
The corporation is considered to come into existence when:
A. the board adopts the bylaws.
B. the officers are chosen.
C. the organizational meeting has commenced.
D. the state accepts the articles of incorporation and issues the charter.
In Hadley v. Baxendale, when Hadley sued because Baxendale took unnecessary time to
get a crankshaft repaired, causing Hadley’s mill to close for an extended time, the court
found:
A. Baxendale owed Hadley compensatory damages because the mill was shut down for
an extended time directly as a result of Baxendale’s delayed delivery.
B. Baxendale owed Hadley consequential damages because the mill was shut down for
an extended time as a result of Baxendale’s delayed delivery and the shutdown was a
foreseeable indirect result of Baxendale’s delay.
C. Baxendale did not owe Hadley consequential damages because the extended closing
time was not foreseeable despite Baxendale’s delay in delivery.
D. Baxendale did not owe Hadley either compensatory or consequential damages but
did owe punitive damages due to the unreasonable delay in delivery.
Which of the following does not require a duty of care or good faith to other
principals?
A. a sole proprietorship
B. a general partnership
C. a limited partnership
D. a family limited partnership
Modern antitrust law’s focus is on:
A. protecting individual companies.
B. protecting the competitive process.
C. protecting individual companies and the competitive process.
D. protecting neither individual companies nor the competitive process.
The document filed with the state that begins the incorporation process in the majority
of states is called the:
A. articles of incorporation.
B. declaration of incorporation.
C. statement of incorporation.
D. certificate of incorporation.
The Superfund law addresses hazardous substance cleanup through which of these
ways?
A. removal and remedial actions
B. removal, remedial, and prevention actions
C. removal actions
D. remedial actions
The principal federal trial court is the:
A. U.S. district court.
B. U.S. court of appeals.
C. U.S. circuit court.
D. U.S. Supreme Court.
Which of the following is not a situation in which strict liability applies?
A. T.J. manufactures cheap clothing that falls apart after minimal use.
B. Amanda owns a pet tiger that she keeps in her home in a suburban neighborhood.
C. Faye owns a business in which she regularly uses explosives.
D. Aimee manufactures snack cakes that are sold in small grocery stores.
Oscar is speeding and driving inattentively when he runs into Felix, who is driving very
cautiously. As a result of the accident, Felix’s car needs $2,500 worth of repairs and
Felix loses a week’s salary because he has to take off from work to recover from
injuries sustained during the crash.
A. Both the repairs and the lost wages are compensatory damages.
B. The repairs are compensatory damages, and the lost wages are consequential
damages.
C. The repairs are consequential damages, and the lost wages are compensatory
damages.
D. Both the repairs and the lost wages are consequential damages.
Which of the following statements may be grounds for a misrepresentation, innocent or
fraudulent, to occur?
A. “This car is the best-looking car in its price class.”
B. “This is the best car that money can buy.”
C. “This car gets 32 miles per gallon in highway driving.”
D. “This car has the most comfortable ride you can buy.”
Which of the following is not required for promissory estoppel to apply?
A. The promise made must be reasonable.
B. The promise made must be relied on by the promisee to the promisee’s detriment.
C. The promisor must suffer an injustice if the promise isn’t enforced.
D. The promisor must know that the promisee is likely to rely on the promise.
Fast Feet is a manufacturer of running shoes. Its shoes are not selling fast enough for
the company to pay its debts and continue its operations. Fast Feet is now insolvent.
What options does Fast Feet have?
The U.S. Supreme Court exercises both original and appellate jurisdiction. In which
matters may the Court exercise its original jurisdiction?
Name the five factors that the courts use to determine whether certain material
constitutes a trade secret.
Goods that exactly meet the specifications of a contract are called ________ goods.
Explain how the Electronic Communications Privacy Act applies to employee privacy
and protections.
Laws that impose liability on liquor stores and bars are called ________ laws.
Final effective ________ are published in the Code of Federal Regulations.
Generally accepted standards of right and wrong in a given society are called _______.
Abbreviations published by the International Chamber of Commerce that are meant to
avoid confusion in international business transactions are called ________ terms.
The FDA jurisdiction includes administering the Flammable Fabrics Act.
Joe wants to propose to Rhonda and goes to a jewelry store to purchase an engagement
ring. After college, Joe had worked as a jeweler while going to law school, and he is
now an attorney. He still remains knowledgeable regarding the jewelry industry. In the
jewelry store the owner listens to what Joe wants, and he takes a diamond ring from a
showcase. The jeweler tells Joe that it’s a class AAA perfect blue-white stone in a
platinum setting and the price is $5,000. Joe, without indicating his jewelry knowledge,
asks to use the jeweler’s loupe (eyepiece) and, upon inspection, sees that it’s a class AA
yellow-white diamond with three minor flaws. He furthermore realizes that the ring is
worth only $4,000. The ring is beautiful, so he decides he’d like to buy it. He asks if the
price is negotiable, and the jeweler offers a sale at $4,500. They settle on $4,300. When
Joe proposes, his girlfriend says no. Dejected, Joe seeks to return the diamond ring but
the jeweler refuses, so Joe sues the jeweler for fraudulent misrepresentation. Who wins
and why?
The SEC’s computer database, which maintains the national clearinghouse for public
corporation disclosures, is known as _______.
What is a pretrial conference, when does it occur, and what are its purposes?
An ________ stops creditors from pursuing their collection actions.
A certain website lets anyone sell items to buyers around the world. The site’s policies
include prohibitions on selling particular illegal items. The site also tells sellers that
they cannot list items in jurisdictions where the sale of those items would violate the
jurisdiction’s applicable laws. The European Union has an antiterrorism law prohibiting
the sale over the Internet of items relating to and supporting the Irish Republican Army.
The website had several IRA items for sale, and the E.U. found this to be a violation of
its law. Would a U.S. court find the same?
Your school is negotiating with another school to run a joint program. The other school
is not sure that your college can handle the increase in students and tells your
administration that it will join the joint-program initiative if your college increases its
faculty. Based on this offer, two full-time tenure track faculty members are hired. Soon
afterward the other college decides that it will not participate in the program and ends
negotiations. What rights does your school have?
Why are trademarks worthy of protections as valuable business assets?