Conditions __________ occur when the mutual duties of performance are to take place
simultaneously.
a. precedent
b. concurrent
c. subsequent
d. consequential
Answer:
The debtor-in-possession must honor all prebankruptcy executory contracts.
a. True
b. False
Answer:
Section 2 of the Sherman Act prohibits:
a. price discrimination.
b. monopolies and attempts to monopolize.
c. every contract, combination or conspiracy in restraint of trade.
d. mergers that threaten competition.
Answer:
The __________ requires that officers and directors not take personal advantage of a
desirable business investment that rightfully belongs to the corporation.
a. right of first refusal
b. corporate opportunity doctrine
c. line of business test
d. expectancy test
Answer:
The North American Free Trade Agreement provides for elimination of barriers to trade
between what countries?
a. The United States, Canada, and Mexico.
b. The United States, Canada, Mexico, and Brazil.
c. The United States and all South American countries.
d. The United States and Mexico only.
Answer:
Contractual arrangements to shift environmental liability between companies are
binding on federal and state governments.
a. True
b. False
Answer:
One of the major criticisms of mediation is the lack of procedural protections,
especially for the person who may appear to have less power and resources.
a. True
b. False
Answer:
Fact Pattern 15-1
Gretta is the CEO of a paper company built near a river used in interstate commerce
although the state in which the company is located is land locked and not near the coast.
Gretta determines that a significant amount of money needs to be spent to comply with
the federal Clean Water Act. She is already in trouble with stockholders because of low
profits and does not wish to spend extra money on pollution control. Therefore, she
instructs employees to simply dump waste into the river. She was aware that she would
be fired if the company received a heavy fine, but she decided to take the risk because
she was in danger of being fired if profits did not come up anyway. Also, while Gretta
believed that the Clean Air Act applied; Linda, a majority stockholder, told her that the
Clean Water Act would not apply based upon the location of the plant.
Refer to Fact Pattern 15-1. Is Linda correct in her argument that the Clean Water Act
would not apply based upon the location of the plant?
a. Yes, Linda is correct that the Clean Water Act would not apply because the state does
not border the coast.
b. Yes, Linda is correct that the Clean Water Act would not apply because a river would
not be considered a navigable waterway.
c. Yes, Linda is correct that the Clean Water Act would not apply because the state does
not border the coast and also because a river would not be considered a navigable
waterway.
d. No, Linda is incorrect; the river would be considered a navigable waterway; it does
not matter that the state is not on the coast; and the Clean Water Act would apply.
Answer:
In __________ voting, a shareholder can cast one vote for each share the shareholder
owns for each nominee whereas in __________ voting, a shareholder may cast all of his
or her votes for one nominee or allocate them among the nominees as the shareholder
sees fit.
a. cumulative; straight
b. absolute; cumulative
c. straight; cumulative
d. straight; absolute
Answer:
Leave under the Family and Medical Leave Act is:
a. paid leave.
b. unpaid leave.
c. paid leave for 3 weeks and then unpaid.
d. paid leave for 10 weeks and then unpaid.
Answer:
Which of the following laws governs the quality of drinking water served by public
drinking-water systems?
a. Clean Sip Act
b. Chemical Control Act
c. Safe Drinking Water Act
d. None of the responses are correct
Answer:
The principal goal of the Clean Water act is to eliminate the discharge of pollutants into
the non-navigable waters of the United States.
a. True
b. False
Answer:
Fact Pattern 4-3
Polly owns a restaurant seating 150 people. She just learns of a newly enacted
regulation in her city requiring that larger restaurants seating over 100 people be
inspected by the health department on a monthly basis whereas smaller restaurants
would only be inspected twice per year. She also learned that Frank, the local mayor,
who recently went through a nasty divorce, was able to get passed a law requiring that
restaurants owned by women pay a higher fee to receive a business license than those
owned by men. Polly is angry about both laws and wants to take action to have them
struck down.
Refer to Fact Pattern 4-3. Under the Equal Protection clause, which of the following
would be the city’s best argument that the law pertaining to more frequent inspections
of larger restaurants should be upheld?
a. That under the rational basis test, inspections by the health department are needed in
order to guard against food-borne illnesses.
b. That under the strict scrutiny test, larger restaurants are important to the tax basis of
the community and should, therefore, be inspected more often to guard against illness
and resulting lawsuits that could impact the ability of the restaurants to remain in
business.
c. That under the substantially related test, owners of larger restaurants should expect to
be inspected more often because products used in interstate commerce are invariably
involved.
d. That under the common good test, large restaurants should be inspected more often in
order to protect the community’s tax base.
Answer:
Federal administrative rules that are not properly published in the Federal Register are
void.
a. True
b. False
Answer:
One popular method in Chapter 11 cases is called a(n) __________ bankruptcy, in
which the company solicits votes on its plan of reorganization prior to filing
bankruptcy.
a. prepackaged
b. cramdown
c. workout
d. confirmation
Answer:
A sales representative cannot legally accept a kickback from a purchaser of his or her
employer’s products.
a. True
b. False
Answer:
Which of the following is true regarding a comparison of the law of the United States
and the law of the European Union?
a. Laws of the United States and the European Union differ in regard to consumer
privacy and emissions standards but are similar in regard to chemical usage and
accounting standards.
b. Laws of the United States and the European Union differ in regard to consumer
privacy, emissions standards, and chemical usage but are similar in regard to accounting
standards.
c. Laws of the United States and the European Union differ in regard to consumer
privacy, emissions standards, chemical usage, and accounting standards.
d. Laws of the United States and the European Union are similar in all significant areas
involving business regulation and vary in only minor respects.
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. Assuming that Susan seeks to be a legally astute manager,
which of the following is true regarding the advice given by Sam to ignore the
regulations pending an investigation?
a. Sam is correct that it is unlikely that any investigation will ever occur and that the
regulations may be safely ignored.
b. Sam is correct only if ABC has not had past investigations because if past
investigations have occurred, it is more likely that the company will be the target of
future investigations.
c. Sam is incorrect but only because safety regulations are concerned.
d. Sam is incorrect because a legally astute manager will take a proactive approach to
regulations.
Answer:
The __________ standard of review comes into place when a(n) __________
implements a defensive measure that touches on issues of shareholder __________.
a. Unocal, board of directors, voting control
b. Blaisus, board of directors, voting control
c. Revlon,board of directors, approval
d. Blasius, CEO, voting control
Answer:
If a borrower fails to repay a secured loan, the lender may foreclose on the collateral.
a. True
b. False
Answer:
When a third party, based on all of its transactions with the enterprise, acts as if it were
doing business with a corporation, the third party is prevented from claiming that the
enterprise is not a corporation because a(n) __________ has been formed.
a. partnership by estoppel
b. corporation de facto
c. corporation de jure
d. corporation by estoppel
Answer:
Under the Teleological theory, the ethical good of an action is judged by the effect of
the action on others.
a. True
b. False
Answer:
The __________ was created to provide financing for the purchase of U.S. exports.
a. World Bank
b. U.S. Bank
c. Export-Import Bank of the U.S.
d. U.S. Trade Association
Answer:
The principle of equity is unique to civil law legal systems.
a. True
b. False
Answer:
In CASE 6.2 City of Arlington v. Federal Communications Commission (2013) the U.S.
Supreme Court considered:
a. whether the judicial deference typically afforded by courts applied to the FCC’S
determination that it had the power to act.
b. whether Congress required the FCC to enact a regulatory program that had a deadline
for the issuance of final regulations.
c. the fundamental principle that FCC employees acting beyond their authority can bind
the federal government.
d. whether all appropriate procedures within the FCC had been exhausted within the
Administrative Procedure Act.
Answer:
The U.S. Supreme Court has original jurisdiction over cases affecting ambassadors and
cases in which a state is a party.
a. True
b. False
Answer:
In CASE 6.1Free Enterprise Fund v. Public Company Accounting Oversight
Board(2010) before the U.S. Supreme Court, the plaintiffs brought various
constitutional challenges involving the appointment and standards for removal of
members of the Public Company Accounting Oversight Board. How did the Court rule
and why?
a. That limitations on the removal of Board members contravened the Constitution’s
separation of powers and that the unconstitutional provisions were not severable from
the remainder of the statute.
b. That limitations on the removal of Board members contravened the Constitution’s
separation of powers but that the unconstitutional provisions were severable from the
remainder of the statute.
c. That limitations on the removal of Board members were constitutional.
d. That limitations on the removal of Board members were constitutional only so long
as the executive branch failed to challenge the restrictions placed on the president.
Answer:
Which of the following is the best defense to negligence?
a. The plaintiff was a friend of the defendant.
b. The defendant did not intend to harm the plaintiff.
c. The defendant was concerned for the safety of the plaintiff.
d. The plaintiff contributed to his own injuries.
Answer:
Which of the following presides over formal agency adjudications at the federal level?
a. An administrative law judge
b. A federal magistrate
c. A federal district judge
d. A judicial commissioner
Answer:
Which of the following statements is NOT true regarding the Sixth Amendment right to
have the assistance of counsel for criminal proceedings?
a. The accused has the right to use his or her own attorney.
b. Once in custody, the accused must be informed of the right to counsel.
c. The assistance of counsel must be effective.
d. There is no constitutional right to counsel on any appeal of a verdict.
Answer:
As a birthday gift, Ben’s uncle promised Ben that he would pay Ben’s business school
tuition for the next semester. In reliance on that promise, Ben quit his part time job at a
fast food restaurant. When the tuition bill became due, Ben’s uncle told Ben that he was
sorry but that he would not be able to pay the tuition because he just built a new
swimming pool at his house, and funds were running short. Ben asks you if there is any
basis upon which he could win in litigation against his uncle. Which of the following
would be the best advice?
a. That Ben should sue for breach of contract because an offer, acceptance, and
consideration are all present.
b. That Ben should sue for breach of contract because an offer and acceptance are
present, and his reliance would substitute for consideration.
c. That Ben should sue based on promissory estoppel.
d. That Ben should hurry and try to get his job back because there is no basis upon
which he would have a viable case.
Answer:
Which of the following is true regarding employment laws within the European Union?
a. The European Union has attempted to bring uniformity to the laws related to
termination of employment.
b. No member states of the European Union recognize the U.S. concept of employment
at will.
c. The European Union has attempted to bring uniformity to the laws related to
termination of employment, but laws of the United Kingdom provide significantly more
benefits and legal protection to employees than do the employment laws of France.
d. In order to facilitate trade, the European Union has mandated that all member states
apply the same laws regarding employment.
Answer: