Paul attempted to hit Bruce without good cause; but Bruce ducked, and Paul hit Alice
instead. Alice was shocked when she felt the blow because she had been looking the
other way and did not see it coming. Which of the following is true regarding the cause
of action, if any, Alice would have against Paul?
a. Alice would not have any cause of action against Paul because he hit her by accident.
b. Based on the theory of transferred intent, Alice would have a cause of action against
Paul for assault.
c. Based on the theory of transferred intent, Alice would have a cause of action against
Paul for assault and battery.
d. Based on the theory of transferred intent, Alice would have a cause of action against
Paul for battery.
Answer:
Which of the following activities are NOT regulated by the 1934 Act?
a. Primary securities sales
b. Proxy solicitations
c. Insider trading
d. Tender offers
Answer:
Service marks are a form of trademarks.
a. True
b. False
Answer:
The UCC requires that a precise form be followed in order to create a security interest.
a. True
b. False
Answer:
What does the Superfund Recycling Equity Act do?
a. It exempts recyclers from liability in private-party actions under CERCLA.
b. It exempts recyclers from suits brought by the state or federal government.
c. It provides a 10% federal rebate for recycling expenses incurred by corporations
engaged in recycling activities.
d. It provides a 5% federal rebate for recycling expenses incurred by corporations
engaged in recycling activities.
Answer:
InMatrixx Initiatives v. Siracusano case referenced in the text, the U.S. Supreme Court
analyzed the question of whether an issuer must disclose known information about
possible side effects of a drug that could affect the drug’s stock price even though no
proven statistical link exists between use of the drug and the adverse effect. The Court
held:
a. that a bright-line test would be applied requiring at least one civil judgment in favor
of a plaintiff before a defendant would be required to disclose allegations of a link
between a drug and an adverse effect and that the defendants were entitled to dismissal
of the case because no showing of a civil judgment had been introduced.
b. that no statistical link between the use of the drug and adverse effects was required
but that the defendants were entitled to dismissal of the case because the plaintiffs did
not personally suffer adverse health effects from the drug.
c. that the defendants were entitled to dismissal of the case because the plaintiffs could
not prove a statistical link between use of the drug and adverse effects.
d. that the “total mix of information” test applied in regard to the issue of materiality,
that statistical proof was unnecessary, and that sufficient evidence existed for the
plaintiffs to proceed to trial.
Answer:
Which of the following is true regarding conscious parallelism?
a. Proof, standing alone, that firms changed prices at the same time is sufficient to prove
a horizontal conspiracy to set prices regardless of whether the firms initially set prices
at the same levels.
b. Proof, standing alone, that firms initially set prices at the same levels is sufficient to
prove a horizontal conspiracy to set prices regardless of whether the firms later changed
prices at the same time.
c. Showing that firms consistently set prices at the same levels and change prices at the
same time is sufficient to prove a horizontal conspiracy to set prices.
d. Merely showing that firms consistently set prices at the same levels and change
prices at the same time is insufficient to prove a horizontal conspiracy to set prices.
Answer:
Because other countries have applied principles of assumption of risk, the U.S. is the
only country where the tobacco industry faces legal problems.
a. True
b. False
Answer:
Molly, the CEO of a corporation owning a number of pet stores, calls you for advice.
She tells you that she received inside information that the stock of the company was
going to go down because of reports that a number of dogs sold by the store had
become ill and that she, therefore, immediately sold all her stock in the company before
the information became public. She tells you that she has been advised that she is going
to be charged with a securities violation involving insider trading. Which of the
following is true regarding her situation?
a. Corporate executives may be fined but may not be sent to jail.
b. Corporate executives may be sent to jail, but only for offenses endangering others.
c. Corporate executives may be sent to jail, but only for fraud involving banks.
d. Corporate executives may be sent to jail for violation of criminal laws.
Answer:
The merger of an airplane manufacturer and an airplane engine manufacturer would
normally be considered a conglomerate merger.
a. True
b. False
Answer:
Which of the following is true regarding the labeling of food imported into the U.S.?
a. Labeling of food imports is not required on the part of grocery stores or restaurants.
b. All grocery stores must label certain products, including unprocessed beef and pork,
with the country of origin; but restaurants are exempt.
c. Grocery stores and restaurants, with no exceptions, must inform customers of the
country of origin of certain products including beef and pork.
d. Grocery stores must label certain products, including unprocessed beef and pork,
with the country of origin; but restaurants and some retail grocery stores with sales
under a certain amount are exempt.
Answer:
The UCC does not specifically define an offer or an acceptance.
a. True
b. False
Answer:
In a state that had adopted the Uniform Electronic Transactions Act, Kiera and Ben
entered into a contract whereby Ben would clean Kiera’s house once a week for
eighteen months for $75 per week. The transaction was done electronically, and both
Kiera and Ben signed through the use of an electronic signature. Unfortunately,
problems resulted when Ben failed to show up as scheduled. Ben told Kiera that the
contract was not good because his signature was made electronically. Kiera told him
that he was wrong and that he needs to get up to date with the modern age. Which of the
following is correct regarding the dispute?
a. Ben is correct because electronic signatures are not recognized as valid under any
circumstances.
b. Ben is correct only if Kiera’s name was typed as opposed to being shown in
handwriting-style (cursive) form.
c. Kiera is correct that the signature is sufficient only if she can show that she and Ben
had previously engaged in electronic transactions.
d. Kiera is correct that her electronic signature is sufficient.
Answer:
Which of the following is true regarding how damages may be awarded in a patent
infringement case?
a. Damages may be awarded based on (1) the patent holder’s lost profits, (2) the
infringer’s profits, or (3) a reasonable royalty for the infringer’s use of the invention.
b. Damages may only be awarded based on the patent holder’s lost profits.
c. Damages may only be awarded based on the infringer’s profits.
d. Damages may only be awarded based on a reasonable royalty for the infringer’s use
of the invention.
Answer:
In CASE 22.2 Halliburton Co. v. Erica P. John Fund, Inc. (2014), the U.S. Supreme
Court considered the __________ theory, as well as the question a defendant in a
securities fraud trial should be allowed to present evidence to challenge the
__________ presumption of __________.
a. Truth-on-the-Market, Levinson,reliance.
b. Efficient Capital Market,Basic,reliance.
c. Fraud-on-the-Market, Basic, reliance.
d. Bespeaks Docrine,Basic, scienter.
Answer:
A warranty of__________ is applied in a minority of jurisdictions and involves a
warranty at the inception of a commercial lease that there are no latent defects in the
premises that will prevent the premises from being used for its intended purpose and
that the premises will remain in a suitable condition.
a. habitability
b. merchantability
c. suitability
d. fitness for a particular purpose
Answer:
The __________ is the private offering counterpart to the prospectus.
a. private registration prospectus
b. red-herring prospectus
c. private-placement memorandum
d. restricted sale
Answer:
Which of the following is the exercise of dominion and control over the personal
property, rather than the real property, of another?
a. Conversion
b. Trespass
c. Invasionary deceit
d. Both conversion and trespass
Answer:
Which of the following is true regarding monopoly law in China?
a. Each offense is specifically set forth with no catch-all provisions.
b. It is not used against foreign investors.
c. It prevents behavior classified as abuse of dominant market position.
d. China lacks an anti-monopoly law although drafting has been in process for several
years.
Answer:
In CASE 20.2 In Re Rural Metro Corporation Shareholders Litigation(2014), the
Delaware Chancery court considered whether an investment banker could be held liable
as an aider and abettor of a breach of fiduciary duty by the board of directors.
a. True
b. False
Answer:
An employer may not be held directly liable under tort law for the failure to use care in
issuing a reference.
a. True
b. False
Answer:
By __________, managers help shape the legal environment in which they do business.
a. lobbying legislators
b. forming coalitions
c. refusing to follow laws viewed as unneeded by company officials
d. lobbying legislators, forming coalitions, and but not by refusing to follow laws
viewed as unneeded by company officials
Answer:
__________ is a purchase of a dissident shareholder’s stock by the issuer at a premium
over market, often in exchange for a standstill agreement, whereby the shareholder
agrees not to commence a tender offer or proxy contest or to buy additional shares of
the issuer for a period of time.
a. Greenmail
b. A freeze out
c. Choice agreement
d. Equitable agreement
Answer:
In CASE 19.1 Gatz Properties, LLC v. Auriga Capital Corporation (2012), Gatz
Properties was the managing member of Peconic Bay, LLC, controlled by the Gatz
family. After failing to dislose material offers for assets of the LLC, Gatz bought out the
minority members’ interests in Gatz Properties LLC for $20,89. The minority members
sued, winning over $800,000 based on Gatz’s breach of fiduciary duties. Gatz appealed.
How did the court rule on appeal on why?
a. Affirmed, Gatz had breached its fiduciary duties to the minority members of Gatz
Properties, LLC.
b. Affirmed, Gatz had breached its lease with Peconic Bay LLC.
c. Reversed,Gatz had breached its fiduciary duties to the minority members of Gatz
Properties, LLC.
d. Reversed, Gatz had breached its lease with Peconic Bay LLC.
Answer:
In CASE 16.2 Leegin Creative Leather Products, Inc. v. PSKS, Inc. (2007), the U.S.
Supreme Court overturned precedent regarding __________, substituting the
__________ treatment for the per se analysis.
a. vertical market division, rule of reason
b. minimum vertical price fixing, vertical market division
c. resale price maintenance, rule of reason
d. tying arrangements, rule of reason
Answer:
In CASE 24.3Kiobel v. Royal Dutch Petroleum Co. (2013) defendants, who had
engaged in oil exploration and drilling in the Ogoni region of Nigeria for decades,were
sued by the Ogoni indigenous peoples. The issuebefore the U.S.Supreme Court was
whether the __________ extended to corporations that aid and abet human rights
violations as a matter of customary international law.
a. Common Law
b. World Trade Organization.
c. Foreign Corrupt Practices Act.
d. Alien Tort Statute
Answer:
Fact Pattern 21-3
Yolanda has filed the registration statement, in connection with a public offering of
stock in ABC Corgi, a company dedicated to the production of clothing and toys
highlighting the highly prized Welsh Corgi breed of dog. The registration statement is
not yet effective. Yolanda would like to move forward with promoting the company as
much as possible. She asks for advice regarding activities in which she could legally
participate. She is particularly interested in making presentations to large institutional
investors.
Refer to Fact Pattern 21-3. Which of the following is true regarding Yolanda’s situation?
a. Because she is in the active period, no sales of securities are allowed.
b. During this quiet period, offers to buy may be accepted.
c. During this waiting period, so long as requirements are met, she may solicit offers to
buy securities but may not accept them yet.
d. During this quiet period, no sales of securities are allowed; and the red herring may
not be distributed
Answer:
Paula recently went to see her doctor for severe glaucoma. He told her that her vision is
in danger and prescribed Seerite made by Drugco. Seerite was the newest and most
promising treatment for glaucoma that exists. The product literature stated, “When used
as directed, Seerite is 100% safe and effective for glaucoma.” After Paula read this she
put the literature in the trash. She overlooked a small statement on the back reading
“Warning: in 2% of the population this product may produce uncontrollable weight
gain.” Three weeks after using Seerite, Paula had gained 50 pounds and continued to
gain weight rapidly. Paula has stopped using Seerite, but she cannot lose the weight and
this condition is now a separate health risk. Is Seerite a defectively designed drug?
What defenses would be available to Drugco against this claim? Is there any other
theory under strict product liability law that Paula may use to recover against Drugco?
Discuss fully.
Answer:
The management of hazardous waste is governed by the __________ as amended.
a. Clean Air Act
b. Clean Water Act
c. Solid Waste Disposal Act
d. Federal Superfund Law
Answer:
Reasons for creating administrative agencies include:
a. Congress lacks the time to address all of the areas that it controls.
b. Congress lacks the necessary expertise in all of the areas it controls.
c. Congress does not have the power to regulate certain areas.
d. Both that Congress lacks the time to address all of the areas that it controls and that
Congress lacks the necessary expertise in all of the areas it controls.
Answer:
TheBilski v. Kapposcase referenced in the text, involved a question of whether a
business process explaining how buyers and sellers of commodities in the energy
market can use hedging to protect against price fluctuations is patentable. How did the
U.S. Supreme Court rule?
a. The court ruled that the claimed invention was a patent-eligible process.
b. The court ruled that the claimed invention was not a patent-eligible process because
it was an abstract idea.
c. The court ruled that the claimed invention was not a patent-eligible process because
under federal patent law, no business methods may be the subject of patents.
d. The court ruled that more information was needed regarding expected profits before a
determination could be made as to patentability.
Answer:
Temporary insiders are persons not directly employed by the corporation, but who
acquire confidential information through the performance of professional services.
a. True
b. False
Answer:
The assumption of risk doctrine makes the manufacturer liable for a resulting injury.
a. True
b. False
Answer:
Which of the following is true regarding battery?
a. Battery is the negligent, nonconsensual, harmful or offensive contact with the
plaintiff’s body or with something in contact with it.
b. Battery is the intentional, nonconsensual, harmful or offensive contact with the
plaintiff’s body or with something in contact with it.
c. Battery is the intentional, consensual, harmful or offensive contact with the plaintiff’s
body or with something in contact with it.
d. Battery is the negligent, consensual, harmful or offensive contact with the plaintiff’s
body or with something in contact with it.
Answer:
Roxanne has a serious heart condition. She has worked as an administrator with
employer-sponsored health insurance at Big Company for ten years. She has been
offered a great job at Up and Coming Company that she would like to take. It pays
slightly less but has great opportunities for advancement. Up and Coming has health
insurance, but there is a preexisting condition with the insurance excluding coverage for
any preexisting health condition for six months. Roxanne says that if she takes the job
at Up and Coming she will not be able to afford to continue her health insurance from
Big Company. Up and Coming wants her to start immediately. She is in a quandary
about what to do. What would you advise her to consider?
a. She should consider relying on the Health Insurance Portability and Accountability
Act which would likely prohibit enforcement of the preexisting condition exclusion.
b. She should consider relying on the Consolidated Omnibus Budget Reconciliation Act
which would require that Big Company pay for the continuation of her insurance
through Big Company for six months.
c. She should file for assistance with the insurance payments under the Worker
Adjustment and Retraining Notification Act.
d. She should not take the job with Up and Coming because she cannot afford to take a
risk with the preexisting condition exclusion.
Answer: