Fact Pattern 30-1
David has worked as a CPA for Accountants R Us for about eight months. When his
wife had a baby, he requested to take some time off. He believes he is allowed to do so
pursuant to the Family and Medical Leave Act.
Does the Family and Medical Leave Act apply to professionals like CPAs?
a. Yes, if they work for a company with at least 50 workers.
b. Yes, but only if they are paid on an hourly basis.
c. No, but the professional firm must provide adequate vacation and sick days.
d. No, unless the employer specifically provides coverage.
Wanda is a teacher at a public school in New Jersey. At a press conference she
complains that standardized tests are generally worthless, and nothing more than an
economic scam on the public because the school board appropriates money for tests,
pays a grading service, and buys “teaching guides. The school board has an emergency
meeting and votes to fire Wanda immediately. What, if true, is Wandas strongest
argument in favor of her reinstatement?
a. The school board does not usually have emergency meetings.
b. The school board cannot restrict the speech of its employees.
c. The teacher handbook demands formal hearings prior to any suspension or firing.
d. Wanda had a constitutional right to be a whistleblower.
Janice wrote a song called “Feelings of Love.” She wrote the piano score and lyrics for
a class she was taking at college and turned it into her professor.
a. Janice’s song was automatically copyrighted when she wrote it down on paper.
b. If Janice wishes to enforce her copyright, she must first register her song with the
Copyright Office.
c. Both of the above are correct.
d. Neither a nor b.
An assignment is valid and enforceable against all parties::
a. from the moment it is made.
b. from the moment the assignor notifies the obligor.
c. from the moment the assignee notifies the obligor.
d. from the moment the obligor is notified from any source.
A marketing representative who is tempted to engage in price-fixing due to heavy
competition and similar prices for competitors’ products should:
a. emphasize factors of her product that do not involve price.
b. emphasize service, reliability, and other factors of her company.
c. understand the serious criminal and civil penalties of engaging in price-fixing.
d. All the above.
Which of the following started out as a trademark name?
a. Zipper.
b. Linoleum.
c. Nylon.
d. All the above.
What is a major difference between a United States lawsuit versus a French lawsuit?
a. In a French civil lawsuit, there is usually no right to a jury trial.
b. The French legal system does not engage in extensive discovery procedures
commonly used in the United States.
c. In a French lawsuit, the rules of evidence are more flexible.
d. All of the above are correct.
In the case of Leegin Creative Leather Products Inc. v. Psks, Inc.the court had to
decide..
a. Is price fixing legal if the prices are reasonable?
b. Is resale price maintenance a per se or rule of reason violation of the Sherman Act?
c. both a & b are correct.
d. None of the above.
Rachel and Cyndi started a retail business called Zebra Toy Company. The business is
operated as a partnership. Under partnership law:
a. Rachel is personally liable for any business contracts entered into by Cyndi.
b. Rachel is personally liable for any business debts, regardless of whether she or Cyndi
created the obligation.
c. Rachel is personally liable for any negligent act committed by Cyndi in the scope of
the business activity.
d. All the above.
Express authority can be created by:
a. words spoken directly to the agent.
b. conduct.
c. written words given to one person to give to another person, the agent.
d. All the above.
What is the definition of default?
a. According to the UCC a debtor must be late on 3 consecutive payments and not
remedy within 90 days.
b. The parties define default in the security agreement.
c. The debtor failing to maintain insurance/
d. None of the above.
Tony raped Jane in the parking lot of Joe’s Brew Pub. The District Attorney’s office
prosecuted Tony on rape charges. Subsequently, Jane filed a lawsuit against Tony for
money damages. Classify each legal action.
a. The District Attorney’s case was a criminal case; Jane’s lawsuit was a civil case.
b. The District Attorney’s case was a civil case. Jane’s lawsuit was a criminal case.
c. Both cases are criminal.
d. Both cases are civil.
What is a choice of law provision:
a. determine which states laws will be used to interpret the contract
b. determines the state in which any litigation would take place
c. prohibits the parties from suing in court
d. none of the above
The term “issuer:
a. is not used in relation to commercial paper.
b. is an all-purpose term that means both maker and drawer.
c. is synonymous with drawee.
d. is used in relation to commercial paper only to indicate the bank which creates a
certificate of deposit.
Jennifer has offered to sell her laptop computer for $750 to Jack. She tells Jack that the
computer is only six months old but, in fact, it is three years old, and Jennifer wants to
unload the lemon. Jack agrees to buy the computer based on Jennifer’s representations.
This contract is:
a. a void agreement because of the fraud involved.
b. a voidable contract, one that Jack can void.
c. a voidable contract, one that Jennifer can void.
d. a void contract because of the UCC.
Generally, constitutional protections do NOT apply to:
a. acts of the federal government.
b. acts of state government.
c. acts of administrative agencies.
d. acts of privately owned businesses.
Mark signs a periodic year-to-year lease at the River’s Edge Warehouse. After the year
expires, Mark stays in the warehouse and the landlord acquiesces. Mark:
a. Has a month-to-month periodic lease, which can be terminated by either party’s
giving a 30-day notice.
b. Has a tenancy at sufferance which is not a true tenancy at all.
c. Has another one-year lease. Periodic tenancies automatically renew unless either
party gives proper notice to the other that the tenancy will terminate upon the expiration
of the time period.
d. None of the above.
Joel is displeased with his sons lifestyle choices and, instead of dividing his estate, Joel
wants to leave all of his property to his daughter, Marie, when he dies. Joel:
a. may not leave everything to his daughter and nothing to his son. If Joel tries to do
this, his son can take a forced share of his fathers estate.
b. may disinherit his son, but he must indicate in the will his reason for doing so.
c. may disinherit his son for any reason as long as Joel indicates in the will that the son
was omitted on purpose.
d. may disinherit his son only if Joel leaves the son a nominal amount, such as $1.
If a buyer unjustly refuses to accept or pay for goods,
a. the injured seller may resell them.
b. the seller may recover the difference between the resale price and contract
c. the seller may recover incidental damages, minus expenses saved
d. all of these answers are true.
Jerry offers to shovel the snow from Ben’s driveway for $35. Ben replies “OK.” This is
an example of:
a. an implied, unilateral contract.
b. an express, unilateral contract.
c. an implied, bilateral contract.
d. an express, bilateral contract.
We Care, a nonprofit environmental organization, believes that Quanaco is violating the
Clean Air Act. The EPA has not taken any action against Quanaco. We Care can file a
citizens suit against the EPA.
What administrative agency regulates pesticides, insecticides, fungicides and
rodenticides?
a. The Food and Drug Administration.
b. The Occupational Safety and Health Administration.
c. The EPA.
d. All the above.
To simplify, clarify, and modernize the law governing commercial transactions, the
UCC permits the use of “open terms” in sales contracts. In the use of “open terms,”
which of the following is true?
a. The court will use market value and other comparable sales to determine what a
reasonable price would have been at the time of delivery if the parties have not settled
the price in the contract.
b. If time of payment is not mentioned in the contract, payment within a commercially
reasonable time is presumed.
c. If the contract permits the buyer or seller to determine the price during contract
performance, the UCC requires the party to do so in good faith.
d. All of the above are true.
In 1992, the North Carolina Supreme Court ruled in a case entitled Goodman v. Wenco
Foods, Inc., that when a substance in food causes injury to a consumer of the food, it is
not a bar to recovery against the seller that the substance was natural to the food. If, in a
2008 case involving a consumers injury caused by a fish bone in a bowl of fish
chowder, the court followed the decision in Goodman v. Wenco Foods, Inc., the court’s
action in the second case is an example of:
a. stare decisis.
b. statutory law.
c. public law.
d. criminal law.
Hasbro, Inc., the trademark owner of “Candy Land,” sought a court injunction to stop
Internet Entertainment Group, LTD from using the domain name, “candyland.com.”
Internet Entertainment Group had established a sexually explicit site at the domain
name. This injunction would have to be issued by:
a. a jury.
b. a judge exercising equitable powers.
c. an executive order.
d. a subpoena.
Under the UCC, the writing need not completely summarize the agreement.
a. it is only required that the writing be sufficient to indicate that the parties made a
contract.
b. the writing does not have to be signed by a party
c. it just has to contain the price of the good sold.
d. none of the above
A company is not liable for sexual harassment committed by its employees if:
a. the victimized employee is still able to work
b. the victim was not another employee
c. the victimized employee has not been demoted or had a job-related detriment
d. it used reasonable care to prevent sexual harassment
Fact Pattern 30-1
David has worked as a CPA for Accountants R Us for about eight months. When his
wife had a baby, he requested to take some time off. He believes he is allowed to do so
pursuant to the Family and Medical Leave Act.
How many weeks is David allowed to take off under the Family and Medical Leave Act
in this situation?
a. Six weeks.
b. 12 weeks.
c. 24 weeks.
d. None.
The intent of the offeror to extend an offer to the offeree is generally determined by
reference to:
a. the beliefs of the offeror.
b. the subjective intention of the offeror.
c. the assumptions of the offeror.
d. the words and conduct of the offeror.
Paul decided he did not want the new jeans he had purchased from a large discount
department store. He had worn them three times and decided he just did not like them.
The jeans fit him fine and there is nothing wrong with them. He takes the jeans back to
the store and, as is its policy, the store gave him a full refund of his money. Which
statement is correct?
a. Paul’s conduct was ethical as long as he was within the time frame for returns.
b. Paul’s conduct was unethical.
c. This is not an issue of ethics since people do this all the time.
d. Paul’s conduct was ethical since the store has a legal duty to return his money when
he returned the jeans.
A state law prohibits firefighters and school teachers from going out on strike. Though
they are allowed to organize into collective bargaining units, state law prohibits them
from striking. Such a state law:
a. is legal.
b. is not legal since the U.S. Supreme Court has ruled such a state law violates the equal
protection clause of the Constitution.
c. is not legal since the federal law (NLRA) preempts state law.
d. is not legal because the right to form unions is illusory without the right to strike.
Lacy sets her textbook under her chair in her business law class and then forgets to take
it with her when she leaves the classroom. A janitor later discovers the textbook and
gives it to the Dean of the Business College. In this situation:
a. the college is a constructive bailee, obligated to return the textbook to Lacy, and until
it does, it is liable for harm to the property.
b. the college is a bailee by agreement because holding items in a lost and found box is
generally part of the college-student agreement when the student enrolls for classes.
c. the college is responsible for the discovered textbook because in this situation, the
college is subject to implied warranties unless the college has disclaimed such
warranties in the student handbook.
d. this is a bailment for the sole benefit of the bailee.
When may an employer require an employee to submit to a lie detector test?
a. When the employee has been hired for less than 90 days
b. When the test is part of an on-going investigation into crimes that have occurred.
c. When the employer has reason to believe the employee is using illegal drugs on the
job.
d. When all employees are being questioned using a lie detector.
Why should ethics be a concern to business?
a. Society as a whole benefits from ethical behavior.
b. People feel better when they behave ethically.
c. Unethical behavior can be very costly.
d. All of the above.
Sophie issues a promissory note made “payable to the order of Molly.” Molly indorses
the note by signing her name and gives the note to Dana. Which of the following is
correct?
a. Sophie issued a bearer instrument and Molly kept it in bearer form.
b. Sophie issued an order instrument, but Molly changed it to bearer form.
c. Sophie issued an order instrument and Molly kept it in order form.
d. Sophie issued a bearer instrument and Molly changed it to bearer form.
Daniel went onto an Internet message board and found that his ex-wife, Faye, had
posted a message calling him a fat, insensitive jerk who only cared about watching
sports on TV. Does Daniel have any protection against Fayes making such statements to
a potentially large number of readers, some of whom may know Daniel and some of
whom may not?
A partnership is a taxable entity, separate from the partners.
Gary, Louise, and Brian, who own competing gas stations in town, happen to see each
other at a restaurant one morning and have breakfast together. While talking, they
decide to set their gas prices at the same amount. They have committed an illegal act
only if the agreed price is unfair to consumers.
Barnett was orally hired by Paula to locate desirable real estate that she could use for
rental property. She stated she wanted to find a four-plex that could be purchased for
under $200,000 that could be rented for at least $1,000 per month per unit (which
equates to $4,000 rental per month for the property). Barnett located a four-plex that
could be purchased for $160,000 and was renting for $1,200 per unit. It was such a
good deal that he purchased it for himself. About two months later he found a second
property that was listed for $199,000 and rented for $1,000 per unit. Paula purchased
the property. Afterwards, she learned that Barnett had bought the $160,000 four-plex for
himself without telling her about it. Paula believes that Barnett has acted improperly.
Barnett claims that he did what she asked — he found a property for under $200,000 that
rented for $1,000 per unit. He also claims that since their agreement was oral, he has a
legal defense if she pursues the matter in court. Does Paula have any legal recourse
against Barnett? Explain.
Because local regulation is ineffective in controlling air pollution, Congress passed the
Clean Air Act of 196
After completing an audit, the most unfavorable opinion an auditor can issue is a
disclaimer of opinion.
Discuss the potential liability differences between a delegation and a novation.
A rule that establishes maximum length of work shifts for air traffic controllers is an
example of an administrative regulation.
A intensely negative opinion cannot be defamation.
In business law, a lawyers primary job is to represent the client in contract litigation.
Parents may not disinherit their minor children without good reason.
Most Americans spend a considerable percentage of their disposable income on
insurance. What can you do to reduce this expense?
An exculpatory clause is generally enforceable when it attempts to exclude an
intentional
tort or gross negligence.
Discuss what considerations are made when determining what accommodations are
reasonable?
A minor (under age 18) can prepare a valid will if it is co-signed by a parent.
Briefly discuss how an offer can be accepted. Include offers for both bilateral and
unilateral contracts.