According to Michael Porter, a company should not undertake a corporate social
responsibility project unless
a. it is profitable for the company in its own right.
b. it improves the company’s reputation.
c. it truly makes a difference in the world.
d. it is absolutely necessary to do business.
Jimmy stole Daves motorcycle and completely revamped the engine and changed the
body. These accessions were very expensive, but Jimmy was completely satisfied with
the results, intending to sell the motorcycle for a huge profit. If the motorcycle is
recovered from Jimmy, Dave must pay Jimmy for the improvements.
a. True
b. False
A de jure corporation is not legal and cannot be recognized as a corporation because the
incorporation process was defective.
a. True
b. False
Which of the following guidelines applies to writing the title of a contract?
a. It should be written in general terms, like “Memorandum of Agreement.
b. It should be written like a sentence, with only the first letter capitalized.
c. It should be brief with no more than five words.
d. It should be descriptive of the agreement, and typed in all capital letters.
A & D, Inc. wrote a negotiable note payable to Vicy, Inc. for the purchase of some
satellite receivers. A & D left the amount of the note blank because it was uncertain as
to amount of the applicable tax. Vicy completed the note for $3,000 more than A & D
actually owed for the receivers it purchased. The note was negotiated to a holder in due
course. A & D will not have to honor the note as this constituted fraud in the execution.
a. True
b. False
The duty of care that each of us must follow is to behave as a reasonable person.
a. True
b. False
What is the name of the treaty that allows American patents to be recognized and
enforced in member countries?
a. The Paris Convention for the Protection of Industrial Property
b. The International Treaty of Trademarks and Patents
c. The World Agreement of London
d. The Berne Convention
A party that wants the Supreme Court to review a lower court ruling must
a. present a non obstante veredicto.
b. file a petition for a writ of certiorari.
c. file a petition for avoir dire.
d. present a motion to dismiss.
Master Glue Hairspray, Inc. contracts to purchase 100 umbrellas with its logo and
slogan, “A spray a day keeps the rain and wind away!” specially printed on the
umbrellas and its 1-800 telephone number on the umbrella handle. After the seller
completes the order, Master Glue refuses to accept or pay for the umbrellas. Because of
the special logo and telephone number, the seller has been unable to find a new buyer. If
the seller sues Master Glue, what is the proper measure of the seller’s damages?
a. Contract price minus market value of the goods at the time of delivery
b. Contract price
c. Lost profits
d. Cover price minus contract price
Mary goes into Honest Harry’s Electronics and purchases a TV. Mary agrees to pay for
the TV in 30 days on the store’s “30 days same as cash” plan. This is an executory
contract.
a. True
b. False
Carey decided to incorporate her business under the name yStar Inc. Before yStar was
incorporated, Carey signed a contract in the name of yStar, Inc. to have some office
space remodeled. Which statement is correct?
a. yStar is liable on the contract because the contract was signed in its name.
b. yStar becomes liable on the contract as soon as it is incorporated.
c. yStar is liable on the contract if the contractor knows that the corporation does not yet
exist.
d. yStar will be liable on the contract only if the corporation adopts the contract.
Sally prepared financial statements for MegaCorp knowing that the company would be
using her statements when applying for a loan at Big Bank. It is discovered she was
negligent in preparing the statements and Big Bank sued her. Sally is liable under the
a. Ultramares doctrine.
b. foreseeable doctrine.
c. Restatement doctrine.
d. All the above.
An advocate of the Chicago School’s position on antitrust legislation would ask which
of the following questions?
a. “Has a competitor been harmed?”
b. “Has competition been harmed?”
c. “Will competitors be allowed to freely enter the market?”
d. “Will interstate commerce be affected?”
Which of the following is NOT a core principle of the Fair Information Practices
(FIPS)?
a. Notice/Awareness
b. Choice/Consent
c. Privacy/Refusal
d. Access/Participation
David and George have a contract wherein George agrees to buy sporting goods and
equipment. Since the goods are not to be delivered for several months, they left the
price open. Under the UCC, which of the following will be true?
a. The price will be the reasonable price based on the market value of the goods at the
time of delivery or a price established by a neutral party or agency.
b. David has the freedom to set any price he wants considering George was foolish
enough to enter into a contract without a price established.
c. George has the right to establish a price because he is the buyer. David should have
taken steps to protect his sales interest.
d. None of the above. The contract is not valid because the terms are not definite and
certain.
The element of a contract that states the parties must be adults of sound mind is
consent.
a. True
b. False
Lucy and Rick sign a contract in which Lucy agrees to deliver 10 boxes of chocolates in
exchange for Rick’s promise to pay $5 per box. Lucy delivers the candy. Rick pays for
the goods. This contract is fully executory.
a. True
b. False
Which of the following contracts is most likely to be declared unconscionable?
a. A consumer sales contract which charges 300 times the fair market value of the
goods.
b. A consumer sales contract which limits the consumer’s remedies to repair or
replacement.
c. A contract between wholesaler and retailer which adds delivery charges at 15% of the
costs of the goods.
d. A sales contract between wholesaler and retailer which limits remedies such as
consequential damages.
A misdemeanor is distinguished from a felony based upon
a. the rules of evidence.
b. the length and place of possible imprisonment.
c. the burden of proof.
d. the type of intent.
Matt, a shareholder, can run for director by simply placing his name on the companys
proxy statement.
a. True
b. False
The elements in a defamation case are:
a. defamatory statement; falsity; communication; and injury.
b. a contract; knowledge of the contract; improper inducement; injury.
c. false or misleading fact statements; statements in commercial advertising; likelihood
of harm.
d. duty; breach of duty; proximate causation; and damages.
An employer would be expected to make reasonable accommodations for a disabled
worker, such as
a. creating a new job that the worker can do.
b. adapting the work environment for all employees so the disabled worker doesnt feel
segregated or stigmatized.
c. providing transportation to and from the workers home.
d. allowing a part-time schedule.
The parties to a criminal trial are the government and the defendant.
a. True
b. False
Ron, a minor, goes to the hospital for treatment of the flu. On the new-patient form Ron
signs, he agrees to pay for any care or treatment he receives. When billed for the
treatment
a. Ron must pay for the value of the benefit he received, because medical care is a
necessary.
b. Ron must pay for the benefit he received because the contract is fully executory.
c. Ron must pay for the benefit he received because he ratified the contract.
d. Ron does not have to pay for the benefit he received.
The name “Johnson Garage Doors cannot be a trademark because a surname is already
being used and other people have the right to continue to use the name.
a. True
b. False
Alice’s Aspirin Inc., produces and packages aspirin for sale to retail stores. Bob buys a
bottle of Alice’s aspirin at Dahl’s Food Stores. Two days later Bob takes two aspirin and
within minutes, becomes very ill and is rushed to the hospital, where it is found that a
defect in the aspirin caused the reaction. Which of the following is correct?
a. Bob can sue both Alice’s Aspirin Inc. and Dahl’s because he suffered personal injury
due to the defective product.
b. Bob cannot sue anyone because he assumed the risk of taking the aspirin.
c. Bob cannot sue anyone because he is not in privity with Dahl’s or Alice’s.
d. Bob can sue but will not be able to recover consequential damages for his medical
expenses.
Jenny is an officer of a corporation. She made a difficult business decision. When
challenged about her decision, the court ruled she had acted in good faith and that the
business judgment rule applied. As such
a. Jenny will not be held personally liable for any harm her decision has caused the
company.
b. Jenny’s decision will be reviewed by a court.
c. Jenny is immune from a lawsuit.
d. Jenny must resign from the board.
Juan has the right to walk (or drive) across his neighbor’s property to reach the highway.
Juan’s right is referred to an easement appurtenant which allows use of the land.
a. True
b. False
Paula is a sales agent for The Rock Insurance Company. Paula accepts a check from a
customer made payable to her in payment for the premium on an insurance policy. Prior
to depositing the check in The Rock’s bank account, Paula indorses the check as
follows: “The Rock Insurance Company, by Paula Beck, agent.” Assuming that Paula
has authority to indorse company checks, if the check is dishonored, then between
Paula, The Rock, and the bank:
a. Paula only will be liable.
b. Paula and The Rock will be liable.
c. The Rock only will be liable.
d. The bank will be stuck with the dishonored check.
The “dormant aspect of the Commerce Clause
a. is also known as the “negative aspect.
b. means that there are many unused powers still available to the government to
regulate trade between the states.
c. guarantees that Congress has the power to regulate trade with foreign countries that
have not yet developed trade practices with the United States.
d. guarantees that the states have the power, even if unused, to impose regulations
affecting interstate commerce.
A buyer who accepts goods but notifies the seller the goods are non-conforming
a. cannot recover any damages.
b. can recover the difference between the goods as promised and as delivered, plus
incidental and consequential damages.
c. cannot recover incidental damages.
d. cannot recover consequential damages.
In the case of an undisclosed principal, a third party
a. can only recover from the principal.
b. can only recover from the agent.
c. cannot recover at all.
d. can recover from either the agent or the principal.
A proxy is a vote that is mailed in, like an absentee ballot.
a. True
b. False