Linda’s company has a code of ethics and a separate code of conduct. If she wants to be
sure that she complies with the company dress code, she would reference the code of
ethics.
A handyman goes to the wrong house by mistake and cleans the gutters while the
homeowners are at work. The homeowners will have to pay for the service under the
quasi-contract theory of unjust enrichment.
Altering people’s values is one of the objectives of an organizational ethics program.
About half of the states provide the same level of protection to general partners in an
LLP as is provided to a limited partner in a limited partnership.
Lori owes the bank the full amount of the loan that she guaranteed since collection
action against Becky was unsuccessful.
Liquidated damages must be directly related to the breach of contract they are
compensating the nonbreaching party for.
Debentures are unsecured promises to pay back money with interest at a certain date
and are backed by the strength of the general credit of the corporation.
The physical presence of an out-of-state party in a particular state is generally an
automatic basis for jurisdiction over the defendant by both that state’s courts and the
federal trial court within that state.
Ms. Bobbin, your ethics teacher, is a first-year professor, just out of school, and she is
very tough and demanding. You’ve done poorly on the first two tests, and you think it’s
her fault. Someone tells you that she has a criminal past, and, without verification, you
spread this allegation. In fact, Ms. Bobbin has been a model citizen and never broken
the law. As a result of your actions, she is put on probation, pending an investigation.
She cannot sue for defamation because, as a professor, she is a public figure and your
conduct was intentional but not a careless disregard of the truth or an act done with
malice.
Only businesses are able to file for Chapter 13 bankruptcy.
Contractual consideration is defined as the thought process a party uses to decide
whether or not to accept the offer and enter into a contract.
If businesses or individuals emit a substance into a water source as part of their
facilities’ operation, they are not required to have a permit if they are not causing
pollution.
According to the decision in Brown v. Entertainment Merchants Association, the court
applied an intermediate-level scrutiny standard because the state’s action was related to
a fundamental rightfreedom of speech.
In the absence of an agreement to the contrary, the Revised Uniform Partnership Act
mandates that general partnership profits be split equally among the partners.
Ownership of personal property is governed by federal law.
If an item has been patented but has not been marked as patented and infringement
occurs, the patent holder is generally barred from collecting damages.
Your school or college has just received a specialized accreditation for which a lot of
work has been done. This specialized accreditation is a great achievement. If the
accrediting body takes a picture from your school or college’s website and publishes the
picture as a thumbnail, along with a hyperlink to your school or college’s website, on its
site to advertise or announce the accomplishment, the accrediting body is infringing on
the picture’s copyright.
The operating agreement of the LLC often controls the amount and methods of
capitalizing the business.
States may require that LLPs carry liability insurance to protect clients and customers
as a condition of LLP formation.
The Social Security Act is funded through mandatory employment taxes paid by both
the employer and the employee.
Family limited partnerships are designed for parents and children to operate a business
together while protecting family-related assets.
All contracts can be described in seven ways.
Title to commercial real estate is conveyed through a contract, while title to
noncommercial real estate, such as private homes, is conveyed through a deed.
The main role of the bankruptcy trustee is to protect the assets of the estate.
Bankruptcy is the only option for businesses that want to not be liable for their debts.
Allen calls PepsiCo, the makers of Pepsi Cola, saying that he’s an employee of
Coca-Cola and he has the Coca-Cola secret recipe. The recipe is legendary as a closely
guarded secret supposedly known to only a handful of people in the world. They
arrange a meeting. Allen begins the meeting by stating that he acquired the recipe
legally, and the PepsiCo representative says that she believes him and PepsiCo will buy
it. Allen in fact stole the recipe. Since PepsiCo does not know specifically that the
recipe was acquired improperly by Allen, the company cannot be guilty of
misappropriation.
Marbury v. Madison, decided in 1803, is no longer considered valid precedent and has
been preempted by statute.
The standard for finding violations of the Foreign Corrupt Practices Act has never been
amended.
Employers, in some states, enjoy an absolute privilege when giving employment
references as long as the reference is factual and without malice.
Alan is the attorney representing Derek in bankruptcy hearings. His fees have the
highest priority among the other unsecured debtors.
Congress may tax activities and property that it might not be authorized to regulate
under any of the enumerated regulated powers.
Collection agencies may threaten to put the debtor in jail in an effort to recover the
money that is owed to the creditor as long as the debt is legitimate and overdue.
Legal purpose means the contract itself does not violate the law.
The National Environmental Policy Act (NEPA) applies to interstate highway
construction.
Which of the following is an example of a suggestive trademark?
A. Fruit of the Loom
B. Victoria’s Secret
C. eBay
D. IHOP
In Mink v. AAAA Development LLC, the court refused to grant personal jurisdiction over
AAAA because:
A. Texas courts refused to follow the Zippo standard since Zippo was decided by a
federal district court, a court that does not establish precedent.
B. the court adopted the Zippo standard and found that the AAAA site had no level of
interactivity, so no minimum contacts were established.
C. the court adopted the Zippo standard and found significant interactivity and more
than sufficient minimum contacts but reasoned that Vermont was so distant from Texas
that it would be unfair to subject AAAA to a Texas lawsuit.
D. the court adopted the Zippo standard and found that there was minimal interactivity
on the AAAA site, which didn’t rise to the level of minimum contacts sufficient to
create personal jurisdiction in Texas.
Roger is the CFO of a corporation and is having a business dinner with some of the
company’s largest shareholders. Roger knowingly and intentionally starts drinking a
variety of alcoholic drinks and even excuses himself to secretly snort cocaine in the
men’s room. By the end of the evening he is obviously intoxicated. His dinner
companions keep buying more rounds of drinks, and Roger needs no urging to continue
drinking. By dessert he is obviously extremely intoxicated. At that point his
companions ask him to sign a variety of documents, which he doesn’t read due to his
condition. The documents turn out to be falsified financial statements, which are then
supplied to the accountants who are auditing the company.
A. Roger’s act of signing the documents is enough for him to be guilty of criminal
fraud.
B. Because Roger was voluntarily intoxicated, he has no defense against a charge of
criminal fraud.
C. Because Roger was so intoxicated, he likely could not have formed the required
mens rea and would not be guilty of criminal fraud.
D. Roger is not guilty of criminal fraud because he did not voluntarily sign the
documents due to his intoxication.
Which of the following is not an option available to a general partnership seeking
capitalization?
A. borrowing money from one or more of the partners
B. selling the right to a percentage of the profits to an investor
C. selling ownership rights through the public markets
D. borrowing money from a commercial lender
The Uniform Residential Landlord-Tenant Act (URLTA) applies to both commercial
and residential agreements.
Platkos Inc., a U.S. company, applies for a permit to import its goods to Russia. A
Russian official denies the permit. Platkos hires a Russian consultant, a very low level
official, to act as a lobbyist. The consultant is paid a very large fee. When the permit is
approved, Platkos sends the consultant a thank-you gift. Is this scenario permissible
under the FCPA?
Both Lloyd and Harry are claiming patent rights protection for the same invention that
each independently created. The rights to protection will be awarded to:
A. the first to file for the patent.
B. the first to have his application approved.
C. the one who actually completed the invention first.
D. the first to bring the invention to the public realm.
The corporation with the most shareholders is the:
A. public corporation.
B. professional corporation.
C. publicly held corporation.
D. nonprofit corporation.
The primary authorization of constitutional powers is given to Congress under:
A. the Preamble to the Constitution.
B. Article I of the Constitution.
C. Article VI of the Constitution.
D. the Bill of Rights.
Trade secret protections are provided through:
A. state statutes and common law.
B. federal statutes.
C. the U.S. Constitution.
D. the Uniform Trade Secrets Act.
The National Environmental Policy Act (NEPA) sets out a ________ for making
decisions.
Delaware is a popular state for many corporations to incorporate in. Each of the
following is a Delaware incorporation advantage except:
A. Delaware has a well-established body of case law, so the reliability and consistency
of judicial decisions are enhanced.
B. Delaware statutes give officers and directors a wide range of decision-making
latitude, not requiring shareholder consent.
C. Delaware statutes provide officers and directors strong protections from shareholder
lawsuits alleging management negligence.
D. Delaware’s tax structure provides significant tax benefits to out-of-state corporations
incorporating in the state of Delaware.
Mitigating circumstances:
A. if proved, may excuse a defendant from an alleged crime.
B. if proved, may be applied to reduce a defendant’s punishment.
C. are the elements of a crime that must be proved at trial.
D. refer to the procedures that must be followed during the investigation of a crime.
Jonathan has graduated and wants to start a business. Which business entity gives him
the most complete and exclusive control over the business and any business decisions?
A. sole proprietorship
B. limited liability company
C. corporation
D. general partnership
Which of the following is not impermissible collector contact under the Fair Debt
Collection Practice Act?
A. contacting the debtor at inconvenient times or at inconvenient places
B. contacting the debtor once the debtor gives written notice of refusal to pay the debt
C. contacting the debtor once the debtor has asked the creditor not to call
D. contacting the debtor once the debtor informs the collector of attorney
representation
The ultimate arbiter of federal law is:
A. the Senate.
B. the President.
C. the U.S. Supreme Court.
D. the full Congress.
Angel is Hispanic and has applied for a job at Buckets Inc. Buckets Inc. has a
workforce that is 45 percent Hispanic, 35 percent black, and 20 percent white. This
closely approximates the workforce available to Buckets. Angel is turned down for the
job and is told that Buckets has too many Hispanics, so he couldn’t be hired. He is a
victim of:
A. mixed motives discrimination.
B. disparate treatment.
C. affirmative action.
D. disparate impact.
Car performance standards are regulated by the EPA.
Which of the following is not an example of a trademark lost, or in danger of losing
protection, due to its becoming a generic term?
A. Kleenex
B. Band-Aid
C. Ford
D. Aspirin
Which act regulates the leasing relationship in which the consumer has possession of a
motor vehicle in exchange for monthly payments?
A. Consumer Lending Act
B. Truth in Lending Act
C. Magnuson-Moss Act
D. Equal Credit Opportunity Act
In Goodrich Corp. v. Town of Middlebury, there were two public landfills that were
designated as Superfund sites. The principally responsible parties formed a coalition to
sue several municipalities for assistance in cleanup costs. During the litigation, a special
master was appointed to determine which parties contributed waste and how much each
contributed. When the case went to trial, the district court chose not to follow the
determinations of the special master; instead, the court itself determined the liability of
the municipalities. The decision was appealed. The appellate court determined that
disregarding the special master’s determination of liability was:
A. permissible for the district court because it was within its rights to determine that
the municipalities were more liable than the special master had determined.
B. not permissible because the district court was legally bound by the Superfund to
accept the liability findings of the special master.
C. permissible because the special master should not have been appointed.
D. not permissible because there was no error of law in the determination of liability.
The clean hands doctrine is most specifically applied to:
A. primarily plaintiffs.
B. primarily defendants.
C. both plaintiffs and defendants equally.
D. the judge and jury deciding the case.
In which case did the Supreme Court hold that a unilateral boycott does not fall under
the Sherman Act?
A. Greyhound v. International Business Machines Corp.
B. United States v. Colgate
C. United States v. Grinnell
D. Covad Communications Co. v. BellSouth Corp.
A motion for a court to issue a ruling declaring that no trial is necessary because there
are no essential facts in dispute is called a:
A. motion for summary judgment.
B. motion to dismiss for mistrial.
C. motion for a judgment as a matter of law.
D. motion to dismiss.
In American Express v. Italian Colors Restaurant, American Express entered into
agreements with Italian Colors Restaurant and other merchants that accept American
Express credit cards. The agreement required that all disputes be settled through
arbitration and prohibits class actions. The merchants filed a class action antitrust claim
against Amex, arguing that they should be allowed to bring the claim as a class because
the cost of expert analysis to prove the case exceeded the maximum recovery available
to an individual merchant plaintiff. How did the U.S. Supreme Court decide?
A. The Court ruled for the merchants because not allowing the case would frustrate the
purpose of having antitrust laws.
B. The Court ruled in favor of Amex, holding that the Federal Arbitration Act (FAA)
does not permit courts to invalidate a contract based solely on the grounds that a
plaintiff’s dispute resolution costs exceed any potential amounts to be recovered. The
Court concluded that the FAA reflects the overarching principle that arbitration is a
matter of contract and that courts had a responsibility to rigorously enforce arbitration
agreements according to their terms.
C. The Court ruled for the merchants because the waiver of class arbitration was not
voluntary.
D. The Court ruled for Amex, holding that it did not violate antitrust laws.
The Fair Labor Standards Act imposes restrictions on hiring workers under:
A. 18 years old.
B. 17 years old.
C. 16 years old.
D. 15 years old.
All income and losses of an LLP are reported:
A. on the entity’s return.
B. to the IRS and state and local tax authorities.
C. on the partners’ individual returns.
D. annually.
Which of the following is an incorrect statement?
A. A corporation may file suit in its own name without the principals filing suit.
B. A corporation may form a contract in its own name without the principals
guaranteeing the contract.
C. A corporation can be sued without the principals being sued.
D. A corporation may not incur obligations separate from those of its principals.
Angelina hires Brad to drive a truck to a depot 200 miles away. She specifies the route
that he is to take and tells him to be sure to arrive by 5 p.m. On the way, Brad finds
himself nodding off due to hunger. He checks the time and finds that he has plenty of
time to make the 5 p.m. deadline, so he decides to stop at a diner that he is familiar
with. The diner is three-quarters of a mile off the route that Angelina had specified.
Brad does not call Angelina to ask for permission. On the way to the diner, Brad runs a
red light and has a collision with Billy Bob. Billy Bob sues Angelina.
A. Angelina wins because Brad was on a detour, freeing her from liability.
B. Angelina wins because Brad was on a frolic, freeing her from liability.
C. Angelina loses because Brad was on a detour, so she is liable.
D. Angelina loses because Brad was on a frolic, so she is liable.
The act of taking away private property by the government is called:
A. police powers.
B. condemnation.
C. eminent domain.
D. easement.
How are the Clean Air Act’s tailpipe emission standards set?
A. Each state adopts its own standards.
B. Each state may choose between the federal and California standards.
C. Each state must use the federal standards.
D. The car manufacturers set the emission standards.
When a company is developing a code of ethics, what are the four key points that must
be followed to create a usable and effective document?
Name the seven computer crimes defined in the Computer Fraud and Abuse Act as
amended by the Patriot Act.
In 1975, Denise purchased a used Volkswagen Beetle from Don. At the sale, Don
produced a title to the car that said it was a 1972 car. In 1976, Denise sold the car to Ed,
delivering a title stating that the car was a 1972 Volkswagen Beetle. Both titles were
genuine and issued by the proper state office. In the 1970s, Volkswagen Beetles
underwent essentially no body changes and, quite frankly, the cars were
indistinguishable from year to year except to experts. When Ed takes the car to his
mechanic for some routine maintenance, he is told that the car is actually a 1970, not a
1972, model. Ed immediately calls Denise and accuses her of fraud. Denise calls Don
and is told that the car was indeed a 1970 car but he had replaced the motor with a new
1972 motor and had the car reregistered for the year of the new engine, an act which at
the time was legal in their state. Has Don committed an actionable wrong? Has Denise
committed any form of an actionable wrong?
You have just graduated and you want to start your own business. You have a degree in
horticulture, so you have chosen to open a florist shop and plant nursery. What type of
business entity will you choose? Explain its benefits and detriments in detail.
Criminal ________ deals with the limits set on the government’s authority when
applying or enforcing criminal law.
A contract that is so blatantly unfair that it shocks the objective conscience would be
rendered unenforceable and subject to the defense of _______.
When a store places an advertisement in a newspaper or runs an ad for broadcast on the
radio, what are the store’s obligations if a customer arrives at the store and demands to
purchase the item at the advertised price? Be complete.
What is the underlying goal and function of the UCC, and why is it crucial to business?
Secured creditors must ________ their security interests before they are protected under
the UCC.
Discuss and explain the types of secondary law and how secondary law has an effect on
the American legal system?
The legal term for guilty knowledge that is an element of fraudulent misrepresentation
is _______.
A trial without a jury is called a ________ trial.
What are some examples of contracts in the business context, and how does having an
understanding of contract law help business owners and managers?
Harry entered into a contract with Sally in which she was to pay $50,000 for Harry’s
hunting cabin. All negotiations, witnessed by various third parties, stated the $50,000
figure as the sales price. When the contract was written, a typographic error was made
indicating a price of $5,000. At settlement, Sally tendered $5,000 and demanded the
deed in accordance with the written contract. Must Harry sell the cabin for $5,000?
An essentially minimal improvement to an existing invention that is not worthy of
patent protection is called a ________ improvement and is considered relatively
obvious.
What were the reasons offered to defend the fact that AIG had paid $165 million in
bonuses to certain employees?
Philip has taken a patented device and reproduced it, leaving out an insignificant
function. He would still be violating the original patent according to the doctrine of
______.
Jennifer is having a party and has invited her friends to her home. These social guests
would be legally classified as ______.