In all cases, an agency agreement must be written in order to be enforceable.
a. True
b. False
Answer:
In CASE 5.2EBC I, Inc. v. Goldman, Sachs & Co., (2005) the plaintiffs claimed that
Goldman Sachs breached a fiduciary duty in acting as an underwriter and in providing
advice to eToys, the plaintiff’s predecessor, in regard to an initial public offering of
stock. How did the court rule and why?
a. The court dismissed the case on the basis that Goldman Sachs as an underwriter
could not be considered a fiduciary based on its role in the transactions at issue.
b. The court refused to order a dismissal of the plaintiff’s claim and found that Goldman
Sachs’ failure to disclose a material conflict of interest established a claim for breach of
fiduciary duty.
c. The court dismissed the case because Goldman Sachs had every right to make a profit
out of the transaction so long as no actual misrepresentations were made to the
plaintiffs.
d. The court refused to order a dismissal of the plaintiff’s claim and found that Goldman
Sachs’ could be held liable based on material misrepresentations made to the plaintiffs
regarding the value of the stock involved in the initial public offering.
Answer:
The entering into of nondisclosure agreements is an unethical practice that should not
be tolerated by a legally astute manager.
a. True
b. False
Answer:
Over time the U.S. Supreme Court has changed its view of the scope of the Commerce
Clause.
a. True
b. False
Answer:
The Federal Trade Commission has _____ commissioners who serve for _____-year
terms.
a. seven; four
b. ten; five
c. six; six
d. five; seven
Answer:
The __________ Act prohibits any payment by a company, its employees, or its agents
directly or indirectly to a foreign government official for the purpose of improperly
influencing government decisions, unless the payment is a __________ to a ‘low
ranking’ official to expedite non discretionary granting of a permit or license.
a. Export Control Reform Initiative, facilitating payment
b. Office of Economic Cooperation and Development, facilitating payment
c. Foreign Corrupt Practices, facilitating payment
d. 1934 Securities Exchange Act, non-facilitating payment.
Answer:
A company’s CEO does not play a significant role in instilling a sense of ethics
throughout the organization.
a. True
b. False
Answer:
Which of the following is NOT true regarding seizures and searches after a traffic stop
by a police officer?
a. If a police officer makes a traffic stop that is objectively justified by probable cause
to believe a traffic violation has occurred, then it is irrelevant that the police officer
might have used the violation only as a pretext to stop the car.
b. Police officers need not inform detained drivers that they are “legally free to go”
before asking for consent to search their vehicles.
c. A police officer may order passengers out of a vehicle during the course of a traffic
stop.
d. Without driver consent, a police officer can conduct a full car search after issuing a
routine traffic citation.
Answer:
Which of the following does NOT generally make a contract voidable?
a. Fraud
b. Duress
c. Unilateral mistake of fact
d. Misrepresentation
Answer:
In regard to a product liability action, a disclaimer of liability is generally effective.
a. True
b. False
Answer:
The duration of a copyright granted to a known individual, not a work done for hire,
will be:
a. the life of the author plus 100 years.
b. the life of the author plus 70 years.
c. 75 years after the first publication.
d. 100 years after the creation of the work.
Answer:
The duty of care includes the duty to make informed decisions.
a. True
b. False
Answer:
The main issue in CASE 2.1 Northeast General v. Wellington Advertising(1993) was
whether:
a. the finder’s fee agreement was valid and enforceable.
b. the CEOs had conspired to deny a finder’s fee to Sternau.
c. a relationship of trust with fiduciary-like obligations was created under the parties’
finder-seller agreement.
d. Margolis engaged in fraud when he signed the agreement without his employer’s
permission.
Answer:
An illegal contract is generally considered a voidable contract.
a. True
b. False
Answer:
Most states have adopted the Uniform Electronic Transactions Act.
a. True
b. False
Answer:
The type of deed used by the seller determines the scope of the warranties the buyer is
given.
a. True
b. False
Answer:
A shareholder who owns sufficient shares to outvote the other shareholders, or to
otherwise set corporate policy, and thus to control the corporation is known as a(n)
__________ shareholder.
a. controlling
b. absolute
c. manipulative
d. chargeable
Answer:
The patent practice of other countries is often different from that of the U.S.
a. True
b. False
Answer:
Breakup fees are liquidated damages for a terminated proxy fight.
a. True
b. False
Answer:
Which of the following is true regarding causation in a failure-to-warn claim?
a. Causation is not an issue so long as the plaintiff can prove that the defendant
intentionally refused to warn of known dangers.
b. Causation is not an issue so long as the plaintiff can prove that the defendant either
intentionally refused to warn of known dangers or negligently failed to warn of known
dangers.
c. Cause in fact, but not proximate cause, is required in a failure-to-warn claim.
d. In an extreme case, a judge may set aside a jury verdict on causation grounds.
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 is
the city’s best argument that the law imposing a higher fee on female restaurant owners
should be upheld?
a. That under the rational basis test, females should pay higher taxes so long as it can be
shown that they have a higher rate of business failure.
b. That under the intermediate level test, distinctions involving gender are examined in
the same way as distinctions based on guarantees in the Bill of Rights, and that the Bill
of Rights allows gender-based classifications.
c. That under the strict scrutiny test, gender is a legitimate method by which to delineate
differences between categories of citizens.
d. The city does not have a good argument because there is no justification for the
distinction under the substantially related test.
Answer:
__________ is the voluntary give-and-take parties engage in when coming to terms
with each other.
a. Litigation
b. Arbitration
c. Mediation
d. Negotiation
Answer:
What is required by the Sarbanes-Oxley Act of 2002 in regard to the certification of the
accuracy of public companies’ SEC filings and the adequacy of internal controls?
a. The chief executive officer, the chief financial officer, and all inside directors must
certify the accuracy of public companies’ SEC filings and the adequacy of internal
controls.
b. The chief executive officer, the chief financial officer, and any controlling
shareholder must certify the accuracy of public companies’ SEC filings and the
adequacy of internal controls.
c. The chief executive officer and the chief financial officer must certify the accuracy of
public companies’ SEC filings and the adequacy of internal controls.
d. The chief executive officer, the chief financial officer, and all outside directors must
certify the accuracy of public companies’ SEC filings and the adequacy of internal
controls.
Answer:
Under the UCC, the __________ term(s) must be in a writing order to satisfy the statute
of frauds.
a. price
b. quantity
c. identity of the parties
d. time and place for delivery
Answer:
A(n) __________ mark is a real word whose ordinary meaning has nothing to do with a
trademarked product.
a. arbitrary
b. suggestive
c. descriptive
d. fanciful
Answer:
A __________ is any crime that is punishable by death or imprisonment for more than
one year.
a. misdemeanor
b. felony
c. federal offense
d. white collar crime
Answer:
Which of the following is NOT a rationale of strict product liability?
a. Manufacturers should not escape liability simply because they typically do not sign a
formal contract with the end-user.
b. The law should protect consumers against unsafe products.
c. Manufacturers should not escape liability simply because they acted negligently as
opposed to intentionally.
d. Manufacturers and sellers of products are in the best position to bear the costs of
injuries caused by their products.
Answer:
Commercial paper is a term that describes short-term corporate indebtedness.
a. True
b. False
Answer:
The Computer Fraud and Abuse Act makes the accidental transmission of computer
viruses illegal.
a. True
b. False
Answer:
Under which of the following systems may a plaintiff recover for any amount of the
defendant’s negligence, even if the plaintiff was the more negligent party?
a. Pure comparative negligence
b. Ordinary comparative negligence
c. Contributory negligence
d. Assumption of the risk
Answer:
With a(n) __________ guaranty, subsidiaries guarantee, or pledge their assets as
security for, the parent’s debt.
a. downstream
b. upstream
c. leveraged
d. subordination
Answer:
__________ do not relieve a contracting party from their responsibilities under the
UCC doctrine of commercial impracticability.
a. Wars
b. Market fluctuations
c. Embargoes
d. Market fluctuations and embargoes
Answer:
Fact Pattern 20-1
Tonya is the president of Big Corporation. Big Corporation is looking for land on which
to build a new facility. Tonya locates suitable land, but purchases it for herself with
plans to sell it at a profit at a later date. Rick, the majority shareholder of Big
Corporation hears about Tonya’s purchase and complains to her about it. She tells Rick
that she viewed and purchased the land on her own time and that she did not breach any
duties owed to the corporation. Rick tells her that she should reconsider and that he
plans to discuss the matter with the rest of the board.
Refer to Fact Pattern 20-1. Did Tonya violate any duties owed to the corporation?
a. Yes, by buying the land for herself without disclosure to the corporation, she violated
the corporate opportunity doctrine.
b. Yes, by buying the land for herself without disclosure to the corporation, she violated
the duty of responsible decision making.
c. Only if the land involved was worth over $50,000 did she violate any duties because
any smaller amount would be considered de minimus.
d. No.
Answer:
Which of the following is true regarding the filing of a claim under Title VII?
a. There is no requirement that a claim be filed with the EEOC so long as a complaint is
filed by a private lawyer within six months after the alleged unlawful employment
practice occurred.
b. Although there is not a requirement that a plaintiff first file a charge of discrimination
with the EEOC, a plaintiff who does not file a charge may only recover back pay from
the date a court action is filed.
c. A plaintiff must file a charge with the EEOC, but the plaintiff may also personally
institute a court action to run concurrently with the EEOC investigation.
d. A plaintiff is required to file a charge with the EEOC; but in the event the EEOC does
not pursue the matter, the plaintiff may proceed personally after receiving a right-to-sue
letter from the EEOC.
Answer: