The Employee Polygraph Protection Act of 1988 prohibits most private employers from
doing all of the following except
a. requiring or causing employees or job applicants to take lie-detector tests.
b. using, accepting, or referring to, or asking about the results of lie-detector tests taken
by employees or applicants.
c. taking or threatening negative employment-related action against employees or
applicants based on results of lie-detector tests.
d. using lie-detector tests to investigate losses due to theft.
Secured transactions are governed by the Uniform Commercial Code (UCC).
a. True
b. False
In sales law, there is only one type of warranty of title.
a. True
b. False
A bank employee stealing funds from a client is an example of embezzlement.
a. True
b. False
When a limited liability company is dissolved, any member who did not wrongfully
dissociate may participate in the winding up process.
a. True
b. False
In some states, an otherwise unenforceable oral contract may be enforced under the
doctrine of promissory estoppel.
a. True
b. False
Etta is a director of Trendy Stuff Corporation. Without informing Trendy, Etta goes into
business with GR8 Things, Inc., in competition with Trendy. Etta is li-able for breach of
a. no duty or rule
b. the business judgment rule.
c. the duty of care.
d. the duty of loyalty.
Phillipa is the sole proprietor of Fun Floral Arrangements. As a sole proprietor, on Fun
Floral Arrangements profits, Phillipa
a. does not pay income taxes.
b. pays only personal income taxes.
c. is taxed twice.
d. pays both personal and sole proprietor income taxes.
A lien is an encumbrance on a property to satisfy or protect a claim for payment of a
debt.
a. True
b. False
Bob, research manager for CornAgri Products, Inc., ap-plies utilitarian eth-ics to
determine that an action is morally cor-rect when it produces the greatest good for
a. Bob.
b. CornAgri.
c. the fewest people.
d. the most people.
By using anothers trademark, a business could lead consumers to believe that its goods
were made by the other business.
a. True
b. False
Frugal Insurance Company sells a policy to Grover Company, in-suring the life of one
of Grovers key executives. When the executive dies, Frugal re-fuses to pay, noting that
it was not licensed to sell insurance in Grovers state and arguing that thus, its policy
cannot be enforced. Grover can recover
a. the amount of the policy from Frugal in full.
b. the amount of the premiums that Grover paid to Frugal.
c. as much of the amount of the policy from Frugal as will cover Grovers costs.
d. nothing.
A corporation can recapture any profits realized by an insider on any purchase or sale of
the firms stock within any six-month period.
a. True
b. False
The contract term “free on board indicates that the selling price of goods includes
transportation costs to the specific F.O.B. place named in the contract.
a. True
b. False
A circular letter”Dear Mr. or Ms. Jones, This is our biggest sale ever!isnotevidence of
an intent to enter into a contract.
a. True
b. False
A warranty of good title means that a seller warrants that he or shehas valid title to the
goods and that transfer of the title is rightful.
a. True
b. False
Richard is an adult. He enters into a contract to sell sixteen-year-old Jane his car for
$3,000. The next day Richard recieves an offer of $4,000 for his car from
twenty-year-old Bill. Richard
a. cannot disaffirm his contract with Jane because he is an adult.
b. can disaffirm his contract with Jane because Bill is an adult and contracts with adults
take precedence over contracts with minors.
c. cannot disaffirm his contract with Jane because she is a minor.
d. can disaffirm his contract with Jane because the contract has not been ratified.
Fresh Produce, Inc., and Great Grocery Stores dispute the interpretation of an
ambiguous phrase in their contract. In a suit between the parties to con-strue the
contract, a court may accept evidence of
a. consistent additional terms only.
b. consistent additional terms and contradictory terms only.
c. contradictory terms only.
d. anything extrinsic to the contract.
Under the covenant of quiet enjoyment, a landlord promises that a ten-ant will not be
disturbed in the possession of the premises.
a. True
b. False
Frank slips and falls on Guys Harbor Tour Boat and is injured. Frank files a suit against
Guys for $500,000. If Frank is 20 percent at fault and Guys is 80 percent, under the “50
percent rule comparative neg-ligence principles, Frank would recover
a. $0.
b. $250,000.
c. $400,000.
d. $500,000.
Ralph contracts to sell his Double-R Ranch to Samantha on May 1. On April 20, Ralph
tells Samantha that he will not go through with the deal. Samantha can recover
a. the cost of any property that Samantha would find suitable.
b. the cost of a similar, nearby ranch.
c. the Double-R Ranch.
d. nothing.
A party seeking to recover in quasi contract must show that he or she has been unjustly
enriched.
a. True
b. False
Gaye, a minor, signs a contract to buy a motorcycle from Hi-Valu Cycles by
mis-representing her age as twenty-one. Gaye fails to make the pay-ments. Hi-Valu
sues. Ordinarily, Gaye can
a. not return the motorcycle nor avoid further liability.
b. not return the motorcycle but can avoid further liability.
c. return the motorcycle and avoid further liability.
d. return the motorcycle but cannot avoid further liability.
An alien corporation is a corporation formed in another country.
a. True
b. False
Little Local Bank wrongfully fails to honor a check signed by its customer Andrea.
Little Local Bank is
a. not liable to Andrea for damages resulting from its refusal to pay.
b. only liable to Andrea for damages resulting from its refusal to pay if Andrea takes
action against the bank within one business day of the failure to honor the check.
c. only liable to Andrea for one half of the damages resulting from its refusal to pay.
d. liable to Andrea for damages resulting from its refusal to pay.
A bank cannot recover from a party who cashes a check bearing a forged drawers
signature once the bank has accepted and paid the item.
a. True
b. False
A person can insure anything in which he or she has an insurable interest.
a. True
b. False
Sound Financials Corporation sends daily e-mail ads to its previous customers and
those who have opted to receive the notices.Instable Investments, Inc., sends e-mail ads
to any e-mail address that Instable can find on the Web or otherwise generate.
Refer to Fact Pattern 6-1. One of the advertiserseither Sound Financials or Instable
Investmentsis acting within the bounds of federal law. Federal law permits the sending
of
a. unsolicited commercial e-mail.
b. solicited commercial e-mail only.
c. commerciale-mail to randomly generated addresses.
d. commercial e-mail to addresses “harvested from Web sites through the use of
specialized software.
An assignment of the interest of a limited partner dissolves a limited partnership.
a. True
b. False
Leona enters into a contract with Munchie Bakery to cater a sales conference. When the
conference is postponed indefinitely, Leona asks a court to cancel the contract and
return the parties to the positions that they held before its formation. This request
involves
a. specific performance.
b. an injunction.
c. rescission.
d. an action that the court cannot order.
OK Dry-Cleaning advertises so effectively that the regular customers of its competitor
Purity Cleaners patronize OK instead of Purity. This is
a. appropriation.
b. conversion.
c. wrongful interference with a contractual relationship.
d. no tort.
Administrative law consists of the rules, orders, and decisions of administrative
agencies.
a. True
b. False
Any conspiracy that has a substantial effect on U.S. commerce is within the reach of the
U.S. antitrust laws.
a. True
b. False
Ben files a suit in a federal district court against Cathy. Cathy loses the suit, appeals to
the U.S. Court of Appeals for the Second Circuit, and loses again. Cathy asks the
United States Supreme Court to hear the case. The Court agrees to hear the case. This
means that
a. at least four justices approve of hearing the case.
b. Cathys petition does not raise a possibility of an important constitutional question.
c. the amount in controversy in Cathys suit is greater than $100,000.
d. the Court feels that the lower courts judgments were erroneous.
Under the theory of negligence, the duty of care requires a careless act.
a. True
b. False