The Environmental Protection Agency was investigating whether Exgrow, Inc. violated
the Clean Air Act. Exgrow refused to give the EPA its computerized reports concerning
pollution. To get the reports, EPA should use
a. a stare decisis.
b. a de novo.
c. an excaliber.
d. a subpoena duces tecum.
Which approach to state regulation of securities requires an issuer to undergo a
full-blown registration complete with a merit review?
a. Registration by qualification
b. Registration by notification
c. Registration by coordination
d. Registration by merit
Silas asks his friend Shelby to come to his property to go fishing at his pond. If he fails
to warn her that the dock has a rotten spot and she falls through and is injured, Silas
would be held liable in most states.
a. True
b. False
Dewayne sold a space heater to Vivian, telling her it would heat a 200-square-foot area,
even though he knew it would effectively heat only about one third of that space.
Dewayne is liable for the intentional tort of fraud.
a. True
b. False
M & E contracted to sell 500 music stands to Coda, Inc. M & E shipped the stands in
accordance with the agreement. Coda paid for the stands as promised. The contract
between M & E and Coda is discharged by
a. full performance.
b. agreement.
c. rescission.
d. accord and satisfaction.
When fraud is committed during the sale of goods, all states allow the remedy of
rescinding a contract while still allowing the remedy of suing for damages.
a. True
b. False
Which of the following limitations does NOT apply to the government in civil
proceedings to take a person’s liberty or property?
a. Procedural Due Process
b. The Takings Clause
c. Substantive Due Process
d. The Equal Protection Clause
Generally, in comparison to a donee beneficiary, a creditor beneficiary has
a. about the same legal rights.
b. substantially greater rights.
c. substantially fewer legal rights.
d. virtually no legal rights.
To ________ means to make a good faith purchase of goods similar to those in the
contract.
a. reform
b. expect
c. cover
d. resolve
Deontologists would agree that the increasing medical concern over obesity in the
United States justifies federal regulation of high fat, high sugar, low nutrition food
advertising during childrens television programs.
a. True
b. False
The amendments to the U.S. Constitution protect the people from the power of state and
federal governments.
a. True
b. False
Tim wrote a negotiable note. Subsequently, Tim’s debts were discharged in bankruptcy.
If a holder in due course presents the note for payment, Tim does not have to pay.
a. True
b. False
Shelly offers to sell Jane goods both parties know are stolen. Jane accepts the offer, and
agrees to pay for the goods. Later, Jane refuses to accept or pay for the goods. If Shelly
sues Jane for breach of contract, what is the probable result?
a. The law would enforce this valid, enforceable contract.
b. Jane would win as this is a voidable contract.
c. Shelly would win as this is a unilateral contract.
d. The law would not enforce Jane’s promise, as it does not have a lawful purpose.
Which of the following statements regarding workplace bullying is accurate?
a. Bullying in the workplace does not subject employers to any real liability claims.
b. The Supreme Court in Indiana ruled that “workplace bullying” cannot be considered
a form of intentional infliction of emotional distress.
c. Studies show that workplace bullying is not a serious issue; only 10 percent of
employees have admitted to being bullied at work.
d. Not a single state has been able to pass anti-bullying legislation.
Unlike with patents, the ideas underlying copyrighted material need not be novel.
a. True
b. False
Which statement most accurately describes third party beneficiary rights?
a. A beneficiary may enforce a contract if the parties intended to benefit him and if
enforcing the promise will satisfy a duty of the promisee to the beneficiary.
b. If a promisee intended to make a gift to the beneficiary, the beneficiary may not
enforce the contract.
c. An intended third party beneficiary has no enforceable rights in a contract.
d. Incidental beneficiaries have enforceable rights against both contracting parties.
Theo believes that everyone must develop his or her own ethical rules. So whereas he
believes that gay marriage should be legal, he understands that other people might feel
differently. Theo would be considered to be a(n) _______ relativist.
a. individual
b. issue-oriented
c. cultural
d. societal
Wanderlust gave a security interest in his Conestoga wagon to Iowa Bank who
perfected its security interest by filing a financing statement with the appropriate
officials in Iowa. Five months later, Wanderlust hit the trail again, moving to Montana.
If Iowa Bank wants to continue its perfected interest in the Conestoga wagon, it should
a. file a continuation statement for another five years in Iowa before Wanderlust moves
on.
b. re-perfect by filing a financing statement in the appropriate place in Montana,
according to Montana law, within four months of Wanderlust’s entering Montana.
c. repossess the Conestoga wagon.
d. file a continuation statement for another four months in Iowa before Wanderlust
moves on.
If Kay, a partner in an auction business, has a personal creditor who is aggressive about
collecting the debt,
a. Kay can sell her share in the partnership to repay the debt, regardless of what her
partners want her to do.
b. the creditor cannot attach the partnership property to pay off the debt.
c. the creditor can attach partnership profits by obtaining a charging order.
d. Kay cannot repay her personal creditor through her partnership assets under any
circumstances.
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, because it is unilateral.
d. a void contract because of the UCC.
John was driving home one night in a terrible snow storm when his car stalled. He
managed to push the car onto a small shopping center’s parking lot. The next day about
noon he came to get the car and it had been towed away by the owner of the parking lot.
The owner explained she had to remove the car to clean the snow off her lot and told
John where the car had been towed. Which statement is correct?
a. The owner of the parking lot is liable for conversion. She took John’s car without his
consent.
b. The parking lot owner has a absolute privilege for towing the car since it was a
business necessity.
c. Even though John left his car in the parking lot under emergency conditions, he still
committed a trespass on the owner’s property.
d. All the above are correct.
An agreement in which a buyer agrees to buy all the goods produced by a manufacturer
is known as
a. a requirements contract.
b. an output contract.
c. an exclusive dealing contract.
d. an option contract.
If a contract does not provide for a time for inspection, the UCC allows inspection to
take place
a. within a reasonable time.
b. the same day as delivery.
c. within 3 days of delivery.
d. within 10 days of delivery.
Unethical behavior is a bar to financial success.
a. True
b. False
A branch of tort law that imposes a much higher level of liability when harm results
from ultrahazardous acts or defective products is referred to as
a. res ipsa loquitur.
b. strict liability.
c. heightened liability.
d. strict negligence.
Regardless of the language of the contract, title to goods passes to the buyer at the time
and place at which the seller physically delivers the goods.
a. True
b. False
If the final registration statement contains a material misstatement or omission, the
purchaser of the security can recover damages from
a. everyone who signed the registration statement..
b. the company’s directors, but not the chief officers.
c. the experts who signed the registration statement, but not any other parties.
d. the issuer of the security, but not the companys directors or chief officers.
The Bill of Rights refers to
a. the inalienable rights found at the beginning of the Constitution.
b. the first ten amendments to the Constitution.
c. a specific listing of individual rights found in the original text of the Constitution.
d. a grouping of individual rights set forth by the United States Supreme Court shortly
after the Constitution was ratified by the states.
Under the Family and Medical Leave Act, an employee can take up to 12 weeks of paid
leave each year for certain personal and family illness situations.
a. True
b. False
Adam decided to play a practical joke on Linda, a co-worker. As Linda was leaving the
office one night, Adam, wearing a mask, stepped out from behind some bushes. He
pointed a handgun made out of licorice at her and demanded her purse. He then pushed
the candy gun to her head and told her if she told anybody he’d kill her. Linda was very
scared during the whole incident. She did not think it was funny when Adam pulled the
mask off and took a bite out of the gun as he gave her the purse back. Which statement
is correct?
a. Adam committed an assault but not a battery.
b. Adam committed a battery but not an assault.
c. Adam committed an assault and a battery.
d. Adam committed neither an assault nor a battery since he used a candy gun and was
only playing a joke on Linda.
Spicy & Hot, Inc. is interested in expanding its Mexican food restaurant into a Mexican
food catering business. Spicy & Hot, Inc. buys a new delivery van from Van World.
Spicy & Hot, Inc. is a buyer in the ordinary course of business when purchasing the
van.
a. True
b. False
Society is hurt when business managers behave ethically.
a. True
b. False