1) The theft of trade secrets is a civil wrong but not a crime.
2) In most states, a director cannot be removed without cause unless the shareholders
have reserved the right to do so at the time of election.
3) Courts apply the assumption of risk doctrine only in emergency situations.
4) Falsifying public records or altering a legal document is larceny.
5) In contract law, intent is determined by the personal or subjective intent, or belief, of
a party.
6) A easement is the revocable right of a person to come onto another person’s land.
7) The major difference between international law and national law is that government
authorities can enforce national law.
8) Working papers are the documents through which a court orders an accountant to
audit a public company.
9) An overemphasis on long-run profit maximization is the most common reason that
ethical problems occur in business.
10) Stubbs buys a Tred-brand bicycle from his brother, Uriah. Uriah agrees to keep the
bike at his house until Stubbs picks it up. During a storm, a tree falls from Victor’s yard
onto Uriah’s garage and destroys the bike. The loss of the bike is suffered by
a.Stubbs.
b.Uriah.
c.Tred.
d.Victor.
11) Rodrick, the chief executive officer of Social Post Host Inc., claims that certain
actions by the state of Texas infringe on rights guaranteed by the Bill of Rights. Most of
these guarantees have been held to limit
a.federal actions only.
b.federal and state actions.
c.federal and state actions, and actions by nongovernment entities.
d.actions by nongovernment entities only.
12) Celine issues a note “payable to the order of Celine,” forges Dash’s signature as the
maker, and indorses the note “pay to Erica.” Celine sells the note to Erica, who
negotiates it by indorsement and delivery to Forest. Forest can extend liability to
a.no one.
b.Celine.
c.Dash.
d.all of the parties.
13) Fact Pattern 3-B2
Martin files a suit against Nichelle in a state court over payment due on a short-term
employment contract. The case proceeds to trial, after which the court renders a verdict.
The case is appealed to an appellate court.
Refer to Fact Pattern 3-B2. After its review of Martin v. Nichelle, the appellate court
upholds the lower court’s verdict. The appellate court has
a.affirmed the case.
b.reversed the case.
c.remanded the case.
d.reversed and remanded the case.
14) The Nebraska Supreme Court issues an opinion that can be found at 285 Neb. 88,
825 N.W.2d 429. €285€ is
a.the number of the volume in the official reports of the court€s decisions.
b.the number of the volume in Thomson Reuter€s unofficial publication of the court€s
decisions.
c.a page number in the appropriate volume.
d.the number of the case in the sequence decided by the state€s highest court.
15) Dallas asks Eddie if he can store his furniture in Eddie’s garage while he serves a
tour of duty with the U.S. Marines Corps. Eddie agrees. This is
a.a bailment.
b.accession.
c.a gift causa mortis.
d.abandoned property.
16) Rubi sends Sage a certified check for $5,000. Sage deposits the check into her
account at Town Bank. The next business day, the bank confirms a $5,000 increase in
Sage’s account. She then wires Rubi $500 for “fees.” Later, the bank discovers that the
check is counterfeit. On these facts, the bank can deduct from Sage’s account
a.$5,500.
b.$5,000.
c.$500.
d.0.
17) Boats & Yachts Corporation is a public company, which California regulates and in
which Dorian invests. The Sarbanes-Oxley Act of 2002 introduced direct federal
corporate governance requirements to
a.public companies.
b.private investors.
c.state regulators.
d.the Securities and Exchange Commission.
18) MedBeat Inc., makes medical devices, including heart pacemakers. Nina, a heart
patient, files a product liability suit against MedBeat, alleging a warning defect with
respect to its pacemaker. In deciding whether to hold MedBeat liable, the court may
consider whether there is a foreseeable risk of harm posed by the pacemaker and
a.the omission of a warning renders the pacemaker not reasonably safe.
b.there is a reasonable alternative design.
c.MedBeat did not use due care in making the pacemaker.
d.Nina lacks insurance coverage.
19) Employment Personnel Company draws a check payable to Felix. Felix indorses the
back and negotiates the check to Guaranty Bank. Primarily liable on the check is
a.Employment Personnel.
b.Felix.
c.Guaranty Bank.
d.none of the choices.
20) Grace signs an instrument payable to the order of Hillside Credit Union “on or
before” June 15. This instrument is
a.negotiable.
b.nonnegotiable, because the maker can move up the payment date.
c.nonnegotiable, because moving up the payment date is optional.
d.nonnegotiable, because the exact payment date cannot be determined from the face of
the instrument.
21) Jane enters into a contract with Jill to provide 100 roses for a dinner party. Jill fails
to deliver the roses. Jane initiates a suit against Jill, asking the court to order Jill to
refund Jane€s payment. Jane is
a.the plaintiff.
b.the defendant.
c.the binding authority.
d.the persuasive authority.
22) Dionne is an officer of Event Ticketing, Inc. As an officer, with respect to the
corporation, Dionne is
a.a fiduciary.
b.a forum.
c.a proxy.
d.a quorum.
23) Franz owns GuestHouse Hotel. His ownership rights include the right to sell or give
away the property without restriction, as well as the right to commit waste, if he
chooses. Franz’s ownership interest is
a.a fee simple absolute.
b.a profit.
c.a life estate.
d.the power of eminent domain.
24) The government of North Korea violates an international law. Persuasive tactics to
remedy the situation fail. The only recourse of other nations is to
a.approve the World Trade Organization’s enforcement of the law.
b.ask the International Court of Justice to enforce sanctions.
c.seek enforcement of the law through the United Nations.
d.take coercive action – sever relations, impose boycotts, go to war.
25) 2.Megan, an agent for a department store, orders one hundred dresses from Sal’s
Clothing Shop for the Spring Blossom Sale. There is no specific agreement in the sale
contract indicating when title will pass to the department store. The title will pass to the
department store when
a.Megan signs the contract.
b.Megan and the Sal’s Clothing Shop agent sign the contract.
c.Sal’s Clothing Shop physically delivers the dresses to the department store.
d.Megan pays Sal’s Clothing Shop for the dresses.
26) Kari is the sole proprietor of Living Earth Garden Shop. As a sole proprietor, on the
business’s profits, Kari pays
a.no income taxes.
b.only personal income taxes.
c.only business income taxes.
d.both personal and business income taxes.
27) Duffy is a passenger in a car that Caleb is driving when an accident occurs. Both
Caleb and Duffy are emotionally rattled, but neither is physically hurt. Caleb is not
liable to Dufy on a negligence theory because
a.both parties were emotionally rattled.
b.Caleb apparently did not intend to cause an accident.
c.Duffy must have been comparatively negligent.
d.Duffy was not injured.
28) Laird is an employee of Motor Parts, an auto parts store. On the orders of his
employer, he switches trademarks on parts that come into the store to be sold to
consumers. This is most likely
a.forgery.
b.larceny.
c.robbery.
d.obtaining goods by false pretenses.
29) A service mark distinguishes products used by those in public service.
30) If delivery of goods becomes impossible, a party who has issued a draft or note
under the contract has a defense for not paying it.
31) Usually, indorsements are qualified indorsements.
32) Rush’s Pasta &Pizza employs Sigfried as a delivery driver. Rush’s guarantees that
an order will be delivered within thirty minutes or there is no charge, and insists that its
drivers meet the limit. One night, while making a delivery, Sigfried is caught in a traffic
jam. To deliver the order within the thirty-minute time limit, Sigfried drives onto a
sidewalk and hits Tanya, a pedestrian. Is Rush’s liable to Tanya for her injuries? Is
Sigfried liable to Tanya? Why or why not?
33) Natural Food Corporation proposes to combine with OrganicProduce, Inc., and asks
Natural Food shareholders to vote on the proposal. Phoebe, aNatural Food shareholder,
votes against it, but is outvoted by the other shareholders. Is there an action that Phoebe
can take to avoid being forced to go along with the transaction? If so, what can she do?
After the combination, Organic Produce ceases to exist. Natural Food is the surviving
firm. What type of combination is this?
34) Duress is a defense to the enforcement of a contract, but not a ground for rescission
of a contract.
35) A unilateral mistake is a mistake made by both parties to a contract.
36) Occasionally, the courts award punitive damages in tort cases to punish the
wrongdoer and deter others from similar wrongdoing.