1) Any lawsuit against the business or its employees does not lead to unlimited personal
liability for the owner of a sole proprietorship.
2) To restrict or encourage exports, Congress can set quotas on various items, such as
grain being sold abroad.
3) Title VII of the Civil Rights Act of 1964 prohibits only intentional discrimination.
4) If a job applicant or an employee with a disability, with reasonable accommodation,
can perform essential job functions, the employer must make the accommodation.
5) A horizontal merger occurs when a company at one stage of production acquires a
company at a higher or lower stage of production.
6) A gift of real estate by will is generally called a bequest.
7) Corporate officers and directors may be held criminally liable for the actions of
employees under their supervision.
8) Cybersquatting is illegal only if a domain name is identical to the trademark of
another, not if the name is merely confusingly similar.
9) FOREIGN citizens can bring civil suits in U.S. courts for injuries caused by
violations of the law of nations or a treaty of the United States.
10) Under the Clean Water Act, criminal penalties apply whether a violation was
intentional or unintentional.
11) The Securities Exchange Act of 1934 applies to companies that have assets in
excess of $5 million and five hundred or more employees.
12) Hudson and Ilka want to market a new line of kayaks and related gear under the
brand name Journeys as a corporation-Journeys Inc. To avoid income taxes at the
corporate level, they should form
a.a C corporation.
b.a close corporation.
c.an S corporation.
d.a private corporation.
13) Cook’s Pantry Appliances, a retail store, must use reasonable care on its premises to
warn its patrons of
a.all risks.
b.hidden risks.
c.obvious risks.
d.no risks.
14) Henry promises not to open his Hank’s Lunchbox Caf© before 10:00 A.M. if Isis,
who owns Isis’s Danish & Donuts next door, promises to close by 4:00 P.M. Henry’s
consideration is
a.the destruction of a legal relationship.
b.the creation of a legal relationship.
c.a forbearance.
d.an exchange of money.
15) Brady accepts what he believes is an offer to work for Canyon River Adventures,
Inc., as a tour and fishing guide. In determining whether a contract has been formed, an
element of prime importance is
a.the price to be paid.
bthe duration of the work.
c.the intent of the parties.
d.the subject of the contract.
16) Avatar, Inc., agrees to deliver t-shirts emblazoned with video game characters for a
certain price to Bling Bling Corporation. To constitute a contract, the terms of this deal
a.must all be express.
b.must all be implied.
c.may be express, implied, or a mixture of both.
d.may be express or implied, but not both.
17) Ginger and Holly are journalists in a courtroom hearing a case. The judge instructs
them not to use social media until the court is adjourned. Despite this instruction,
during the trial Ginger and Holly tweet play-by-play commentary for the public as
events unfold. Possible sanctions that the judge might impose include
a.fines and imprisonment.
b.fines but not imprisonment.
c.imprisonment but not fines.
d.none of the choices.
18) Misty’s debit card, issued by National United Bank, is stolen and used without her
permission. She tells the bank within thirty days. She may be required to pay no more
than
a.$5.
b.$50.
c.$500.
d.$5,000.
19) Fleet Feet Corporation makes athletic shoes. Gloria, a marathoner, files a product
liability suit against Fleet Feet, alleging a design defect. In deciding whether to hold
Fleet Feet liable, the court may consider an alternative design’s
a.popularity among industrial designers and consumers.
b.weight and heft.
c.aesthetics.
d.advantages and disadvantages.
20) Jean promises to paint Katy’s house in exchange for Lila’s promise to plant trees on
Jean’s property. This is
a.a delegation.
b.an assignment.
c.a third party beneficiary contract.
d.none of the choices.
21) Sati contracts to work exclusively for Thermal Imaging Company during July for
$5,000. On June 30, Thermal Imaging cancels the contract. Sati finds a similar job for
the month of July but earns only $3,000. Sati files a suit against Thermal Imaging. As
compensatory damages, Sati can recover
a.$3,000.
b.$2,000.
c.$1,000.
d.$0.
22) Cattle Ranch Company offers its stock for sale only in a single state. The law in
Cattle Ranch′s state is like the law in most states. Cattle Ranch′s offer is subject to state
securities statutes that include
a.antifraud and disclosure provisions.
b.antifraud provisions only.
c.disclosure provisions only.
d.neither antifraud nor disclosure provisions.
23) Lorena is appointed as an agent for Milled Grains, Inc. The agency agreement is
silent as to the level of sales that Lorena is expected to achieve. She must
a.achieve nothing because the agreement says nothing on the issue.
b.attain the level that Lorena achieved with her previous employer.
c.maintain the level Milled Grains attained before Lorena became an agent.
d.use reasonable diligence and skill in selling.
24) Becca is a minor. As a minor, Becca
a.is not usually legally bound by a contract.
b.has the right to avoid liability under a valid contract.
c.has the capacity to enter into a valid contract.
d.all of the choices.
25) Jackie, an accountant, distributes a handbill to her business clients and potential
customers accusing her competitor Ked of being a convicted thief. The statement is
defamatory if
a.a recipient of one of the handbills repeats it.
b.Ked suffers emotional distress.
c.the statement is true.
d.the statement is false.
26) Donato is Equipment Repair Service Company’s chief executive officer. On
Equipment Repair’s behalf, Donato solicits business, hires and fires workers, and
handles finances. Equipment Repair pays Donato varying amounts, depending on his
“needs.” Donato is most likely
a.a principal.
b.an employee.
c.an employer.
d.an independent contractor.
27) Isaac holds one ton of perishable fruit in storage for Juice Smoothies Corporation.
Juice Smoothies does not pay for the storage. Isaac sells the fruit to Kayo Beverage
Company. This sale represents
a.a breach of contract.
b.a mitigation of damages.
c.liquidated damages.
d.a quasi contract.
28) Ajay sells “Bulk Up” steroids over the Internet. He is arrested and charged with the
sale of a controlled substance. This is cyber crime, which is
a.a new category of crime that is not related to older types of crime.
b.a crime that occurs in the virtual community of the Internet.
c.a crime that is less real than the same crime in the physical world.
d.no crime.
29) To acquire the ownership of Bart’s mountain cabin by adverse possession, Cody
must occupy the cabin exclusively, continuously, and peaceably for a specified period
of time
a.in an, open, hostile, and adverse manner.
b.until Bart files a suit.
c.without Bart’s knowledge.
d.with the state’s permission.
30) Congress may tax some states and exempt others.
31) The UETA does not apply to all writings and signatures.
32) Brett boards her horse Charley at Dallas’s Equestrian Stables. Brett sells the horse to
Flem and tells Dallas, “I sold Charley to Flem.” Dallas says, “Okay.” That night,
Charley is kicked in the head by another horse and dies. Who suffers the loss?
33) To be negotiable, an instrument cannot be portable.
34) An individual debtor cannot exempt or exclude any property from the bankruptcy.