The term “GAASs” stands for “generally accepted accounting standards.”
According to Kantian ethics, if you rationalized that it is acceptable for you to engage
in deceptive practices, it is acceptable for competitors to do so also.
The Fair Employment Access Commission (FEAC) is the federal agency responsible
for enforcing most federal antidiscrimination laws.
Generally, a counteroffer is not effective until it is actually received by the offeror.
Unless otherwise agreed, the principal owes a duty to cooperate with and assist the
agent in the performance of the agent’s duties and the accomplishment of the agency.
Click-wrap licenses contain terms of the agreement, disclaimers of warranties,
guarantees for the protection of trademarks and trade secrets, and other provisions that
would normally be contained in a paper license.
A limited liability company member is personally liable for torts he or she commits
while conducting company business.
If a court finds that the subject matter of a contract is not legal, the court will undo the
contract and place the parties in the status quo.
A ‘silver parachute” references large severance payments received by top executives
when they leave their employment at a corporation.
Contributory negligence and comparative negligence result in the same outcome.
A fee simple owner has the right to exclusively possess and use his property to the
extent that the owner has not transferred any interest in the property.
An anti-assignment clause may be used if the obligor does not want to deal with or
render performance to an unknown third party.
If an oral modification brings a contract within the Statute of Frauds, then it must be in
writing to be enforceable.
Article II, Section 4, clause 2 of the United States Constitution provides that “The
Congress shall have the power…to establish…uniform laws on the subject of
bankruptcies throughout the United States.”
The length of time the parties live together is not sufficient alone to establish a common
law marriage.
Felony murder requires proof that the defendant intended to kill someone during the
commission of a felony.
An offer that is made to two (2.) or more persons jointly may be accepted by either
person.
Anyone who uses a franchisor’s mark without authorization may be sued for negligence.
Chapter 13 is a rehabilitation form of bankruptcy for individuals.
Federal, state, and local governments are exempt from the scope of the Occupational
Safety and Health Act.
If a buyer receives and accepts goods, pursuant to an oral contract and the Statute of
Frauds of applies, then the contract is unenforceable.
A voidable contract has no legal effect.
Your neighbor Brittany is a corporate attorney for a company that competes with your
business. One night you say to her, “I just molested someone, could you recommend a
good criminal lawyer if I get caught.” The next day you’re arrested. Brittany may not be
called to testify that you admitted to the crime based on attorney-client privilege.
A multinational corporation is also referred to as a transnational corporation.
In a consignment, title passes to the consignee when the consignee takes possession of
the goods.
A court has the discretion to award up to treble damages if the patent infringement was
intentional.
The Labor-Management Relations Act allows the president of the United States to seek
an injunction against a strike that would create a national emergency.
The terms of an “engagement” are specified when an accountant and a client enter into
a contract.
The suffix “.pro” is not a valid top-level suffix for a domain name.
Under the ULLCA, the articles of organization of a limited liability company must set
forth whether the limited liability company is a term LLC, and if so, the term specified.
The federal minimum wage is set by the United States Department of Labor and can be
changed.
The shareholders of a corporation elect the corporate officers.
Financing statements must be filed to perfect security interests in motor vehicles,
trailers, boats and fixtures.
The United States Supreme Court has applied the per se rule, but not the rule of reason,
in determining the legality of vertical restraints of trade under Section 1 of the Sherman
Act.
A(n) ________ is the transfer of rights under a contract.
A) apportionment
B) delegation
C) allocation
D) assignment
E) easement
Which of the following is false regarding OPEC?
A) The initials “OPEC” stand for the Organization of the Petroleum Exporting
Countries.
B) Nigeria is a member of OPEC.
C) Venezuela is a member of OPEC.
D) OPEC sets quotas on the output of oil production by member nations.
E) OPEC consists of fifty member nations.
Pedro hires Andrea to negotiate the purchase of a sailboat for Pedro. Andrea decides to
buy a sailboat from Sally that meets Pedro’s specifications. Andrea tells Sally that the
purchase is really being made by Pedro, and Andrea and Sally sign a written contract,
with Andrea signing on Pedro’s behalf. Based on this situation:
A) Pedro is not liable on this contract, but Andrea is liable.
B) neither Andrea nor Pedro can be held liable on this contract.
C) Andrea is not liable on this contract, but Pedro is liable.
D) either Andrea or Pedro could be held liable on this contract.
E) Pedro is liable on the contract, but only if Andrea is insolvent.
Which governmental entity has primary responsibility for enforcing claims of
employment discrimination?
A) the Equal Employment Opportunity Commission
B) the National Labor Relations Board
C) the United States Senate
D) state attorneys general
E) county prosecutors
The four theories of social responsibility of business discussed in the text can best be
described as:
A) laws, only one of which applies in each state.
B) laws, more than one of which can apply in a particular state.
C) mutually-exclusive policies on which laws should be based.
D) policies on which laws should be based, more than one of which might be proper.
E) policies, only one of which is proper.
Which of the following is not one of the four general types of negotiable instruments?
A) notes
B) drafts
C) certificates of deposit
D) money orders
E) checks
The Statute of Frauds applies to which contracts under Articles 2 and 2A of the UCC?
A) The Statute of Frauds applies to all contracts.
B) The Statute of Frauds applies to sales contracts of goods costing more than $100 and
lease contracts involving payments of $500.
C) The Statute of Frauds applies to sales contracts of goods costing more than $500 and
lease contracts involving payments of $1,000.
D) The Statute of Frauds applies whenever the value of the contract is greater than
$1,000.
E) The Statute of Frauds applies whenever the value of the contract is greater than
$5,000.
When a bank has wrongfully dishonored a check, the payee can:
A) sue the bank for recovery of the check amount, plus damages.
B) sue the drawer for recovery of the check amount, plus damages.
C) sue the drawer or the bank for recovery of the check amount, plus damages.
D) sue either the drawer or the bank for recovery of the check amount only.
E) sue the drawer for recovery of the check amount only.
Kristin offers to sell land to Ian for $5,000. Ian says that $5,000 is too much but he will
pay $4,000. Kristin says that she will not sell for $4,000. Two days later, Ian says that
Kristin’s original offer to sell for $5,000 is acceptable. Kristen says she no longer
wishes to sell to Ian because he is a jerk. Which of the following is true about this
situation?
A) There is a valid contract between Kristin and Ian for the sale of the land for $5,000.
B) Ian’s counteroffer of $4,000 terminated Kristin’s original offer, and she does not have
to sell.
C) If Kristen does not sell to Ian for $5,000, then she cannot sell the land to anyone else
for $5,000 or less.
D) The land can no longer be sold for $4,000 or less.
E) Kristen loses unless she can establish that Ian cannot come up with $5,000 within 10
days.
Once appointed, a bankruptcy ________ becomes the legal representative of the
debtor’s estate.
A) conservator
B) guardian
C) referee
D) trustee
E) agent
Secured transactions usually involve:
A) one or two parties.
B) one, two or three parties.
C) two or three parties.
D) two, three or four parties.
E) one, two, three or four parties.
Which of the following must the plaintiff demonstrate in order to prevail in an
intentional misrepresentation lawsuit?
A) The wrongdoer made a false representation of material fact.
B) The wrongdoer had knowledge that the representation was false and intended to
deceive the innocent party.
C) The innocent party justifiably relied on the misrepresentation.
D) The innocent party was injured.
E) The wrongdoer made a false representation of material fact, the wrongdoer had
knowledge that the representation was false and intended to deceive the innocent party,
the innocent party justifiably relied on the misrepresentation, and the innocent party
was injured.
________ is the unauthorized and harmful or offensive physical contact with another
person that causes injury.
A) Negligence
B) Negligent infliction of emotional distress
C) Intentional infliction of emotional distress
D) Assault
E) Battery
Which of the following is not an exception to the Digital Millennium Copyright Act?
A) access by software developers to achieve compatibility of their software with the
protected work
B) parents accessing protected work to protect their children from pornography
C) Internet users identifying and disabling cookies
D) law enforcement agencies doing criminal investigations
E) software developers accessing protected work to get ideas for new software
Attachment is a(n) ________ court order that permits the seizure of a debtor’s property
that is in the debtor’s possession while a lawsuit against the debtor is pending.
A) equitable
B) quasi-equitable
C) pre-judgment
D) post-judgment
E) collateral judgment
Billy enters into a contract with Computer, Inc. Computer, Inc. will send Billy 50
touch-screen computers. Computer, Inc. will allow Billy to sell the computers and to
return whatever remains unsold within 30 days. Billy keeps the entire amount that he
sells the computers for. What type of conditional sale is this?
A) sale or return
B) sale on approval
C) consignment
D) bailment
E) no-sale, no-cost
Under the UCC what is the difference between a sale and an ordinary lease?
A) In a sale the buyer gets the right to possess the goods for a period of time, but in a
lease the title passes to the lessor.
B) In a sale the title passes to the buyer, but in a lease the lessee receives the right to
possession and use for a period of time.
C) In a sale, the title only passes to the buyer, if the buyer is a merchant; and in a lease
the right to possession passes to the lessor even if the lessor is not a merchant.
D) In a sale, the title passes to vendor and in a lease the supplier receives the right to
possession and use.
E) In a sale the buyer has a right to possession and use for a period of time, but in a
lease the title passes to the vendor.
Under the UCC, a consignment is treated as what type of conditional sale?
A) sale on approval
B) ordinary lease
C) finance lease
D) sale or return
E) a bailment
Which of the following statements is false?
A) Only the government can bring an action under antitrust law.
B) Private parties, including injured consumers, may enforce antitrust laws.
C) Antitrust laws provide for both criminal and civil sanctions.
D) A government antitrust case judgment may be used as a prima facie case in a private
action.
E) Successful plaintiffs may recover three times their actual damages.
Which of the following statements is not true under the Fair Labor Standards Act?
A) Children under the age of fourteen cannot work at all, except on farms.
B) Children between the ages of fourteen and fifteen may work limited hours in
non-hazardous jobs approved by the United States Department of Labor.
C) Children between the ages of sixteen and seventeen may work unlimited hours in
non-hazardous jobs.
D) Persons aged eighteen years or older may work unlimited hours in non-hazardous
jobs.
E) Persons aged eighteen years or older may work unlimited hours in hazardous jobs.
A shareholder’s proxy can be granted to:
A) other shareholders.
B) officers.
C) officers or directors.
D) any shareholder who is also an officer or director.
E) anyone.
An accountant’s failure to follow generally accepted auditing standards when
performing an audit constitutes:
A) civil fraud.
B) civil misrepresentation.
C) negligence.
D) civil deceit.
E) no-fault liability.
Which of the following is true about the American Federation of Labor?
A) It was formed in the early part of the twentieth century.
B) When originally formed, only skilled craft workers were allowed to join.
C) All members of other unions are automatically members of the organization.
D) It is not allowed to engage in political lobbying.
E) Today, approximately twenty percent of private sector wage and salary workers are
members of the organization.
Manny, a newspaper reporter who writes a weekly article on the automotive industry,
states in one of his columns that BMWs are “overrated.” BMW feels that this is
injurious to its reputation. If BMW sues Manny and his newspaper, will the car
manufacturer be successful in its lawsuit?
A) yes, based on the tort of disparagement
B) yes, based on the tort of libel
C) yes, based on the tort of intentional infliction of emotional distress
D) yes, based on the torts of disparagement and libel
E) no
The transfer of rights under a contract is called a(n):
A) obligence.
B) assignment.
C) delegation.
D) accord.
E) stipulation.
Which of the following factors is not required to qualify a business as a partnership?
A) equal investments of effort and capital
B) an association of two or more persons
C) the “carrying on” of a business
D) co-ownership of the business
E) the sharing of profits
Jonathan’s Soccer Mart (JSM) advertises a pair of boots on sale. The normal price is
$150.00 and the advertisement says $15.00. Josh walks into the store, picks up a pair of
the boots and puts $15.00 on the counter demanding to purchase the boots at the
advertised price. Which of the following is correct?
A) JSM must sell the boots at the advertised price.
B) Josh has accepted JSM’s offer to sell.
C) JSM has made an offer.
D) Josh has made an offer.
E) JSM does not have to sell only if they can prove that the advertisement was a
misprint.
Mike approaches you and tells you that he is a sales representative for The Good Hands
Massage and Spa, a national chain of health spas. He tells you there is a special half
price sale and you write a check for a one year membership payable to The Good Hands
Massage and Spa and give it to Mike. Mike in fact does not represent Good Hands. He
forges an endorsement and cashes the check. Which rule applies in this situation?
A) the imposter rule
B) the fictitious payee rule
C) the transfer warranty rule
D) the shelter principle rule
E) the presentment warranty rule
Which of the following is not federal statute?
A) the Worker’s Compensation Act
B) the Clean Water Act
C) the Securities Act of 1933
D) the National Labor Relations Act
E) the Americans with Disabilities Act
What is the effect of a limited partner making a personal guarantee on behalf of the
limited partnership?
A) The limited partner will be considered a general partner for liability purposes.
B) The guarantee is void, because it contradicts the concept of limited liability.
C) The guarantee will create liability for the general partners, because they have
unlimited liability.
D) The limited partner will be held liable on the guarantee up to the amount of his
investment in the limited partnership.
E) The limited partner will be liable under the terms of the guarantee, but will otherwise
continue to be treated as a limited partner.
Under the perfect tender rule, when a shipment of 10,000 identical products contains 15
nonconforming units, which ones can the buyer reject?
A) none, because there are so few nonconforming units that this is substantial
performance
B) all or none of the 15 nonconforming units, but none of the conforming units
C) all, some, or none of the 15 nonconforming units, but none of the conforming units
D) all 10,000 units or none at all
E) all, none, or some of the units, in any combination of conforming and
nonconforming units
Which is true about the two kinds of discrimination that are actionable under Title VII?
A) Disparate impact and disparate treatment are both based on how an employer treats a
specific individual.
B) Disparate impact and disparate treatment are both based on how an employer treats a
protected class.
C) Disparate treatment refers to individuals, while disparate impact refers to protected
classes.
D) Disparate impact refers to individuals, while disparate treatment refers to protected
classes.
E) Disparate treatment is actionable without proof of actual damages, while disparate
impact is not actionable without proof of actual damages.