Victoria registered a trademark under the Lanham Act. Six years later Don noticed
Victoria’s trademark and filed a lawsuit to enjoin her from using it. He proved he had
registered the mark in several states more than ten years before Victoria obtained her
trademark. Will Don prevail?
a. Yes. Victoria should have conducted a better search of trademarks registered under
state laws.
b. Yes. Federal law specifically states a federal trademark is not valid for any lawful
owner of the same mark under state law.
c. No. Don will not prevail and Victoria can continue to use the mark because of the
time involved.
d. None of the above.
MegaCorp wishes to sell $25 million of securities. The only investors will be 20
institutional buyers. Which of the following applies to this offering?
a. Rule 504 of Regulation D of the 1933 Act.
b. Rule 505 of Regulation D of the 1933 Act.
c. Rule 506 of Regulation D of the 1933 Act.
d. None of the above apply to this $25 million offering.
Bert had his driver’s license suspended by the state department of transportation. He
believes his constitutional due process rights were violated by the administrative
agency. Can he immediately file a court action to have agency’s actions reviewed?
a. Yes. A court has the jurisdiction to immediately review an agency’s alleged
unconstitutional action.
b. Yes. Bert must specifically allege his constitutional rights have been violated and file
a court action in federal court – not a state court.
c. No. Bert must first utilize the administrative agency’s procedures to review the
suspension before he seeks judicial review by a court.
d. No. A court of law does not have jurisdiction to review an administrative agency’s
actions.
The Big Four accounting firms spend about what percentage of their revenue on
litigation, including settlements and insurance?
a. Less than five percent.
b. Between 10 and 20 percent.
c. About 25 percent.
d. Over 30 percent.
Ron and several fellow workers of Vicy, Inc., a small manufacturing company, wished
to organize a union. When Vicy learned of this activity, it issued a bulletin to all
workers stating that a union will only hurt the company and that “we are a family that
can solve any problems ourselves — we do not need union activists from outside our
company trying to tell us what to do!” Which statement is correct concerning the
bulletin issued by Vicy?
a. Vicy has committed an unfair labor practice. Vicy must remain neutral during the
organizing drive.
b. Vicy has committed an unfair labor practice. The bulletin constitutes outrageous
interference with the union organizing campaign.
c. Vicy has not committed an unfair labor practice. An employer may vigorously
present anti-union views to its employees.
d. Whether Vicy has committed an unfair labor practice depends on whether the bulletin
was approved by the NLRB.
Criminal liability for accountants:
a. is not an option under securities law; there is only civil liability.
b. is possible under the Securities Act of 1933, the 1934 Act, state securities laws, and
the Internal Revenue Code.
c. may result in fines but not imprisonment from violation of the federal securities laws.
d. will result from violation of the accountant-client privilege under federal law.
A contract between a company in the U.S. and one in China, contained a clause that
stated: “If an event happens which is extraordinary and out of the control of the parties
such as a strike, act of God, fire, accident, or transportation difficulties, then the
affected party shall be relieved of its obligations under the contract.” This type of clause
is:
a. an objective impossibility clause.
b. a force majeure clause.
c. a concurrent condition clause.
d. a condition precedent clause.
The first step a court takes in choosing a remedy is to determine:
a. what interest it is trying to protect.
b. if the damages can be quantified with reasonable certainty.
c. if punitive damages should be awarded.
d. whether the injured party mitigated its damages.
A national magazine published an article about a famous television star. The television
personality is upset because the information contained in the story is not correct. If the
actress sues the magazine:
a. she will need to show that the magazine has a history of being “reckless” with facts
on a regular basis.
b. she will need to show that the magazine either knew the story was false or acted with
reckless disregard of the facts.
c. she will need to show that the magazine failed to attempt to verify the story by trying
to contact her or her agent before the story was printed.
d. she will need to show that the magazine could have discovered that the story was
false but failed to do so.
The doctrine of estoppel would most often apply in situations of:
a. implied authority.
b. apparent authority.
c. transaction authority.
d. actual authority.
Which of the following is NOT one of the three ways to amend a written contract?
a. write and sign an amendment document.
b. verbally agreeing to the changes and shaking hands on the deal.
c. crossing out the mistakes and writing in the corrections.
d. writing a totally new contract with the correct provisions.
Under the UCC statute of frauds, the writing for a sale of goods must:
a. state quantity.
b. state price.
c. be signed by both parties.
d. be notarized.
If a buyer does not receive goods by the contract deadline, remedies available include:
a. incidental and consequential damages.
b. cover.
c. damages for non-delivery.
d. All of the above.
Which of the following is correct concerning the SEC regulations on shareholder
resolutions?
a. The proposals cannot be used to seek to satisfy a personal grievance against the
company.
b. The proposals cannot relate to the ordinary business operations of the corporation.
c. The proposals must relate to operations accounting for at least 5 percent of total
assets, gross sales, or net earnings.
d. All the above are correct.
Dodger bought an insurance contract from Liberty Farm Co. The policy contained a
clause stating that all claims for losses had to be reported within 45 days after the date
of the loss or the claim would be barred. Time is stated to be of the essence. Dodger
sustained a covered farm loss, but did not report it to Liberty Farm until 50 days later.
Liberty Farm denied coverage for the claim. If Dodger sues, who wins?
a. Dodger wins; the contract was substantially performed.
b. Liberty Farm wins; there was failure of a condition subsequent.
c. Dodger wins; courts will not enforce a time-of-the-essence clause.
d. Liberty Farm wins; the impossibility doctrine applies.
Charlie Sheens drug use and violent behavior:
a. were bad enough that to warrant CBSs firing of him from a hit TV show.
b. have no impact on his job as an actor.
c. enhance his reputation as a “tough guy and should be tolerated.
d. are false accusations.
Adam moved into an apartment complex. The rules of the complex prohibit unmarried
men and women from living together in the same apartment. When Adam’s friend,
Diane, moved into the apartment he was served with eviction papers. Adam claims the
apartment complex is violating his constitutional rights since it allows married couples
to live together. Is Adam right?
a. Yes. His equal protection rights have been violated.
b. No. His fundamental right of cohabitation has not been violated.
c. Yes. He and Diane are being treated differently than married couples.
d. No. Constitutional protections do not extend to privately owned apartment
complexes.
GBH, an accounting firm, was hired to prepare financial statements for E-treme. Great
State Bank has asked to see GBH’s working papers. Great State Bank is thinking about
extending a $4 million line of credit to E-treme. GBH:
a. can show the bank the working papers because Great State Bank has a proper
purpose.
b. can show the bank the working papers because Great State Bank is a known third
party.
c. cannot show the bank the working papers under any circumstances as they are not
finalized.
d. cannot show the bank the working papers unless E-treme gives permission.
Commonground Collections has been hired to collect past-due medical bills for
Lakeview Physicians. List some activities that Commonground may not do pursuant to
the FDCPA.
Which of the following projects would require the preparation of an Environmental
Impact Statement?
a. A plan initiated by the Forest Service to eliminate a herd of wild goats causing
damage in the Olympic (Washington) National Park.
b. The building of a golf course outside of Los Angeles that requires a government
permit to build in wetlands.
c. The expansion of a runway to a major city airport.
d. All the above.
Tina is an undercover police officer. One evening she is posing as a prostitute in a bar.
Larry, a salesman who is attending an out-of-state convention, begins talking with Tina.
After about ten minutes, Tina suggests going to her room for a good time but points out
he will need to “donate” $100 to her. Arriving at Tina’s hotel room, Larry asks if she is a
policewoman. Tina lies and says she is not. When Larry gives her $100, Tina shows him
her identification and arrests him.
a. Larry appears to have been the victim of entrapment since Tina lied about being a
police officer.
b. Larry appears to have been the victim of entrapment since Tina was the one who
suggested the activity that resulted in Larry’s arrest.
c. Both of the above are correct.
d. None of the above is correct.
Which of the following parties has primary liability on a draft?
a. The drawee.
b. The acceptor.
c. The drawer.
d. Any accommodation parties.
The U.S. Supreme Court was asked to decide whether same-sex sexual harassment is a
violation of Title VII of the Civil Rights Act. This law forbids discrimination in
employment on the basis of sex. In interpreting statutes, the court may use which of the
following?
a. The plain meaning rule.
b. Legislative history.
c. Public policy.
d. All of the above.
Pamela hired Lena to sell her business. Lena:
a. can buy the business as long as the price is fair.
b. can buy the business as long as she qualifies for financing.
c. can buy the business only with Pamela’s permission.
d. cannot buy the business under any circumstances.
What prevents the market system from achieving a clean environment on its own?
a. Externalities.
b. Inefficiently managed business.
c. Remainders.
d. SIPs.
Bob, a house builder, contracts with Ollie to build a house on Ollie’s lot. Bob hires Rob
to take his place as the builder on this contract. What has Bob done?
a. Subcontracted Rob.
b. Breached the contract.
c. Delegated his duties.
d. Assigned his rights.
Trey, a full-time college student, sold his car to Don, another student. In the
performance of this contract, Trey:
a. has a duty of good faith which means honesty in fact and the exercise of good
judgment.
b. has a duty of good faith which means honesty in fact.
c. has a duty of good faith which means honesty in fact and the exercise of reasonable
commercial standards of fair dealing.
d. does not have a duty of good faith.
Angela sued Tom for battery. Angela was awarded $30,000 for future medical expenses.
Five years after the award, Angela realizes that her medical expenses will far exceed
$30,000. Under the single recovery principle:
a. Angela will be able to submit the additional medical bills to the court for payment.
b. Tom will have to pay the additional medical bills.
c. Tom will have a qualified privilege and only have to pay a portion of the additional
medical expenses.
d. Angela will have no recourse against Tom or the court for the medical expenses as
long as the original award was reasonable.
The Model Business Corporation Act states: “All corporate powers shall be exercised
by or under the authority of, and the business and affairs of the corporation managed by
or under the direction of its:
a. shareholders.
b. officers.
c. board of directors.
d. executive committee.
Judge Zellar was asked to decide if a plaintiff could see the interrogatories procured by
the defendant. The judge viewed the documents alone and decided that they should be
made available to the plaintiff. The judge made:
a. an in camera inspection.
b. a motion to compel answers to interrogatories.
c. a request for admission.
d. a request for the production of documents.
Victoria has a MasterCard with a credit limit of $9,000. This is:
a. open-end credit.
b. closed-end credit.
c. an installment loan.
d. a secured debt.
Discuss the requirements of promissory estoppel.
A principal is bound by contracts that an agent enters into with authority. Discuss the
various types of contractual authority an agent may have.
Bill was shopping at the mall. As he was walking to Tonne’s Department Store, his
wallet fell out of his pants. While trying on a new suit, Bill left his leather jacket in the
change room. Sue found Bill’s wallet. Arnie, a sales associate, found his coat. What
kind of found property is Bill’s wallet? What kind of property is his jacket? What rights
do Sue and Arnie have in the found property?
Article 9 applies to any transaction intended to create a security interest in real property.
Mavrex, Inc. received an application from Larry and, since his written qualifications
seemed to meet a pressing current need, they hired him without checking his references
or prior records. Actually, Larry had been in prison for murder several years earlier.
Tom, a long-time Mavrex employee, angered Larry when Tom tried to tell Larry how to
do his job. Larry attacked and injured Tom. If Tom sues Mavrex, what would his cause
of action be, and what elements would Tom need to prove to win his case?
Identify the basic job of a President of the United States, the source of executive power,
and three key powers associated with the position of President.
Alice offers to sell her car to Barryfor $500, and Barry accepts. Alice’s car has a market
value of $1,000 but this fact is unknown to Alice. The contract is enforceable.
Matt wrote a $500 check to Alistar for some yard work that Alistar had done. What will
Alistar have to do negotiate this instrument to Totally Tough, Inc. in payment for some
yard equipment Alistar had bought?
Taking a personal property without paying for it is a common type of larceny.
In a mixed contract involving goods and services, Article 2 of the UCC will govern if
the predominant purpose is the sale of goods.
A letter of intent summarizes progress made during business negotiations, but more
importantly, it creates a binding contract.
Injunctions are frequently used by courts to force employees to complete their
contractual obligations with their employers.
A spouse is entitled to a forced share of a decedent’s estate.
There is no way to attach a security interest in electronic chattel paper.
Tianhui was recently hired as a sales representative by Oxtron, Inc. Before leaving on
his first sales trip, a number of the other sales representatives take Tianhui aside and tell
him that it is customary for the sales representatives to “pad” (increase) their expense
reports each month by 20%. Use utilitarian ethics to decide what Tianhui should do
about the expense report he submits to Oxtron.
Wever, Inc. is considering relocating a facility to Mexico. The interests of the various
stakeholders affected by this decision may conflict.