SmartPhone Company’s ad states that its product is ‘The Best that Money Can Buy.’
Because of this ad, the Federal Trade ComÂmission is most likely to issue
a. a cease-and-desist order.
b. a counteradvertising order.
c. a multiple product order.
d. none of the choices.
Answer:
Elsa participates in an investigation into possible violations of the Civil Rights Act of
1964 at Fabrication Foundry, Inc., where she works. As a result, Elsa’s employer
demotes her. Elsa can file a
a. harassment complaint.
b. retaliation claim.
c. constructive discharge claim.
d. disparate-impact discrimination claim.
Answer:
Reed owns one share of stock in SK8 Boards Corporation, as evidenced by a stock
certificate. Reed loses the certificate. Reed’s ownership of the stock is
a. forfeited immediately.
b. forfeited within ten days of a third party’s claim to ownership.
c. forfeited within thirty days if she cannot find the certificate.
d. not affected.
Answer:
Business Computer Solutions Education Service enters into a contract to employ
Chandra as an instructor for two years to begin June 1. One month before the term
begins, Business Computer is underbid by a competitor and loses a major client, Debt
Consolidation Corporation. Business Computer now refuses to hire Chandra. Business
Computer’s repudiation of its contract to employ Chandra is most likely
a. a material breach.
b. a minor breach.
c. a condition subsequent.
d. not a breach.
Answer:
In an effort to reduce traffic, Bay City enacts an ordinance that allows only a few
specific street vendors to opÂerÂate in certain areas. A court would likely review this
ordinance under the principles of
a. the commerce clause.
b. the equal protection clause.
c. the due process clause.
d. the First Amendment.
Answer:
Secure Investments, Inc., a U.S. firm, expands into international markets through a joint
venture. In this situation, Secure Investments owns
a. all of the operation.
b. as much of the operation as Secure Investments wants.
c. none of the operation.
d. part of the operation.
Answer:
Data Analytics, Inc., is a corporation engaged in the business of compiling, analyzing,
and marketing data. To accomplish its purposes, Data Analytics obtains financing, and
hires and fires employees. Laws and government regulations affect such business
activities as
a. hiring and firing decisions.
b. the manufacturing and marketing of products.
c. business financing.
d. all of the choices.
Answer:
Pualani and Quentin do business as partners in Rio Vista Builders, a residential
construction firm. For federal income tax purposes, Rio Vista would be treated as
a. a pass-through entity.
b. a natural person.
c. a tax-paying entity.
d. a partnership by estoppel.
Answer:
California Produce Company hires Drew to work on California Produce’s shipping
dock, checking outgoing loads and dispatching the company’s drivers. With respect to
California Produce, Drew is most likely
a. an agent.
b. an independent contractor.
c. a principal.
d. a work for hire.
Answer:
Ed’s Electric substantially performs its contract with Forest Hills Apartments, Inc., to
deliver and install an alarm system and parking lot lighting. Forest Hills is entitled to
a. damages.
b. nothing more.
c. to be excused from performance.
d. suspend performance.
Answer:
Dom, an EZ Baked Goods salesperson, follows Flora, a salesperson for Gooey Pastries,
Inc., as she attempts to make sales to food stores. Dom solicits each of Flora’s
customers. Dom is most likely liable for wrongful interÂference with a
a. bargaining relationship.
b. business relationship.
c. contractual relationship.
d. customer relationship.
Answer:
Orel incorporates his business as Posts & Wire Corporation in Texas. He and his group
of shareholders intend to make a profit from their sales of fencing materials. Posts &
Wire is
a. a nonprofit corporation.
b. not a corporation.
c. an alien corporation.
d. a private corporation.
Answer:
Fleet Delivery Corporation is a public company with a market capitalization of less than
$75 million. Fleet is poised to issue securities in a transaction that, under the Securities
Act of 1933, is ‘exempt.’ This enables Fleet to
a. reduce the compliance costs by not requiring an auditor report.
b. buy and sell the securities without liability for ‘recaptures.’
c. make forward-looking financial forecasts without liability.
d. withhold inside information from accredited investors.
Answer:
Facetime Social Media Inc. sells its users’ personal information. This may violate
a. businesses’ duties to their customers.
b. individuals’ rights to their privacy.
c. governments’ duties and rights with respect to public welfare.
d. no rights or duties.
Answer:
Fact Pattern 17-1
Jumbo Juice Inc. offers entrepreneurs the opportunity to operate a franchise under the
Jumbo Juice trade name as a member of a select group of dealers that engage in retail
juice sales.
Refer to Fact Pattern 17-1. To potential investors, Jumbo Juice must provide
a. actual earnings figures.
b. hypothetical earnings figures.
c. projected earnings figures.
d. none of the choices.
Answer:
Brewster, the chief executive officer of Cog & Gear Lubricants Corporation, wants to
enÂsure that Cog & Gear’s activities are legal and ethical. The best course for Brewster
and Cog & Gear is to act
a. in good faith.
b. out of ignorance of the law.
c. with regard for the firm’s shareholders only.
d. in their own self-interest.
Answer:
Palette Paints, Inc. expends funds and takes steps to ensure that all employees are safe
on the job, that all products are safe for consumers, and that the environmental impact
of the corporation is minimal. Palette Paints appears to believe in the concept of
a. the moral minimum.
b. corporate social responsibility.
c. ‘grey areas’ in the law.
d. government oversight.
Answer:
Karen is a judge hearing the case of Local Dispatch Co. v. National Transport Corp.
Applying the relevant rule of law to the facts of the case requires Karen to find cases on
point’”previÂously decided cases that, in relation to the case under conÂsideraÂtion,
are
a. as different as possible.
b. as similar as possible.
c. at odds.
d. exactly identical.
Answer:
To complain about Discount Retail Corporation’s products, Edsel opens a Web site with
the domain name ‘discountretailcorporationsucks.com.’ Discount Retail files a suit
against Edsel. If the court rules in the defendant’s favor, it will most likely be on the
basis of
a. a likelihood of confusion.
b. a right to privacy.
c. the freedom of speech.
d. trademark law.
Answer:
Farrah and Grant are shareholders of Hong Kong Restaurants, Inc. As shareholders,
they must approve
a. conducting a merger.
b. deciding to pursue new business opportunities.
c. none of the choices.
d. negotiating a contract between management and labor.
Answer:
The basis for India to give effect to the laws and court decisions of the United States is
primarily
a. courtesy and respect.
b. fear and intimidation.
c. admiration and envy.
d. payments of cash and exchanges of property.
Answer:
Most states imply a warranty’”the implied warranty of habitability’”in the sale of new
homes.
Answer:
The only defense to criminal liability that justifies the use of force is self-defense.
Answer:
A limited liability company can be taxed as a partnership.
Answer:
The law allows an innocent party to be discharged when the other party has materially
altered a written contract without consent.
Answer:
A franchisee is generally legally independent of the franchisor.
Answer:
A price-fixing agreement that is reasonable does not violate antitrust law.
Answer:
Dividends can be paid from the undistributed net profits earned by the corporation.
Answer:
International treaties never stipulate arbitration for resolving disputes.
Answer:
Judges use proximate cause to limit the scope of a defendant’s liability to a subset of the
total number of potential plaintiffs that might have been harmed by the defendant’s
negligence.
Answer:
Dissociation normally entitles the partner to buy his or her interest from the partnership.
Answer: