1) A failure to follow generally accepted accounting principles and generally accepted
auditing standards is proof of a lack of due diligence.
2) Professionals are governed by the contracts they enter into with their clients.
3) The Equal Pay Act and other federal laws prohibit employers from engaging in
gender-based wage discrimination.
4) Managers must apply the same standards to themselves as they do to the company’s
employees.
5) Stare decisis is a doctrine obligating judges to help persons who have failed to
protect their own rights.
6) If a wage differential is due to any factor other than gender, then it does not violate
the Equal Pay Act.
7) Orchid and Peony enter into a contract for the sale of Orchid’s textbook at the end of
the fall semester for which Peony agrees to pay Orchid $75. Peony wants to transfer her
right to payment for the book to Queenie. This transfer
a.is prohibited.
b.may be oral or written.
c.must be implied.
d.must be in writing.
8) Quisa and Reilly are partners in Sport Bikes, which rents and sells bikes, bike
accessories, and related gear. Quisa manages the business. Unless the partnership
agreement states otherwise, Quisa is
a.entitled to compensation in proportion to her effect on the business.
b.entitled to compensation in proportion to her effort.
c.entitled to compensation in proportion to her capital contribution.
d.not entitled to compensation.
9) Imogen is a shareholder of Jazz Street Studios, Inc. Imogen could normally exercise
appraisal rights if Jazz Street participated in
a.a share exchange.
b.a dissolution.
c.a takeover.
d.a winding up.
10) Luke and Maya form Northwest Air Express, a general partnership. The essential
elements of this partnership do not include
a.a sharing of profits and losses.
b.a joint ownership of the business.
c.an equal right to management in the business.
d.goodwill.
11) SurgeStop Company makes electrical cords and other connectors for electronic
devices. Rollo files a product liability suit against SurgeStop, alleging a warning defect.
In deciding whether to hold SurgeStop liable, the court may consider
a.consumers’ general lack of desire to read the product’s warnings.
b.the plaintiff’s specific lack of desire to read the product warnings.
c.the obvious risks of other products.
d.the obvious risks of this product.
12) Interactive Entertainment Corporation markets its products online. Through the use
of cookies, Interactive Entertainment and other online marketers can
a.track individuals ‘ Web browsing activities.
b.gain access to competitors ‘ servers.
c.’sweet talk” consumers into buying certain products.
d.attack competitors ‘ Web sites.
13) Renee is a director of Sharp Focus Lens Corporation. With respect to Sharp Focus,
Reneecan access the corporation’s books and records. Renee has this access under
a.the director’s right to participation.
b.the director’s right of inspection.
c.the director’s right to indemnification.
d.the articles of incorporation or corporate bylaws.
14) Oscar buys a new HD TV from Priceless Retail Mart, using the means that accounts
for more retail payments than any other. This means of payment is
a.a cashier’s check.
b.a debit card.
c.a personal check.
d.digital cash.
15) Duffy and Elbert agree to hijack a truck carrying a load of almonds. Duffy later
refuses to go through with the crime. Elbert can
a.enforce the agreement.
b.obtain damages from Duffy in the amount of Duffy’s probable share of the illegal
profits.
c.recover in quasi contract for the loss of his share of the illegal profits.
d.not enforce the agreement or recover damages.
16) Fact Pattern 15-B2
Organic Farms Company contracts to buy two tracts of land from Prime Bottomland,
Inc. Both parties believe that the two tracts are adjacent, but in fact they are not. Prime
Bottomland is still willing to sell the land, but under these circumstances the deal would
adversely affect Organic Farms.
Refer to Fact Pattern 15-B2. The parties’ belief about the adjacency of the property is
a.a bilateral mistake.
b.a fraudulent misrepresentation.
c.a unilateral mistake.
d.unconscionable.
17) Charles is a federal judge whose judicial decisions are part of case law, which does
not include interpretations of
a.regulations created by administrative agencies.
b.constitutional provisions.
c.statutes enacted by legislatures.
d.sound bites in the media.
18) American Coffee Company and Beans Brokers, Inc., enter into a contract for the
sale of a certain quality and quantity of coffee beans, with Beans Brokers to determine
the price. The price must be set according to
a.the concept of good faith.
b.the principle of fair trade.
c.the predominant-factor test.
d.the doctrine of unconscionability.
19) The lender does not have to strictly comply with the state statute governing
foreclosure – substantial compliance is sufficient.
20) A counterclaim is raised by a plaintiff against a defendant’s answer.
21) In a limited partnership, a general partner’s dissociation from the firm normally will
lead to dissolution unless all partners agree to continue the business.
22) There can be no satisfaction unless there is first an accord.
23) Bothe federal and state laws expand the amount that can be taken from a debtor’s
weekly take-home pay through garnishment proceedings.
24) Vested is the condition in which rights have taken effect and cannot be taken away.
25) On behalf of Meadow’s Edge Golf Course & Club, Norton signs and returns a letter
from Oralee, referring to her services as a resident golf pro and their price. When
Norton attempts to complete the deal, however, Oralee refuses, claiming that they have
no contract. Norton claims that they do. What standard determines whether these parties
have a contract?
26) A surety cannot assert the principal debtor’s bankruptcy as a defense to avoid
liability on the debtor’s obligation.