Accounting Law
Question Bank
Course Introduction
Accounting Law examines the legal framework governing the accounting profession and the preparation, presentation, and auditing of financial statements. The course explores the roles and responsibilities of accountants in legal contexts, compliance with relevant regulatory bodies, ethical issues, and the legal implications of financial reporting and disclosure. Students will study major statutes, case law, and regulations affecting accounting practices, such as fraud, negligence, and contractual obligations, gaining practical insight into legal risks and protections within the accounting field.
Recommended Textbook
Fundamentals of Business Law Summarized Cases 9th Edition by Roger LeRoy Miller
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Page 2
Chapter 1: The Legal and Constitutional Environment of Business
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Sample Questions
Q1) The Arkansas state legislature enacts a statute that prohibits the advertising of video games "because the games might be harmful to minors." Despite this new statute,the president of Games Marketing,Inc.(GMI),orders GMI marketers to place ads in any media.When a GMI ad appears on HDTV,a local television station,GMI and HDTV are charged with violating the statute.What is the defendants' best defense against a conviction?
Answer: GMI and HDTV cannot be convicted because a state legislature cannot enact a statute that restricts commercial speech (in this problem,marketing video games)to this extent.The First Amendment protects commercial speech.Commercial speech is not as protected as much as noncommercial speech,however,so states can place some restraints on the former.For example,to protect consumers,a state may ban certain kinds of marketing practices,such as deceptive or misleading advertising.Generally,a restriction on commercial speech will be considered valid as long as it (1)seeks to implement a substantial government interest, (2)directly advances that interest,and (3)goes no further than necessary to accomplish the objective.Here,the complete ban on video ads "because the games might be harmful to minors" is too restrictive:it goes too far in attempting to protect minors for an apparently unsubstantiated purpose.
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Chapter 2: Traditional and Online Dispute Resolution
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Sample Questions
Q1) Quality Products,Inc. ,files a suit against Retail Sales Corporation.Sid is a witness for Quality.Tod is a witness for Retail.Quality may direct interrogatories to A)Retail only.
B)Retail,Sid,or Tod.
C)Sid only.
D)Sid or Tod only.
Answer: A
Q2) The function of the courts is to interpret and apply the law.
A)True
B)False
Answer: True
Q3) National Consumer Goods Corporation and Paula Purchaser agree to resolve their dispute in arbitration.The arbitrator's decision is called A)a conclusion of law.
B)a finding of fact.
C)an award.
D)a verdict.
Answer: C
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4
Chapter 3: Ethics and Business Decision Making
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Sample Questions
Q1) Bribery of foreign government officials is both an ethical and a legal issue.
A)True
B)False Answer: True
Q2) Business ethics focuses on ethical behavior in the business world.
A)True
B)False Answer: True
Q3) An ethics program can clarify what a company considers to be unacceptable conduct.
A)True
B)False Answer: True
Q4) Kennedy Capital Corporation provides other firms with funds to expand operations.If Kenney strictly complies with existing laws,the firm will
A)fulfill all business ethics obligations.
B)fulfill no business ethics obligations.
C)fulfill some business ethics obligations.
D)not need to fulfill any business ethics obligations.
Answer: C
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Chapter 4: Torts and Cyber Torts
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Sample Questions
Q1) Reaching for a bottle of soda from a display in a Bargain Mart store,Cody slips in a puddle of spilled soda and falls,suffering an injury.Bargain Mart's employees are not aware of the spilled soda until Cody falls.In a suit against Bargain Mart,Cody will most likely
A)lose,because Bargain Mart's employees were not aware of the spill.
B)lose,because Cody should have exercised more care.
C)win,because Bargain Mart can recover from the soda bottler.
D)win,because the spilled soda was foreseeable.
Q2) 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.
Q3) Under a dram shop act,liability can be imposed without proof of negligence. A)True B)False
Q4) Consent is a defense to an allegation of assault,but not battery. A)True B)False
Page 6
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Chapter 5: Intellectual Property and Internet Law
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Sample Questions
Q1) Hawk Corporation begins making and selling motorcycles in 2000 under the mark "Hawk." Ten years later,Hawk.com,Inc. ,a different company selling medical equipment and supplies,begins to use "hawk" as part of its URL and registers it as a domain name.Can Hawk Corporation stop Hawk.com's use of "hawk"? If so,what must the motorcycle-maker show?
Q2) A suggestive use of ordinary words may not be trademarked.
A)True
B)False
Q3) Mary Kate Corporation allows Ashley Company to use Mary Kate's trademark as part of Ashley's domain name.This is
A)a license.
B)a likelihood of consumer confusion.
C)cybersquatting.
D)trademark dilution.
Q4) Trade dress has the same legal protection as trademarks.
A)True
B)False
Q5) Copyright protection is automatic-registration is not required.
A)True
B)False
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Chapter 6: Criminal Law and Cyber Crime
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Sample Questions
Q1) A federal judge must adhere strictly to federal sentencing guidelines.
A)True
B)False
Q2) Under the Fourth Amendment,a general search warrant and a general search through a person's belongings are permitted.
A)True
B)False
Q3) Corporations,unlike persons,cannot be liable for crimes.
A)True
B)False
Q4) Kino sees a DVD player on the porch of Lulu's house,takes the player to his home,and tells everyone he owns it.Maya,holding a knife,forces Nick to give her his boom box,and runs away with it.Ollie breaks into Pam's apartment,takes a computer,and leaves.Which of these acts are crimes,and what are the differences among them?
Q5) Only blue-collar crimes are prosecuted under RICO.
A)True
B)False
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8
Chapter 7: Nature and Classification
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Sample
Questions
Q1) On behalf of the rock group Uno,their manager Thalia agrees to a performance in Seaside Amphitheatre on July 4.Rex,acting for Seaside Productions,sends a written copy of the agreement to Thalia to be signed.Typically,businesspersons put their contracts in writing to
A)ensure proof of the contracts' existence.
B)create substance from form.
C)obtain a check or other negotiable instrument.
D)practice their "letters of credit."
Q2) A quasi contract arises from a mutual agreement between two parties.
A)True
B)False
Q3) A unilateral contract is formed when the one receiving the offer completes the requested act or performance.
A)True
B)False
Q4) When the words in a contract have more than one meaning,they are cut from the contract.
A)True
B)False
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Chapter 8: Agreement in Traditional and E-Contracts
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Sample Questions
Q1) A partnering agreement reduces the likelihood that a dispute will arise under a contract.
A)True B)False
Q2) The terms of a shrink-wrap agreement may be enforced in the same way as the terms of other contracts.
A)True B)False
Q3) Quik Fix-It,Inc. ,offers Pam a job as a plumber.No time for acceptance is specified in the offer.The offer will terminate
A)after a reasonable period of time.
B)after a typical work week (five business days).
C)after a usual month (thirty calendar days). D)never.
Q4) An auction-"we ask you to bid on this item"-is an offer.
A)True B)False
Q5) An invitation to negotiate-"can you afford this?"-is an offer.
A)True B)False
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Chapter 9: Consideration,capacity,and Legality
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Q1) In contract law,"consideration" refers to the courtesy that one party shows another in negotiating a deal.
A)True
B)False
Q2) A covenant not to sue is against public policy.
A)True
B)False
Q3) Boz runs an illegal gambling business and pays Colin,a police officer,not to interfere.The payments are discovered.Boz and Colin are sent to prison.With respect to the amount of the payments,Boz can recover
A)all of it.
B)none of it.
C)only as much as Colin has not spent.
D)only as much as Colin has spent.
Q4) A severable contract is unenforceable as a violation of public policy.
A)True
B)False
Q5) An adult may avoid any contract with a minor.
A)True
B)False
11
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Chapter 10: Defenses to Contract Enforceability
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Sample Questions
Q1) Elle buys a new textbook for $100 and a used car for $5,000,and signs a one-year lease for an apartment for $1,000 monthly rent to start at the beginning of the next month.The Statute of Frauds covers
A)the apartment lease,and the textbook and car purchases.
B)the apartment lease and the car purchase only.
C)the apartment lease only.
D)the textbook and car purchases only.
Q2) Misrepresentation of an opinion is an element of fraud.
A)True
B)False
Q3) Oral evidence of the meaning of a contract with incomplete terms can be introduced at a trial.
A)True
B)False
Q4) If a price quotation contains a mistake in the adding of a number of figures,the contract may not be enforceable.
A)True
B)False
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Chapter 11: Third Party Rights and Discharge
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Sample Questions
Q1) Refer to Fact Pattern 11-1.Neil's performance is most likely
A)a material breach.
B)a minor breach.
C)Mutual's breach.
D)no breach.
Q2) On April 1,OK Contractors,Inc. ,contracts to build a store for Lo-Cost Jewelers at a specific location in Metro City.On May 1,Metro changes its zoning laws to prohibit the construction of a commercial building at that location.When the store is not built,Lo-Cost files a suit against OK.In this situation
A)OK is in breach of contract.
B)Metro is in breach of contract.
C)the contract is discharged.
D)the contract is suspended.
Q3) After a contract is made,a supervening event may make performance impossible and discharge the contract.
A)True
B)False
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13
Chapter 12: Breach and Remedies
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Sample Questions
Q1) The four broad types of damages in contract law are conciliatory,consecutive,punctual,and nominative.
A)True
B)False
Q2) National Drilling Company ships its only pump to American Hydraulics Corporation,the manufacturer,for repair.National hires Overland Transport,Inc. ,to take the pump to American Hydraulics and to return it to National as soon as the repair is complete.National is forced to suspend operations without a pump,but Overland does not know this.National expects to be without the pump for five days and to lose profits of $5,000.When the pump is not returned by the end of the fifth day,National rents a pump at a cost of $100 per day.Overland delays five more days before returning the pump.National files a suit against Overland,asking for compensatory,consequential,and punitive damages.Will National recover?
Q3) A contract may include a clause stating that no damages can be recovered for a certain type of breach.
A)True
B)False
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Page 14
Chapter 13: The Formation of Sales and Lease Contracts
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Q1) Rodeo,S.A. ,which is based in Spain,enters into a contract for the sale of seven hydraulic lifts to Tonnage Shipping Company,which is based in the United States.This contract is governed by A)Spanish law.
B)the provisions in the laws of both countries that are similar.
C)Article 2 of the UCC.
D)the United Nations Convention on Contracts for the International Sale of Goods.
Q2) Under the UCC,a contract for a sale of goods that includes open terms is void. A)True
B)False
Q3) Fungible goods are goods that cannot be delivered by physical transport. A)True
B)False
Q4) A sale of "things attached" to realty is always considered a sale of goods.
A)True
B)False
Q5) A consumer lease is exempted from coverage under the UCC. A)True B)False
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Chapter 14: Performance Breach of Sales Lease Contracts
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Sample Questions
Q1) Ramblin' Country Stables contracts to buy 1,000 horseshoes from Blacksmith,Inc. ,for $1 per shoe.When the market price decreases to 50 cents per shoe,Ramblin' refuses to go through with the deal.Blacksmith can recover
A)$1,500.
B)$1,000.
C)$500.
D)$0.
Q2) Screen Perfect,Inc. ,and TV Stores enter into a contract for a sale of high-definition television sets.Screen Perfect ships goods that do not exactly conform to the contract in some details.TV Stores
A)cannot reject the entire shipment.
B)can reject the entire shipment.
C)must accept the entire shipment.
D)must reject the entire shipment.
Q3) Until the time for performance under a contract expires,the seller has a right to cure.
A)True B)False
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Chapter 15: Warranties and Product Liability
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Q1) Only a statement made after a contract is entered into can be an express warranty.
A)True
B)False
Q2) City Car Company and Dave's Autos enter into a contract for a sale of motor vehicles.City assures Dave's that it has valid title to the vehicles.Under the UCC,a warranty of title arises
A)automatically in most sales contracts.
B)only if the buyer asks for such a warranty.
C)only if the seller expresses such a warranty.
D)only in conjunction with lease contracts,not sales contracts.
Q3) Ceramic Tile Company designs and makes floor tiles.In a product liability suit based on negligence,Ceramic could be liable for violating its duty of care with respect to A)neither the design nor the making of the tiles.
B)the design and the making of the tiles.
C)the design of the tiles only.
D)the making of the tiles only.
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Chapter 16: Negotiability,transferability,and Liability
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Q1) An instrument payable "with interest" must specify a particular rate to be negotiable.
A)True
B)False
Q2) Don writes a check to Eve drawn on Don's account at First Bank.Eve presents the check for payment to First Bank,which accepts it.The bank is
A)not liable for payment.
B)primarily liable for payment.
C)secondarily liable for payment.
D)simultaneously liable,with Don,for payment.
Q3) A check "payable to the order of bearer" is neither an order instrument nor a bearer instrument.
A)True
B)False
Q4) A maker is secondarily liable on an instrument.
A)True
B)False
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18
Chapter 17: Checks and Banking in the Digital Age
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Q1) A bank is obligated to pay an uncertified check presented less than six months from its date.
A)True
B)False
Q2) A bank has no right to charge a customer's account for the amount of a stale check.
A)True
B)False
Q3) Pat,the manager of Quik Mart,deposits the store's receipts in its account at Regional Bank.As to the receipts,the relationship between Quik Mart and the bank is
A)attorney and client.
B)creditor and debtor.
C)guardian and ward.
D)trustee and beneficiary.
Q4) Generally,a bank has no obligation to pay a customer's overdrafts.
A)True
B)False
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Chapter 18: Security Interests in Personal Property
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Q1) On default,unless the security agreement states otherwise,the secured party has the right to repossess collateral.
A)True
B)False
Q2) An improper filing renders a secured party unperfected.
A)True
B)False
Q3) Under certain conditions,a purchase-money security interest will take priority over a previous creditor's interest in after-acquired property.
A)True
B)False
Q4) A security interest that provides for a security interest in proceeds is a floating lien.
A)True
B)False
Q5) A purchase-money security interest in consumer goods is perfected automatically at the time of a credit sale.
A)True B)False
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Chapter 19: Creditors Rights and Bankruptcy
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Q1) Payment of the principal obligation will not discharge the surety from the obligation.
A)True
B)False
Q2) A guarantor can be required to pay an obligation only after the principal debtor defaults.
A)True
B)False
Q3) Delia refuses to pay Ewing $500 in cash on their contract to repair certain theater sets,which Ewing still possesses.Ewing's lien on the sets will terminate
A)if Ewing continues to maintain possession.
B)if Ewing does not file a written notice of lien within thirty days.
C)if Ewing voluntarily surrenders possession.
D)within thirty days.
Q4) A surety is secondarily liable for the debt of a principal.
A)True
B)False
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Chapter 20: Mortgages Foreclosures After the Recession
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Q1) Franz asks Gateway Mortgage Credit for a loan to pay for the purchase of a home.With a poor credit score and a high current debt-to-income ratio,Franz does not qualify for a standard mortgage.Gateway is most likely to provide A)a deed in lieu of foreclosure.
B)a reverse mortgage.
C)a subprime mortgage.
D)a workout agreement.
Q2) A lender can make a higher-priced mortgage loan based on the value of the consumer's home without verifying the consumer's ability to repay the loan.
A)True
B)False
Q3) Duran applies to EZ Credit Mortgage Company for $100,000 to buy a home.EZ Credit steers Duran toward an adjustable-rate mortgage even though he qualifies for a fixed-rate mortgage.This is A)a short sale.
B) a subprime mortgage. C)loan flipping.
D)steering and targeting.
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Chapter 21: Agency Relationships
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Q1) Lather Up Soap Products Company grants its agent Kathy an exclusive territory in which to sell Lather Up products.The firm cannot compete with Kathy in that territory under the principal's duty of A)avoidance.
B)cooperation.
C)indemnification.
D)reimbursement.
Q2) Geoff serves in a representative capacity for Huck.To accomplish the objectives of this relationship,Geoff's authority can be implied
A)by contradiction.
B)by custom.
C)by lack of reason.
D)under no circumstances.
Q3) An agency can terminate once its purpose is achieved.
A)True
B)False
Q4) An agency relationship may be created for any legal purpose.
A)True
B)False
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Chapter 21: Management Perspective:
Independent-Contractor Negligence
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Q1) Pharma Meds Corporation employs Ogilvie under an employment contract that sets out a specific amount of money to be paid for certain results over a stated period of time.During the term of the contract,it becomes clear that the results are not likely to be attained.Pharma then gives Ogilvie the option of accepting a lesser position with fewer duties for less money.Ogilvie accepts via e-mail,but soon files a suit against Pharma for breach of the original contract.The court is most likely to rule that Ogilvie's e-mail
A)showed only an agreement to agree.
B)accepted the proposed modification of the employment contract.
C)constituted a non-binding,non-contractual communication.
D)contained an acceptance but is unenforceable because it is electronic.
Q2) According to the dissent's opinion in Media General Operations,Inc.v.National Labor Relations Board,in determining whether a discharge for an employee's "outburst" in violation of a workplace rule violates the NLRA,the court should focus on whether
A)the arrest of the employee is warranted.
B)the NLRA generally protects the employee from discharge.
C)the remark undermines workplace discipline.
D)the rule is fair and justifiable.
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Page 24
Chapter 22: Employment, immigration, and Labor Law
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Q1) Under the Equal Pay Act of 1963,all of the women on an employer's staff must be paid the same as all of the men.
A)True
B)False
Q2) Frida is an employee of Green Recycled Products Company.A state statute protects Frida from Green's retaliation if Frida reports to state officials,or others,that Green is involved in unsafe or illegal activity.With respect to the employment-at-will doctrine,this is
A)an example of the doctrine.
B)an exception based on contract theory.
C)an exception based on public policy.
D)an exception based on tort theory.
Q3) Detail Designs Company,an architectural firm,wants to hire Eduardo,a noncitizen.A temporary work visa is most likely to be set aside for a noncitizen who is
A)a "person of ethnic similarity to the employer's workforce."
B)a "person of extraordinary ability."
C)a "person of ordinary ability and ambition."
D)a "person with an extraordinary work ethic."
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25
Chapter 23: Sole Proprietorships, partnerships, Limited Liability Co
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Q1) Refer to Fact Pattern 23-2.Luann signs a contract with Oleo Chips,a retail component supplier,apparently on Networx's behalf.The contract is binding on
A)Luann,Mace,and Networx.
B)Luann only.
C)Networx only.
D)Oleo only.
Q2) As with partnerships,a court can order a limited liability company to dissolve in certain circumstances.
A)True
B)False
Q3) Jay is a member of Kitchen Cookouts,LLC,a limited liability company.Jay is liable for Kappa's debts
A)in proportion to the total number of members.
B)to the extent of his investment in the firm.
C)to the extent that the other members do not pay the debts.
D)to the full extent.
Q4) A limited liability company is not a citizen of any state.
A)True
B)False
Page 26
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Chapter 24: Corporate Formation, financing, and Termination
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Q1) A holding company is a company whose business activity consists of holding shares in another company.
A)True
B)False
Q2) A court will not pierce the corporate veil of a corporation that is formed merely to evade an existing legal obligation.
A)True
B)False
Q3) Once a dissenting shareholder elects appraisal rights,the shareholder loses his or her shareholder status.
A)True
B)False
Q4) A corporate director is the owner of the corporation.
A)True B)False
Q5) Shareholder appraisal rights do not usually extend to short-form mergers. A)True B)False
Page 27
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Chapter 25: Corporate Directors, officers, Shareholders
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Q1) Raul is chairman of the board of Swif-Vac Corporation.Pinky,a consumer,is injured while using a Swif-Vac product.Pinky sues Swif-Vac,and Raul individually.Swif-Vac may pay Raul's legal fees under
A)the director's right to certification.
B)the director's right to compensation.
C)the director's right to indemnification.
D)no circumstances.
Q2) Kelly transfers shares of stock that she owns in Lone Starz Company to Max.A shareholders' meeting takes place before Max's ownership is entered in Lone Starz's stock book.A vote at the meeting can be cast by
A)Kelly and Max.
B)Kelly only.
C)Max only.
D)neither Kelly nor Max.
Q3) The article of corporation cannot exclude shareholders' voting rights.
A)True
B)False
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Chapter 26: Investor Protection, insider Trading, Corp Gov
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Q1) Players Video Game Centers,Inc. ,wants to issue stock of $1 million in a single offering.Players must provide all investors with material information about itself,its business,and its securities if
A)all investors are accredited.
B)under any circumstances.
C)any investors are accredited.
D)any investors are unaccredited.
Q2) Olive Grove Enterprises,Inc. ,completes its registration process and issues a free-writing prospectus.This tells prospective investors
A)about investing freely.
B)how to write their own prospectus.
C)that they can "freely write their own ticket" to buy Olive's securities.
D)that they may obtain the prospectus at the SEC's Web site.
Q3) Generally,stock offerings that are made in a limited manner during any twelve-month period are not exempt from the registration requirement.
A)True
B)False
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29
Chapter 27: Personal Property and Bailments
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Q1) Refer to Fact Pattern 27-1.TTC can avoid liability
A)by proof that TTC did not convert the goods and was not negligent.
B)by proof that TTC's warehouse is located in a high-crime area.
C)by proof that Unlimited Sales was negligent in hiring TTC.
D)under any circumstances.
Q2) Faye owns the land on which Golden Spurs Ranch is situated,plus the ranch house,barn,and other structures permanently attached to the land.Faye's brother Huey owns everything else in the ranch's operation-livestock,feed,and so on.The personal property is owned by
A)Faye and Huey.
B)Faye only.
C)Golden Spurs Ranch.
D)Huey only.
Q3) Stan is liable for the conversion of Tyler's business law textbook
A)if Tyler proves that the book was in Stan's possession when it disappeared.
B)if Tyler proves that the book is now in a third party's possession.
C)if Tyler proves that the book was not in his possession when it disappeared.
D)under no circumstances.
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Chapter 28: Real Property and Landlord-Tenant Law
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Q1) An item cannot be a fixture unless it is physically attached to the land.
A)True
B)False
Q2) Jai owns an orchard behind Key's house and property.The only access to the orchard is Key's driveway,which Jai uses to get to her orchard.Jai sells the orchard to Laurentz.Can Laurentz use the right-of-way across Key's property?
Q3) Bakri owns a house.In the house,on a tile floor is a throw rug.Most likely to meet the definition of a fixture is
A)the house.
B)the throw rug.
C)the tile floor.
D)none of these choices.
Q4) Dora leases a house from Evan for a two-year term.To ensure the validity of their lease,it should include
A)a description of the premises.
B)a due date for the payment of the property taxes.
C)a requirement that Dora perform structural repairs to the house.
D)a requirement that Evan carry liability insurance.
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Chapter 29: Insurance, wills, and Trusts
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Q1) A loss sustained between the time of application and the delivery of an insurance policy may not be covered.
A)True
B)False
Q2) Kelsy obtains a business liability insurance policy from Luminous Insurance Company for Kelsy's Framing & Art Supplies store.When an event occurs that gives rise to a claim,Luminous has a duty to A)investigate to determine the facts.
B)file a suit against Kelsy so that a court can settle the claim.
C)find a third party on whom to impose liability.
D)refund any unearned amount of the premium.
Q3) An "X" can qualify as a signature on a will.
A)True
B)False
Q4) In defense against payment,an insurance company can raise any of the defenses that would be valid in an ordinary action on a contract.
A)True
B)False
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Chapter 30: Liability of Accountants Other Professionals
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Q1) An accountant's liability under the Securities Act of 1933 requires privity of contract with the purchaser of a security.
A)True
B)False
Q2) A failure to follow generally accepted accounting principles and generally accepted auditing standards is proof of a lack of due diligence.
A)True
B)False
Q3) Ezra,an accountant,intentionally misstates a material fact to mislead Fruit Packing Industries,Inc. ,a client.Fruit Packing justifiably relies on the misstatement to its detriment.Ezra is most likely liable for A)actual fraud.
B)constructive fraud.
C)destructive fraud.
D)virtual fraud.
Q4) Malpractice is professional negligence. A)True
B)False
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Chapter 31: International Law in a Global Economy
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Q1) Chiang Ltd. ,a Chinese firm,imports its goods into the United States and offers those goods for sale at "less than fair value." This is A)confiscation.
B)defalcation.
C)dumping.
D)expropriation.
Q2) A treaty is a contract or other agreement between two or more nations that must be ratified by the United Nations to take effect.
A)True
B)False
Q3) The Association of Southeast Asian Nations is a regional trade association that was created through
A)a bilateral agreement.
B)a lateral agreement.
C)a multilateral agreement.
D)a unilateral agreement.
Q4) Dumping is the exporting of environmentally polluting goods to a foreign market.
A)True
B)False
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Chapter 32: Adapting the Law to the Online Environment:
The Supreme Court Upholds a Law That Prohibits Pandering
Virtual Child Pornography
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Q1) World Investment & Trading,Inc.(WIT),encourages its employees to build trust with its customers and other companies.Unfounded complaints and exaggerated charges leveled against WIT online would most likely be regarded by a court as
A)an expression of fact.
B)a form of speech protected by the First Amendment.
C)an inappropriate online disclosure.
D)libelous.
Q2) Federal law requires new car labels to state fuel economy estimates.California state law proscribes deceptive advertising.Chad buys a new car from Drive-Away Sales in California.Later,Chad files a suit against the car's manufacturer,claiming that the car does not attain the fuel economy estimate and thus its maker engaged in deceptive advertising in violation of state law.In the opinion of the dissent in Paduano v.American Honda Motor Co. ,the court should hold that
A)the federal law does not preempt Chad's state law claim.
B)the federal law preempts Chad's state law claim.
C)California's state law preempts the federal fuel economy law.
D)the federal and state laws preempt each other.
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Q1) According to the dissent in MedImmune,Inc. ,v.Genentech,Inc.case,a patent licensee can challenge the validity of a licensed patent
A)only after breaching the license agreement.
B)only before breaching the license agreement.
C)without breaching the license agreement.
D)under no circumstances.
Q2) O.K.Valve Company applies for a patent for a valve.Meanwhile,O.K.licenses its products,including the valve,to Petro Pumps,Inc. ,which uses the valve to make oil pumps.Under the terms of the license,Petro agrees to pay royalties on O.K.'s "patented" products.When a patent is granted on the valve,O.K.asks Petro to pay royalties on the sales of its pumps.Petro wants to challenge the validity of O.K.'s patent.According to the majority in MedImmune,Inc. ,v.Genentech,Inc.case,a patent licensee can challenge the validity of a licensed patent
A)only after breaching the license agreement.
B)only before breaching the license agreement.
C)without breaching the license agreement.
D)under no circumstances.
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Chapter 35: Management Perspective: E-Mailed
Credit-Card Receipts
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Q1) Gabe asks his cousin Francie to sacrifice her career,move her home and family,and provide services,at a lower salary than usual,to Gabe's new Farm-to-Fork Produce Company.Gabe tells Francie that she will jointly own and run the firm.Francie agrees.Later,after the firm gains the benefit of Francie's services,Gabe forces Francie out.According to the dissent in the Braddock case,these facts sufficiently allege the elements of a claim for A)damages based on quasi contract.
B)recovery in fraud.
C)relief from a unilateral mistake.
D)none of the choices.
Q2) Dani asks her cousin Cedric to sacrifice his career,move his home and family,and provide services,at a lower salary than usual,to Dani's new Commercial Shipping Company.Dani tells Cedric that he will jointly own and run the firm.Cedric agrees.Later,after the firm gains the benefit of Cedric's services,Dani forces Cedric out.According to the majority in the Braddock case,these facts sufficiently allege the elements of a claim for A)damages based on quasi contract.
B)recovery in fraud.
C)relief from a unilateral mistake.
D)none of the choices.
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Chapter 34: Case Study With Dissenting Opinion: Prestridge
V Bank of Jena
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Q1) In the facts of the previous question,suppose that Thalia had had access to Rhett's checks through his carelessness.The majority in the Prestridge case would then most likely hold Silverado liable for A)all checks.
B)checks that were cashed less than thirty days after the statement. C)checks that were cashed more than thirty days after the statement. D)no checks.
Q2) More than thirty days after Rhett receives his account statement from Silverado Bank,he notifies the bank that Thalia forged Rhett's name on some of the checks that the bank has cashed.The majority in Prestridge v.Bank of Jena would most likely hold Silverado liable for A)all checks.
B)checks that were cashed less than thirty days after the statement. C)checks that were cashed more than thirty days after the statement. D)no checks.
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Chapter 36: Adapting the Law to the Online Environment: The Thorny Issue
of Taxing Internet Sales
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Q1) Tour Vista,an online travel company,buys blocks of rooms from Skyview Towers,a hotel in River City,at a wholesale rate.Tour Vista reslls the rooms to consumers at a retail rate.In recent efforts to collect taxes from e-commerce,some cities claim that hotel occupancy taxes should be assessed and remitted directly to the cities based on
A)the dire financial straits of the cities during the latest recession.
B)the retail rates of the rooms.
C)the states of residency of the consumers who reserve the rooms.
D)the wholesale rates of the rooms.
Q2) According to the dissent in Casserlie v.Shell Oil Co. ,an inquiry into a seller's motive in setting prices is necessary to determine if the seller acted
A)in good faith.
B)with the motive of driving competitors out of business.
C)with the intent of making the most profit in the least time.
D)to set commercially unreasonable and discriminatory prices.
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The Debt That Never Goes Awayits Discharged in Bankruptcy but Still on the Debtors Credit Report
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Q1) In the facts of the first question,according to the reasoning of the dissent in the Central case,the prevailing party would be A)both Vance and WSU.
B)neither Vance nor WSU.
C)Vance.
D)WSU.
Q2) In the facts of the previous question,according to the court in the Central case,a party that would prefer a different result should seek relief from A)Congress.
B)the courts.
C)the president.
D)the students of WSU and other state schools.
Q3) Dale's debts are discharged in a liquidation bankruptcy.With respect to Dale's prebankruptcy debt,Even Stevens Credit Reporting Agency must automatically report A)nothing.
B)the debt as "discharged," except the nondischargeable debt.
C)the debt as "discharged," including the nondischargeable debt.
D)the debt as "unpaid."
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Chapter
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Q1) Rewind Investments Inc.owns 90 percent of Swift Blades Inc.(SBI).Rewind's majority shareholders are also its directors and the directors of SBI.SBI's business is the design and assembly of wind-driven turbines.SBI is offered the opportunity to buy Typhoon Turbines,Inc. ,a competitor,but SBI's board turns it down.Within six months,Rewind buys Typhoon.Based on the court's reasoning in Notz v.Everett Smith Group,Ltd. ,,a minority SBI shareholder could bring
A)a claim against Typhoon's former directors.
B)a direct claim against SBI's majority shareholders.
C)a shareholder's derivative suit against Rewind.
D)no claim.
Q2) Sayer is an employee of Thorny Foliage Eradication,Inc.Sayer tweets messages about Thorny Foliage to employees and outside interested parties,including investors and others.According to the Securities and Exchange Commission,Sayer's messages are subject to
A)federal securities laws.
B)international communications regulations.
C)state blog and tweet rules.
D)no law.
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Chapter 39: Case Study With Dissenting Opinion: Kovarik V
Kovarik
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Q1) In the facts in the previous question,if the CDs are seen as the property of Heidi and Irene,the sisters are most likely
A)joint tenants.
B)tenants at sufferance.
C)tenants by the entirety.
D)tenants in common.
Q2) Glen and Heidi are married.Later,Heidi's parents invest their savings in certificates of deposit (CDs)in the names of Heidi and her sister Irene.Their parents keep the CDs.When Glen files for divorce from Heidi,he lists the CDs as marital assets.Before the court divides the assets,Irene cashes in the CDs at her parents' instruction without sharing the proceeds with Heidi.Under the reasoning of the majority in Kovarik v.Kovarik,the court will most likely rule that,with respect to Glen and Heidi's marital estate,the CDs are
A)not included because Heidi's parents did not intend to give them to her.
B)not included because Irene cashed them without sharing the proceeds.
C)included because Glen and Heidi were married when the CDs were acquired.
D)included because Heidi's parents gave up control when the CDs were placed in the names of Heidi and Irene.
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Chapter 40: Unit Case Study With Dissenting Opinion: Dole
Food Co V Patrickson
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Q1) In the facts of the previous question,according to the reasoning of the dissent in Dole Food Co.v.Patrickson,parties who would be potentially subject to suit in U.S.courts would include
A)Amigos and Bueno.
B)neither Amigos nor Bueno.
C)only Amigos.
D)only Bueno.
Q2) In the facts of the previous questions,a U.S.court might pierce Amigos and Bueno's corporate status to impose liability on their owners,including the government of Chile,if the firms failed to follow or be involved in
A)business activities.
B)corporate formalities.
C)ethical practices.
D)foreign affairs
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