Business Ethics and Law Review Questions
Course Introduction
Business Ethics and Law explores the complex interplay between ethical principles and legal frameworks within the modern business environment. This course examines fundamental concepts such as corporate social responsibility, ethical decision-making, and the relationship between moral values and organizational conduct. It also covers key aspects of business law, including contracts, employment regulations, consumer protection, and intellectual property, emphasizing their impact on day-to-day business operations. Through real-world case studies and interactive discussions, students will develop critical thinking skills to navigate ethical dilemmas and legal challenges, enabling them to make informed and responsible decisions as business professionals.
Recommended Textbook
Andersons Business Law and the Legal Environment Comprehensive 23rd Edition by Twomey
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51 Chapters
2716 Verified Questions
2716 Flashcards
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Chapter 1: The Nature and Sources of Law
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60 Verified Questions
60 Flashcards
Source URL: https://quizplus.com/quiz/21143
Sample Questions
Q1) A ______ is a legal principle expressed for the first time in court decision.
A) statutory law
B) stare decisis
C) case law
D) precedent
Answer: D
Q2) The right of privacy consists of:
A) the right to be secure against unreasonable searches by the government only.
B) the right to protection against intrusions by others only.
C) both the right to be secure against unreasonable searches by the government and the right to protection against intrusions by others.
D) the right to be secure against warrantless searches only
Answer: C
Q3) A good example of a uniform state law would be:
A) statutory law.
B) case law.
C) constitutional law.
D) the Uniform Commercial Code.
Answer: D
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Page 3
Chapter 2: The Court System and Dispute Resolution
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57 Verified Questions
57 Flashcards
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Sample Questions
Q1) Which is not considered an alternate means of dispute resolution?
A) civil lawsuit
B) arbitration
C) association tribunals
D) minitrial
Answer: A
Q2) The U.S. Courts of Appeals consists of ______federal judicial districts.
A) Ten (10)
B) Fifteen (15)
C) Thirteen (13)
D) Nine (9)
Answer: C
Q3) Garnishment is a method for satisfying a judgment against a defendant.
A)True
B)False
Answer: True
Q4) All courts have general jurisdiction.
A)True
B)False
Answer: False
Page 4
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Chapter 3: Business Ethics, Social Forces, and the Law
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52 Verified Questions
52 Flashcards
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Sample Questions
Q1) In addition to issues of social responsibility, business values and ethics play an important role in the success or failure of a business.
A)True
B)False
Answer: True
Q2) Laws that prohibit theft, operation of a factory in areas zoned residential, and copyright infringement exist primarily:
A) for protection of the person.
B) for protection of public health, safety, and morals.
C) for protection of property.
D) for protection of the state.
Answer: C
Q3) Moral relativists believe that ethical decisions will differ based on circumstances. A)True
B)False
Answer: True
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Page 5
Chapter 4: The Constitution As the Foundation of the Legal Environment
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60 Verified Questions
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Sample Questions
Q1) Ex post facto laws can be adopted by either the states or the national government.
A)True
B)False
Q2) Many changes have been made to the Constitution by the constitutional method of amending.
A)True
B)False
Q3) The Second Amendment provides for the right to keep and bear arms.
A)True
B)False
Q4) A constitution is the written document that establishes the structure of the government and its relationship to the people.
A)True
B)False
Q5) A business' right to commercial speech - or advertising - has the same protections as a natural person.
A)True
B)False
Page 6
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Chapter 5: Government Regulation of Competition and Prices
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Sample Questions
Q1) The Sherman Act applies only to buying and selling activities, not manufacturing and production activities.
A)True
B)False
Q2) The government can regulate not just businesses, but also business competition and prices.
A)True
B)False
Q3) Freezo Refrigerators are sold by various retailers. Most of the same retailers also sell Icy Refrigerators. The Freezo brand outsells Icy in some stores, but not in others. Freezo has decided to offer secret bonuses and discounts to retailers where the sale of Freezo Refrigerators lags behind the sale of Icy Refrigerators. Freezo sees this action as an advertising ploy to increase market share. Retail stores where Freezo is number one are not eligible for any of these bonuses and discounts. Discuss the implications of Freezo's advertising plan.
Q4) An agreement between real estate brokers to never charge a commission less than 6% is not an example of price fixing.
A)True
B)False
Page 7
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Chapter 6: Administrative Agencies
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Sample Questions
Q1) A subpoena to testify or to produce records:
A) is prohibited by the constitutional guarantee against unreasonable searches and seizures.
B) is an illegal attempt to gain information by compulsion.
C) cannot be opposed on the grounds that such a request constitutes an unreasonable search and seizure.
D) must be approved by corporate officers to be effective.
Q2) The modern administrative agency typically possesses legislative, executive, and judicial powers.
A)True
B)False
Q3) The Sunshine Act requires most meetings of major administrative agencies to be open to the public.
A)True
B)False
Q4) When it comes to administrative agencies, courts:
A) regard agencies as able to perform their duties effectively.
B) accept rules that have been established by agencies using a rational basis.
C) do not substitute their own judgment in agency decisions.
D) All of these.
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Chapter 7: Crimes
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Sample Questions
Q1) Crimes are generally defined and their punishments specified by:
A) trial court judges.
B) appellate judges.
C) codes and statutes.
D) the United States Constitution.
Q2) Counterfeiting is:
A) a federal crime only.
B) a state crime only.
C) both a federal and state crime.
D) determined by the individual.
Q3) Generally, misdemeanors are more serious than felonies.
A)True
B)False
Q4) Larceny is best defined as the taking of personal property from the presence of the victim by the use of force or fear.
A)True
B)False
Q5) Destroying information stored on a computer may be a crime.
A)True
B)False
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Chapter 8: Torts
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Sample Questions
Q1) The tort of intentional infliction of emotional distress requires proof of outrageous conduct and resulting emotional distress in the victim.
A)True
B)False
Q2) If the plaintiff has either engaged in or refrained from actions that are at least partially to blame for the injuries received, what negligence has occurred?
A) criminal
B) contributory
C) personal
D) prejudicial
Q3) Customer reviews and complaints such as "the worst cruise experience of my life" are protected opinion.
A)True
B)False
Q4) The tort of invasion of privacy requires the reasonable intrusion into one's private affairs.
A)True
B)False
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Page 10
Chapter 9: Intellectual Property Rights and the Internet
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Sample Questions
Q1) Trademarks and service marks are recorded with the Register of Copyrights.
A)True
B)False
Q2) Under the Semiconductor Chip Protection Act's _______, competitors may not only study mask works but may also use the results of that study to design their own semiconductor chip products embodying their own original masks.
A) fair use exemption
B) statutory damages waiver
C) reverse engineering exemption
D) semiconductor mask product exemption
Q3) The America Invents Act:
A) amended federal copyright law.
B) replaced the patent "first to file system" with a "first to invent" system.
C) speeds up the application process for energy conservation inventions for a $4,800 fee.
D) replaced the patent "first to invent system" with a "first to file" system.
Q4) Protection for trade dress is available under the Lanham Act.
A)True
B)False
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Chapter 10: The Legal Environment of International Trade
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57 Verified Questions
57 Flashcards
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Sample Questions
Q1) Which of the following statements is true regarding the World Trade Organization (WTO)?
A) The WTO has been in place since 1947.
B) The WTO coordinates its activities with GATT.
C) It provides a dispute settlement body to promote the resolution of trade disputes.
D) It has the ability to impose criminal penalties.
Q2) The jurisdictional ________, which is based on ________, balances the vital interests, including laws and policies, of the United States with those of the foreign country involved.
A) Rule of Reason, Comity.
B) Effects Doctrine, Comity.
C) Act-of-State Doctrine, Comity.
D) Rule of Reason, Sovereign Immunity.
Q3) A direct sale to customers in a foreign country is a(n):
A) foreign distributorship.
B) agency arrangement.
C) licensed sale.
D) export sale.
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Chapter 11: Nature and Classes of Contracts: Contracting
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Sample Questions
Q1) A bilateral contract consists of a:
A) promise for an act.
B) promise for refraining from acting.
C) promise for a promise.
D) promise to contract.
Q2) The promisor in a contract may also be called the:
A) obligor.
B) grantor
C) obligee
D) grantee
Q3) Negotiable instruments are:
A) formal contracts.
B) informal contracts.
C) option contracts.
D) first-refusal agreements.
Q4) Whenever a person receives a benefit for which payment has not been made, there is an unjust enrichment and the value of such benefit must be paid to the person conferring the benefit.
A)True
B)False
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Chapter 12: Formation of Contracts: Offer and Acceptance
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Sample Questions
Q1) Bart owned 100 shares of a stock that was actively traded on a national stock exchange. Bart wanted to sell the shares but felt that his profit would be seriously diminished by selling through a broker and paying the customary brokerage commission. Bart offered the 100 shares to any of a group of six people in a conversation at a party. The offered price was $72.50 per share, the price at which the shares had closed that day. No one really responded to the offer at that time. Ten days later when the shares were trading at $76.25, Marie, one of the offerees at the party, appeared at Bart's office saying that she accepted the offer. Bart claimed the offer no longer was available. Evaluate the legal outcome of this dispute.
Q2) If an offer does not state how long it shall remain open, it remains open for ten days. A)True B)False
Q3) A requirements contract is too vague to be a legally-enforceable agreement. A)True B)False
Q4) An offer is effective only if it is communicated by the offeror in person. A)True B)False
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Page 14
Chapter 13: Capacity and Genuine Assent
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Sample Questions
Q1) A finding of undue influence would most likely not occur in a contract between:
A) parent and child.
B) attorney and client.
C) neighbor and neighbor.
D) guardian and ward.
Q2) Roberta, an educated person, purchased real estate from Maurice. Roberta did not read entirely the contract that she signed. As a result, she did not notice the provision in the contract about the interest imposed on the unpaid portion of the purchase price. She refused to pay the interest specified in the contract. Maurice sued her. Could he recover?
Q3) An apparently voluntary agreement may in fact not be voluntary if:
A) undue influence is present.
B) physical duress is present.
C) economic duress is present.
D) all of these.
Q4) A claim of undue influence will be unsuccessful unless the contracting parties have a close relationship of trust.
A)True
B)False
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15
Chapter 14: Consideration
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Sample Questions
Q1) A promise to make a gift is enforceable.
A)True
B)False
Q2) An agreement to pay reasonable additional compensation to a contractor for the performance of a pre-existing contract when the contractor faces extraordinary circumstances caused by unforeseen difficulties is called a:
A) good-faith adjustment.
B) bribe.
C) compensatory allowance.
D) relief payment.
Q3) Promissory estoppel does NOT require
A) a signed writing explaining the promise.
B) a clear and definite promise
C) that justice be better served by enforcement of a promise
D) that a promisee has justifiably relied on the promise
Q4) Consideration is not required in:
A) contracts for the sale of goods.
B) employment contracts.
C) agreements to modify employment contracts.
D) agreements to modify contracts for the sale of goods.
Page 16
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Chapter 15: Legality and Public Policy
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Sample Questions
Q1) An agreement is illegal only when either its performance is a crime.
A)True
B)False
Q2) If the law is intended to protect one of the parties to an otherwise illegal contract, that party may seek relief in court.
A)True
B)False
Q3) A court may sever an unconscionable clause from a contract and enforce the remainder of the contract.
A)True
B)False
Q4) Sam Wilson often goes to the horse races, participates in his state's lottery, and invests heavily in the stock of major U.S. companies. At work, Wilson is approached by his coworkers and asked to participate in a football pool. "It's totally based upon skill," his friends claim. In addition, Wilson's philanthropic club is holding a raffle in which an individual could win a new car. Are these activities gambling and therefore illegal activities?
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17
Chapter 16: Writing, Electronic Forms, and Interpretation of Contracts
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60 Verified Questions
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Sample Questions
Q1) An oral contract can be enforced when it relates to:
A) the purchase of a television set for $200.
B) the sale of an interest in land for $400.
C) managing a factory for five years.
D) a promise to answer for the debt of another.
Q2) An oral understanding is not binding if:
A) the services performed were not to the satisfaction of the other party.
B) the amount agreed to be paid for services rendered was not a fair and reasonable amount.
C) the parties intended to formalize their understanding with a written agreement.
D) the understanding may be terminated at will by either party.
Q3) A note or memorandum does not have to contain all the essential terms of the contract to be valid.
A)True
B)False
Q4) Under the statute of frauds, an oral contract must be completed within one year after performance begins.
A)True
B)False
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Chapter 17: Third Persons and Contracts
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Sample Questions
Q1) When duties under a contract are delegated, the party making the delegation remains responsible for the performance of the contract just as though no delegation had been made.
A)True
B)False
Q2) If a municipality contracts with a contractor to pave a street, the homeowners on that street are third-party beneficiaries of the contract.
A)True
B)False
Q3) Only written words that show an intention to transfer or assign will be given the effect of an assignment.
A)True
B)False
Q4) When a buyer assigns the right to goods under a contract, the buyer's liability to make payment to the seller is:
A) transferred to the third party.
B) terminated.
C) still in effect.
D) shared equally with the third party.
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Chapter 18: Discharge of Contracts
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Sample Questions
Q1) A seller's inability to obtain from any supplier the goods called for by the contract generally discharges the contract for impossibility of performance.
A)True
B)False
Q2) Impossibility of performance applies when the debtor does not have sufficient funds to pay a debt.
A)True
B)False
Q3) A condition precedent must occur before a party to a contract has an obligation to perform.
A)True
B)False
Q4) There is no exact standard or test by which to determine whether contractual performance is substantial.
A)True
B)False
Q5) A condition subsequent can alter but not terminate a contract.
A)True
B)False
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Chapter 19: Breach of Contract and Remedies
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Sample Questions
Q1) When an anticipatory repudiation of a contract occurs, the non-breaching party may do any of the following except:
A) do nothing and wait for performance per the contract.
B) immediately declare a breach of contract.
C) consider the repudiation as an offer to cancel the contract.
D) immediately seek an injunction.
Q2) Repeated breaches and waivers are generally interpreted to indicate:
A) poor business practices.
B) illegal behavior.
C) ignorance of the law.
D) modification of contract.
Q3) If a seller delivers defective goods, the buyer does not lose the right to object to the breach of contract if the buyer:
A) accepts the goods.
B) accepts the goods with a reservation of right.
C) agrees to a modification of the contract.
D) accepts the performance without protest.
Q4) Punitive damages are generally recoverable in contract actions.
A)True
B)False
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Chapter 20: Personal Property and Bailments
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Sample Questions
Q1) The intent to make a gift requires an intent to transfer title at that time.
A)True
B)False
Q2) Barry and Eldridge owned Blueacre as tenants in common. Eldridge died. Blueacre is owned:
A) solely by Barry because of the survivorship feature.
B) jointly by Barry and the state because of escheat.
C) by Barry and Eldridge's heirs.
D) solely by Eldridge's heirs.
Q3) A bailee's __________ gives the bailee the right to maintain possession of the bailed property until reasonable storage and/or repair charges are paid.
A) reversionary interest
B) lien
C) remainder interest
D) mortgage
Q4) If a thief sells stolen property to a good-faith buyer, the buyer acquires title to the property.
A)True
B)False
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Chapter 21: Legal Aspects of Supply Chain Management
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Sample Questions
Q1) A carrier owned and operated by the shipper is:
A) a common carrier.
B) a common carrier
C) a private carrier.
D) a consigno
Q2) A transferee's rights to a warehouse receipt may be defeated by a good-faith purchaser of the goods from the transferor of the receipt.
A)True
B)False
Q3) A sale by a factor can pass title to goods from the consignor to the purchaser.
A)True
B)False
Q4) A negotiable warehouse receipt states that the goods received will be "delivered to the bearer."
A)True
B)False
Q5) A public warehouser is statutorily required to insure all the goods. A)True
B)False
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Chapter 22: Nature and Form of Sales
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Sample Questions
Q1) A merchant cannot revoke a firm offer to buy or sell goods if the merchant has:
A) promised to keep the offer open.
B) declared in the presence of two or more reputable witnesses that the offer will be kept open.
C) received consideration to keep the offer open.
D) stated in a signed letter that the offer would not be revoked for a specified period of time.
Q2) A writing that is offered to satisfy the statute of frauds must have been written for that purpose.
A)True B)False
Q3) Consumer leases:
A) must always be evidenced by a writing.
B) are always three- party transactions.
C) require the lessor to make all usual warranties made by a seller in a sale of goods..
D) all of these.
Q4) The term "course of dealing" refers to the language and customs of an industry.
A)True B)False
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Chapter 23: Title and Risk of Loss
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Sample Questions
Q1) Future goods can always be identified before they are manufactured.
A)True
B)False
Q2) __________ goods are goods that, when mixed together, are indistinguishable.
A) Tangible
B) Intangible
C) Heterogeneous
D) Fungible
Q3) A consignment sale is treated as a(n) __________ under UCC Article 2, and the dealer-consignee has full authority to sell the goods for the consignor and can pass title to the goods.
A) ordinary sale
B) final sale
C) sale on approval
D) sale or return
Q4) In an FOB Place of Destination shipment Title passes to the buyer:
A) when the goods are tendered at the seller's loading dock.
B) when goods are tendered to the buyer at the destination.
C) when goods are tendered to the carrier.
D) when the goods are identified by the seller.
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Chapter 24: Product Liability: Warranties and Torts
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Sample Questions
Q1) The right to sue for damages sustained from a defective product is reserved exclusively to the original purchaser of the product.
A)True
B)False
Q2) The sale of food or drink at a restaurant carries all of the following implied warranties except:
A) the food or drink will be of average quality.
B) the food or drink will be fit for human consumption.
C) the food or drink will contain no foreign substances such as a nail or screw.
D) the food or drink will meet the customer's expectations.
Q3) An auto manufacturer is excused from strict liability if it can be shown the defect was in a component part purchased from a manufacturer. A)True B)False
Q4) An action for negligence rests upon common law tort principles. A)True B)False
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Chapter 25: Obligations and Performance
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Sample Questions
Q1) If adequate assurance of performance is not given within five (5) business days from the time of the demand for assurance, the demanding party may treat the contract as repudiated.
A)True
B)False
Q2) Unless otherwise agreed, the proper place for the delivery of goods is:
A) the buyer's place of business.
B) the seller's home.
C) a delivery service selected by the seller.
D) the seller's place of business.
Q3) In a cash sale that does not require the physical moving of the goods, the:
A) parties are required to perform concurrently.
B) seller is required to tender the goods before the buyer must pay for them.
C) buyer must pay for the goods in advance.
D) buyer must actually receive the goods before he or she is required to pay for them.
Q4) If a party refuses to perform a contract when the time for performance arises, the other party has the right to seek assurances.
A)True
B)False
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Chapter 26: Remedies for Breach of Sales Contracts
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Sample Questions
Q1) In the absence of a liquidated damages clause and a proof of greater damages, the seller's damages are computed as:
A) 25% of the purchase price or $500, whichever is less.
B) 25% of the purchase price or $500, whichever is greater.
C) 20% of the purchase price or $500, whichever is greater.
D) 20% of the purchase price or $500, whichever is less.
Q2) An action for breach of warranty generally must be brought within three (3) years of the breach.
A)True B)False
Q3) When a buyer has possession of goods after rightfully rejecting them, the buyer is treated:
A) the same as a seller in the possession of goods after default by a buyer.
B) as being strictly liable for the safety of the goods.
C) the same as if an entrustment had been created.
D) as an insurer of the goods until the seller retakes possession.
Q4) Consumer protection law prohibits the waiver of defenses in consumer contracts.
A)True B)False
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Chapter 27: Kinds of Negotiable Instruments and Negotiability
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Sample Questions
Q1) An action taken by a person on behalf of another is called:
A) agency.
B) negotiability.
C) representative capacity.
D) identification of principal.
Q2) When ambiguous language in an instrument exists:
A) the instrument becomes non-negotiable.
B) handwriting supersedes typewritten words.
C) typewritten words supercede handwritten words.
D) judgment interest accumulates at the rate of 5% per annum.
Q3) Antedating an instrument affects an instrument's negotiability.
A)True
B)False
Q4) If an instrument is negotiable, it is governed by Article 4 of the UCC.
A)True
B)False
Q5) Commercial paper are transferable, written, signed promises to pay a specified sum of money.
A)True
B)False
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Chapter 28: Transfers of Negotiable Instruments and
Warranties of Parties
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Sample Questions
Q1) If an instrument bears a restrictive indorsement, any further transfer or negotiation is effectively barred.
A)True
B)False
Q2) In the case of a check, when the impostor rule applies:
A) the drawer of the check can successfully raise the defense of the forged indorsement.
B) the forged indorsement is effective to negotiate the instrument.
C) the forged indorsement is ineffective to negotiate the instrument.
D) the instrument becomes nonnegotiable.
Q3) The transferring of an instrument in such a way as to make the transferee the holder of the paper is termed:
A) an assignment.
B) a conversion.
C) a sale.
D) a negotiation.
Q4) An instrument may be transferred only by negotiation.
A)True
B)False
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Chapter 29: Liability of the Parties Under Negotiable Instruments
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Q1) Jose receives a promissory note from his grandmother as a birthday present. Is Jose a holder in due course (HDC) with respect to the note?
A) No, because the note was a gift
B) No, because the note was signed by a relative
C) Yes, because the note was a gift made in good faith
D) Yes, because although the note was a gift, Jose took it without notice
Q2) A taker of an instrument who is a holder in due course at the time of the transfer, but who thereafter learns of a defense:
A) becomes a holder through a holder in due course.
B) becomes an ordinary holder.
C) remains a holder in due course.
D) becomes an assignee.
Q3) Manuel sued Patricia on a promissory note. Patricia admitted signing the note, but raised the defense that Manuel was not a holder in due course. Can Manuel recover without proving that he is a holder in due course?
Q4) Value is similar to consideration..
A)True
B)False
Page 31
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Chapter 30: Checks and Funds Transfers
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Q1) A check may be certified by a bank upon the request of the drawer or the holder.
A)True
B)False
Q2) The Railway Express Agency delivered a shipment of goods to Lorraine. Payment for the goods was made with a certified check, payable to the order of the Railway Express Agency. The check was drawn by Lorraine on the First National Bank of Detroit. Later, the bank refused to pay the check when it was presented by Railway Express, the holder, because the bank had become insolvent and stopped doing business. The Railway Express Agency sued Lorraine. Lorraine claimed that she was not liable on the check because it was certified. Is she correct?
Q3) A consumer who notifies the issuer of an EFT card within two (2) days after learning of a loss or theft of the card is limited to a maximum liability of:
A) $500.
B) $50.
C) There is no liability limitation in this situation.
D) There is no liability in this situation.
Q4) In theory, a valid check can be written on a cocktail napkin.
A)True
B)False
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Chapter 31: Nature of the Debtor Creditor Relationship
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Q1) Letters of credit are a two-party agreement used for financing.
A)True
B)False
Q2) Sureties have no rights or remedies to protect them from loss or breach of contract.
A)True
B)False
Q3) Standby letters of credit are used only in international trade situations.
A)True
B)False
Q4) Under the ______, the respective parties are protected by a careful description of the documents that will trigger payment.
A) letter of credit rule.
B) standby letter rule.
C) independence rule.
D) strict compliance rule.
Q5) Suretyship is a pledge to pay one's own debts and obligations.
A)True
B)False
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Chapter 32: Consumer Protection
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Q1) Sue Thompson received a home "cold-canvas" sales call at her home from a representative of the Enlightened Encyclopedia Company. The salesperson, after a rather aggressive presentation, convinced Sue to order a $1,200 Deluxe Encyclopedia set for her two children. Sue was impressed with the quality of the books, but shortly after signing the contract, she realized that she could not really afford to make the required monthly payments. What rights, if any, does Sue have in this situation?
Q2) Consumer protection statutes and regulations do not protect against:
A) deceptive advertising.
B) the consumer's own negligence.
C) unsolicited credit cards sent to creditworthy consumers.
D) unreasonable methods of debt collection by debt collection agencies.
Q3) The types of provisions that make contracts unconscionable include clauses that award excessive damages or the application of credit payments across purchases over time so that the consumer is never able to pay off any goods.
A)True
B)False
Q4) The Fair Credit Reporting Act applies only to consumer credit.
A)True B)False
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Chapter 33: Secured Transactions in Personal Property
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Q1) Creditors cannot legally request collateral on a previously unsecured loan.
A)True
B)False
Q2) Grund, a professional night club musician, financed the purchase of a drum set to be used in his night club act. Under Article 9, the drum set will be classified as a consumer good.
A)True
B)False
Q3) A debtor must have rights in the collateral for a security interest to attach.
A)True
B)False
Q4) If the collateral is in the possession of the creditor: ______.
A) a financing statement must be filed to perfect the interest.
B) the security interest is perfected.
C) only a security interest has been obtained.
D) the type of goods will determine the method of perfection.
Q5) A security interest needs to be perfected, regardless of whether there are competing claims for the collateral.
A)True
B)False
35
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Chapter 34: Bankruptcy
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Q1) Under no circumstances may a reorganization plan include executory contracts or collective bargaining agreements.
A)True
B)False
Q2) In a Chapter 7 bankruptcy, the debtor's nonexempt assets are liquidated to pay debts.
A)True
B)False
Q3) By operation of law, the trustee automatically becomes the owner of all of the debtor's property in excess of the property to which the debtor is entitled under exemption laws.
A)True
B)False
Q4) A(n) ______ is a written statement, signed by the creditor or an authorized representative, setting forth any claim made against the debtor and the basis for it.
A) Proof of Claim
B) Self-Settled Trust
C) Preferential Transfer
D) Voidable Preference
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Chapter 35: Insurance
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Q1) The person to whom an insurance promise is made is called: ______.
A) the insured.
B) the insurer.
C) the broker.
D) the agent.
Q2) An insured person is generally allowed, by policy provision or statute, a grace period of what length of time in which to make the payment of a premium due on a life insurance policy?
A) 14 to 15 days
B) 30 to 31 days
C) 60 to 61 days
D) 90 days
Q3) The promisor in an insurance contract is called the underwriter.
A)True
B)False
Q4) What is a correct statement concerning burden of proof?
A) The insured has the burden of proving that the loss was a covered loss.
B) The insurer has the burden of proving that the loss was not covered.
C) Exceptions to coverage are liberally interpreted in favor of the insurer.
D) Exceptions to coverage are disregarded in life insurance matters.
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Chapter 36: Agency
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Q1) An agent appointed by a power of attorney is referred to as an: ______.
A) implied attorney.
B) attorney in fact.
C) implied agent.
D) attorney at law.
Q2) The term apparent authority is used when an appearance of authority has been created by a principal, but actual authority does not exist.
A)True
B)False
Q3) If a principal terminates an agency without giving notice of the termination to third persons, the agent may retain the power to make contracts that will bind the principal and third persons.
A)True
B)False
Q4) The intention to ratify an unauthorized act may be expressed by words or conduct. A)True
B)False
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Chapter 37: Third Persons in Agency
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Q1) Subject to certain limitations, a third person, on learning of the existence of an undisclosed principal, may sue the principal.
A)True
B)False
Q2) The rule of law imposing vicarious liability on an innocent employer for the wrong of an employee is known as the doctrine of respondeat superior.
A)True
B)False
Q3) John is an agent for Peabody. John tells Wanda (a third party) of Peabody's existence, but not its identity, therefore John is an agent for a(n) ______ principal. If John signs a contract with Wanda on behalf of Peabody, John is ______ on the contract.
A) undisclosed, personally liable.
B) partially disclosed, not personally liable.
C) partially disclosed, personally liable.
D) undisclosed, not personally liable.
Q4) Agents may intentionally make themselves contractually liable to third persons.
A)True B)False
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Chapter 38: Regulation of Employment
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Q1) ERISA establishes an insurance plan to protect employees when the employer goes out of business. To provide this protection, the statute created a: ______.
A) Pension surety system.
B) Pension Benefit Guaranty Corporation.
C) Pension Accrual Compensation System.
D) bond system of payment.
Q2) Which of the following is a permissive versus a mandatory subject of union bargaining?
A) wages
B) hours
C) benefits for already retired workers
D) no-strike no-lockout clauses
Q3) Employers may verify ______ through the federal government's employment verification program using the ______ system.
A) employers' compliance with ICRA, E-Verify
B) new employee eligibility status, I-9
C) new employee eligibility status, E-Verify
D) new employee eligibility status, ICRA
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Chapter 39: Equal Employment Opportunity Law
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Q1) In order for an employer to be strictly liable for a(n) ______ harassment, there must have been a(n) _______ action.
A) supervisor's, tangible employment.
B) supervisor's, hostile work.
C) co-worker's, res ipsa loquitur.
D) co-worker's, quid pro quo.
Q2) The Pregnancy Discrimination Act does not:
A) require employers to treat pregnancy as other disabilities are treated.
B) require women disabled by pregnancy to be provided with the same benefits as other disabled workers.
C) require an employer to provide paid sick leave benefits to pregnant women if it does not provide them to other disabled workers.
D) prevent termination because of pregnancy
Q3) An affirmative action policy can do all of the following except:
A) help ensure a diverse work force.
B) be an effective means to avoid litigation costs.
C) provide job preferences for minorities and women.
D) provide equal pay for employees.
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Chapter 40: Types of Business Organizations
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Q1) A corporation has perpetual life, until one of its shareholder dies.
A)True
B)False
Q2) Who serve as agents of the corporation and run the "day-to-day" operations of the business?
A) officers
B) directors
C) shareholders
D) employees
Q3) An owner's death would have no effect on any of the business entities below, except: ______.
A) a partnership
B) a corporation
C) a sole proprietorship
D) joint venture
Q4) The owner of a sole proprietorship pays federal income taxes at the corporate income tax rate, based on the net earnings of the sole proprietorship.
A)True
B)False
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Chapter 41: Partnerships
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Q1) A partner has the power to withdraw from the partnership at any time except: ______.
A) when the withdrawal violates the partnership agreement.
B) when the partnership is not for a definite purpose.
C) when the partnership is not for a definite time.
D) when the partnership violates an agreement.
Q2) In determining the rights of partner Dewey in the firm of Dewey, Cheatham, and Howe, the most important reference point is: ______.
A) the Uniform Partnership Act.
B) the partnership agreement.
C) the sworn testimony of Cheatham and Howe.
D) the customs and traditions of similar partnerships.
Q3) In determining whether a partnership exists, which of the following factors is not evidence of a partnership?
A) Shared profits and losses
B) Co-ownership of property
C) Equal control of the business
D) Partner contributions.
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Chapter 42: LPs, LLCs, and LLPs
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Q1) Under the RULPA, limited partners may engage in certain "safe harbor" activities without losing their protection from liability.
A)True
B)False
Q2) The rules for dissolution of a limited partnership are the same as those of a general partnership.
A)True B)False
Q3) An protects partners from liability for the wrongful acts of those whom they directly supervise and control.
A)True
B)False
Q4) The owners of a limited liability company are known as: ______. A) members.
B) partners.
C) contributors.
D) electors.
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44
Chapter 43: Corporate Formation
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Q1) The Revised Model Business Corporation Act: ______.
A) has eliminated the certificate of incorporation.
B) has made the process of incorporation more difficult.
C) states that corporate existence begins when the secretary of state issues a certificate of incorporation.
D) has eliminated the need for articles of incorporation.
Q2) For the purpose of suing a corporation in federal court, the corporation is a citizen in the state where it has its principal place of business.
A)True
B)False
Q3) When two corporations merge: ______.
A) their separate existences cease, and a new corporation is formed.
B) one of the corporations absorbs the other.
C) each corporation's stockholders keep their original shares of stock
D) a new charter is needed.
Q4) "Conglomerate" describes the relationship of equal companies engaged in similar fields of business activity.
A)True
B)False
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Chapter 44: Shareholder Rights in Corporations
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Q1) All shares must have a par value of at least one dollar per share.
A)True
B)False
Q2) Ownership of shares of stock may be transferred by any of the following methods except: ______.
A) delivery of the stock endorsed by its owner in blank.
B) delivery of a notice of intent to transfer.
C) delivery of the stock endorsed by its owner to a specified person.
D) delivery of the certificate and a separate power of attorney executed by the owner.
Q3) A shareholder has: ______.
A) an absolute right to dividends.
B) a right to dividends when declared.
C) a right to insist that dividends be declared.
D) to share equally all dividends with fellow shareholders.
Q4) If a shareholder borrows money and delivers stock as collateral security, the creditor has a perfected security interest in the stock without any filing by the creditor.
A)True
B)False
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Chapter 45: Securities Regulation
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Q1) Any shareholder owning more than five (5) percent of any class of the corporation's equity securities is statutorily defined as an insider and must file with the SEC a disclosure statement regarding such ownership and all related transactions.
A)True
B)False
Q2) Under SEC rules, an investment attorney cannot be classified as a temporary insider.
A)True
B)False
Q3) The Securities Exchange Act of 1934 is concerned with the secondary distribution of securities in the national securities markets and in the over-the-counter markets.
A)True
B)False
Q4) One of the key elements in the Supreme Court's definition of an 'investment contract' is the right to a refund of the investment.
A)True
B)False
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Chapter 46: Accountants Liability and Malpractice
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Q1) Unidentified members of a certain class may sue for negligent malpractice in states that follow the __________ rule.
A) contact
B) known user.
C) unidentified user
D) foreseeable user
Q2) Professionals who fail to exercise normal care and skill in the performance of a contract for their services may be sued for a special type of breach known as: ______.
A) sub par performance.
B) illegal practice.
C) malpractice.
D) competence reservation.
Q3) An accountant is generally not liable for damages if the accountant fails to inform a client of the tax consequences associated with selling a business.
A)True
B)False
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Chapter 47: Management of Corporations
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Q1) A director is disqualified from taking part in corporate action with respect to a matter in which the director has a disclosed conflicting interest.
A)True
B)False
Q2) Under the responsible corporate officer doctrine a CEO could be criminally liable for failure to prevent the commission of a crime.
A)True
B)False
Q3) Directors do not have the right to evaluate management's performance.
A)True
B)False
Q4) Which of the following is an incorrect statement about directors?
A) Their eligibility requirements may be found in the bylaws.
B) Bylaws may require that directors be shareholders in the corporation.
C) The board of directors has authority to manage the corporation.
D) Courts will interfere with the board's discretion when they disagree with its actions.
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Page 49
Chapter 48: Real Property
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Q1) An oral promise to create an easement is not binding because of the statute of frauds.
A)True
B)False
Q2) The right to _________ which is found in the ______ Amendment to the U.S. Constitution, authorizes the government to take land for public use with just compensation.
A) a restrictive covenant, Fifth Amendment.
B) eminent domain, Fifth Amendment.
C) eminent domain, Fourth Amendment.
D) adverse possession, First Amendment.
Q3) A quitclaim deed must specify what interest is being transferred in order to be valid.
A)True B)False
Q4) The attractive nuisance rule is a defense for landowners when children trespassers are injured. Small children are afforded additional protection against the trespass rule through the "attractive nuisance" doctrine.
A)True B)False
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Chapter 49: Environmental Law and Land Use Controls
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Q1) The Clean Air Agency was authorized by Congress to establish national air quality standards and see that the states developed plans for the implementation of those standards.
A)True
B)False
Q2) The fact that harm occurred is sufficient to establish a prima facia case for a nuisance.
A)True
B)False
Q3) Public zoning and restrictive covenants in deeds have a similar purpose, but each has a different source of authority.
A)True
B)False
Q4) A(n) __________ may prevent the landowner from use of the land.
A) eminent domain restriction
B) nonconforming use
C) variance restriction
D) zoning restriction
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Chapter 50: Leases
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Q1) A __________ action restores the property to the landlord's possession unless the tenant complies with payment requirements.
A) forcible entry and detainer
B) forcible exit and retainer
C) passive entry and detainer
D) passive exit and retainer
Q2) While a landlord cannot lock out a tenant for overdue rent, he can initiate a summary legal procedure called ____________ to regain possession even if the lease expressly gives the landlord the right to self-help.
A) URLTA Summary Eviction process.
B) forcible entry and retainer.
C) Fair Housing Eviction Act.
D) forcible entry and detainer
Q3) A provision in a residential lease stating that the landlord cutting off heat or water will not constitute an eviction is unconscionable.
A)True
B)False
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Chapter 51: Decedents Estates and Trusts
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Q1) When property is transferred to a trust, the trustee has legal title and the beneficiary has equitable title.
A)True
B)False
Q2) A will may be contested on any of the following grounds except: __________.
A) lack of mental capacity of the testator.
B) undue influence, duress, or mistake.
C) forgery.
D) appointment of a personal representative.
Q3) When a person dies with a will, usually the probate judge names who the administrator of the estate.
A)True
B)False
Q4) A trust may be terminated by its own terms.
A)True
B)False
Q5) A will cannot be modified by merely crossing out a clause and writing in something new.
A)True
B)False
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