Business Ethics and Law
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Course Introduction
Business Ethics and Law explores the intersection of ethical principles and legal frameworks within the modern business environment. The course examines foundational ethical theories, corporate governance, social responsibility, and the implications of both domestic and international laws on business decisions. Through case studies and real-world scenarios, students analyze topics such as corporate compliance, ethical leadership, consumer protection, employment law, and intellectual property rights. The course prepares students to identify ethical dilemmas, understand relevant laws, and make responsible decisions that uphold both legal standards and ethical values in business practice.
Recommended Textbook
Business Law Today Text and Summarized Cases E Standard 9th Edition by Roger LeRoy Miller
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Chapter 1: The Legal Environment
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Q1) Refer to Fact Pattern 1-1.These opinions are collected and published in volumes called A) citations.
B) codes.
C) regulations.
D) reporters.
Answer: D
Q2) Lewis is a state court judge.Like other judges,Lewis often refers to secondary sources of law for guidance.These sources include
A) official comments to statutes.
B) other states' statutes.
C) state constitutions.
D) the U.S. Constitution.
Answer: A
Q3) As a judge,Potter applies common law rules.These rules develop from A) administrative regulations.
B) court decisions.
C) federal and state statutes.
D) proposed uniform laws.
Answer: B
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Page 3
Chapter 2: Constitutional Law
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Q1) The First Amendment protects obscene speech.
A)True
B)False
Answer: False
Q2) The establishment clause of the U.S.Constitution prohibits the federal government from establishing an official religion.
A)True
B)False
Answer: True
Q3) A Minnesota state statute restricts certain kinds of advertising to protect consumers from being misled.A court would likely hold this statute to be
A) an unconstitutional restriction of speech.
B) constitutional under the First Amendment.
C) justified by the need to protect individual rights.
D) necessary to protect national interests.
Answer: B
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Page 4
Chapter 3: Courts and Alternative Dispute Resolution
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Q1) Voir dire is a process for presenting evidence in a case.
A)True
B)False
Answer: False
Q2) To prepare for a trial between Large Lots Development Corporation (LLDC)and MiniMansion Construction Company (MMCC),MMCC's attorney places LLDC's president under oath.A court reporter makes a record of the attorney's questions and the officer's answers.This is
A) a cross-examination.
B) a deposition.
C) an imposition.
D) an interrogatory.
Answer: B
Q3) Interrogatories are written questions for which written answers are prepared and signed under oath.
A)True
B)False
Answer: True
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Chapter 4: Torts and Cyber Torts
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Q1) If it can be shown that a trespass to personal property was warranted,a complete defense exists.
A)True
B)False
Q2) Frank slips and falls on Guy's Harbor Tour Boat and is injured.Frank files a suit against Guy's for $500,000.If Frank is 20 percent at fault and Guy's is 80 percent,under the "50 percent rule" comparative negligence principles,Frank would recover
A) $0.
B) $250,000.
C) $400,000.
D) $500,000.
Q3) Bette backs out of City Parking Garage,colliding with Dill's car.Dill may recover $7,500 to cover the cost of the repairs if Bette failed to act as A) a blameless person. B) a faultless person.
C) a reliable person. D) a reasonable person.
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Chapter 5: Intellectual Property and Internet Law
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Q1) Joey reproduces Mina's copyrighted work without paying royalties.Joey is most likely excepted from liability for copyright infringement under the "fair use" doctrine if
A) Joey copies the entire work.
B) Joey distributes the copies freely to the public.
C) Joey's use has no effect on the market for Mina's work.
D) Joey's use is for a commercial purpose.
Q2) Downloading software or music into a computer's random access memory without authorization is copyright infringement.
A)True
B)False
Q3) Paula develops a new espresso machine,which she names "Quik Shot." She also writes the operating manual.Paula can obtain trademark protection for A) the espresso machine.
B) the "newness" of the espresso machine.
C) the name.
D) the operating manual.
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Chapter 6: Criminal Law
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Q1) Naomi,a businessperson,is charged with RICO offenses.Naomi may be subject to penalties under RICO only if she
A) committed two or more certain federal or state crimes.
B) has never been convicted of a crime.
C) intends to commit future RICO offenses.
D) was previously convicted of a crime.
Q2) Leah gains access to government records and alters certain dates and amounts in her favor.This is
A) embezzlement.
B) forgery.
C) larceny.
D) no crime.
Q3) Only blue-collar crimes are prosecuted under RICO.
A)True
B)False
Q4) The only defense to criminal liability that justifies the use of force is self-defense.
A)True
B)False
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Page 8
Chapter 7: Cyber Crime
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Q1) Most states regulate spam.
A)True
B)False
Q2) Through a series of e-mail messages,Hudson convinces Gwen to transfer funds to Hudson to invest in Fried Critter Company stock on Gwen's behalf.Fired Critter stock does not exist.This is computer crime in which the computer is
A) the object of the crime.
B) the subject of the crime.
C) the instrument of the crime.
D) irrelevant to the crime.
Q3) Phishing occurs when a criminal poses as a member of the rock group Phish.
A)True
B)False
Q4) A stolen credit card is more likely to hurt a consumer than a merchant.
A)True
B)False
Q5) States' authority to regulate Internet gambling is limited to their physical boundaries. A)True
B)False
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Chapter 8: Ethics and Business Decision Making
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Q1) To assist in detecting illegal bribes,Cut Rite Contractors,Inc.,and all U.S.companies,must
A) conceal financial records that reveal past bribes.
B) keep records that "accurately and fairly" reflect financial activities.
C) make bribes through third parties rather than directly to officials.
D) permit payments to foreign officials that are unlawful in that country.
Q2) Bess runs Creditors Asset Recovery.She recruits clients by misrepresenting the facts and pretending to be licensed in various occupations in Michigan.Bess's conduct most likely warrants
A) an ethical admonishment but no other sanctions.
B) an injunction plus other sanctions.
C) no sanctions but no praise.
D) praise for her aggression in recovering the assets of "deadbeat" debtors.
Q3) Businesspersons who would choose to act unethically may be deterred from doing so because of public opinion.
A)True
B)False
Q4) A business firm can sometimes predict whether a given action is legal.
A)True
B)False
Page 10
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Chapter 9: Nature and Classification
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Q1) One of the requirements of a valid contract is its acceptance.
A)True
B)False
Q2) Offers may not be revoked before they are accepted.
A)True
B)False
Q3) Cory enters into a contract with Dian to act as her personal sports trainer.If they later dispute the meaning,and the contract contains unclear terms,the rules of contract interpretation will give effect to
A) the parties' intent as expressed in their contract.
B) what the defendant claims was the parties' intent.
C) what the plaintiff claims was the parties' intent.
D) what the parties now agree they intended.
Q4) Mona asserts that a contract she entered into with Nate is unenforceable.Defenses to the enforcement of a contract include
A) a desire not to perform.
B) adverse economic consequences.
C) results that do not match expectations.
D) the lack of a party's genuine assent.
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Chapter 10: Agreement in Traditional and E-Contracts
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Q1) On behalf of Bay Oyster Company,Celia types her name at the bottom of an e-mail purchase order and submits the order to Deepwater Parts Company.Under the UETA,qualifying Celia's name as her "signature" is A) attribution.
B) cybernotarization.
C) acceptance.
D) agreement.
Q2) Final Foto,Inc.,makes photo and video editing software,which includes a shrink-wrap agreement.Gert buys a package of the software.With respect to the contract for the software's purchase,the shrink-wrap agreement may not be enforced if
A) Gert does not read it.
B) Gert learns of it after contracting.
C) Gert learns of it before contracting.
D) the quality of the software is poor.
Q3) Most advertisements-"this property for sale"-are offers.
A)True
B)False
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Chapter 11: Consideration, capacity, and Legality
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Q1) A release does not require consideration to be legally binding.
A)True
B)False
Q2) Refer to Fact Pattern 11-3.The agreement between Dex and Carmen is
A) a covenant not to sue.
B) an accord and satisfaction.
C) a release.
D) promissory estoppel.
Q3) An illegal contract is valid if the parties to it were unaware of the illegality.
A)True
B)False
Q4) A minor may disaffirm a contract only if the subject matter is illegal.
A)True
B)False
Q5) An illusory promise is a promise that is enforceable without consideration.
A)True
B)False
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Page 13
Chapter 12: Defenses to Contract Enforceability
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Q1) Nina and Owen enter into an oral contract for Nina's sale to Owen of a laser printer for $400.Before Owen takes possession of the printer,the contract is enforceable by A) either party.
B) Nina only.
C) neither party.
D) Owen only.
Q2) Gary threatens physical harm to force Hugh to sell his business,Imported Goods,Inc.,to Gary for a below-market price.This is A) duress.
B) fraud.
C) puffery.
D) undue influence.
Q3) An innocent party can enforce a fraudulent contract.
A)True
B)False
Q4) Oral evidence of the meaning of a contract with incomplete terms can be introduced at a trial.
A)True
B)False
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Chapter 13: Third Party Rights and Discharge
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Q1) A right to receive damages on a breach of a contract for a sale of goods may be assigned.
A)True
B)False
Q2) Ellen contracts to buy six cases of vintage Fertile Valley wine from Grapes & Vines Winery for $1,200.The contract states that delivery is to be made at Ellen's residence "on or before May 1,to be used for daughter's wedding reception on May 2." On May 1,Grapes & Vines's delivery van is involved in an accident,no wine is delivered that day,and no one from Grapes & Vines tells Ellen.On the morning of May 2,Ellen buys the wine from Happy Hill Winery.That afternoon,just before the reception,Grapes & Vines tenders delivery of the wine at Ellen's residence.She refuses tender.Grapes & Vines sues her for breach of contract.How is the court most likely to rule?
Q3) Xavier enters into a contract to operate a Yummy Yogurt franchise,which Yummy agrees to support as long as Xavier maintains his business license.Yummy's duty to perform is
A) absolute.
B) conditional.
C) licentious.
D) operational.
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Chapter 14: Breach and Remedies
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Q1) The measure of damages for the breach of a contract for a sale of land depends on which party breaches and when.
A)True
B)False
Q2) Pure Oil Company enters into a contract with QuikBilt,Inc.,to construct an oil pipeline to withstand specific conditions.If QuikBilt fails to meet this standard,which is construed as a breach of contract and a breach of a duty of care,Pure might be awarded punitive damages to
A) establish, as a matter of principle, that QuikBilt acted wrongfully.
B) provide Pure with funds for a foreseeable loss beyond the contract.
C) provide Pure with funds for its loss of the bargain.
D) punish QuikBilt and deter others from similar acts.
Q3) Handy Hardware Store agrees to hire Ilsa for one year at a salary of $500 per week.When Handy cancels the contract,Ilsa spends $100 to obtain a similar job that pays $450 per week for a year.Ilsa is entitled to recover
A) the amount of the wages that Handy promised only.
B) the difference between the wages at the two jobs only.
C) the difference between the wages at the two jobs plus $100.
D) $100 only.
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Page 16
Chapter 15: The Formation of Sales and Lease Contracts
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Q1) If a seller is not a merchant,and the seller holds the goods,the risk of loss cannot pass to a buyer.
A)True
B)False
Q2) A seller with voidable title can transfer good title to a good faith purchaser for value. A)True
B)False
Q3) Curtis enters into a contract with Drive-Away Lease Company for a three-year lease of a car.This contract is subject to
A) Article 2 of UCC.
B) Article 2A of the UCC.
C) Article 11 of the CISG.
D) the common law only.
Q4) Stocks are an example of property that does not come under UCC Article 2. A)True B)False
Q5) A bailee is a buyer or lessee. A)True B)False
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Chapter 16: Performance Breach of Sales Lease Contracts
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Q1) Refer to Fact Pattern 16-1.Java can
A) assign its rights under the contract but cannot terminate it. B) do nothing.
C) suspend performance under the contract until Java is fully paid.
D) terminate the contract and seek damages.
Q2) Timber Mills Corporation and Ur-Choice Lumberyards enter into a contract for a sale of plywood.Under a destination contract,the seller must A) allow the buyer to reject the goods for any reason.
B) deliver the goods to a particular destination.
C) inspect the goods before tendering their delivery.
D) place the goods into the hands of a carrier.
Q3) A buyer who obtains substitute goods to replace goods that a seller did not deliver can also recover damages from the seller.
A)True
B)False
Q4) If a contract specifies a certain carrier,a substitution of a different carrier for any reason breaches the contract.
A)True
B)False
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Chapter 17: Warranties and Product Liability
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Q1) Open Country,Inc.,makes grills,camp ovens,and other outdoor cooking appliances.Under the Restatement (Third)of Torts: Products Liability,Open Country could be liable for a warning defect if there is a foreseeable risk of harm posed by one of its products and
A) the omission of a warning renders the product not reasonably safe.
B) there is a reasonable alternative design.
C) there is a lack of care in making of the product.
D) none of the choices.
Q2) A seller must use words such as "warrant" to make an express warranty.
A)True
B)False
Q3) A design defect is not the sort of product defect that will support the imposition of liability on a strict product liability basis.
A)True
B)False
Q4) An expression of opinion by a seller will not usually create a warranty.
A)True
B)False
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Chapter 18: Negotiable Instrument: Transferability Liability
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Q1) Wilbur signs a note that includes a clause under which the note's holder can delay the date of its payment indefinitely.This is
A) an acceleration clause.
B) an extension clause.
C) an immaturity clause.
D) a stop-payment clause.
Q2) Todd indorses a check,"Pay to Interstate Trucking if they deliver the lumber by May 1,2010." This is
A) a blank indorsement.
B) a qualified indorsement.
C) a restrictive indorsement.
D) a special indorsement.
Q3) A signature can consist of initials signed by a party.
A)True
B)False
Q4) Pola wants to transfer a check to Quin.The check is defective if it
A) has been previously dishonored.
B) has no irregularities on its face.
C) is not overdue.
D) is so complete that no element of negotiability is lacking.
Page 20
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Chapter 19: Checks and Banking in the Digital Age
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Q1) Each bank in a collection chain must pass a check on before midnight of the day of its receipt.
A)True
B)False
Q2) Refer to Fact Pattern 19-2. Digital's bank is
A) the cashing bank.
B) the depositary bank.
C) the intermediary bank.
D) the payor bank.
Q3) E-Bank,an online financial institution,gives financial information about Paula and other customers to a federal agency without the customers' permission.E-Bank may be liable under
A) the Federal Trade Commission Act.
B) the Financial Services Modernization Act.
C) the Right to Financial Privacy Act.
D) the Uniform Electronic Transactions Act.
Q4) Currently,it is not clear which,if any,laws apply to the security of e-money payment information.
A)True
B)False
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Chapter 20: Security Interests in Personal Property
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Q1) A financing statement is effective for no more than five months from the date of filing.
A)True
B)False
Q2) To be valid,a security agreement must contain a description of the collateral.
A)True
B)False
Q3) Select Furniture Store sells household consumer goods.To create a purchase-money security interest,Select Furniture must
A) assign, to a collecting agent, a portion of its accounts payable.
B) assign, to a collecting agent, a portion of its accounts receivable.
C) extend credit for part or all of the purchase price of the goods.
D) refer purchasers to a third-party lender.
Q4) A security interest is enforceable only if the collateral is in the secured party's possession.
A)True
B)False
Q5) An improper filing renders a secured party unperfected.
A)True
B)False
22
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Chapter 21: Creditors Rights and Bankruptcy
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Q1) The homestead exemption under the Bankruptcy Code is unlimited.
A)True
B)False
Q2) First State Bank holds a mortgage on Gigi's property.Gigi defaults on the debt.The bank forecloses.If the proceeds of the foreclosure sale are insufficient to pay the costs of the sale and the debt,the bank can
A) obtain a deficiency judgment against Gigi.
B) prorate the costs to its other debtors.
C) reclaim the property as a voidable transfer.
D) use the equity of redemption to redeem the property.
Q3) A surety is primarily liable on an obligation.
A)True
B)False
Q4) Pola files a petition in bankruptcy.Pola's non-dischargeable debts include
A) domestic-support obligations.
B) student loans if payment would impose undue hardship.
C) unpaid loans to finance home repairs.
D) unsecured credit-card debt.
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Chapter 22: International Law in a Global Economy
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Q1) The government of the United States and the governments of other nations have the power to enforce their respective national laws within their borders.The power to enforce international law within the borders of all nations rests with
A) no court or international organization.
B) the European Union.
C) the International Court of Justice.
D) the United Nations General Assembly.
Q2) Refer to Fact Pattern 22-1.To obtain payment,Lapland must comply with all of the requirements of the letter of credit
A) strictly.
B) substantially.
C) reasonably.
D) materially.
Q3) The United States taxes each barrel of imported oil at a flat rate.This is
A) an antidumping duty.
B) a dumping duty.
C) a quota.
D) a tariff.
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24
Chapter 23: Agency Relationships in Business
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Q1) Jody is an agent for Insta Cross Country Trucking Inc.In the course of Jody's performance for the firm,Jody pays Heck for certain vehicle maintenance and repair services.Jody's right to obtain the amount of those payments from Insta arises under the principal's duty of
A) avoidance.
B) cooperation.
C) indemnification.
D) reimbursement.
Q2) An agent is authorized to act on behalf of a principal in doing business with third parties.
A)True
B)False
Q3) The equal dignity rule does not apply to a corporate officer who,in an ordinary business situation,acts on behalf of his or her firm.
A)True
B)False
Q4) Before a principal can ratify a contract,the agent must withdraw from the deal.
A)True
B)False
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Chapter 24: Employment,immigration,and Labor Law
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Q1) Employee contributions to pension plans vest immediately.
A)True
B)False
Q2) Generally,an employer's monitoring of electronic communications in the workplace does not violate employees' privacy rights.
A)True
B)False
Q3) Socrates Software Corporation wants to hire Tomas,a noncitizen.To hire Tomas,Socrates must petition
A) Citizenship and Immigration Services.
B) the U.S. Department of State.
C) Immigration and Customs Enforcement.
D) the National Labor Relations Board.
Q4) To recruit employees from other countries,an employer must first complete a verification process.
A)True
B)False
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Chapter 25: Employment Discrimination
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Q1) Refer to Fact Pattern 25-2.Liability for Kit's conduct most likely rests with
A) Long-Term Care male employees, who should have acted themselves.
B) Long-Term Care, which should have known, and Kit, who acted.
C) Nia, who did not cooperate.
D) no one, because no law was violated.
Q2) To bring an action against an employer based on intentional discrimination,a person must show that he or she is a member of a protected class.
A)True
B)False
Q3) Gail is an employee of Home Appliances,Inc.,but is unable to perform her job because of her pregnancy.Gail is
A) entitled to disability leave only if Home treats other temporarily disabled employees similarly.
B) entitled to disability leave under any circumstances.
C) not entitled to disability leave because she cannot perform her job.
D) not entitled to disability leave under any circumstances.
Q4) Title VII does not cover employees' online activities.
A)True
B)False
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Chapter 26: Sole Proprietorships and Private Franchises
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Q1) Opie buys a franchise from Paradise Clothing Corporation.Because this franchise relationship is,like all other franchise relationships,primarily of a certain type,it is governed by
A) contract law.
B) the federal service-station franchise termination law.
C) the Federal Trade Commission's Franchise Rule.
D) the Illinois Franchise Disclosure Act.
Q2) An owner's license of a formula to make a certain product to an outside party is a franchise.
A)True
B)False
Q3) A franchisor can suggest retail prices but cannot mandate them.
A)True
B)False
Q4) In a chain-style business operation,a franchise operates under a franchisor's trade name.
A)True
B)False
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Chapter 27: All Forms of Partnerships
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Q1) Jim and Kyle are partners in J&K Sales,which exports technical equipment under a three-year partnership agreement.The U.S.government declares that the equipment can no longer be exported.J&K
A) dissolves as soon as the stated term expires.
B) dissolves as soon as the partners agree to dissolve it.
C) dissolves immediately unless the partners change its business.
D) does not dissolve.
Q2) A limited liability partnership must be formed in compliance with state law.
A)True
B)False
Q3) Fern and Gray want to form a limited partnership to manage two restaurants: Café Latte and Deli Delite.In most states,a limited partnership will be created when
A) a certificate of limited partnership is filed.
B) a partnership agreement is executed.
C) the business for which the firm is formed actually begins.
D) the partners make their capital contributions.
Q4) The death of a limited partner dissolves a limited partnership.
A)True
B)False
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Chapter 28: Limited Liability Companies Special Business
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Q1) Location! Realty LLC is a limited liability company.Like other LLCs,for federal jurisdictional purposes,Location! Realty is most likely a citizen of A) all states.
B) every state in which its members are citizens.
C) no state.
D) only the state in which it was formed.
Q2) Buyers Club is an incorporated cooperative.Like other incorporated cooperatives,Buyers Club distributes profits to its owners on the basis of A) the amount of capital they contribute.
B) the degree to which they participate in management.
C) their transactions with the cooperative.
D) the requirements of the state in which it was incorporated.
Q3) Like a corporation,the ownership of a joint stock company is represented by shares of stock.
A)True
B)False
Q4) A limited liability company is required to have an operating agreement.
A)True
B)False
30
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Chapter 29: Corporate Formation, merger, and Termination
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Q1) A sale of all of a corporation's assets requires the approval of the state.
A)True
B)False
Q2) Mall Stores Corporation owns 95 percent of the shares of Niche Retail Corporation.Mall Stores combines with Niche Retail,but only Mall Stores continues to exist.This transaction was
A) a consolidation.
B) a share exchange.
C) a short-form merger.
D) a termination.
Q3) Raven is a shareholder of Quantum Mechanix Corporation.Raven could normally exercise appraisal rights if Quantum participated in A) a consolidation.
B) a dissolution.
C) a takeover.
D) a winding up.
Q4) Winding up a corporation's affairs can only be performed under court supervision. A)True B)False
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Chapter 30: Corporate Directors, officers, Shareholders
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Q1) A director cannot be elected by the other members of the board.
A)True
B)False
Q2) The board of directors of Integral Components Corporation consists of Frida,Gayla,and Hart.A quorum is the minimum number of these directors
A) who must be at odds in a dispute to call for its resolution.
B) who must be present to validly transact business.
C) that the shareholders may remove from office at any one time.
D) whose positions must be vacant to warrant an election.
Q3) Shareholders' meetings must occur at least annually.
A)True
B)False
Q4) Coast-to-Coast Distribution,Inc.,is a direct-mail distribution company.Like most corporations,Coast-to-Coast's employees include its
A) board of directors.
B) incorporators.
C) officers.
D) shareholders.
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Chapter 31: Investor Protection, insider Trading, Corp Gov
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Q1) North American Properties,Inc.,and its officers,directors,and shareholders,buy and sell securities.Section 16(b)of the Securities Exchange Act of 1934 covers A) all purchases and sales of securities.
B) only purchases and sales of securities involving misappropriation.
C) only purchases and sales of securities involving short-swing profits.
D) only purchases and sales of securities involving tippers and tippees.
Q2) Lexy,a salesperson for My-T-Fine Corporation,learns that My-T-Fine will increase the dividend it pays to shareholders.Lexy buys 10,000 shares of My-T-Fine stock.When the price increases,Lexy sells the shares for a profit.Lexy would not be liable for insider trading if the information about the dividend was
A) material when she sold the stock.
B) public after she bought the stock.
C) public before she bought the stock.
D) speculative when she bought the stock.
Q3) Pumping up a company occurs when a single person using multiple aliases on an online forum creates the illusion of widespread interest in a stock.
A)True
B)False
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33
Chapter 32: Promoting Competition
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Q1) A market in which there is more than one seller,even if only a limited number,cannot be a monopoly.
A)True
B)False
Q2) Size alone determines whether a firm is a monopoly.
A)True
B)False
Q3) Refer to Fact Pattern 32-1.A court would most likely rule that the agreement between Cardio and Emitate is
A) a deal that neither restrains trade or harms competition.
B) a legal restraint of trade.
C) a per se violation of the Sherman Act.
D) subject to analysis under the rule of reason.
Q4) International Software,Inc.,conditions the sale of one of its products on Nationwide Office System's agreeing to buy another of International's products.This deal is A) legal, depending on its purpose and the effect on competition.
B) legal, depending on production and transportation costs.
C) legal under any circumstances.
D) not legal under any circumstances.
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Chapter 33: Consumer and Environmental Law
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Q1) Longhaul Trucking Company transports radioactive materials.Marla suffers from cancer.To succeed in a strict liability action against Longhaul,Marla must show that her injury was caused by
A) Longhaul's failure to use reasonable care to prevent harm to Marla.
B) Longhaul's intentional lack of regard for the general public.
C) Longhaul's operation.
D) radiation from any source.
Q2) A toxic tort is an action against a polluter that results in heavy,or "toxic," damages.
A)True
B)False
Q3) Once the government begins to clean up a waste disposal site,only the party who generated the waste must contribute to the cost.
A)True
B)False
Q4) A consumer who believes that he or she has been or may be victimized by identity theft may place an alert on his or her credit file.
A)True
B)False
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Chapter 34: Liability of Accountants Other Professionals
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Q1) The liability of professionals is based solely on common law.
A)True
B)False
Q2) Professionals can limit their liability for the misconduct of other professionals with whom they work to some extent by disclaiming it.
A)True
B)False
Q3) Dominique,a certified public accountant,provides accounting services to Eagle Corporation.The services include preparing Eagle's financial reports and issuing opinion letters based on the reports.In 2008,Eagle falls into serious financial trouble,but neither Dominique's reports nor her opinion letters indicate this situation.Relying on Dominique's portrayal of Eagle's financial situation,Eagle borrows a large sum of money to build a new shipping facility.In lending Eagle the money,First National Bank relies on Dominique's opinion letter.Dominique is aware of this reliance.If Dominique did not engage in intentional fraud but was negligent,what is her potential liability?
Q4) Aiding or assisting in the preparation of a false tax return is a felony.
A)True
B)False
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Page 36
Chapter 35: Personal Property and Bailments
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Q1) Mona asks Ned if she can store her furniture in his garage while she serves a tour of duty with the U.S.Marines Corps.Ned agrees.This is a bailment for
A) neither party's benefit.
B) the parties' mutual benefit.
C) the sole benefit of the bailee.
D) the sole benefit of the bailor.
Q2) For an effective bailment,the bailor must deliver possession of the bailed property with its title.
A)True
B)False
Q3) Edna and Flavia buy a boat that they dock in a marina near Gulfport,Mississippi.On the death of either owner,that owner's interest in the boat passes to her heirs.This is A) a joint tenancy.
B) a tenancy by the entirety.
C) a tenancy in common.
D) ownership in fee simple absolute.
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Chapter 36: Real Property and Landlord-Tenant Law
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Q1) Refer to Fact Pattern 36-1.Nika deeds some of her land to Polly.The deed states,"To Polly,for life,then to Quay." Nika has given Polly
A) a fee simple absolute.
B) a leasehold estate.
C) a life estate.
D) an easement.
Q2) Property Management Corporation (PMC)owns several apartment buildings in two states.Regarding standards for maintenance of the buildings,PMC should consult A) the applicable city ordinances and state statutes.
B) the previous owners.
C) the long-term tenants.
D) the Uniform Landlords' Maintenance Manual.
Q3) A quitclaim deed warrants more than any other deed.
A)True
B)False
Q4) Personal property may become real property by attaching it to real property.
A)True
B)False
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Chapter 37: Insurance, wills, and Trusts
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Q1) Isabel obtains a fire insurance policy on her home from Justice Insurance Company.The home is lost in a fire,but the parties dispute the amount of Justice's liability under an ambiguous clause in the policy.A court would most likely
A) interpret the clause against Isabel.
B) interpret the clause against Justice.
C) rewrite the clause and apply it as rewritten.
D) strike the clause from the policy.
Q2) To "publish" a will means to record it in the appropriate county office.
A)True
B)False
Q3) Patty,who is divorced,owns a house.She has no reasonable expectation of benefit from the life of Quinn,her ex-spouse,but she applies for insurance on his life anyway.She also obtains a fire insurance policy on the house,which she later sells.Five years later,Quinn dies and the house is destroyed in a fire.Can Patty obtain payment on either the death of Quinn or the loss of the house? Explain.
Q4) A person can insure anything in which he or she has an insurable interest.
A)True
B)False
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