Business Law
Exam Solutions
Course Introduction
Business Law provides an introduction to the legal principles and frameworks governing commercial transactions and the operation of businesses. The course covers fundamental topics such as contract law, agency, sales, negotiable instruments, business organizations, regulatory compliance, and dispute resolution. Students will explore the rights and obligations of businesses and individuals in the commercial environment, gaining an understanding of how legal concepts apply to real-world business scenarios and decision-making processes. By the end of the course, students will be equipped to identify legal issues in business contexts and understand the implications of legal compliance for successful enterprise management.
Recommended Textbook
Business Law and the Legal Environment Standard Volume 23rd Edition by David P. Twomey
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39 Chapters
2081 Verified Questions
2081 Flashcards
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Page 2
Chapter 1: The Nature and Sources of Law
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60 Verified Questions
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Sample Questions
Q1) Treaties made by the United States are not deemed part of the law.
A)True
B)False
Answer: False
Q2) Suppose Jack signs a contract to purchase a home from Jill, but Jill later refuses to transfer title to the home to Jack. Jack could force Jill to transfer title to the home by asking a court for an order of  ________
A)injunctive law.
B)specific performance.
C)legal damages.
D)substantive law.
Answer: B
Q3) Law is often defined as the body of principles that courts or administrative agencies will enforce.
A)True
B)False
Answer: True
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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) The federal court system consists of three levels.
A)True
B)False
Answer: True
Q2) Garnishment is a method for satisfying a judgment against a defendant.
A)True
B)False Answer: True
Q3) A family law court is an example of a small claims court.
A)True
B)False
Answer: False
Q4) The _____ rule(s) on the admissibility of evidence.
A)Judge
B)Jury
C)Attorneys
D)court clerk
Answer: A
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Page 4
Chapter 3: Business Ethics, Social Forces, and the Law
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52 Verified Questions
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Sample Questions
Q1) Entitlement theory says that everyone has rights but it is up to the government to protect those rights.
A)True
B)False
Answer: True
Q2) Despite the importance of ethical behavior for business success, few Fortune 500 companies have codes of ethics to resolve ethical dilemmas.
A)True
B)False
Answer: False
Q3) Maintaining confidentiality is an ethical issue for both employees and company management.
A)True
B)False
Answer: True
Q4) Moral relativists solve ethical dilemmas according to time and place.
A)True
B)False
Answer: True
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Chapter 4: The Constitution As the Foundation of the Legal Environment
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Sample Questions
Q1) A(n)___________ is the power to adopt laws that protect the general welfare, health, safety, and morals of the people.
A)Ex post facto law
B)State's shared power
C)Delegated power
D)State's police power
Q2) The powers given by the federal government to the states are described as delegated powers.
A)True
B)False
Q3) When the federal government deregulates an industry, the states automatically have the power to regulate the same industry.
A)True
B)False
Q4) Congressional 'silence' in particular subject area could mean Congress doesn't want to regulate in that particular subject area.
A)True
B)False
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Chapter 5: Government Regulation of Competition and Prices
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Sample Questions
Q1) The Federal Trade Commission administers the law prohibiting unfair methods of competition.
A)True
B)False
Q2) Quickness Computer, Inc.is a manufacturer of computers.A Hollywood star indicated on national television that Quickness was his favorite computer.Buoyed by this comment, sales of Quickness computers surged.Since demand outpaced supply, Quickness decided to sell no more computers unless an accompanying software package was purchased.A competitor informed the Office of the Attorney General of this policy, asserting it was illegal.Decide.
Q3) The Sherman Act does not prohibit:
A)a company from engaging in purposeful conduct to exclude competitors.
B)a seller from dominating a market because of superior product or business.
C)competitors from agreeing not to deal with certain buyers.
D)contracts to fix prices.
Q4) The government can regulate not just businesses, but also business competition and prices.
A)True
B)False
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Chapter 6: Administrative Agencies
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Sample Questions
Q1) In an emergency, an administrative agency can act beyond the scope of the statute that created it.
A)True
B)False
Q2) A(n) __________ is a negotiated disposition of a matter before an administrative agency, generally without public sanctions.
A)formal settlement
B)informal settlement
C)judicial verdict
D)quasi-judicial verdict
Q3) An administrative agency is a governmental body charged with administering and implementing legislation.
A)True
B)False
Q4) An administrative agency is barred from examining the records of a business enterprise by the constitutional guarantee against unreasonable searches and seizures.
A)True
B)False
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Page 8
Chapter 7: Crimes
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Sample Questions
Q1) Corporations are entitled to Fifth Amendment protection.
A)True
B)False
Q2) 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.
Q3) Computer crimes include:
A)theft of hardware.
B)theft of software.
C)intentional damage to information stored on a computer.
D)All of these.
Q4) Perjury occurs:
A)only in federal court.
B)only in written form.
C)only in state courts.
D)In both oral and written forms.
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Page 9
Chapter 8: Torts
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Sample Questions
Q1) The same action can have both civil and criminal liability.
A)True
B)False
Q2) A trespass to personal property is any unpermitted entry below, on, across, or above the land of another.
A)True
B)False
Q3) Product disparagement is a form of defamation.
A)True
B)False
Q4) People generally have a duty to act as a reasonably prudent person would in similar circumstances.
A)True
B)False
Q5) Governments are generally immune from tort liability.
A)True
B)False
Q6) If a crime does not hurt an identifiable person, it is not a tort.
A)True
B)False
Page 10
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Chapter 9: Intellectual Property Rights and the Internet
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Sample Questions
Q1) The Sony Bono Copyright Extension Act of 1998 extended copyright protection to the life of the author plus 50 years.
A)True
B)False
Q2) Under the Semiconductor Chip Protection Act reverse engineering exemption, competitors may study mask works but may not use the results of that study to design their own semiconductor chip.
A)True
B)False
Q3) 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
Q4) Stealing trade secrets can result in fines, but not imprisonment.
A)True
B)False
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Chapter 10: The Legal Environment of International Trade
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Sample Questions
Q1) In order to strengthen the ________, in 1982 Congress passed the ________ to provide clarity on the extraterritorial reach of antitrust actions against foreign companies that have a "direct, substantial, and reasonably foreseeable effect" on U.S.commerce.
A)Rule of Reason Doctrine, Foreign Trade Antitrust Improvements Act
B)Act-of-State Doctrine, Foreign Trade Antitrust Improvements Act
C)Sovereign Compliance Doctrine, Foreign Trade Antitrust Improvements Act
D)Sherman Act, Foreign Trade Antitrust Improvements Act
Q2) You plan to enter the export market with a new product that you have just developed.You feel that the product has great promise, but you are confused over whether you are required to obtain an export license.Further, your brother-in-law says that he knows someone in the Japanese government who could greatly assist you in your endeavors for a very modest fee.Discuss this situation.
Q3) Since 1947 and the end of the World War II era, the goal of the General Agreement on Tariffs and Trade (GATT) has been to restrict world trade.
A)True
B)False
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Page 12
Chapter 11: Nature and Classes of Contracts: Contracting on
the Internet
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Sample Questions
Q1) Quasi-contractual liability will generally be imposed when the cost of performing a contract is greater than had been expected.
A)True
B)False
Q2) Louise owned a house next to Robert's house.Robert made a contract with Midcity Painters to paint his house.The painters arrived to paint Robert's house, but mistakenly painted Louise's house.She saw the painters at work and made no comment.Later, Midcity Painters sent Louise a bill for painting her house.She claimed that she was not liable because she had not made any contract with them.Is this a valid defense?
Q3) A recognizance is an agreement by which one party admits or recognizes that a specified sum of money is owed to another party.
A)True
B)False
Q4) Negotiable instruments are examples of formal contracts.
A)True
B)False
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13
Chapter 12: Formation of Contracts: Offer and Acceptance
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Sample Questions
Q1) A properly mailed acceptance takes effect when mailed, even if it never is received by the offeror.
A)True
B)False
Q2) An output contract is too vague to be a legally-enforceable agreement.
A)True
B)False
Q3) A(n) __________ contract is a contract to buy all requirements of the buyer from the seller.
A)output
B)essentials
C)necessaries
D)requirements
Q4) If either the offeror or offeree dies or becomes mentally incompetent before the offer is accepted, the offer is automatically terminated.
A)True
B)False
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Chapter 13: Capacity and Genuine Assent
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Sample Questions
Q1) An agreement is not binding when:
A)one party makes a mistake regarding a material fact but the mistake is unknown to the other contracting party.
B)both parties make a mistake regarding a material fact.
C)one party makes a mistake of law.
D)both parties make a mistake in judgment.
Q2) John, a 17-year-old, purchased a ping-pong table and four new ping-pong paddles.A week after he turned 18, John tried to return the ping-pong paddles.He told the seller that he had decided to keep the table.Can John avoid the contract in this way?
Q3) A minor cannot avoid a contract that has been:
A)ratified.
B)signed.
C)processed.
D)disallowed by the court.
Q4) Ratification consists of any words or conduct of a former minor manifesting an intent to be bound by the terms of a contract made while a minor.
A)True
B)False
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Page 15
Chapter 14: Consideration
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Sample
Questions
Q1) In a contract for the sale of goods, any modification made by the parties to the contract must be supported by consideration to be binding.
A)True
B)False
Q2) The effect of the making of a partial payment to satisfy an admitted debt is an example of the rule that:
A)past benefits cannot be consideration for a later promise.
B)a conditional promise may be consideration.
C)doing what one is already under a legal obligation to do is not consideration.
D)consideration must be adequate to be binding.
Q3) A contract in which one party agrees to purchase goods from another contingent upon the purchaser's ability to locate suitable financing is said to:
A)be illegal.
B)result from undue influence.
C)contain a waiver.
D)contain a conditional promise.
Q4) A promise to make a gift is enforceable.
A)True
B)False
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Chapter 15: Legality and Public Policy
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Sample Questions
Q1) 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
Q2) In most states the usury laws apply to loans made to both individuals and corporations.
A)True
B)False
Q3) In an employment contract, agreements not to compete are:
A)illegal
B)uniformly held to be in the public interest and therefore legal
C)valid only if the restriction protects the employee
D)valid, if the restriction is reasonable and necessary for the protection of the former employer
Q4) An agreement to slander a third person would not be enforceable because slander is a(n):
A)crime.
B)civil wrong.
C)infringement of privacy.
D)restraint against trade.
Page 17
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Chapter 16: Writing, Electronic Forms, and Interpretation of Contracts
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60 Verified Questions
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Sample Questions
Q1) When interpreting an integrated contract, a court will exclude parol evidence in all of the following cases except:
A)to add to the terms of a contract.
B)to modify the terms of a contract.
C)to contradict the terms of a contract.
D)to show fraud.
Q2) If a contract is unclear, it will be interpreted against the party who drafted it.
A)True
B)False
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) In the absence of a statute requiring a writing, a contract may be oral or written. A)True
B)False
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Page 18
Chapter 17: Third Persons and Contracts
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Sample Questions
Q1) In general, an assignee stands:
A)in a position subordinate to the assignor.
B)exactly in the position of the assignor.
C)in a position superior to the assignor.
D)in a position similar to, but not equal to, the assignor.
Q2) Alberto enters into a contract with a contractor to build a parking garage in Gotham City.Stop-N-Go will greatly benefit from this contract since Alberto's parking garage is adjacent to Stop-n-Go.In this scenario Stop-n-Go is:
A)an incidental beneficiary.
B)a partial beneficiary.
C)a donee beneficiary.
D)an implied beneficiary:
Q3) The rights of an intended third-party beneficiary are destroyed if the contract is discharged in bankruptcy proceedings.
A)True
B)False
Q4) Generally, an assignment must be in writing and signed by both parties.
A)True
B)False
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Chapter 18: Discharge of Contracts
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Sample Questions
Q1) The parties may agree that the adequacy of performance under a contract is to be determined by a third party.
A)True
B)False
Q2) Sam Student had borrowed $1,000 from his cousin.Sam and the cousin became involved in a heated disagreement when the cousin began to press Sam for repayment of the loan.Finally, Sam wrote a check for $190 to the cousin and conspicuously wrote on the check in big letters that it was full and final payment of the $1,000 loan.In need of money, the cousin cashed the check and demanded the remaining $810 from Sam.Sam refused to pay, claiming that they had entered into an accord and satisfaction that discharged Sam's obligation to pay anything more.The cousin sued Sam.Discuss the probable outcome.
Q3) A condition subsequent can alter but not terminate a contract.
A)True
B)False
Q4) By operation of law, a party can be discharged in bankruptcy from debts.
A)True
B)False
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Page 20
Chapter 19: Breach of Contract and Remedies
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Sample Questions
Q1) Consequential damages may not be recovered, even if they were within the contemplation of the parties at the time of contracting.
A)True
B)False
Q2) A contractual provision which states that a waiver of rights will not constitute a modification to the contract is:
A)not enforceable as being in bad faith.
B)not enforceable as a violation of law.
C)enforceable by one party only.
D)enforceable.
Q3) If one of the parties retains money or a legal benefit in a breach of contract, that person is obligated to make restitution to the person conferring the benefit.
A)True
B)False
Q4) An innocent party to an anticipatory repudiation of a contract has the right to treat the repudiation as a present, material breach and may file suit.
A)True
B)False
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21
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) Personal property is lost when an owner does not know where it is located but intends to find it.
A)True
B)False
Q3) Which of the following is not a classification of ordinary bailments?
A)for the sole benefit of the bailor
B)for the sole benefit of the bailee
C)for the sole benefit of the third party beneficiary
D)for the mutual benefit of the bailor and the bailee
Q4) A gift causa mortis does not become irrevocable until the donor ______ from the contemplated event, but it is ______ revoked if the donor survives.
A)dies, automatically
B)recovers, automatically
C)dies, not
D)recovers, not
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22
Chapter 21: Legal Aspects of Supply Chain Management
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Sample Questions
Q1) The rights of a holder of a duly negotiated warehouse receipt are extinguished by the warehouser's surrender of goods to the depositor.
A)True B)False
Q2) A negotiable warehouse receipt states that the goods received will be "delivered to the bearer."
A)True B)False
Q3) Myra, a person who attended a wedding reception at the Hotel Miramar, is injured on the dance floor. Miramar is liable to Myra for her injuries.
A)True
B)False
Q4) A purchaser of a nonnegotiable warehouse receipt:
A)receives no implied warranties.
B)may acquire rights superior to those of the transferor.
C)acquires only the title and the rights the transferor had authority to transfer.
D)may be considered to have the rights of a holder in due course.
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23
Chapter 22: Nature and Form of Sales
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Sample Questions
Q1) A contract that has elements of both goods and services is always classified as a contract for the sale of goods.
A)True
B)False
Q2) A firm offer is effective for three months, but only if the merchant receives consideration.
A)True
B)False
Q3) The sale of goods is governed which article of the Uniform Commercial Code?
A)Article 6
B)Article 8
C)Article 2
D)Article 4
Q4) If a contract for the sale of goods omits the price to be paid, the: ______.
A)contract is void because it is too indefinite to be enforced.
B)buyer is required to pay a reasonable price for the goods.
C)buyer can pay whatever price the buyer in good faith believes is a proper price.
D)seller can rightfully charge whatever price the seller in good faith believes is a proper price.
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Chapter 23: Title and Risk of Loss
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Sample Questions
Q1) In a sale on approval, the buyer's approval must be demonstrated by express words.
A)True
B)False
Q2) A sale or return is a completed sale with an option for the buyer to return the goods.
A)True
B)False
Q3) Fungible goods are always homogeneous.
A)True
B)False
Q4) In an FOB place of shipment contract the seller's risk of loss for goods under an that are damaged in transit, ends when they are
A)True
B)False
Q5) In a consignment, the dealer-consignee is often referred to as a(n):
A)remainder.
B)factor.
C)quotient.
D)exponent.
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Chapter 24: Product Liability: Warranties and Torts
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Sample Questions
Q1) A seller who makes a written express warranty for consumer goods costing more than $50 must conform to FTC regulations.
A)True
B)False
Q2) Which of the following must be proven by a plaintiff to recover for strict liability in tort?
A)negligence of the seller or manufacturer
B)recklessness of the seller or manufacturer
C)unreasonably dangerous defects in goods that cause harm
D)privity of contract between the manufacturer and the buyer
Q3) Product liability based on privity of contract is accepted by the Uniform Commercial Code.
A)True B)False
Q4) In most instances, the mere fact that a sale was made gives rise to a(n):
A)express warranty.
B)limited warranty.
C)implied warranty.
D)full warranty.
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Chapter 25: Obligations and Performance
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Q1) If appropriate assurance is not given in response to a demand for assurance of performance, the demanding party may:
A)treat the contract as repudiated.
B)sue for libel.
C)file for an insurance payment.
D)not replace the repudiated contract.
Q2) An acceptance of goods can be done either expressly or by implication.
A)True
B)False
Q3) 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.
Q4) If a contractually-specified mode of transportation is not available, the:
A)contract is automatically voided.
B)seller must make delivery by a commercially-reasonable substitute.
C)buyer must arrange to pick up the goods.
D)seller must make personal delivery.
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Chapter 26: Remedies for Breach of Sales Contracts
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Q1) A sales contract may provide that in case of breach, no damages may be recovered or no consequential damages may be recovered.
A)True
B)False
Q2) A buyer may revoke acceptance because of a seller's failure to complete promised repairs.
A)True
B)False
Q3) A buyer who cancels a sales contract because the seller fails to deliver the goods is entitled to recover as much of the purchase price as had been paid.
A)True
B)False
Q4) To revoke acceptance of goods:
A)any defect or nonconformity must be discovered.
B)the goods must be dangerously defective.
C)the nonconformity must substantially impair the value of the goods.
D)action must be taken by the buyer within 60 days of delivery.
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Chapter 27: Kinds of Negotiable Instruments and Negotiability
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Q1) The maker is the person who writes out and creates a promissory note.
A)True
B)False
Q2) A check that is postdated ceases to be order paper.
A)True
B)False
Q3) The requirement of a sum certain in money is fulfilled even though the interest rate changes at maturity.
A)True
B)False
Q4) An authorized agent signing an instrument will not be liable on the instrument if the agent discloses on the paper either the identity of the principal or the fact that the agent has signed in a representative capacity.
A)True
B)False
Q5) The bank is the drawee on a check and has no liability until it has accepted the instrument.
A)True B)False
Page 29
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Chapter 28: Transfers of Negotiable Instruments and
Warranties of Parties
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Sample Questions
Q1) The warranties made by an unqualified indorser guarantee that payment of the instrument will be made.
A)True
B)False
Q2) A holder is also known as an assignee of the paper
A)True
B)False
Q3) The order or bearer character of the paper determines how it may be:
A)assigned.
B)sold.
C)negotiated.
D)accepted.
Q4) Order paper is converted into bearer paper by the holder's blank indorsement.
A)True
B)False
Q5) Indorsements may be classified in terms of whether the indorser has added any words to the indorsement and what those words are.
A)True B)False
Page 30
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Chapter 29: Liability of the Parties Under Negotiable Instruments
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Sample Questions
Q1) When the primary party refuses to pay an instrument according to its terms, said party is required to give:
A)notice of nonpayment.
B)notice of dishonor.
C)notice of denial.
D)secondary party notice.
Q2) A(n) __________ is an unauthorized change or completion of a negotiable instrument designed to modify the obligation of a party to the instrument.
A)alteration
B)modification
C)transformation
D)transmutation
Q3) A holder in due course must meet all of the following conditions except:
A)giving value for the instrument.
B)taking the instrument when it is overdue.
C)acting in good faith.
D)being ignorant of defenses and adverse claims.
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Page 31
Chapter 30: Checks and Funds Transfers
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Q1) In theory, a valid check can be written on a cocktail napkin.
A)True
B)False
Q2) Morris issued a check to Al in payment of a debt.There were sufficient funds in Morris' account to cover the check when it was presented for payment.However, due to an error, the bank dishonored the check.Which of the following parties is/are potentially liable to the holder?
A)the drawee bank only
B)Morris and the drawee bank
C)Morris only
D)the drawee bank and any collecting bank
Q3) Funds transfers made by businesses are governed by __________ regulations.
A)UCC
B)Federal Reserve
C)UCC and Federal Reserve
D)neither UCC nor Federal Reserve
Q4) A bank must be given a reasonable amount of time to put a stop payment order into effect.
A)True
B)False
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Chapter 31: Nature of the Debtor-Creditor Relationship
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Q1) Indemnity is the right of a co-obligator to demand that other obligators pay their fair share of the debt.
A)True
B)False
Q2) A surety may not raise the defense of mistake because it is not an ordinary contract defense.
A)True
B)False
Q3) Letters of credit are a two-party agreement used for financing.
A)True
B)False
Q4) A guaranty of collection allows the creditor to firstproceed against the debtor before suing the guarantor.
A)True
B)False
Q5) A surety that has made payment of a claim for which it was liable as surety is entitled to indemnity from the principal debtor.
A)True
B)False
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Chapter 32: Consumer Protection
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Q1) A sale of goods or services for $25 or more made to a buyer at home may be set aside within __________ days.
A)three (3) business
B)three (3) calendar
C)five (5) business
D)five (5) calendar
Q2) It is lawful to refuse to extend credit to a consumer based on the consumer's: A)race.
B)marital status.
C)credit history.
D)age.
Q3) 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.
Q4) A consumer may waive all defenses otherwise provided for by law.
A)True
B)False
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Chapter 33: Secured Transactions in Personal Property
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Q1) When a state statute requires a security interest in a motor vehicle to be noted on the certificate of title, the security interest is perfected:
A)by the certificate notation, when a non-inventory motor vehicle is involved.
B)by filing under the UCC, regardless of how the vehicle is classified.
C)by filing under the UCC, when the motor vehicle is inventory.
D)either by the certificate notation or by a UCC filing, depending on how the state statute defines the term motor vehicle.
Q2) In a secured transaction, the person to whom the money is owed is secured party and the buyer is the debtor.
A)True
B)False
Q3) When the filing of a financing statement is defective: ______.
A)the security interest is lost.
B)the filing fails to perfect the security interest.
C)the security interest is perfected through the court's application of equitable principles.
D)the public notice of the creditor's interest is still effective.
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Chapter 34: Bankruptcy
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Q1) The balance sheet test is merely a comparison of assets to liabilities without considering whether the debtor will be able to meet future obligations as they become due.
A)True
B)False
Q2) The filing of an involuntary bankruptcy case petition results in an order of relief.
A)True
B)False
Q3) A transfer of property by a debtor within ______ prior to filing with the intent to hinder, delay, or defraud creditors is called a(n) ______.
A)3 months, proof of claim.
B)3 months, voidable preference
C)12 months, proof of claim
D)12 months, voidable preference.
Q4) Chapter 7 bankruptcy is:
A)a liquidation proceeding.
B)a reorganization proceeding.
C)an extended time payment plan.
D)always an involuntary proceeding.
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Chapter 35: Insurance
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Q1) If a provision in an insurance policy is ambiguous:
A)it is interpreted in favor of the insurer because the insured could have rejected the policy.
B)it is interpreted against the insurer.
C)parol evidence is admitted to show what was intended.
D)the policy is declared void and the insurer is required to return all premiums to the insured.
Q2) Part of every whole life insurance premium covers the cost of insurance.The remainder of the premium is devoted to the investment component of the policy, which builds up over time to its:
A)reimbursement point.
B)cash surrender value.
C)culmination value.
D)return point.
Q3) When a provision of an endorsement conflicts with a provision of a policy, the policy controls.
A)True
B)False
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Chapter 36: Agency
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Q1) An employer does not have control over the performance of the work done by an independent contractor.
A)True
B)False
Q2) A principal may ratify an action taken by an agent that the principal would not have been capable of authorizing at the time that the action was taken.
A)True
B)False
Q3) An agent is under a duty to obey: ______.
A)all instruction given by the third party.
B)all lawful instructions given by the principal.
C)all instructions given by the principal.
D)none of these, since "obedience" is not an obligation of the agent.
Q4) Notification to a principal may be implied when the principal does not object to a contract and accepts its benefits.
A)True
B)False
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Chapter 37: Third Persons in Agency
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Q1) The principal is bound by knowledge but not by notice of any fact that is acquired by an agent while acting within the scope of actual or apparent authority.
A)True
B)False
Q2) When a disclosed principal authorizes an agent's transaction with a third person, the principal and the third person may each sue the other in the event of a breach of the contract.
A)True
B)False
Q3) Apparent authority has the same effect as:
A)undisclosed authority.
B)actual authority.
C)partially disclosed authority.
D)imputation authority
Q4) When a third person makes payment to an authorized agent, such payment is deemed made to the principal at the time the agent remits the payment to the principal.
A)True
B)False
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Chapter 38: Regulation of Employment
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Q1) Joe Swartz, an employee of Acme Company, worked for months during company time and used Acme's equipment to develop an idea that he had been nurturing.Finally, the idea came to fruition.Swartz's employer laid claim to the invention on the grounds that the firm's equipment had been utilized on company time.Swartz had obtained a patent on the invention and claimed that his employer had no rights to the invention at all.Who is right? How could an employer guard against such arguments in the future?
Q2) The Federal Wiretapping Act makes it unlawful to intercept oral and written communications, except: ______.
A)for personal phone calls without the employee's consent.
B)when an employer monitors a firm's phones during the course of business.
C)when an employer monitors an employee's private email.
D)for personal calls after it is ascertained the call is purely personal.
Q3) Public policy exceptions to the employment-at-will doctrine apply only to "whistleblowing" situations.
A)True
B)False
Q4) The sole issue addressed in the Fair Labor Standards Act is child labor.
A)True
B)False
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Chapter 39: Equal Employment Opportunity Law
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Q1) A seniority system is unlawful if:
A)workers with longer years of service are laid off last.
B)a union did not agree to the policy.
C)it results from an intention to discriminate.
D)workers with longer years of service are predominantly from one race.
Q2) Tom was a tall man who operated a successful restaurant that he owned.He believed that tall people commanded more respect in a restaurant.Accordingly, he never hired a waiter or waitress who was less than six feet tall.Because of this, he had seventeen waiters and no waitresses working at the restaurant.Lucinda, a woman less than six feet tall, applied for a job as a waitress and was not hired.Later, Lucinda learned that a man who was over six feet in height was hired to fill the position.After a few inquiries, she learned of Tom's height requirements and alleged that she was the victim of illegal discrimination.Decide.
Q3) Title VII is the only law regulating equal employment opportunities.
A)True
B)False
Q4) A plaintiff in a Title VII lawsuit must belong to a protected class.
A)True
B)False
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