Business Organizations Law
Review Questions
Course Introduction
Business Organizations Law is an in-depth study of the legal principles and frameworks governing various forms of business entities, including partnerships, limited liability companies (LLCs), and corporations. The course explores foundational concepts such as formation, management structure, fiduciary responsibilities of owners and managers, financing, dissolution, and the rights and obligations of stakeholders. It also examines the legal relationships between organizations and third parties, as well as the regulatory environment impacting business operations. Through case analysis and problem-solving, students gain practical insight into the real-world challenges of advising and operating within business organizations.
Recommended Textbook
Business Law Today Standard Text and Summarized Cases 10th Edition by Roger LeRoy Miller
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Chapter 1: The Legal Environment
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Q1) Judge Julia decides that the precedent for the case she is hearing is no longer correct due to technological changes. She overturns the precedent when she decides the case. It is most likely that her case will
A) go unnoticed by the public.
B) be thrown out of court.
C) receive a great deal of publicity.
D) be ignored by the media.
Answer: C
Q2) State constitutions are supreme within their respective borders.
A)True
B)False
Answer: True
Q3) A court may depart from a precedent if the precedent is no longer valid.
A)True
B)False
Answer: True
Q4) Damages are never paid in money.
A)True
B)False
Answer: False
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Chapter 2: Constitutional Law
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Sample Questions
Q1) The First Amendment protects defamatory speech.
A)True
B)False
Answer: False
Q2) Adult Shoppe in Bay City sells a variety of publications, including child pornography. Bay City enacts an ordinance prohibiting the sale of such materials. This ordinance is most likely
A) an invalid restriction of individuals' privacy.
B) an unconstitutional restriction of speech.
C) a violation of adults' rights to enjoy certain privileges.
D) constitutional under the First Amendment.
Answer: D
Q3) Brad stands in front of Rooster's Round-Up Café, shouting "fighting words" that are likely to incite Rooster's patrons to respond violently. The First Amendment protects such speech
A) all of the time.
B) none of the time.
C) only if it is noncommercial.
D) only if it is symbolic.
Answer: B
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Chapter 3: Courts and Alternative Dispute Resolution
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Q1) Generally, a state court's power is limited to the territorial boundaries of the state in which it is located and the immediately adjacent states.
A)True
B)False
Answer: False
Q2) Jack and Jill, citizens of Vermont, are involved in a case related to the adoption of their child. The Vermont state courts
A) have concurrent jurisdiction with federal courts over this case.
B) have original jurisdiction over this case.
C) have exclusive jurisdiction over this case.
D) do not have jurisdiction for over case.
Answer: C
Q3) An answer never admits to the allegations made in a complaint.
A)True
B)False
Answer: False
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Page 5
Chapter 4: Torts and Cyber Torts
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Q1) George has a badly infected right foot. Herb, George's physician, prescribes amputation. George agrees. During the operation, Herb amputates the left foot. In George's suit against Herb, George's best theory for recovery is A) assumption of risk.
B) negligence per se.
C) res ipsa loquitur.
D) strict liability.
Q2) The public disclosure of private facts about a person is an invasion of privacy. A)True B)False
Q3) Louis-larger and stronger than Mica-threatens to hit Mica before hitting and injuring him. Mica files a suit against Louis for assault and battery. Mica will most likely recover for A) assault and battery. B) assault but not battery.
C) battery but not assault.
D) neither assault nor battery.
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6
Chapter 5: Intellectual Property and Internet Law
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Q1) Joey reproduces Mina's copyrighted work Storm on the Mountain 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 without charge 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) Trade names have the same legal protection as trademarks.
A)True
B)False
Q3) Which of the following can not be registered as a trade name?
A) Pear Blossom, Certified Public Accountant
B) Apples & Oranges, Investment Partnership
C) Banana Republic Clothing, Inc.
D) Strawberries
Q4) Copyright protection is automatic-registration is not required.
A)True
B)False
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Chapter 6: Criminal Law and Cyber Crime
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Sample Questions
Q1) Divestiture of a business interest is a possible penalty under RICO.
A)True
B)False
Q2) Robert uses the Internet to defraud Prairie Valley Credit Union. He is found guilty of wire fraud. He can be punished by
A) imprisonment for not more than one year.
B) imprisonment for up to thirty years and fines of up to $1 million.
C) fines for not more than $50,000.
D) death.
Q3) Picking pockets is larceny.
A)True
B)False
Q4) All persons who are arrested have the constitutional right to remain silent.
A)True
B)False
Q5) A criminal case must be proved beyond a reasonable doubt.
A)True
B)False
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Chapter 7: Ethics and Business Decision Making
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Sample Questions
Q1) Flexo Trucking Company transports hazardous waste. Garn is a Flexo driver, whom the company knows drives longer hours than federal regulations permit. One night, Garn exceeds the limit and has an accident. Spilled chemicals contaminate Hill City's water source, forcing the residents to move away. Flexo acted unethically because
A) Flexo showed reckless disregard for Hill City's residents and others.
B) Garn exceeded the federal time limit.
C) harm was caused by an unfortunate accident.
D) Hill City should have better protected its water source.
Q2) Lia works for Media Marketing Company. Her job includes putting "spin" on the firm's successes and failures. In this context, ethics consist of
A) "bad" versus "good" publicity.
B) questions of rightness and wrongness.
C) the firm's quarterly revenue.
D) whatever is legal.
Q3) If the interests of different stakeholders conflict, it can be difficult to determine which group's interest should receive greater weight.
A)True
B)False
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Chapter 8: International Law in a Global Economy
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Sample Questions
Q1) Optima Medico Corporation, a U.S. firm, signs a contract with Pharma Beneficial, Ltd., a Canadian firm, to give Pharma the right to sell Optima's products in Canada. This is A) a distribution agreement.
B) a joint venture.
C) direct exporting.
D) licensing.
Q2) Sam, or any U.S. citizen, can bring a civil suit in a U.S. court against a foreign entity for A) a tort allegedly committed in the United States only. B) a tort allegedly committed in the United States or overseas.
C) a tort allegedly committed overseas only.
D) no purpose.
Q3) Confiscation occurs when a government seizes private property for an illegal purpose or without just compensation.
A)True
B)False
Q4) A tariff is always a flat rate per unit.
A)True
B)False
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Chapter 9: Nature and Classification
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Sample Questions
Q1) Kelly tells Jimmy she will pay him $1,000 if he builds a shed in her backyard. Kelly is a(n)
A) offeree.
B) offeror.
C) promisee.
D) contractor.
Q2) GR8 Marketing Company and Brainfreeze Tunes, Inc., sign a document that states GR8 agrees to create a marketing campaign for Brainfreeze, which agrees to pay GR8 for the service. GR8 and Brainfreeze have
A) an executed contract.
B) an express contract.
C) an implied contract.
D) a quasi contract.
Q3) Every contract involves at least two parties.
A)True
B)False
Q4) A quasi contract is not enforceable by a court.
A)True
B)False
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Chapter 9: Offer and Acceptance
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Sample Questions
Q1) In most cases, an offeror can revoke an offer as long as the revocation is communicated before the offeree accepts.
A)True
B)False
Q2) Deb buys a song through eSongs, an online music vendor. Before completing the purchase and downloading the song, Deb must agree to a provision stating that she will not make and sell copies of the song. This provision is
A) a browse-wrap term.
B) a click-on agreement.
C) a shrink-wrap agreement.
D) a wrap-on agreement.
Q3) Not all of the terms presented in shrink-wrap agreements have been enforced.
A)True
B)False
Q4) A circular letter-"Dear Mr. or Ms. Jones, This is our biggest sale ever!"-is not evidence of an intent to enter into a contract.
A)True
B)False
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Page 12
Chapter 11: Consideration, Capacity, and Legality
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Sample Questions
Q1) Eli, a minor, buys an automobile insurance policy from Faithful Insurance Company and pays a $1,000 premium. If Eli can disaffirm the contract, he can most likely recover
A) $500.
B) $1,000.
C) $1,500.
D) nothing.
Q2) Forbearance is the act of refraining from doing something that one has a legal right to do.
A)True
B)False
Q3) A covenant not to compete is never enforceable.
A)True
B)False
Q4) If a minor disaffirms a contract, he or she must disaffirm the entire contract.
A)True
B)False
Q5) Statutes often set forth rules specifying the terms of contracts.
A)True
B)False
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Chapter 12: Defenses to Contract Enforceability
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Q1) Joy and Karl contract for the sale of Joy's prize-winning show dog for $1,000. Unknown to either party, the dog has died. Karl is
A) entitled to another dog of equivalent value.
B) not required to pay due to the bilateral mistake.
C) not required to pay due to the unilateral mistake.
D) required to pay because he assumed the risk the dog might die.
Q2) A contract is sometimes voidable if one party is aware that the other party made a mistake of fact.
A)True
B)False
Q3) A unilateral mistake is a mistake made by both parties to a contract. A)True
B)False
Q4) A false statement by an expert to a naive buyer usually will entitle the buyer to rescind or reform a contract.
A)True
B)False
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14
Chapter 13: Third Party Rights and Discharge
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Q1) An assignment of rights in real estate often cannot be prohibited.
A)True
B)False
Q2) Jayson and MaryElise enter into a contract. Jayson agrees to mow MaryElise's yard every week for the summer. MaryElise is the A) obligor.
B) obligee.
C) assignee.
D) assignor.
Q3) In most contracts, promises of performance are not expressly conditioned.
A)True
B)False
Q4) Pam borrows $5,000 from Quality Auto Sales to buy a car. When Pam does not pay the loan or return the car, Quality wants to transfers the right to the payment to Rapid Collection Agency. Rapid agrees to pay Quality for this right, but for a price that is less than the amount owed. Can Quality transfer this right to Rapid without Pam's consent? If so, and Quality committed fraud in the deal with Pam, could Pam legitimately refuse to pay Rapid? Explain.
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Page 15
Chapter 14: Breach and Remedies
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Sample Questions
Q1) The failure of one party to perform a contract entitles the other party to rescind it.
A)True
B)False
Q2) Punitive damages are generally available in contract disputes.
A)True
B)False
Q3) When a breach of contract occurs, the innocent injured party has a duty to mitigate the damages.
A)True
B)False
Q4) Drew contracts to sell a residential duplex to Evan. The contract provides that if Drew does not close the deal by September 15, he must pay Evan one-half of the contract price. This provision is not enforceable because it is
A) a liquidated damages clause.
B) a mitigation clause.
C) a nominal damages clause.
D) a penalty clause.
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Chapter 15: The Formation of Sales and Lease Contracts
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Q1) Levi, a well-known lumber dealer with a good reputation, buys a load of lumber and pays for it with a check that is later dishonored. Sam, who is unaware of the bad check, buys the lumber from Levi. Sam is a(n)
A) good faith purchaser.
B) bad faith purchaser.
C) insolvent purchaser.
D) bailee.
Q2) Trend-Rite Clothiers, Inc., sells t-shirts to Brand Name Stores, Inc., under an existing contract. When textile costs increase, Brand agrees to a price increase, but later wants to cancel the contract. Brand may
A) cancel the contract immediately.
B) cancel the contract only after accepting a final shipment.
C) cancel the contract only on reasonable notice.
D) not cancel the contract.
Q3) Under the UCC, parties to sales and lease contracts are not free to establish whatever terms they wish.
A)True
B)False
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17
Chapter 16: Performance and Breach of Sales Lease Contracts
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Sample Questions
Q1) Mitch and Nadine enter into a contract for a sale of seventy-six specially made motion detectors. When Nadine does not deliver within a reasonable time after the agreed delivery date, Mitch files a suit for breach. Nadine asserts the doctrine of commercial impracticability. This doctrine extends only to problems that are A) foreseen.
B) preventable.
C) unforeseen.
D) ordinarily assumed by a seller or lessor.
Q2) If a buyer breaches a contract while the seller is still in possession of the goods, the seller can resell the goods and hold the buyer liable for any loss.
A)True
B)False
Q3) Under the UCC, if a contract does not designate the place of delivery for the goods, then the goods must be made available at a location halfway between the seller's and the buyer's places of business.
A)True
B)False
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Page 18
Chapter 17: Warranties and Product Liability
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Sample Questions
Q1) Goldtone Corporation makes cell phones. Haji files a product liability suit against Goldtone, alleging a design defect. In deciding whether to hold Goldtone liable, the court may consider an alternative design's
A) popularity among industrial designers.
B) attractiveness to consumers.
C) aesthetics.
D) effect on the product.
Q2) Big Screen Video Corporation sells high-definition television sets. Under most circumstances, Big Screen Video will be presumed to have warranted that its title to the TVs is
A) the same as each brand's name.
B) none of the choices-a warranty of title is not presumed.
C) good and valid.
D) the best that money can buy.
Q3) Promises of fact made during the bargaining process are express warranties.
A)True
B)False
Q4) Warranties of title do not arise in most sales contracts.
A)True
B)False
19
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Chapter 18: Negotiable Instruments: Transferability Liability
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Q1) Fred has six nieces, ages five to sixteen. He writes an order instrument for $50 that states, "Pay to the order of my niece." The order instrument is
A) negotiable.
B) nonnegotiable, because the amount of money is less than $500.
C) nonnegotiable, because it is illegal to write an order instrument payable to a relative.
D) nonnegotiable, because there is no specific person identified.
Q2) Stature Loan Company has notice that a promissory note is overdue if the note is a demand instrument and Stature takes it
A) an unreasonable time after its due date.
B) before its due date.
C) on its due date.
D) without noticing its due date.
Q3) A holder takes an instrument for value if he or she gives a check as payment for it.
A)True
B)False
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Chapter 19: Checks and Banking in the Digital Age
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Q1) A bank that encodes information on an item after its issue warrants to any subsequent bank that the information is correct.
A)True
B)False
Q2) A bank may contractually shift to the customer the risk of forged checks created by the use of facsimile or other nonmanual signatures.
A)True B)False
Q3) A bank may not pay any checks on a customer's account after the date of the customer's death.
A)True
B)False
Q4) When a customer deposits cash into a checking account, he or she becomes a debtor for the amount deposited.
A)True B)False
Q5) A written stop payment order is valid for only thirty days. A)True B)False
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Chapter 20: Secured Transactions
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Q1) Hal's Hardware store defaults on a debt to Intrastate Bank, which takes possession of the collateral securing the debt. Intrastate sells the collateral. The proceeds from the sale are applied first to
A) Hal's debt to Intrastate.
B) Hal's debts to other creditors.
C) Intrastate's fees for the sale.
D) payments Hal's made on the debt to Intrastate.
Q2) Lena borrows from Mac and Nicol, using the same farm equipment as collateral for both loans. Only Nicol has a perfected security interest. Lena defaults on both loans. The party with first rights to the collateral is
A) Lena.
B) Mac and Nicol, in proportion to Lena's debt to each.
C) Mac only.
D) Nicol only.
Q3) For a creditor to have an enforceable security interest, the debtor must have rights in the collateral.
A)True
B)False
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Chapter 21: Creditors Rights and Bankruptcy
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Q1) Bankruptcy law is state law.
A)True
B)False
Q2) Dana defaults on a debt to Rachel. Rachel will NOT be able to recover the debt from
A) the sale of Dana's prize winning pet dog.
B) the sale of Dana's investments in stocks.
C) Dana's wages.
D) Dana's lottery winnings.
Q3) A lien is an encumbrance on property to satisfy a debt or protect a claim for the payment of a debt.
A)True
B)False
Q4) In some states, a judgment creditor must obtain a separate order of garnishment to cover each of the debtor's pay periods.
A)True
B)False
Q5) A husband and wife may file a joint petition for bankruptcy.
A)True
B)False
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Chapter 22: Mortgages Foreclosures After the Recession
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Q1) Laurel borrows $150,000 from Marketplace Mortgage Loans to buy a home. The financing documents require Laurel to maintain the property, obtain homeowners' insurance, and pay all property taxes and other assessments through the lender. With respect to these terms, a court is most likely to
A) enforce them.
B) refuse to enforce them.
C) rescind them.
D) rewrite them.
Q2) Forbearance is a process that allows a lender to legally repossess and auction off the property securing a loan.
A)True
B)False
Q3) If a lender fails to provide certain material disclosures, a borrower has up to seven years to rescind the mortgage.
A)True
B)False
Q4) Recording a mortgage protects the creditor's security interest in the property.
A)True
B)False
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Chapter 23: Agency Relationships in Business
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Q1) Bernard is an expert on exotic flowers. Fine Floral Fixtures, Inc. (FFF) hires Bernard to order exotic flowers from various greenhouses. Bernard does not bother to examine the quality of the flowers he purchases on behalf of FFF. Bernard has breached
A) the duty of performance.
B) the duty of loyalty.
C) no duty.
D) the duty of notification.
Q2) An agent has a duty to keep and make available to the principal an account of all property and funds received and paid out on behalf of the principal.
A)True
B)False
Q3) If a principal does not ratify an authorized contract, the principal is not bound. A)True B)False
Q4) Authority declared in clear, direct, definite terms is express authority. A)True B)False
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Chapter 24: Employment, Immigration, and Labor Law
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Q1) Only the federal government sets safety standards governing workplaces.
A)True
B)False
Q2) Jo works for Tall Tales Publishing, Inc. The basis for Jo's contribution under the Federal Insurance Contribution Act (FICA) is based on her
A) seniority at Tall Tales.
B) annual wage base.
C) special job skills.
D) county of residence.
Q3) An employee can continue the health benefits provided by his or her employer for a period of time only on an involuntary loss of employment.
A)True
B)False
Q4) Under federal law, only key employees who take temporary family or medical leave are entitled to job reinstatement.
A)True
B)False
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Chapter 25: Employment Discrimination and Diversity
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Q1) An employer may defend against a claim of unintentional discrimination by asserting that a practice that has a discriminatory effect is a business necessity.
A)True
B)False
Q2) Eton files a suit in a federal district court against Florida, alleging employment discrimination under the Age Discrimination in Employment Act of 1967. The state asks the court to dismiss the suit. The court is most likely to rule that A) the state is immune from the suit.
B) the suit can proceed.
C) Eton is immune from any defense the state might offer.
D) the court is immune from such request.
Q3) Protection against discrimination under the Civil Rights Act of 1964 does not extend to situations in which individuals are harassed by members of the same gender.
A)True
B)False
Q4) The Civil Rights Act of 1964 does not protect against reverse discrimination.
A)True
B)False
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Chapter 26: Sole Proprietorships and Private Franchises
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Q1) Events Promotion Corporation licenses trademarks to Fandom Souvenirs, Inc., to use in selling caps, sweatshirts, and similar goods. This is
A) a franchise.
B) an entrepreneur.
C) a principal-agent relationship.
D) a sole proprietorship.
Q2) Jack buys a Kitchens, Inc., franchise, which the franchisor later terminates. In determining whether the termination was proper, a court will generally
A) balance the rights of both parties.
B) emphasize the right of Kitchens, Inc., to its business operation.
C) focus on the right of Jack to be dealt with fairly.
D) underscore the interest of consumers in affordability.
Q3) Jody owns KuppaJava Kiosks, a sole proprietorship. Jody's liability is
A) limited by state statute and varies from state to state.
B) limited to the extent of capital expenditures.
C) limited to the extent of his or her original investment.
D) unlimited.
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28
Chapter 27: All Forms of Partnership
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Q1) Clu, Dolf, and Elton do business as Fertile Valley Farm. Clu's relationship to the firm ends, but it continues to do business. This is
A) dissociation.
B) dissolution.
C) winding up.
D) wrongful.
Q2) Each partner in a partnership has the right to full and complete information concerning the conduct of all aspects of partnership business.
A)True
B)False
Q3) Each partner is deemed to be an agent of the other partners and of the partnerships.
A)True
B)False
Q4) A partner is a co-owner of partnership property.
A)True
B)False
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Chapter 28: Limited Liability Companies Special Business
Forms
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Q1) Bee Hive Honey, LLC's members include Chad. For purposes of suing and being sued, Bee Hive Honey is
A) an aggregate of Chad and the other members.
B) a natural person in the members' "family."
C) a legal entity apart from the owners.
D) a non-participating third party.
Q2) If there is no limited liability company (LLC) agreement covering a topic under dispute, the state LLC statute will govern the outcome.
A)True
B)False
Q3) 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.
Q4) A limited liability company can be taxed as a partnership. A)True
B)False
Page 30
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Chapter 29: Corporate Formation, Merger, and Termination
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Q1) Smalltown, Alabama is incorporated by the government. Smalltown is A) a foreign corporation.
B) a public corporation.
C) a private corporation.
D) an alien corporation.
Q2) A corporation whose shares are held by relatively few persons is a close corporation.
A)True
B)False
Q3) When a conflict arises among the documents that involve Express Flights Corporation, the first priority for resolving the conflict is given to A) resolutions of the board of directors.
B) Express Flights's bylaws.
C) state statues.
D) the U.S. Constitution.
Q4) When a sale of assets amounts to what in fact is a consolidation, the acquiring corporation inherits the selling corporation's liabilities. A)True B)False
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Chapter 30: Management and Ownership of a Corporation
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Q1) A majority shareholder does not owe a fiduciary duty to minority shareholders under any circumstances.
A)True
B)False
Q2) After the first board, the directors are chosen by the corporate officers.
A)True
B)False
Q3) RayAnn is a corporate officer for Timmy's Trees, Inc. As a corporate officer, RayAnn is A) the head of the board of directors.
B) involved in the day-to-day operations of Timmy's Trees.
C) not involved in the day-to-day operations of Timmy's Trees.
D) in charge of selecting members of the board of directors.
Q4) A director can be elected by the other members of the board.
A)True
B)False
Q5) Cumulative voting refers to the accumulation of proposals presented annually for a shareholders' vote.
A)True
B)False
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Chapter 31: Investor Protection, Insider Trading, Corp Gov
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Q1) Refer to Fact Pattern 31-2. Regarding Sid's profits on the purchase and sale of Tech stock, under Section 16(b) of the Securities Exchange Act of 1934 Tech may recapture A) all of Sid's profits.
B) half of Sid's profits.
C) 10 percent of Sid's profits.
D) none of Sid's profits.
Q2) Refer to Fact Pattern 31-3. If Dhani is liable under the Securities Exchange Act of 1934, it will be because the information on which he based his purchase of Eureka stock was A) a forward-looking forecast.
B) not material.
C) not yet public.
D) not yet true.
Q3) Generally, federal securities law are patterned after states' antifraud laws.
A)True
B)False
Q4) Few securities can be resold without registration.
A)True
B)False
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33
Chapter 32: Promoting Competition
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Q1) A restraint of trade is an agreement between firms that has the effect of reducing competition in the marketplace.
A)True
B)False
Q2) The offense of monopolization does not require the intent to monopolize.
A)True
B)False
Q3) Gourmet Foods, Inc., requires all distributors of its products to sell them at a specified minimum price. Under the Sherman Act, this is a violation
A) if the anticompetitive effects outweigh the competitive benefits.
B) if the competitive benefits outweigh the anticompetitive effects.
C) under any circumstances.
D) under no circumstances.
Q4) To fall under the Sherman Act, an activity must
A) substantially affect interstate commerce.
B) involve monopolization.
C) promote competition.
D) involve international trade.
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Page 34
Chapter 33: Consumer and Environmental Law
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Q1) The Environmental Protection Agency has concluded that greenhouse gases, including carbon dioxide emissions, do not constitute a public danger.
A)True
B)False
Q2) Performance standards for major sources of air pollution require the use of the any available technology, or AAT.
A)True
B)False
Q3) Manufacturers are required to report on any products intended for sale if the products have proved to be hazardous.
A)True
B)False
Q4) Sweet Treats, Inc., wants to market a new snack food. On the product's label, standard nutrition facts are
A) prohibited.
B) required.
C) strictly voluntary.
D) warranted by the nature of the food.
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Page 35
Chapter 34: Liability of Accountants Other Professionals
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Q1) Gert, an accountant, contracts to conduct an audit for Hailey. In performing the audit, Gert fails to detect certain misconduct. Gert is most likely
A) liable if a normal audit would have revealed the misconduct.
B) liable if Gert issues a specifically qualified opinion.
C) not liable if Gert generally disclaims any liability.
D) not liable if the misconduct was due to Hailey's negligence.
Q2) An accountant's liability under the Securities Act of 1933 requires privity of contract with the purchaser of a security.
A)True
B)False
Q3) Estes, an accountant, contracts to perform services for Frasier. In performing those services, Estes uncovers a suspicious financial transaction. Estes is most likely not liable if he
A) acted negligently in failing to discover the transaction sooner.
B) conceals the discovery and otherwise finishes the work.
C) investigates and reports the discovery to Frasier.
D) obtains restitution from the perpetrator without Frasier's knowledge.
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Page 36
Chapter 35: Personal Property and Bailments
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Q1) A finder acquires title to mislaid property good against the whole world, including the true owner.
A)True
B)False
Q2) Killing a wild animal amounts to assuming ownership of it.
A)True
B)False
Q3) A copyright is tangible personal property.
A)True
B)False
Q4) Rocco gives Sequoia a smartphone as a gift. Sequoia develops a new game app for the phone. She obtains intellectual property protection, and forms Titan Games, LLC, to make and market the game. Sequoia's acquisition of the game is by A) gift.
B) accession.
C) confusion.
D) production.
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Chapter 36: Real Property and Landlord-Tenant Law
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Q1) A tenant is responsible for all damage to leased premises.
A)True
B)False
Q2) A tenant cannot withhold rent for any reason.
A)True
B)False
Q3) A recording statute allows deeds to be recorded to give notice to the public.
A)True
B)False
Q4) To acquire the ownership of a mountain cabin by adverse possession, Cody must occupy the cabin exclusively, continuously, and peaceably for a specified period of time A) in an, open, hostile, and adverse manner.
B) until the owner files a suit.
C) without the owner's knowledge.
D) with the state's permission.
Q5) In most states, the seller of a new house warrants that it is fit for habitation.
A)True
B)False
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Chapter 37: Insurance, Wills, and Trusts
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Q1) A business firm may have an insurable interest in the life of any of its employees, except a key employee.
A)True
B)False
Q2) Bret obtains a fire insurance policy on his rental house with Continental Insurance Company. Like all insurance, this policy is an arrangement for A) avoiding the assumption of responsibility.
B) predicting a potential loss based on unknown factors.
C) shifting the imposition of liability.
D) transferring and allocating risk.
Q3) Because insurance law follows contract law, bad faith tort actions against insurers are not allowed.
A)True B)False
Q4) A coinsurance clause provides that two or more people will be covered by the same life insurance policy.
A)True B)False
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