Business Organizations
Mock Exam
Course Introduction
Business Organizations explores the various legal forms and structures available for conducting business, including sole proprietorships, partnerships, limited liability companies (LLCs), and corporations. The course examines the formation, operation, and dissolution of these entities, as well as their rights, duties, and obligations under the law. Major topics include fiduciary duties, governance, liability, financing, and issues pertaining to agency law. Real-world case studies and statutory analysis provide students with a foundational understanding of how businesses organize and operate, equipping them with essential knowledge for legal practice or entrepreneurial endeavors.
Recommended Textbook
Business Law and the Legal Environment Standard Volume 23rd Edition by David P. Twomey
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2081 Verified Questions
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Page 2
Chapter 1: The Nature and Sources of Law
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Sample Questions
Q1) Criminal laws carry damage penalties for a wronged individual.
A)True
B)False
Answer: False
Q2) Criminal laws:
A)define wrongs against society.
B)define the rights of one person against another.
C)carry damage remedies against the wronged individual.
D)are punished by individuals who have been wronged.
Answer: A
Q3) Within each state in the United States, only the U.S.Constitution is in force.
A)True
B)False Answer: False
Q4) Civil laws define wrongs against society.
A)True
B)False
Answer: False
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Page 3
Chapter 2: The Court System and Dispute Resolution
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Sample Questions
Q1) The person who initiates a civil lawsuit is called the: A)defendant.
B)prosecutor
C)plaintiff.
D)judge.
Answer: C
Q2) Federal district courts are the trial courts of the federal court system.
A)True
B)False
Answer: True
Q3) All courts have general jurisdiction.
A)True
B)False Answer: False
Q4) Which is not considered an alternate means of dispute resolution?
A)civil lawsuit
B)arbitration
C)association tribunals
D)minitrial
Answer: A
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Chapter 3: Business Ethics, Social Forces, and the Law
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Sample Questions
Q1) Rights theory includes all of the following except:
A)is also known an entitlement theory.
B)states that everyone has a set of rights.
C)believes that it is the government's responsibility to protect our rights.
D)using others in a way that gives you a one-sided benefit.
Answer: D
Q2) The ethical category of integrity and truthfulness is best expressed as maintaining one's values and principles:
A)so long as profits can be maintained.
B)so long as the costs are not great.
C)unless deviating will go unnoticed.
D)despite the consequences or costs.
Answer: D
Q3) Moral relativists believe that ethical decisions will differ based on circumstances.
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) Ex post facto laws can be adopted by either the states or the national government.
A)True
B)False
Q2) Which of the following powers is not reserved solely to the national government?
A)power to regulate interstate commerce
B)power to tax
C)power to coin money
D)power to borrow money on the credit of the United States
Q3) The Due Process clause now guarantees protection against loss of property rights without a chance to be heard.
A)True
B)False
Q4) According to the Privileges and Immunities clause, a state cannot bar someone who comes from another state from engaging in local business or from obtaining a hunting or fishing license.
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) The United States Supreme Court generally has held that vertical merger agreements should not automatically be condemned as an unlawful restraint of interstate commerce merely because they create the potential to monopolize it.
A)True
B)False
Q3) In large cities talent agencies typically charge clients no more than a 10% commission.Tina's Talent, Amy's Actors & Models and the Barton Agency are the only three talent agents in a small city.Due to the limited amount of work available for actors and models in their city, the three talent agents have gotten together and agreed to never charge a commission below 15%.Discuss if this is acceptable under the Sherman Act.
Q4) Boycotts are always illegal, even when done with good intentions.
A)True B)False
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Chapter 6: Administrative Agencies
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Sample Questions
Q1) Administrative hearings often have additional parties involved, called ______, who are _______ with an interest in the case are permitted to participate.
A)intervenors, political entities.
B)industry organizations, intervenors
C)intervenors, ALJ's.
D)intervenors, industry organizations.
Q2) A subpoena to testify or to produce records:
A)is prohibited by the constitutional guarantee against unreasonable searches and seizures.
B)is an illegal attempt to gain information by compulsion.
C)cannot be opposed on the grounds that such a request constitutes an unreasonable search and seizure.
D)must be approved by corporate officers to be effective.
Q3) Regulations properly adopted by agencies are important, but they do not have the full force of law, as do statutes.
A)True
B)False
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Chapter 7: Crimes
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Sample Questions
Q1) The Racketeer Influenced and Corrupt Organizations (RICO) Act is a product of:
A)Congress.
B)international trade agreements.
C)state law.
D)the Constitution.
Q2) In some states, the taking of information from a computer without the consent of the owner is called _______.
A)unauthorized use of computers
B)diverted delivery by computer.
C)computer trespass.
D)economic espionage by computer.
Q3) One of the modern trends in punishing business crimes involves barring executives and officers from working in their fields if they have a criminal conviction.
A)True
B)False
Q4) Destroying information stored on a computer may be a crime.
A)True
B)False
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Chapter 8: Torts
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Sample Questions
Q1) Libel is the printed equivalent of the spoken form of defamation known as slander.
A)True
B)False
Q2) A crime is a wrong that arises from a violation of a private duty, whereas a tort is a wrong that arises from a violation of a public duty.
A)True
B)False
Q3) Comparative negligence:
A)has been rejected by most of the states.
B)allows a comparison of negligence between plaintiff and defendant.
C)only applies when the plaintiff has signed a release.
D)is a bar to recovery under common law.
Q4) Slander of title and trade libel are collectively known as product __________.
A)Divestiture
B)Disparagement
C)Dilution
D)Diversion
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Chapter 9: Intellectual Property Rights and the Internet
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Sample Questions
Q1) When secret information is shared or communicated for a special purpose and the person receiving the information knows it is not to be made known, it loses the protection it had while secret.
A)True
B)False
Q2) Design patents have a duration of ____ years.
A)10
B)14
C)17
D)20
Q3) Descriptive terms such as locations and colors are never subject to trademark protections.
A)True
B)False
Q4) Trademarks and service marks are recorded with the Register of Copyrights.
A)True
B)False
Q5) Stealing trade secrets can result in fines, but not imprisonment.
A)True
B)False
11
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Chapter 10: The Legal Environment of International Trade
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Sample Questions
Q1) Which of the following does not describe the European Union (EU)?
A)It was formerly known as the European Economic Community.
B)It had ten members sign on in 2004.
C)It eliminated internal barriers to the free movement of goods, persons, services, and capital between member countries.
D)It is administered solely by the heads of state of the member countries.
Q2) The SEC has accused the Acme Company of fraud in connection with the sale of its securities to American citizens.Although the firm is American-owned, it is located in Switzerland.All of the accounts and business records of the firm are in several Swiss banks.The SEC has been actively pursuing the case, although it has not been able to provide a great deal of hope for those victimized by the fraud.What factors are probably hindering the SEC, and how might this be handled?
Q3) Under which of the following doctrines is it held that a foreign sovereign cannot be sued unless it engages in illegal commercial conduct?
A)act-of-state
B)sovereign compliance
C)Timberlane
D)sovereign immunity
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Chapter 11: Nature and Classes of Contracts: Contracting on
the Internet
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Sample Questions
Q1) With regard to a unilateral contract, the offeree does not accept the offer by express agreement, but rather by performance.
A)True
B)False
Q2) When purchasing from a website, the website terms generally become the contract of the parties and are legally enforceable.
A)True
B)False
Q3) Quasi contracts are fictional contracts.
A)True
B)False
Q4) Negotiable instruments are examples of formal contracts.
A)True
B)False
Q5) The law requires parties to be fair and reasonable in the making of a contract.
A)True
B)False
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Chapter 12: Formation of Contracts: Offer and Acceptance
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Sample Questions
Q1) If an offer requires that acceptance be communicated by a specific date and the acceptance is properly dispatched by the offeree on the final date,
A)no contract is formed, since the offeror will undoubtedly receive the dispatched acceptance after the deadline for acceptance.
B)a contract is formed, but the contract is voidable at the election of the offeror.
C)the acceptance is timely and a contract is formed, even though the offeror actually receives the acceptance well after the specified date has passed.
D)the acceptance is timely and a contract is formed, but only if the offeror actually receives the acceptance by the deadline specified for acceptance.
Q2) A(n) __________ contract is a contract to buy all requirements of the buyer from the seller.
A)output
B)essentials
C)necessaries
D)requirements
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14
Chapter 13: Capacity and Genuine Assent
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Sample Questions
Q1) Marquez agrees to buy Dale's pickup truck so he can pull his trailer.Both Marquez and Dale believe that the truck is big enough to do the job.After they complete the deal, Marquez finds that the truck is not strong enough to handle the trailer.The contract between Marquez and Dale can be rescinded because of:
A)a unilateral mistake.
B)a defective acceptance.
C)a mutual mistake.
D)negligent misrepresentation.
Q2) At common law, a minor cannot be held contractually liable for his or her necessary medical expenses when the parent is unable or unwilling to pay.
A)True
B)False
Q3) An incompetent person may ordinarily avoid a contract in the same manner as a minor.
A)True
B)False
Q4) Fraud requires intent that the listener rely on the false statement of fact.
A)True
B)False
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Chapter 14: Consideration
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Sample Questions
Q1) In a composition of creditors, the various creditors of a single debtor mutually agree to accept a fractional part of their claims in full satisfaction of the claims.
A)True
B)False
Q2) The doctrine of promissory estoppel is also known as the doctrine of beneficial reliance.
A)True
B)False
Q3) With regard to an unliquidated debt, payment by the debtor of less than the amount claimed by the creditor is consideration for the latter's agreement to release or settle the claim.
A)True
B)False
Q4) When a debtor tenders a check stating "paid in full" and the creditor cashes the check, the debt:
A)is always discharged.
B)may be discharged if it is a liquidated debt.
C)may be discharged if it is a unliquidated debt.
D)is never discharged.
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Chapter 15: Legality and Public Policy
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Sample Questions
Q1) In the sale of a business, all the following elements are necessary to create an enforceable noncompete clause, except:
A)not unduly burdensome on buyer
B)reasonable time limitation
C)estimated value of the seller's business
D)geographic restriction not overly broad
Q2) Even if a contract appears legal on its face, it may be unenforceable if:
A)the illegal contract has not been performed.
B)the contract has been partially performed.
C)the contract has been fully performed.
D)the contract has an illegal purpose.
Q3) Substantive unconscionability has to do with matters of freedom of assent.
A)True
B)False
Q4) A noncompetition covenant may be held invalid because of vagueness concerning the duration and geographic area of the restriction.
A)True
B)False
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17
Chapter 16: Writing, Electronic Forms, and Interpretation of Contracts
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Sample Questions
Q1) The parol evidence rule is based on the theory that any oral agreement was abandoned when the contact was written.
A)True
B)False
Q2) The parol evidence rule:
A)applies to complete written contracts.
B)prevents proof of fraud.
C)applies to incomplete contracts.
D)is not designed to preserve the integrity of written contracts.
Q3) The provisions of a contract must be construed as a whole in such a way that every part is given effect.
A)True
B)False
Q4) Parol evidence may be admitted to show that a provision was omitted as the result of:
A)fraud.
B)mistaken understanding.
C)oral additions.
D)oral modification.
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Chapter 17: Third Persons and Contracts
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Sample Questions
Q1) The delegator of construction duties remains liable if:
A)the delegatee performs the work properly, but the obligee did not approve of the delegation.
B)the delegatee performs the work improperly.
C)the obligee objects in writing to the delegatee's performance of the work, even if the delegatee performs the work properly.
D)the value of the contract is $500 or more and the delegatee performs the work properly.
Q2) The making of an assignment relieves the assignor of any and all obligations existing under the original contract.
A)True
B)False
Q3) The rights of an intended third-party beneficiary are destroyed if the contract is discharged in bankruptcy proceedings.
A)True
B)False
Q4) It is necessary that a third-party beneficiary be identified by name.
A)True
B)False
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Chapter 18: Discharge of Contracts
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Sample Questions
Q1) Which of the following events excuses a promisor from performing his or her contractual obligations?
A)a riot
B)a shortage of materials necessary for production of goods and/or provision of services called for under the contract
C)an unanticipated increase in the cost of performance
D)destruction of the subject matter through no fault of either party
Q2) The federal Consumer Credit Protection Act gives the debtor the right to rescind a credit transaction within three (3) business days when the transaction would impose a lien on the debtor's home.
A)True
B)False
Q3) A contract can be discharged by impossibility in all the following scenarios except:
A)destruction of subject matter in a sales contract.
B)performance under the contract becomes 25% more expensive due to currency fluctuations in construction contract.
C)when the law changes.
D)death of obligee in a personal services contract.
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Chapter 19: Breach of Contract and Remedies
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Q1) A landlord who continuously accepts late rental payments without collecting the late fee provided in the lease:
A)waives the late fee.
B)will collect the late fee at a later date.
C)is ignorant of the late fee.
D)allows the tenant to repudiate the lease.
Q2) Only direct losses from a breach of contract may be recovered by an injured party. A)True
B)False
Q3) A waiver is based on the subjective opinion of the innocent party. A)True
B)False
Q4) A firm request for additional payment under an existing contract without refusal to perform until the additional payment is made is considered a repudiation of a contract. A)True
B)False
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Chapter 20: Personal Property and Bailments
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Q1) Warren brought his television in for repairs.After Warren left the store, gunmen came in to rob the proprietor.As they ran out, Warren's television was knocked over and destroyed.Warren demanded that the proprietor of the store compensate him for the fair market value of the television.The bailee:
A)is liable, since the goods were not returned to Warren in proper condition.
B)is liable, since the bailee did not prevent the gunmen from damaging the television.
C)is not liable, since this was a mutual-benefit bailment.
D)is not liable, since the damage was caused by the criminal act of a third party.
Q2) In a(n) ___________, the bailor has a legal duty to make a reasonable investigation for defects and inform the bailee if any are known or found
A)mutual benefit bailment
B)bailment for the sole benefit of the bailee.
C)constructive bailment
D)gratuitous bailment
Q3) In certain cases, real property can constitute a bailment.
A)True
B)False
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Page 22
Chapter 21: Legal Aspects of Supply Chain Management
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Sample Questions
Q1) Hal was a merchant who deposited 2,000 barrels of olive oil in a public warehouse operated by Welcome Warehouse.Hal was issued a warehouse receipt for the 2,000 barrels that by its terms was deliverable "to bearer." Hal had engaged in many other transactions with Welcome and was in arrears for quite a bit of money to Welcome.Hal duly negotiated the warehouse receipt to Esmeralda Enterprises in payment of cash.Hal's financial affairs continued to deteriorate and Welcome never was paid the debt.When Esmeralda's agent requested the oil and offered to remit the warehouse receipt, Welcome refused to release the oil, claiming a lien on the oil for Hal's debt.Esmeralda sued.Decide the case.
Q2) 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.
Q3) A negotiable warehouse receipt that provides for delivery of the goods to the order of Jill Jones may be negotiated by delivery of the document to the purchaser.
A)True
B)False
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Chapter 22: Nature and Form of Sales
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Sample Questions
Q1) The UCC permits a court to refuse to enforce a sales contract that it finds to be unconscionable.
A)True
B)False
Q2) Gonzalez Manufacturing negotiated by telephone to purchase approximately $7,000 worth of digital video recorders from Video Imports.The final details were worked out by telephone calls on April 2nd.On April 4th, Video sent Gonzalez a confirmation of their telephone agreement, which included pertinent details.Meanwhile, on April 3rd, Gonzalez was offered a better deal than Video's and accepted it.Upon arrival of the confirmation on April 6th, Gonzalez ignored it and did nothing further until May 1st, the date before Video was to deliver.On May 1st, Gonzalez informed Video that their contract was an unenforceable oral contract and that delivery would not be accepted.?When attempts to amicably settle the matter failed, Video sued Gonzalez for breach of contract.Decide.
Q3) A contract for the sale of goods is enforceable even if the price is "open."
A)True
B)False
Q4) The term "course of dealing" refers to the language and customs of an industry.
A)True
B)False
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Chapter 23: Title and Risk of Loss
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Q1) __________ reserve auctions are those in which the goods must be sold regardless of whether the auctioneer is satisfied with the levels of the bids.
A)With
B)Without
C)Unqualified
D)Unrestricted
Q2) When particular goods have been selected by either the buyer or the seller, or both, as being the goods called for by the sales contract, the goods are said to be A)identified.
B)actualized.
C)realized.
D)materialized.
Q3) If a contract contains a delivery term of __________, the seller's responsibility is to get the goods to the buyer.
A)FOB place of shipment
B)FOB place of destination
C)CIF place of shipment
D)CIF place of destination
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25
Chapter 24: Product Liability: Warranties and Torts
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Sample Questions
Q1) The theories of product liability are mutually exclusive.
A)True
B)False
Q2) An inadequate warning label about a product's dangers can be considered a defective product.
A)True
B)False
Q3) A merchant has greater potential warranty liability than does a casual seller.
A)True
B)False
Q4) Any warranty that does not provide the complete protection of a full warranty is called a warranty in breach.
A)True
B)False
Q5) An action for negligence rests upon common law tort principles.
A)True
B)False
Q6) A defective product can injure intangible economic interests.
A)True
B)False
Page 26
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Chapter 25: Obligations and Performance
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Q1) The standard for determining commercial impracticability is objective, not subjective.
A)True
B)False
Q2) Upon a seller's tender of nonconforming goods and the buyer's rejection of them, the transaction has ended.
A)True B)False
Q3) The UCC imposes a higher standard of good faith on merchants than on nonmerchants.
A)True
B)False
Q4) The right to ___________ is a second chance for a seller to make a proper tender of conforming goods.
A)rehabilitate
B)repair
C)heal
D)cure
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Chapter 26: Remedies for Breach of Sales Contracts
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Q1) If a buyer refuses to pay for goods after an acceptance that was not revoked, the seller may bring action to recover the purchase price and any incidental damages.
A)True
B)False
Q2) A secured transaction is a pledge of property by the buyer that enables the seller to take possession of the goods if the buyer fails to pay the amount owed.
A)True
B)False
Q3) The recovery of lost profits by the seller provides reimbursement for costs the seller incurred in gearing up for contract performance.
A)True
B)False
Q4) Proof of substantial impairment of the value of a contract to the buyer is required to justify revocation of acceptance.
A)True B)False
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Chapter 27: Kinds of Negotiable Instruments and Negotiability
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Q1) An instrument is order paper when by its terms it is payable to the order of any person described in it, or to a person or order.
A)True
B)False
Q2) Article 2 of the Uniform Commercial Code governs negotiable instruments.
A)True
B)False
Q3) An unconditional written promise made by one person to another, signed by the maker, that promises to pay on demand a specific sum of money to the bearer is a:
A)nonnegotiable draft.
B)bill of exchange.
C)promissory note.
D)certificate of deposit.
Q4) An action taken by a person on behalf of another is called:
A)agency.
B)negotiability.
C)representative capacity.
D)identification of principal.
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Chapter 28: Transfers of Negotiable Instruments and
Warranties of Parties
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Q1) The order or bearer character of a paper is determined as of the time the negotiation takes place.
A)True
B)False
Q2) Under the UCC, a negotiation is not effective when it is made by a minor or any other person lacking capacity.
A)True
B)False
Q3) The transfer and collection of negotiable instruments between banks requires specific indorsements.
A)True
B)False
Q4) When the name of the payee is spelled incorrectly, the payee:
A)must indorse the instrument with the incorrect spelling of the payee's name.
B)must indorse the instrument with the correct spelling of the payee's name.
C)may indorse the instrument with either the correct or incorrect spelling of the payee's name.
D)may not indorse the instrument.
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Chapter 29: Liability of the Parties Under Negotiable Instruments
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Q1) A person who acquires a negotiable instrument with notice of a defense:
A)has acted in bad faith.
B)has acted illegally.
C)cannot be a holder in due course.
D)has taken unfair advantage of the maker.
Q2) Generally, defenses that could be raised in a breach of contact claim cannot be raised against a holder in due course.
A)True
B)False
Q3) Fraud in factum:
A)occurs when a person is persuaded to execute an instrument because of fraudulent statements.
B)occurs when a person signs an instrument as a result of being fraudulently deceived regarding essential terms.
C)is not a universal defense.
D)cannot be raised against a holder in due course.
Q4) Manuel sued Patricia on a promissory note.Patricia admitted signing the note, but raised the defense that Manuel was not a holder in due course.Can Manuel recover without proving that he is a holder in due course?
Page 31
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Chapter 30: Checks and Funds Transfers
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Q1) A written stop payment order is binding on the bank for 90 days.
A)True
B)False
Q2) The fact that a stop payment on a check has been issued renders the check nonnegotiable.
A)True
B)False
Q3) Checks that involve amounts of more than $5,000 generally trigger the bank reporting requirements under the USA Patriot Act.
A)True
B)False
Q4) If a consumer reports the loss before the card is used, the consumer: ______.
A)is not liable for any charges.
B)is only liable for losses up to $50.
C)is not liable for losses over $500.
D)is liable if they failed to examine periodic banking statements.
Q5) A tender occurs when the holder of a check or other consumer transaction authorization demands payment.
A)True
B)False
32
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Chapter 31: Nature of the Debtor-Creditor Relationship
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Q1) The use of letters of credit arose in international trade.
A)True
B)False
Q2) Standby letters of credit are used only in international trade situations.
A)True
B)False
Q3) In a letter of credit the beneficiary is the drawer of the drafts that will be drawn under the letter of credit.
A)True
B)False
Q4) A surety is discharged if the creditor substitutes a different debtor.
A)True
B)False
Q5) A debtor-creditor relationship is essentially a bi-lateral contract with enforceable rights and duties for both parties.
A)True
B)False
Q6) A surety is liable from the moment the principal is in default.
A)True
B)False
Page 33
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Chapter 32: Consumer Protection
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Q1) Consumer protection law often requires those dealing with consumers to make certain mandated disclosures.
A)True
B)False
Q2) Those who are liable for violations of consumer protection situations are persons or enterprises that regularly enter into the type of transaction in which the injured consumer was involved.
A)True
B)False
Q3) One of the protections for consumers against subprime loans includes credit counseling before consumers may sign for certain types of subprime loans.
A)True
B)False
Q4) Pursuant to the Credit Repair Organization Act of 1996, credit repair organizations must be "non-profit."
A)True
B)False
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Chapter 33: Secured Transactions in Personal Property
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Q1) Collateral may change its form and character during the course of a security agreement.
A)True
B)False
Q2) Field warehousing is an example of perfection by the mere by possession of the collateral.
A)True B)False
Q3) Electronic chattel paper is a record of a right to payment or property that is stored in an electronic medium.
A)True
B)False
Q4) When a consumer gives a creditor a security interest in forthcoming health insurance proceeds, the creditor must file a statement with the insurance company in order to have a perfected security interest.
A)True
B)False
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Chapter 34: Bankruptcy
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Q1) A voluntary petition in bankruptcy may not be filed by any of the following except a(n): ______.
A)husband and wife.
B)railroad company.
C)insurance company.
D)municipality
Q2) A(n) ______ is a written statement, signed by the creditor or an authorized representative, setting forth any claim made against the debtor and the basis for it.
A)Proof of Claim
B)Self-Settled Trust
C)Preferential Transfer
D)Voidable Preference
Q3) Individuals and corporations, but not partnerships, may be reorganized under the Bankruptcy Code.
A)True
B)False
Q4) Nonprofit corporations are exempt from involuntary bankruptcy proceedings.
A)True
B)False
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Chapter 35: Insurance
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Q1) A person has a(n) ______ in a particular piece of property if they would suffer a direct pecuniary loss if the property were destroyed.
A)contractual risk.
B)hazard.
C)underwriting.
D)insurable interest.
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) Commercial General Liability (CGL) policies apply to trademark infringement suits.
A)True
B)False
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Chapter 36: Agency
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Q1) Ann was seriously ill and feared that she might lapse into a coma or somehow become unable to speak or act for herself in her medical emergency.She is aware that agents ordinarily lose their authority to act for principals who become mentally disabled.She nevertheless desires to have her husband Alberto make medical decisions and speak on her behalf.She is particularly concerned about existing on life support in a persistent and incurable vegetative state.Is there any action that she might take to enable Alberto to act for her?
Q2) The acts of the agent obligate the principal to third persons and give the principal rights against third persons.
A)True
B)False
Q3) An agent appointed by a power of attorney is referred to as an: ______.
A)implied attorney.
B)attorney in fact.
C)implied agent.
D)attorney at law.
Q4) The scope of an agent's authority is always known by the third party.
A)True
B)False
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Chapter 37: Third Persons in Agency
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Questions
Q1) An employer may be liable on the theory of negligent hiring:
A)when it is shown the employer knew the employee would create an undue risk of harm in carrying out job responsibilities.
B)by hiring an individual with a criminal record.
C)whether or not prospective employees fill out applications forms and are subject to pre-employment background checks and character qualifications.
D)if he participates in the agent's tortious conduct.
Q2) A principal is not bound by statements made by an agent during the transaction of business that is within the scope of the agent's authority.
A)True
B)False
Q3) The liability of a buyer for the purchase price of goods is terminated by the fact that the buyer gave the buyer's agent the purchase price to remit to the seller.
A)True
B)False
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Chapter 38: Regulation of Employment
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Q1) In the absence of an agreement to the contrary, when an employee is discharged, regardless of the reason, the employer must: ______.
A)provide COBRA compensation.
B)make a two-week severance payment.
C)pay wages to the expiration of the last pay period.
D)create a severance package based on market conditions.
Q2) In older cases, the employment relationship was called the______ relationship.
A)principal-agent.
B)employer-employee.
C)boss-worker.
D)master-servant.
Q3) Sarbanes-Oxley (SOX) allows whistleblowers who are retaliated against, to file an immediate lawsuit in federal district court.
A)True
B)False
Q4) The Family and Medical Leave Act entitles an employee to a total of 24 workweeks of unpaid leave during any 12-month period
A)True B)False
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Chapter 39: Equal Employment Opportunity Law
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Q1) In order for an employer to be vicariously liable for sexual harassment, a tangible employment action by the supervisor must have occurred.
A)True
B)False
Q2) Hostile work environment sexual harassment:
A)cannot be created by unwelcome sexual flirtation and propositions.
B)cannot result in an injunction being granted against offensive conduct.
C)does not affect an employee's economic benefits but causes anxiety and "poisons" the work environment for the employee.
D)can result in the court ordering the business to be sold, upon proper notice, at a publicly-held auction.
Q3) 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.
Q4) A plaintiff in a Title VII lawsuit must belong to a protected class.
A)True
B)False
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