Commercial Law
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Course Introduction
Commercial Law is the study of the legal principles that govern business and commercial transactions. This course examines key topics such as contract formation, the sale of goods, commercial paper, secured transactions, and the regulation of business organizations. Students will explore the rights and obligations of parties engaged in trade, the legal structures for conducting business, mechanisms for resolving commercial disputes, and aspects of international commercial law. Emphasis is placed on understanding how legal rules impact business decisions and the practical application of these rules in real-world commercial scenarios.
Recommended Textbook
Business Its Legal Ethical and Global Environment 10th Edition by Marianne M. Jennings
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21 Chapters
2597 Verified Questions
2597 Flashcards
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Page 2
Chapter 1: Introduction to Law
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108 Verified Questions
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Sample Questions
Q1) The Code of Federal Regulations includes the enactments of federal administrative agencies.
A)True
B)False
Answer: True
Q2) In confirmation hearings of nominated judges and justices, what role may stare decisis play in the questioning of the nominee?
Answer: Stare decisis means to "let the decision stand". A judge is supposed to apply the law as written by a legislature. By following stare decisis, a judge will not disregard established precedent simply because the judge does not like it. Since Senators are not supposed to ask nominees about specific case holdings, the questions can try to avoid that by, for example, asking a nominee if she or he believes Roe v. Wade is a legal precedent and then asking if she or he believes in stare decisis.
Q3) The Internal Revenue Code is part of federal statutory law.
A)True
B)False
Answer: True
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3
Chapter 2: Business Ethics and Social Responsibility
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Sample Questions
Q1) An anonymous reporting system is a requirement for companies under Sarbanes-Oxley.
A)True
B)False
Answer: True
Q2) Which of the following is not an element of the Nash test?
A) Will I feel as good over the long term about this decision?
B) Is it legal?
C) How did I get into this situation in the first place?
D) Could I discuss this decision with the affected parties?
Answer: B
Q3) Which of the following statements is true about an ethical business?
A) It will always be profitable.
B) It will always satisfy all stakeholders.
C) It will always survive over the long run.
D) It will avoid the consequences of unethical behavior.
Answer: D
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4
Chapter 3: The Judicial System
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Sample Questions
Q1) When a case is remanded:
A) it is affirmed.
B) it is sent back to the trial court.
C) it is completed.
D) precedent is not being followed.
E) none of the above
Answer: B
Q2) Which of the following would not be a cite for a U.S. Supreme Court opinion?
A) 411 U.S. 292
B) 93 S. Ct. 1011
C) 43 L.Ed 2d 33
D) 798 F.2d 1214
Answer: D
Q3) Bankruptcy courts are the only courts in the state or federal system that handle bankruptcy declarations and proceedings.
A)True
B)False
Answer: True
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Chapter 4: Managing Disputes: Alternative Dispute
Resolution and Litigation Strategies
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Sample Questions
Q1) A pretrial conference is:
A) a meeting between the parties.
B) a hearing for a motion for summary judgment.
C) held before discovery begins.
D) none of the above
Q2) List the information that will be required to file a valid complaint on a breach of contract suit.
Q3) The plaintiff is the only party in a suit who can counterclaim.
A)True
B)False
Q4) So long as a court has subject matter jurisdiction, there is no need for in personam jurisdiction.
A)True
B)False
Q5) A motion to dismiss must be filed before an answer is filed.
A)True B)False
Q6) E-mail cannot be obtained during discovery.
A)True
B)False Page 6
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Page 7
Chapter 5: Business and the Constitution
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Sample Questions
Q1) In supremacy clause cases, the pervasiveness of the regulatory scheme is examined.
A)True
B)False
Q2) Police power is:
A) the states' authority to bypass the Fifth Amendment.
B) the states' authority to conduct searches under the Fourth Amendment.
C) government agencies' authority to conduct a search of private property at any time.
D) the states' power to pass laws to promote public welfare and health and safety .
Q3) Where in the U.S. Constitution are the provisions governing a student's right to a hearing prior to suspension from school?
A) First Amendment
B) Commerce Clause
C) Article III
D) Article II
E) Fifth Amendment
Q4) Discuss the ruling and the importance of Citizen's United.
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Chapter 6: Administrative Law
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Sample Questions
Q1) The FTC has proposed a series of regulations to require disclosure of repair/accident history in the sale of used cars. The Classic Car Club believes that historical vehicles (1960 and earlier) should be exempt from the requirements. What can the club do to voice its concerns?
Q2) The Code of Federal Regulations is published every business working day.
A)True
B)False
Q3) An FOIA request (to be valid):
A) must be in writing.
B) must describe the reason the documents are sought.
C) can request any information in an agency's file.
D) must include prepayment of copy fees.
Q4) Discuss the Administrative Procedures Act and its amendments and purpose.
Q5) Discuss the ways a business could challenge a promulgated agency rule.
Q6) The withdrawal of rulemaking without substantial evidence can be challenged as arbitrary and capricious action on the part of an agency.
A)True
B)False
Q7) Describe the roles of administrative agencies.
Page 9
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Chapter 7: International Law
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Sample Questions
Q1) Sunoco Oil Company had long-term oil supply contracts with KW, an oil company in Kuwait. The contracts were negotiated in 1989. The contracts ran smoothly until 1990, when armed forces from Iraq took possession of the oil- producing facilities of Kuwait. The eventual result was the Persian Gulf War which began in early 1991. Sunoco's oil was not delivered for over one year. Sunoco wishes to know its damage rights against KW for the year-long interruption in its oil supply.
Q2) MFN stands for most favored nation status under GATT.
A)True
B)False
Q3) What is the effect of trade sanctions?
A) businesses are prohibited from dealing with certain countries
B) businesses are prohibited from selling certain items in countries subject to the sanctions
C) there is no effect; they are strictly voluntary
D) either a or b
E) none of the above
Q4) Tariffs can be revenue-raising and protectionist for domestic goods.
A)True
B)False
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Chapter 8: Business Crime
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Sample Questions
Q1) Penalties for corporate officers under Sarbanes-Oxley include:
A) 5-20 years for mail and wire fraud.
B) 1-10 years for violation of fiduciary duties.
C) a maximum penalty of $5,000.
D) both a and b
Q2) At which of the following procedures may a defendant present evidence?
A) initial appearance
B) trial
C) grand jury
D) appeal
Q3) McGuire was an employee of First National Bank of Grayson (FNBG). FNBG participated in a Kentucky Housing Corporation (KHC) program in which KHC loaned money to financial institutions. The institutions would then make low-interest loans to low-income individuals who qualified for purchase of a home. FNBG received the funds and produced bogus paperwork for 80 loans but never loaned the money. Instead, they invested the money at a high rate of interest. Eventually the money was returned to KHC, but McGuire was charged with making false records and fraud. Can McGuire, as an employee, be held liable?
Q4) Discuss the procedural changes made as a result of Arizona v. Gant.
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Chapter 9: Business Torts
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Sample Questions
Q1) When skiing, those participating assume the risk of poorly marked trails.
A)True
B)False
Q2) The shopkeeper's privilege applies:
A) regardless of the amount of time the shopper is detained.
B) even if the shopkeeper made a good-faith mistake.
C) only if a security guard is used by the store.
D) all of the above
Q3) Driving with brakes in need of replacement is not a breach of duty.
A)True
B)False
Q4) Galley, Inc. has a contract for operating the kitchen at the Palm Crest Hotel in Miami, Florida. Mealco has approached Palm Crest's director of operations and stated, "Look, sign with us. We'll take care of whatever damages you owe Galley." Mealco's statements: A) are defamatory.
B) constitute the tort of contract interference.
C) constitute the tort of negligence.
D) none of the above
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Page 12
Chapter 10: Cyberlaw, Social Media, and Privacy
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Sample Questions
Q1) At least one court has held that the placement of cookies on an individual's computer without consent is a form of unauthorized access.
A)True
B)False
Q2) Users do have some First Amendment protections from identity disclosure.
A)True
B)False
Q3) There are state laws, but no federal laws, concerning cyberbullying.
A)True
B)False
Q4) Which of the following is correct about Lakes' policy on emails?
A) The monitoring is overly broad and will not be permitted under federal law.
B) The monitoring is limited to company e-mail messages, but personal email messages are discoverable.
C) The monitoring policy fits within current legal standards.
D) The monitoring is not permitted.
Q5) Warrants are not required in cyberspace.
A)True
B)False
13
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Chapter 11: Environmental Regulation and Sustainability
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112 Verified Questions
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Sample Questions
Q1) Who is liable for the remaining amount due for the clean-up?
A) Marcantuone and Gieson
B) Lessees of the dry-cleaning establishment
C) Previous owners of the property
D) all of the above
Q2) Most insurers now include an exclusion policy on CERCLA exposure, but coverage is available as a policy rider.
A)True
B)False
Q3) The EPA has developed three categories of water pollutants: conventional, international, and toxic pollutants.
A)True
B)False
Q4) Under which act was the EIS developed?
A) Clean Air Act
B) National Environmental Policy Act
C) Clean Water Act
D) Toxic Substances Control Act
E) all of the above
Q5) Discuss how EMF problems can affect property values.
Page 14
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Chapter 12: Contracts and Sales: Introduction and Formation
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Sample Questions
Q1) UETA does not apply when there is an applicable statute of frauds.
A)True
B)False
Q2) Under CARD, the terms of the credit card must be:
A) sent to the customers.
B) printed on paper.
C) posted on the Internet.
D) all of the above.
Q3) List the federal laws regulating credit contracts and give a brief description of each.
Q4) Buyer on fax: "Will take house for $587,500 if front lawn is fixed." Seller on fax in response: "Price is $589,000 and no front lawn." Buyer on fax in response: "$588,000 plus the front lawn." Seller on fax in response: $589,000 plus the front lawn."
A) There is a contract for the sale of the house at $588,000 plus the lawn.
B) There is a contract for the sale of the house at $589,000 plus the lawn.
C) There is no contract.
D) none of the above
Q5) What additional disclosures must be made in credit transactions in which the debtor's home will serve as security for the loan?
Page 15
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Chapter 13: Contracts: Performance, Remedies, and Rights
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Sample Questions
Q1) Which of the following is not covered by the Fair Debt Collections Practices Act?
A) an attorney collecting for a client
B) a collection agency with one exclusive client
C) a hospital using its collection department to collect fees from patients
D) an attorney collecting on a contingent fee basis
E) All of the above are covered under the FDCPA.
Q2) Chapter 11 is the liquidation provision in bankruptcy.
A)True
B)False
Q3) Angela, age 17, is injured in a car accident and receives $5,200 in medical treatment at the emergency room. The hospital sends a bill to Angela, who signed the admitting form in which she agreed to pay for the treatment. Angela:
A) is a minor and need not pay the bills.
B) is liable for the bill as a necessity.
C) can rescind the agreement.
D) none of the above
Q4) The difference between fraud and misrepresentation is proof of intent.
A)True
B)False
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Chapter 14: Sales: Product Advertising and Liability
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Sample Questions
Q1) Glenda purchased new light shades for her chandelier from Shades Plus. The Internet description of the shades she purchased was, "These shades fit almost all fixtures." When the shades arrived, they could not be placed on the chandelier because they were too narrow. Shades Plus has refused to take the shades back on a return from Glenda.
A) Shades need not take back the shades because the shades did not have a quality problem.
B) Shades need not take back the shades because it is not responsible for language on its Internet site.
C) Shades must take back the shades for breach of an express warranty.
D) both a and b
Q2) Which of the following would be a "defect" for purposes of 402A?
A) failure to warn not to put a hair dryer in water
B) food package that permits tampering
C) a missing bolt on a car steering column
D) all of the above
Q3) A consent decree is similar to a no-contest plea in a criminal proceeding.
A)True
B)False
Q4) In the Nestle case, what ethical issues existed?
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Chapter 15: Products: Business Intellectual Property
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Sample Questions
Q1) Which of the following is/are generic term(s)?
A) Band-Aid
B) Jell-O
C) Aspirin
D) All of the above are generic.
Q2) Palming off:
A) is what occurs with gray market goods.
B) is a tort that has no remedy.
C) occurs when one seller recreates another seller's product.
D) can occur only with copyrighted properties.
Q3) There can be infringement of patents, copyrights, trademarks, trade names and trade dress.
A)True
B)False
Q4) Corporations cannot hold copyrights.
A)True
B)False
Q5) The United States has opposition proceedings as part of the patent process.
A)True
B)False
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Chapter 16: Business Competition: Antitrust
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Sample Questions
Q1) Requiring a franchisee to use trademark napkins is a per se antitrust violation.
A)True
B)False
Q2) The tying product is the desired product.
A)True
B)False
Q3) The failing company doctrine is an exception to horizontal merger restrictions.
A)True
B)False
Q4) Which of the following is not required for an enforceable covenant not to compete?
A) sale of a business
B) reasonable geographic scope
C) reasonable time limits
D) All of the above are required.
Q5) Interlocking directorates tend to be efficient, effective, ethical, and legal.
A)True
B)False
Q6) Pat's Bicycle Shop is a Schwinn dealer. In order to be such a dealer, Pat's has to agree not to carry other brands of bicycles. Is this agreement illegal?
Page 19
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Chapter 17: Management of Employee Conduct: Agency
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Sample Questions
Q1) An agency contract must be evidenced by a record to be valid.
A)True
B)False
Q2) The Uniform Unincorporated Nonprofit Association Act provides for limited liability of the members of a nonprofit organization that is not incorporated.
A)True
B)False
Q3) Apparent authority and agency by estoppel are the same thing.
A)True
B)False
Q4) The public policy exception to employment at will does not afford protection for whistle-blowers.
A)True
B)False
Q5) "I'll make good on my employee's promise," is an example of a ratification.
A)True
B)False
Q6) Discuss the requirements for ending an agency relationship.
Q7) What is the difference between implied authority and apparent authority?
Page 20
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Chapter 18: Governance and Structure: Forms of Doing Business
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Sample Questions
Q1) Parent corporations can never be held liable for the environmental clean-up costs of subsidiaries.
A)True
B)False
Q2) Under Sarbanes-Oxley, the majority of members of the audit committee must be independent directors.
A)True
B)False
Q3) The shareholders of Beazer Homes USA filed suit against the directors for the compensation plan that the Board approved for officers that provided the officers with bonuses despite the losses the company experienced and the continuing declines in sales of homes. Which of the following is correct about the suit?
A) Shareholders are not permitted to sue their own directors.
B) Absent fraud or illegality, the shareholders have no rights against the directors.
C) The shareholders will need to establish a violation of the business judgment rule.
D) Unless the shareholders were harmed directly, they have no right to bring suit or recover.
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Page 21
Chapter 19: Governance and Regulation: Securities Law
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Sample Questions
Q1) Insider trading rules apply only to officers and directors.
A)True
B)False
Q2) Which of the following is not a Section 12 violation?
A) false statements in the registration statement
B) failure to file a registration statement
C) false statement in the prospectus
D) All of the above are Section 12 violations.
Q3) Section 16 applies to:
A) all shareholders.
B) only directors who also own stock.
C) an officer of a corporation.
D) only officers who own stock.
E) none of the above
Q4) The scienter required for proof of a 10(b) violation is:
A) intent to defraud.
B) gross negligence.
C) negligence.
D) a or b
Q5) Describe shareholders' rights under Section 14.
Page 22
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Chapter 20: Management: Employee Welfare
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Sample Questions
Q1) If a union is certified by workers in a plant, what is the least amount of time before another union election can be held?
A) the next day because the right to organize is ongoing
B) in six months
C) five years
D) twelve months
E) none of the above
Q2) John Smith is injured at work when he and another employee hold forklift races during their lunch hour at the warehouse where they work. All workers had been repeatedly warned about using the forklifts for such activity. Which of the following statements is true?
A) John's injuries will not be covered under workers' compensation because of his negligence.
B) John's injuries will be covered under workers' compensation.
C) John's injuries will not be covered because he violated company rules in doing the races.
D) none of the above
Q3) Discuss the leading causes of occupational injuries.
Q4) What protections does the Equal Pay Act provide?
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Chapter 21: Management: Employment Discrimination
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Sample Questions
Q1) The Americans with Disabilities Act applies to all employers.
A)True
B)False
Q2) Which of the following would be an exception to preferential treatment?
A) a BFOQ
B) seniority or merit system
C) misconduct
D) All of the above are exceptions.
Q3) An atmosphere of sexual harassment:
A) is not a form of discrimination.
B) can exist through language.
C) requires proof of quid pro quo.
D) none of the above
Q4) An atmosphere of harassment can result in employer liability even if the employer is unaware of specific claims.
A)True
B)False
Q5) The Rehabilitation Act of 1973 applies to all employers.
A)True
B)False
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