Fundamentals of Business Law Test Bank
Course Introduction
Fundamentals of Business Law introduces students to the essential legal concepts and frameworks that govern business transactions and commercial relationships. The course covers topics such as contract formation and enforcement, the legal structure of businesses, torts relevant to business operations, sales and consumer protection laws, intellectual property, employment law, and dispute resolution. Through practical examples and case studies, students learn to identify legal risks and apply basic legal reasoning to real-world business situations, developing foundational knowledge necessary for informed and ethical decision-making in the business world.
Recommended Textbook Business Law and the Legal Environment Standard Volume 23rd Edition by David
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Page 2
P. Twomey
Chapter 1: The Nature and Sources of Law
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Sample Questions
Q1) Statutory law includes U.S.Supreme Court opinions.
A)True
B)False
Answer: False
Q2) Although laws are enacted at different levels of government to provide the framework for business and personal rights and duties, the framework for this legal system is constitutional law.
A)True
B)False
Answer: True
Q3) Administrative regulations generally do not have the force of law.
A)True
B)False
Answer: False
Q4) Within each state in the United States, only the U.S.Constitution is in force.
A)True
B)False
Answer: False
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Chapter 2: The Court System and Dispute Resolution
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Q1) Which of the following is not an example of limited or special jurisdiction court?
A)Probate court
B)Juvenile court
C)Domestic Relations court
D)Court of original jurisdiction. Answer: D
Q2) If questions of fact are involved, a judge will usually decide the case based on the pleadings alone.
A)True
B)False Answer: False
Q3) Federal district courts are the trial courts of the federal court system.
A)True
B)False Answer: True
Q4) Garnishment is a method for satisfying a judgment against a defendant.
A)True
B)False Answer: True
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Chapter 3: Business Ethics, Social Forces, and the Law
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Q1) Positive law:
A)is enacted by government authority.
B)ensures that businesses will follow a high level of ethical standards.
C)is also known as natural law.
D)is moral-based law.
Answer: A
Q2) Civil disobedience is the remedy natural law proponents use to change positive law.
A)True
B)False
Answer: True
Q3) There is often a conflict between the goal of making money for shareholders and the goal of solving social problems through business.
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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Q1) The greatest changes to the written Constitution have been brought about by: A)departure by treaty.
B)judicial interpretation.
C)constitutional amendment.
D)amendment by practice.
Q2) The requirement that a business be licensed would be an example of a shared power.
A)True
B)False
Q3) Ex post facto laws can be adopted by either the states or the national government.
A)True
B)False
Q4) Like the Declaration of Independence, the U.S.Constitution refers to our fundamental rights as "unalienable" rights.
A)True
B)False
Q5) The Second Amendment provides for the right to keep and bear arms. A)True B)False
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Chapter 5: Government Regulation of Competition and Prices
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Q1) A violator of the Sherman Act may be subject to:
A)fine only.
B)imprisonment only.
C)both fine and imprisonment.
D)neither fine nor imprisonment.
Q2) A "suggested retail price" is not a violation of the antitrust laws.
A)True
B)False
Q3) 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
Q4) Market power under the Sherman Act is defined by both geographic and product markets.
A)True B)False
Q5) Governments may regulate prices but not credit terms. A)True
B)False
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Chapter 6: Administrative Agencies
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Q1) Meetings are to be open to the public under:
A)the Administrative Protection Act.
B)the Sunshine Act.
C)the Freedom of Information Act.
D)the Administrative Procedure Act.
Q2) Within the area in which the administrative agency is authorized to make decisions, the agency can be regarded as a specialized court or court of limited jurisdiction.
A)True
B)False
Q3) The United States constitution places the most significant limitations on administrative investigation in the area of:
A)search and seizure of the person.
B)aerial inspection.
C)search and seizure of papers and records.
D)guarantee against self-incrimination.
Q4) Agency investigations of possible violations of agency rules are handled through independent enforcement agencies.
A)True
B)False
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Chapter 7: Crimes
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Q1) For business crimes, managers cannot be held criminally responsible for the conduct of their employees.
A)True
B)False
Q2) Racketeering is defined as:
A)using money to influence public officials.
B)using money to influence employees of competitors.
C)using money derived from illegal activities to invest in legitimate businesses.
D)using money to influence foreign officials.
Q3) All states recognize _________, which protects privileged documents and notes from seizure by the government, even with a warrant.
A)the warrantless search privilege
B)the "plain view" privilege
C)the attorney-client privilege
D)the Fifth Amendment privilege.
Q4) Due process includes the right to be heard, question witnesses, and present evidence.
A)True
B)False
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Chapter 8: Torts
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Sample Questions
Q1) John owed Barney money.Barney called John's home several times per day for five weeks asking for repayment, with some of the calls coming after midnight.Barney might be liable for:
A)defamation.
B)wrongful interference with a contract.
C)intentional infliction of emotional distress.
D)trespass.
Q2) The assumption of risk defense has been abolished in several states.
A)True
B)False
Q3) Trespass to personal property requires:
A)the personal property to be connected to real property.
B)destroying the personal property.
C)the invasion of personal property regardless of whether the owner grants permission.
D)the invasion of personal property without the permission of the owner.
Q4) Professionals have a duty to perform their functions at the same level as would a reasonable person.
A)True
B)False
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Chapter 9: Intellectual Property Rights and the Internet
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Sample Questions
Q1) A copyright bestows upon the creator of an artistic or literary work a federal statutory right to exclusively:
A)use the work.
B)reproduce the work.
C)display the work.
D)All of these
Q2) The Sony Bono Copyright Extension Act of 1998 extended copyright protection to the life of the author plus 50 years.
A)True
B)False
Q3) In determining whether limited use of copyrighted material may be permitted as "fair use," courts will consider:
A)the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes.
B)the nature of the copyrighted work.
C)the amount and substantiality of the portion used in relation to the copyrighted work as a whole.
D)all of these.
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Chapter 10: The Legal Environment of International Trade
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Q1) Which of the following is NOT a nontariff barrier?
A)government subsidies
B)import quotas
C)complex custom procedures
D)an import or export duty or tax placed on goods as they move in or out of a country
Q2) A societé anonyme is the European counterpart of a U.S.corporation.
A)True
B)False
Q3) Franchising is a form of licensing that now is very common in international business.
A)True
B)False
Q4) 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
Q5) United States antitrust laws have broad extraterritorial reach.
A)True
B)False
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Chapter 11: Nature and Classes of Contracts: Contracting
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Sample Questions
Q1) A contract never can be both executory and unilateral.
A)True
B)False
Q2) A contract for an amount greater than $1 million must be made under seal or it is not binding.
A)True
B)False
Q3) An implied contract is shown by:
A)a writing.
B)the acts and conduct of the parties.
C)statements made in open court.
D)an exchange of oral promises.
Q4) The main thrust of the quasi contract is to:
A)encourage the making of written contracts.
B)prevent enrichment.
C)compensate those who voluntarily help others.
D)prevent unjust enrichment.
Q5) A contract can only involve two parties: the promisor and the obligor. A)True
B)False
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Chapter 12: Formation of Contracts: Offer and Acceptance
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Q1) Acceptance of an offer to form a unilateral contract need not be communicated to the offeror to be effective.
A)True
B)False
Q2) An acceptance must be absolute and unconditional.
A)True
B)False
Q3) The fact that there has been a series of contracts between the parties and that one party's offer has always been accepted before by the other does not create any legal obligation to continue to accept subsequent offers.
A)True
B)False
Q4) An offer that is indefinite may be clarified by reference to another writing through: A)incorporation.
B)reference.
C)annotation.
D)indexing.
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Chapter 13: Capacity and Genuine Assent
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Q1) As a general rule, the nondisclosure of information that is not asked for does not impose fraud liability or impair the validity of a contract.
A)True
B)False
Q2) 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
Q3) An apparently voluntary agreement may in fact not be voluntary if:
A)undue influence is present.
B)physical duress is present.
C)economic duress is present.
D)all of these.
Q4) A finding of undue influence would most likely not occur in a contract between:
A)parent and child.
B)attorney and client.
C)neighbor and neighbor.
D)guardian and ward.
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Chapter 14: Consideration
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Q1) In the case of unforeseen difficulties, a second promise to pay a contractor a higher amount on the original contract may be enforceable.
A)True
B)False
Q2) Liz agrees to cook 20 dinners for Brian, and in exchange, Brian will repair all of the plumbing in Liz's house.Liz and Brian's 'deal' has:
A)insufficient consideration, because cooking twenty dinners is not worth as much as repairing all of the plumbing in Liz's house.
B)insufficient consideration, because this kind of bargain is against public policy.
C)insufficient consideration, because there is a clear lack of any bargain.
D)sufficient consideration, because Liz has promised something of value.
Q3) If a merchant receives and cashes a check for partial payment of a debt and the check bears the notation that the amount is in full payment of a disputed sum, the total debt is released.
A)True
B)False
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Chapter 15: Legality and Public Policy
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Q1) Dealing honestly, reasonably, and in good faith means all the following except:
A)these are implied duties in every contract for services.
B)these are implied duties in every contract for the sale of goods.
C)the parties will not injure each other.
D)these are express duties in every contract for services.
Q2) The failure to have a license will not render agreements void if the license:
A)is based on formal education
B)is required for engaging in a particular business or trade
C)is a regulatory license
D)is readily obtainable by anyone who offers payment of a required fee
Q3) An agreement not to compete is enforceable:
A)in the sale of a business.
B)between competitors.
C)in contracts for the sale of goods.
D)in contracts for the sale of securities.
Q4) An unlicensed doctor can sue a patient for the doctor's fee if the patient in fact recovered because of the doctor's care.
A)True
B)False
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Chapter 16: Writing, Electronic Forms, and Interpretation of Contracts
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Q1) 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
Q2) Parol evidence is not admissible to show fraud, duress or mistake.
A)True
B)False
Q3) The one-year performance requirement for an oral contract begins:
A)on the day of the agreement.
B)on the first day of performance.
C)on the day following the agreement.
D)the day on which the agreement was placed in writing.
Q4) The parol evidence rule may not apply if:
A)the contract is materially incomplete.
B)the parties disagree on the meaning of the contract.
C)there is no ambiguity regarding the terms of the contract.
D)one party is unable to perform the contractual obligations.
Q5) Customs and trade usage can override the express provisions of a contract. A)True B)False
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Chapter 17: Third Persons and Contracts
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Q1) The party making an assignment is called the:
A)assignee.
B)assignor.
C)obligor.
D)successor.
Q2) A life insurance contract is a third-party:
A)beneficiary contract.
B)assignment contract.
C)payment contract.
D)performance contract.
Q3) A person entitled to receive money may generally assign that right to another person.
A)True
B)False
Q4) An assignment of royalties to a song:
A)is a contract.
B)requires consideration.
C)is a transfer of rights.
D)is not enforceable.
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Chapter 18: Discharge of Contracts
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Q1) If the parties to a contract agree to undo the agreement and return any consideration involved, the contract is discharged by:
A)mutual cancellation
B)mutual rescission.
C)novation
D)accord and satisfaction
Q2) A Federal Trade Commission regulation gives a buyer three (3) business days in which to cancel a home-solicited sale of goods or services costing more than:
A)$25.
B)$50.
C)$100.
D)$500.
Q3) For the parties to enter into an accord and satisfaction that discharges the original obligation, there must be a bona fide dispute.
A)True
B)False
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Chapter 19: Breach of Contract and Remedies
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Q1) An antimodification clause specifies that a waiver to any breach automatically modifies the contract.
A)True
B)False
Q2) When a written contract does not correctly state the agreement already made but the parties either party make seek a(n):
A)rescission
B)injunction
C)reformation of the contract
D)action for specific performance
Q3) When the contract requires that both parties submit disputes to arbitration, this is an example of a limitation-of-remedies clause.
A)True
B)False
Q4) The normal remedy for breach of contract where the plaintiff has suffered a loss is nominal damages.
A)True
B)False
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Chapter 20: Personal Property and Bailments
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Q1) A bailee's interest in the bailed property can be characterized as: A)ownership.
B)a fractional proprietary interest.
C)possession.
D)constructive ownership.
Q2) Vacarro gave her son Mark a car on the day Mark left for college.Vacarro told Mark that she expected him to use the car for school purposes and to earn good grades.Mark flunked out of college in his second semester.Vacarro sued to regain title to the car on the ground that the gift was conditional on Mark's earning good grades and remaining in college.Will Vacarro win the case?
Q3) A bailee's lien gives the bailee the right to keep possession of the bailed property until reasonable charges for storage and/or repairs are paid.
A)True B)False
Q4) Wrongful dominion over a principal's tangible personal property is a form of conversion.
A)True
B)False
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Chapter 21: Legal Aspects of Supply Chain Management
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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) The rights of a holder of a warehouse receipt depend on whether the receipt is:
A)negotiable.
B)rescissory.
C)notarized as a document of title.
D)notarized as a bill of lading.
Q3) A warehouse receipt may be either negotiable or nonnegotiable.
A)True B)False
Q4) The rights and duties of warehousers are regulated by the UCC.
A)True
B)False
Page 23
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Chapter 22: Nature and Form of Sales
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Q1) The CISG:
A)governs all contracts between parties in countries that have ratified it.
B)applies only to goods bought for personal, family or household uses.
C)applies to contracts in which the predominant part of the obligation is the supply of labor or other services.
D)None of these.
Q2) An output or requirement contract is not enforceable unless the parties include an estimate of prospective amounts.
A)True
B)False
Q3) An agreement to periodically deliver home-heating oil to a residential customer that does not indicate the duration of the contract
A)is enforceable for a reasonable period of time.
B)lasts for one delivery only.
C)is not a legally-enforceable contract.
D)constitutes a bulk transfer.
Q4) A gift is a free transfer of the title to property.
A)True
B)False
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Chapter 23: Title and Risk of Loss
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Q1) A buyer with a voidable title cannot pass on valid title to a subsequent good faith purchaser.
A)True
B)False
Q2) When goods are sold at an auction in separate lots, the title to each lot passes:
A)when the winning bidder tenders payment for the lot.
B)when the lot is received by the winning bidder.
C)only when all lots have been sold.
D)when the auctioneer announces that the lot in question has been sold to the bidder.
Q3) Someone who finds and resells stolen property passes on a good title to a good faith purchaser.
A)True
B)False
Q4) A document of title is not sufficient for a creditor to take an interest in goods.
A)True
B)False
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Chapter 24: Product Liability: Warranties and Torts
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Q1) If there is a written contract, a disclaimer of the implied warranty of merchantability must be conspicuous.
A)True
B)False
Q2) A catalog illustration can become the basis of an express warranty.
A)True
B)False
Q3) If a merchant sells a lawn mower that will not cut any type of grass, there is a breach of the warranty of merchantability.
A)True
B)False
Q4) If an express warranty is breached:
A)the warrantor is not liable if due care was exercised in the manufacture or handling of the product
B)the seller has no warranty obligation if the buyer had the opportunity to inspect the goods before purchasing them.
C)the warrantor is not liable if (s)he honestly believed that the warranty was true.
D)the warrantor is always liable.
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Chapter 25: Obligations and Performance
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Q1) A party who has demanded adequate assurances must wait 90 days before she can treat the contract as repudiated.
A)True
B)False
Q2) If a buyer accepts goods but later claims the goods suffered from a substantial impairment, he is:
A)only required to prove the goods do not conform to the contract.
B)only required to prove the goods are shown to be worthless.
C)only required to prove the use to the buyer is materially different than the contract promised.
D)automatically canceling the contract.
Q3) To be adequate, after a proper demand an assurance of performance must:
A)include consideration.
B)allow for the additional examination of the goods.
C)be sufficient to assure a reasonable person that the contract will be performed.
D)be written.
Q4) A buyer has a right to insist that all the goods be delivered at one time.
A)True
B)False
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Chapter 26: Remedies for Breach of Sales Contracts
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Q1) A liquidated damages clause is a contractually-agreed upon amount of damages to be paid in the event of default or breach.
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) The commercially reasonable charges incurred by a seller in caring for goods after the buyer's breach are recoverable by the seller in an action for damages as:
A)contract damages.
B)punitive damages.
C)additional damages.
D)incidental damages.
Q4) Under both the CISG and the UCC, a buyer may reject goods only if the tender of the goods is a fundamental breach of the contract.
A)True
B)False
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Chapter 27: Kinds of Negotiable Instruments and Negotiability
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Q1) Article 3 of the UCC establishes a four year statute of limitations for most actions involving negotiable instruments.
A)True
B)False
Q2) If an instrument is negotiable, it is governed by Article 4 of the UCC.
A)True
B)False
Q3) The person to whom the order in a draft is addressed is known as the: A)payee.
B)drawee.
C)drawer.
D)maker.
Q4) A nonnegotiable instrument's terms are not enforceable.
A)True
B)False
Q5) Which of the following terms would make an instrument nonnegotiable?
A)It is dependent upon an event.
B)It is undated.
C)It is payable in foreign money.
D)It gives the holder the right to receive interest.
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Chapter 28: Transfers of Negotiable Instruments and
Warranties of Parties
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Q1) The transfer and collection of negotiable instruments between banks requires specific indorsements.
A)True
B)False
Q2) A qualified indorsement is given by using the phrase __________.
A)"as is"
B)"without recourse"
C)"with all faults"
D)"buyer beware"
Q3) A blank indorsement turns a(n) __________instrument into a(n) __________ instrument.
A)negotiable; non-negotiable
B)non-negotiable; negotiable
C)bearer; order
D)order; bearer
Q4) When the negotiable instrument is negotiated by delivery without indorsement, the warranty liability of the transferor runs only to the immediate transferee.
A)True
B)False
30
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Chapter 29: Liability of the Parties Under Negotiable Instruments
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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 taker of a negotiable instrument may be denied the status and protection of a holder in due course if:
A)one party is a consumer.
B)the close-connection doctrine applies.
C)the instrument is bearer paper.
D)the presentment is not made in a commercially reasonable manner.
Q3) The primary party on a certificate of deposit is the drawer.
A)True
B)False
Q4) A contract signed by a minor raises a universal defense against any kind of holder.
A)True
B)False
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Chapter 30: Checks and Funds Transfers
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Q1) A check is a particular kind of draft.
A)True
B)False
Q2) The delivery of a check is an assignment of money on deposit, and the drawee bank is required to pay the holder the amount of the check.
A)True
B)False
Q3) A check may be certified by a bank upon the request of the drawer or the holder.
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 bank always is liable to the depositor on a counterfeit check that the bank has paid.
A)True
B)False
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Chapter 31: Nature of the Debtor-Creditor Relationship
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Q1) A surety that has made payment of a claim for which it was liable as a surety is entitled to which of the following from the principal?
A)Indemnity
B)Exoneration
C)Assignment
D)Subrogation
Q2) Deirdre read that bids were being solicited for the construction of an apartment tower.Deirdre submitted the lowest bid and was offered the contract contingent on her providing acceptable sureties in the amount of $1 million.Because Deirdre never had done work on this scale, it was virtually impossible for her to obtain the appropriate sureties.She convinced Reassuring Sureties, Inc.to issue the necessary commitment by misrepresenting that she was a famous builder in Canada.As the work progressed, it seemed to be going well and Deirdre was asked to make the project 52 stories instead of 50 stories, which was the original contract height.She agreed to this change.?After the work was completed, many breaches of contract on the part of Deirdre became evident.Reassuring Sureties was sued for a $500,000 loss.Reassuring Sureties defended on the grounds of fraud and material change in the contract.Decide.
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Chapter 32: Consumer Protection
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Q1) The FTC requires that only descriptive and non-ambiguous terms such as jumbo, giant, or full be used in product labeling.
A)True
B)False
Q2) Consumer title loans, made in exchange for title to a car if the borrower defaults, are also called predatory loans and are illegal per se.
A)True
B)False
Q3) Sue Thompson received a home "cold-canvas" sales call at her home from a representative of the Enlightened Encyclopedia Company.The salesperson, after a rather aggressive presentation, convinced Sue to order a $1,200 Deluxe Encyclopedia set for her two children.Sue was impressed with the quality of the books, but shortly after signing the contract, she realized that she could not really afford to make the required monthly payments.What rights, if any, does Sue have in this situation?
Q4) Individuals can seek criminal and civil penalties against those who violate consumer protection statutes.
A)True
B)False
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Chapter 33: Secured Transactions in Personal Property
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Q1) Security agreements allow for "blanket" descriptions of collateral that do not provide specific details on the specific type of collateral involved.
A)True
B)False
Q2) King Electronics, a retailer of video equipment, sold two DVRs to Larson, a psychologist, for use in her professional practice, which was located in her home.The sale to Larson was made on credit.King retained a security interest in the DVRs sold but did not file a financing statement.Mills, another creditor of Larson, has asserted that his lien on the two DVRs is superior to King's security interest.Is he right? As you decide, remember to classify the DVRs as collateral in the hands of King and Larson.
Q3) All of the following are elements of attachment except: ______.
A)the filing of a financing statement
B)a security agreement
C)value received by the debtor
D)the debtor has rights in the collateral
Q4) A creditor must file a financing statement for a security interest to attach.
A)True
B)False
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Page 35
Chapter 34: Bankruptcy
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Q1) Where the debtor has fewer than twelve (12) creditors, how many must sign an involuntary petition?
A)one (1), assuming that the creditor's unsecured claim is at least $15,325
B)one (1), assuming that the creditor's secured claim is at least $15,575
C)three (3), assuming that the creditors' unsecured claims total at least $14,425
D)three (3), assuming that the creditors' secured claims total at least $15,575
Q2) Which of the following debts is not dischargeable in bankruptcy?
A)judgments based on negligence
B)judgments based on breach of contract
C)judgments for willful and malicious injuries
D)judgments in which the creditors would receive no distribution
Q3) An involuntary bankruptcy case is commenced by creditors filing a petition with a bankruptcy court.
A)True
B)False
Q4) In order to be eligible for Chapter 13 bankruptcy an individual must have secured debts of less than $1,000,000.
A)True
B)False
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Chapter 35: Insurance
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Q1) The person to whom an insurance promise is made is called: ______.
A)the insured.
B)the insurer.
C)the broker.
D)the agent.
Q2) Armenia purchased life insurance on her life.Regarding the beneficiary: _______.
A)Armenia must name a person with a pecuniary interest in her life.
B)Armenia must name a close relative.
C)Armenia must name a close relative or business associate.
D)Armenia may name whomever she wishes.
Q3) The insured must comply with a number of time limitations in making a claim.
A)True
B)False
Q4) Insurance designed to protect an insured driver or owner from the claims of others is called:
A)collision insurance.
B)financial responsibility insurance.
C)liability insurance.
D)comprehensive insurance.
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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) If a store owner places Joe as manager and gives him a special nametag, customers may assume that Joe has ______ for the owner in that respect.
A)apparent authority
B)ratification powers
C)special agency
D)universal agency
Q3) A person has apparent authority as an agent when the principal's words or conduct leads a third person to reasonably believe that the person has that authority and the third person relies on that appearance.
A)True
B)False
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Chapter 37: Third Persons in Agency
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Q1) In which of the following situations is the principal - and not the agent - liable to a third party for breach of contact?
A)signature by partially disclosed principal
B)signature by undisclosed principal
C)ratification by disclosed principal
D)ratification by undisclosed principal
Q2) Eric is a driver for UPS.While delivering packages in the rain, he accidentally hits Lou, causing him serious physical injuries. Lou comes to you asking for advice on who is liable; what do you advise?
A)File a claim against Eric only based on respondeat superior because the injuries were outside the scope of employment.
B)File a claim against UPS based on respondeat superior because the injuries occurred within the scope of employment
C)Contact the prosecutor for criminal charges.
D)File a claim against UPS based on negligent hiring.
Q3) An agent is necessarily liable if the principal is undisclosed.
A)True
B)False
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Chapter 38: Regulation of Employment
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Q1) A person cannot be both an employee and an agent for a party at the same time.
A)True
B)False
Q2) In the absence of an agreement to the contrary, regardless of why an employee is discharged the employer must pay wages to the expiration of the last pay period.
A)True
B)False
Q3) Public policy exceptions to the employment-at-will doctrine apply only to "whistleblowing" situations.
A)True
B)False
Q4) In older cases, the employer-employee relationship was referred to as the common law's description of the master-servant relationship.
A)True
B)False
Q5) 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) Failing to hire an individual who does not have English language skills violates Title VII unless those language skills have a clear connection to the successful performance of the job to which it is applied.
A)True
B)False
Q2) Title VII and the ADA protects U.S.citizens against discrimination in foreign countries:
A)as long as there is no "undue hardship" on the foreign employer.
B)if they are employed by American-owned companies.
C)if they are employed by foreign-owned companies.
D)regardless of what nation controls the company.
Q3) What is an employer defense to a disparate impact charge?
A)The employer did not intend to discriminate.
B)The employment practice is job-related and consistent with business practice.
C)The disparate impact was not the result of extreme recklessness or gross negligence on the part of the employer.
D)The practice is widespread and accepted in the industry.
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