Introduction to Law Exam Review
Course Introduction
Introduction to Law provides students with a foundational understanding of the legal system, its structures, and core principles. This course explores the sources of law, including constitutions, statutes, case law, and administrative regulations, while examining the roles of judges, lawyers, and the courts. Students will learn basic legal terminology, the process of legal reasoning, and the impact of law on society. Case studies and real-world examples are used to illustrate how law shapes individual behavior, resolves disputes, and promotes justice. This course serves as an essential base for further legal studies or for understanding the relevance of law in various professional fields.
Recommended Textbook
Business Law Principles for Todays Commercial Environment 5th Edition by Twomey
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51 Chapters
2716 Verified Questions
2716 Flashcards
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Chapter 1: The Nature and Sources of Law
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Sample Questions
Q1) A party may ask for legal,but not equitable,remedies in a single court.
A)True
B)False
Answer: False
Q2) Substantive law:
A) specifies the steps to follow to enforce legal rights.
B) concerns equitable relief only.
C) creates, defines, and regulates rights and liabilities.
D) draws solely on English legal principles.
Answer: C
Q3) A ______ is a legal principle expressed for the first time in court decision.
A) statutory law
B) stare decisis
C) case law
D) precedent
Answer: D
Q4) Administrative regulations generally do not have the force of law.
A)True
B)False
Answer: False
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Chapter 2: The Court System and Dispute Resolution
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57 Verified Questions
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Sample Questions
Q1) Generally,the prevailing party in a lawsuit is awarded the costs of the action,including witness fees and jury fees.
A)True
B)False
Answer: True
Q2) A probate court is an example of a general trial court.
A)True
B)False
Answer: False
Q3) 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
Q4) Depositions are usually taken in the courtroom for purposes of discovery.
A)True
B)False
Answer: False
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Chapter 3: Business Ethics, Social Forces and the Law
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52 Verified Questions
52 Flashcards
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Sample Questions
Q1) Laws that prohibit defamation,invasions of privacy,and reputation exist primarily:
A) for protection of the person.
B) for protection of public health, safety, and morals.
C) for protection of property.
D) for protection of the state.
Answer: A
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) Civil disobedience is the remedy natural law proponents use to change positive laws.
A)True
B)False
Answer: True
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5
Chapter 4: The Constitution as the Foundation of the Legal Environment
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Sample Questions
Q1) For the past century,the United States Supreme Court has generally followed the "living document" view in interpreting the Constitution.
A)True
B)False
Q2) In a "bedrock view" the Constitution is merely a statement of goals and objectives,intended to grow and change with time.
A)True
B)False
Q3) Which of the following is not characteristic of the "living" Constitution?
A) strong government
B) strong President
C) administrative agencies
D) states' powers equal to federal powers
Q4) The Fifth and Fourteenth Amendments prohibit the national and state governments from depriving any person of property without due process of law.
A)True
B)False
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Chapter 5: Government Regulation of Competition and Prices
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48 Verified Questions
48 Flashcards
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Sample Questions
Q1) Vertical mergers:
A) occur between firms that have a competitor relationship.
B) occur between firms that have buyer and seller relationships.
C) are not covered by the Clayton Act.
D) are always protected by the federal government.
Q2) A "suggested retail price"is not a violation of the antitrust laws.
A)True
B)False
Q3) Under the Clayton Act,a divestiture order is:
A) notification from the Department of Justice that a merger is about to occur.
B) notification from the Department of Justice that a merger did not occur.
C) a decision by a court requiring a defendant to sell an enterprise.
D) an order by a court requiring an enterprise to dispose of its inventory.
Q4) The government can regulate not just businesses,but also business competition and prices.
A)True
B)False
Q5) Having a large percentage of the market is not necessarily a monopoly.
A)True
B)False
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Chapter 6: Administrative Agencies
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58 Flashcards
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Sample Questions
Q1) A(n)__________ is a negotiated disposition of a matter before an administrative agency,generally without public sanctions.
A) formal settlement
B) informal settlement
C) judicial verdict
D) quasi-judicial verdict
Q2) The Federal Register lists all administrative regulations,presidential proclamations,and executive orders on a semiannual basis.
A)True
B)False
Q3) 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.
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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Sample Questions
Q1) 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.
Q2) The unauthorized use of a computer belonging to someone else is:
A) a crime in all states.
B) a crime in some states.
C) not a crime in any state.
D) a crime under federal law only.
Q3) If U.S.Senator Jones is charged with a conflict of interest because of his financial interest in a firm he helped to secure a contract,he would most likely be charged with the crime of ________.
A) bribery
B) extortion
C) improper political influence
D) blackmail
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9
Chapter 8: Torts
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Sample Questions
Q1) A contractor would be liable for ________ if the demolition of a structure with dynamite caused damages to surrounding structures.
A) strict liability
B) contributory negligence
C) criminal wrongdoing
D) tortious interference
Q2) The tort of invasion of privacy requires the reasonable intrusion into one's private affairs.
A)True
B)False
Q3) Causing someone's character to be questioned is a wrong against the person and is the tort of defamation.
A)True
B)False
Q4) A trespass to personal property is any unpermitted entry below,on,across,or above the land of another.
A)True
B)False
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Page 10
Chapter 9: Intellectual Property Rights and the Internet
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Sample Questions
Q1) Trade dress refers to the packaging look and overall image of a product.
A)True
B)False
Q2) Descriptive terms such as locations and colors are never subject to trademark protections.
A)True
B)False
Q3) The Digital Millennium Copyright Act :
A) made notice of copyrights no longer mandatory.
B) changed the life of a copyright.
C) was enacted to curb the pirating of software and other pirated works.
D) provided a safe harbor for copyright infringers.
Q4) Trademarks and service marks are recorded with the Register of Copyrights.
A)True
B)False
Q5) In limited circumstances customer lists are protected under trade secret laws.
A)True
B)False
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Chapter 10: The Legal Environmental of International Trade
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Sample Questions
Q1) The transfer of technology rights in a product to allow another firm in a foreign country to produce a product in return for royalties or other specified payments is called:
A) exporting.
B) licensing.
C) agency representation.
D) subsidiary sales.
Q2) The "Turtle Law" prohibits the importation of shrimp from countries that allow the harvesting of shrimp that could adversely affect endangered sea turtles.
A)True
B)False
Q3) The use of import quotas represents the most common form of tariff barrier.
A)True
B)False
Q4) The Securities and Exchange Commission (SEC)is not limited to litigation when a securities law enforcement investigation runs into secrecy or blocking laws.
A)True
B)False
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Chapter 11: Nature and Classes of Contracts: Contracting
on the Internet
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53 Verified Questions
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Sample Questions
Q1) Quasi contracts are fictional contracts.
A)True
B)False
Q2) Negotiable instruments are examples of formal contracts.
A)True
B)False
Q3) A right of __________ refusal is the right of a party to meet the terms of a proposed contract before it is executed,such as a real estate purchase agreement.
A) concomitant
B) conditional
C) formal
D) first
Q4) The promisor in a contract may also be called the:
A) obligor.
B) grantor
C) obligee
D) grantee
Q5) A contract never can be both executory and unilateral.
A)True
B)False
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Chapter 12: Formation of Contracts: Offer and Acceptance
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Sample Questions
Q1) An offer is terminated upon rejection by the offeree unless:
A) the period of time for which the offeror agreed to keep the offer open has not yet expired.
B) the offeror renews the offer.
C) the offeree revokes the rejection.
D) the offeree makes a counteroffer.
Q2) An agreement that consists of two or more parts and calls for corresponding performances of each part by the parties is called a:
A) partial contract.
B) divisible contract.
C) performance contract.
D) divided contract.
Q3) A revocation of an offer is ordinarily effective after the offer has been accepted. A)True
B)False
Q4) Contract terms may not be implied from the parties' conduct.
A)True
B)False
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Chapter 13: Capacity and Genuine Assent
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Sample Questions
Q1) Ordinarily,every party to a contract is presumed to have contractual capacity until the contrary is shown.
A)True
B)False
Q2) Ordinarily,a party to a contract has no duty to volunteer information to the other party.
A)True B)False
Q3) A contract obtained by physical duress is void.
A)True
B)False
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.
Q5) A person who has drunk too much alcohol at a party and signs a contract may be able to rescind that contract.
A)True
B)False
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Chapter 14: Consideration
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Sample Questions
Q1) A landowner's promise to pay a contractor a bonus to complete construction of a building according to the terms of a pre-existing contract between the landowner and the contractor is:
A) binding if the promise is in writing.
B) binding, since the promise is made by a non-merchant.
C) binding, since the promise is made to a merchant.
D) ordinarily not binding on the promisor.
Q2) Charitable pledges or subscriptions are binding on the donor if the donor knew the charity would rely on the pledge.
A)True
B)False
Q3) True consideration occurs only when the value of one promise is equal to the value of the promise given by the other party.
A)True
B)False
Q4) In most states,promises made to another based on moral obligation lack consideration and are not enforceable.
A)True
B)False
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Chapter 15: Legality and Public Policy
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Sample Questions
Q1) If a contract can be interpreted in two ways,one legal and the other illegal,the court will assume that the legal meaning was intended unless the contrary is clearly indicated.
A)True
B)False
Q2) All of the following are types of contracts that might be unenforceable as contrary to public policy except:
A) a contract that is contrary to the protection of the public welfare, health, or safety
B) a contract that is contrary to the protection of the person
C) a contract that is contrary to the protection of recognized social institutions
D) a contract that does not harm the public good
Q3) The validity of a contract is not affected by:
A) the effect of the contract on the community.
B) unconscionability.
C) the absence of good faith.
D) the fact that the contract turned out to be a bad bargain for one of the parties.
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Chapter 16: Writing, Electronic Forms, and Interpretation of Contracts
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Sample Questions
Q1) A contract is interpreted to give effect to:
A) the intent of the parties.
B) what the court believes is a fair contract.
C) what the defendant thought the contract meant.
D) what will be best for the economic life of the community.
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) When an insurance policy is ambiguous,the policy is interpreted:
A) against the insurer.
B) in favor of the insurer.
C) according to the dictionary meaning of the words.
D) according to the meaning of the words in the insurance industry.
Q4) An oral contract can be enforced when it relates to:
A) the purchase of a television set for $200.
B) the sale of an interest in land for $400.
C) managing a factory for five years.
D) a promise to answer for the debt of another.
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Chapter 17: Third Persons and Contracts
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Sample Questions
Q1) Which of the following is not a third-party beneficiary contract?
A) a contract in which A hires B to give A's niece piano lessons
B) a contract to repair sewers in front of Macy's Department Store
C) a life insurance contract with a named beneficiary
D) a contract between X and Y for Y to install a new door on Z's home
Q2) An assignee's rights are the same as those that had been possessed by the assignor.
A)True
B)False
Q3) If a municipality contracts with a contractor to pave a street,the homeowners on that street are third-party beneficiaries of the contract.
A)True
B)False
Q4) A third-party beneficiary:
A) may be obligated to pay for services rendered.
B) may bring suit on and enforce the contract.
C) must consent to the contract.
D) must be identified by name.
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19
Chapter 18: Discharge of Contracts
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Sample Questions
Q1) Sam Student had borrowed $1,000 from his cousin.Sam and the cousin became involved in a heated disagreement when the cousin began to press Sam for repayment of the loan.Finally,Sam wrote a check for $190 to the cousin and conspicuously wrote on the check in big letters that it was full and final payment of the $1,000 loan.In need of money,the cousin cashed the check and demanded the remaining $810 from Sam.Sam refused to pay,claiming that they had entered into an accord and satisfaction that discharged Sam's obligation to pay anything more.The cousin sued Sam.Discuss the probable outcome.
Q2) The parties may decide that their contract is not the one they want.They may then replace it with another contract.If they do,the original contract is discharged by
A) solution
B) elocution
C) retribution
D) substitution
Q3) An offer to perform is known as a(n)__________.
A) rendering
B) offering
C) tinder
D) tender
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Chapter 19: Breach of Contract and Remedies
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Sample Questions
Q1) Damages in excess of actual loss,imposed for the purpose of punishing or making an example of the defendant,are known as compensatory damages.
A)True
B)False
Q2) When an anticipatory repudiation of a contract occurs,the non-breaching party may do any of the following except:
A) do nothing and wait for performance per the contract.
B) immediately declare a breach of contract.
C) consider the repudiation as an offer to cancel the contract.
D) immediately seek an injunction.
Q3) Contract provisions that limit the remedies of the parties are generally unenforceable.
A)True
B)False
Q4) An injured party that does not suffer an actual loss from the breach of a contract is entitled to consequential damages.
A)True
B)False
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21
Chapter 20: Personal Property and Bailments
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Sample Questions
Q1) A person becomes a(n)__________ at the moment of taking possession of abandoned personal property.
A) bailor
B) bailee
C) constructive bailee
D) owner
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) In a bailment,the person who turns over the possession of bailed property is the bailee,and the person who accepts possession is the bailor.
A)True
B)False
Q4) Joint tenancy and tenancy in common both feature the right of survivorship.
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) A negotiable warehouse receipt states that the goods received will be "delivered to the bearer."
A)True
B)False
Q2) A warehouse receipt may be either negotiable or nonnegotiable.
A)True
B)False
Q3) A common carrier transporting goods under a COD shipment may:
A) make delivery without first obtaining payment.
B) not make delivery without first receiving payment.
C) accept a check as payment and have no liability.
D) not avoid liability without a signed release.
Q4) A transferee's rights to a warehouse receipt may be defeated by a good-faith purchaser of the goods from the transferor of the receipt.
A)True B)False
Q5) A common carrier is liable for all delays in the delivery of goods. A)True
B)False
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Chapter 22: Nature and Form of Sales
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Sample Questions
Q1) Which term is not required in a writing in order to satisfy the statute of frauds?
A) language indicating that a sale or contract to sell has been made
B) the price of the goods
C) the quantity of goods involved in the transaction
D) the signature of the defendant
Q2) A writing that is offered to satisfy the statute of frauds must have been written for that purpose.
A)True
B)False
Q3) Consumer protection statutes may require a writing that is more detailed than the writing required by the statute of frauds provision of the Uniform Commercial Code.
A)True
B)False
Q4) Any modification of a sales contract between merchants must be supported by some form of consideration.
A)True
B)False
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Chapter 23: Title and Risk of Loss
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Sample Questions
Q1) In an FOB place of shipment contract,the seller's obligation ends when he delivers the goods to a carrier for shipment.
A)True
B)False
Q2) The expense and the risk of return in a sale or return situation is on the:
A) seller.
B) buyer.
C) lienholder.
D) secured creditor.
Q3) In a self-service store a sale cannot occur until the goods are paid for.
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
Q5) In an FOB shipment contract,title to the goods pass to the buyer when goods are delivered to the carrier.
A)True
B)False
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Chapter 24: Product Liability: Warranties and Torts
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Sample Questions
Q1) A full warranty requires the purchaser to pay for the shipping cost of returning the product for repair.
A)True
B)False
Q2) All of the following apply to strict tort liability except:
A) strict tort liability is independent of the UCC.
B) strict tort liability has abolished privity of contract.
C) strict tort liability requires the defect exists at the time of manufacture.
D) strict tort liability requires assumption of the risk.
Q3) The federal regulation of express warranties:
A) applies only to limited warranties.
B) applies to a seller who makes a written express warranty for a consumer product costing more than $10.
C) requires all express warranties to be full warranties.
D) requires an implied warranty to be designated as either full or limited.
Q4) The theories of product liability
A) are mutually exclusive.
B) are not mutually exclusive.
C) are set forth exclusively in the UCC.
D) are set forth exclusively in the common law.
Page 26
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Chapter 25: Obligations and Performance
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Q1) An acceptance of goods can be done either expressly or by implication.
A)True
B)False
Q2) A non-repudiating party has the right to require a guarantee of performance or a pledge of security.
A)True
B)False
Q3) When a contract to sell identified goods does not specify a place of delivery,the goods are considered delivered at the seller's place of business.
A)True
B)False
Q4) The UCC does not specify the form that the assurance of performance is to take.
A)True
B)False
Q5) If a party refuses to perform a contract when the time for performance arises,the other party has the right to seek assurances.
A)True
B)False
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Chapter 26: Remedies for Breach of Sales Contracts
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Sample Questions
Q1) When a plaintiff sues on the basis of strict tort liability,the action is subject to:
A) the UCC statute of limitations.
B) the appropriate state's tort statute of limitations.
C) no statute of limitations.
D) FTC approval.
Q2) If goods are specially manufactured,unique,or rare,a buyer may have the right to specific performance.
A)True
B)False
Q3) A buyer may reject a tender of delivery:
A) if the goods do not conform to the contract in some way.
B) only if the goods have a substantial defect.
C) unless the seller promises to cure the defective tender.
D) unless the goods have been sold on credit.
Q4) A defrauded buyer may avoid the contract and recover damages.
A)True
B)False
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28
Chapter 27: Kinds of Negotiable Instruments and Negotiability
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Sample Questions
Q1) A certificate of deposit is a written promise made and signed by the maker to pay a sum certain in money to the holder of the instrument.
A)True
B)False
Q2) When ambiguous language in an instrument exists:
A) the instrument becomes non-negotiable.
B) handwriting supersedes typewritten words.
C) typewritten words supercede handwritten words.
D) judgment interest accumulates at the rate of 5% per annum.
Q3) The payee has no rights in an instrument until the drawer or the maker has delivered it to the payee.
A)True
B)False
Q4) When the drawee of a draft has indicated by writing or record a willingness to pay the amount specified in the draft the drawee is called a(n):
A) acceptor.
B) accommodation party.
C) payee.
D) secondary obligator.
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Chapter 28: Transfers of Negotiable Instruments and
Warranties of Parties
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Sample Questions
Q1) If a negotiable order instrument is transferred to another party without an indorsement,the instrument has been:
A) assigned.
B) negotiated.
C) obtained by fraud, and is therefore invalid.
D) obtained by fraud, but may be ratified.
Q2) When a negotiable instrument is negotiated by delivery without indorsement,the warranty liability of the transferor runs:
A) only to the immediate transferee.
B) not to the immediate transferee, but to all subsequent transferees.
C) to both the immediate transferee and all subsequent transferees.
D) neither to the immediate transferee, nor to any subsequent transferees.
Q3) The transferring of an instrument in such a way as to make the transferee the holder of the paper is termed:
A) an assignment.
B) a conversion.
C) a sale.
D) a negotiation.
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Chapter 29: Liability of the Parties Under Negotiable Instruments
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Q1) A holder through a holder in due course is subject to only certain,limited defenses.
A)True
B)False
Q2) Illegality,such as a note for gambling,is a universal defense.
A)True
B)False
Q3) If a person signs a negotiable instrument because he is fraudulently deceived regarding its nature or essential terms gives the holder a universal defense..
A)True
B)False
Q4) Which of the following is not a universal defense available against all holders?
A) fraud as to the nature or essential terms of the instrument
B) forgery or lack of authority
C) fraud in the inducement
D) duress depriving control
Q5) Instruments may be negotiated even if it is overdue.
A)True
B)False
31
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Chapter 30: Checks and Funds Transfers
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Q1) Checks that involve amounts of more than $5,000 generally trigger the bank reporting requirements under the USA Patriot Act.
A)True
B)False
Q2) A check may be certified by a bank upon the request of the drawer or the holder.
A)True
B)False
Q3) To be effective,checks must be executed on forms that are printed expressly for that purpose and issued by a bank or other financial institution.
A)True
B)False
Q4) Funds transfers made by businesses are governed by __________ regulations.
A) UCC
B) Federal Reserve
C) UCC and Federal Reserve
D) neither UCC nor Federal Reserve
Q5) A notice of dishonor may be oral,written or electronic.
A)True
B)False
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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) Under an indemnity contract,one person pays another consideration in return for a promise to pay a specified sum of money in the event that a specified loss is suffered.
A)True
B)False
Q3) Subrogation is an agreement that a party shall not be liable for loss.
A)True
B)False
Q4) Sureties have no rights or remedies to protect them from loss or breach of contract.
A)True
B)False
Q5) A surety is liable from the moment the principal is in default.
A)True
B)False
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Chapter 32: Consumer Protection
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Q1) What is not a correct statement concerning the Fair Debt Collection Practices Act?
A) It prohibits improper practices in the collection of consumer debts.
B) It applies to original creditors who are collecting from original debtors.
C) The validity of the debt is not a defense.
D) Violators are liable to debtors for damages.
Q2) The types of provisions that make contracts unconscionable include clauses that award excessive damages or the application of credit payments across purchases over time so that the consumer is never able to pay off any goods.
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) Corrective advertising required by the FTC also is called retroactive advertising. A)True
B)False
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Chapter 33: Secured Transactions in Personal Property
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Q1) If two creditors have a security interest in the same collateral,their priority is determined according to the "last in-first out" provision.
A)True
B)False
Q2) Secured transactions are governed by Article 2 of the Uniform Commercial Code.
A)True
B)False
Q3) Creditors cannot legally request collateral on a previously unsecured loan.
A)True
B)False
Q4) A(n)__________ statement is a document,which may be requested by a paid-up debtor,stating that a security interest is no longer claimed under the specified financing statement.
A) execution
B) discharge
C) termination
D) hold harmless
Q5) Property that is subject to a security interest is called collateral.
A)True
B)False
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Chapter 34: Bankruptcy
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Q1) The filing of a voluntary,but not an involuntary,petition operates as an automatic stay.
A)True
B)False
Q2) The ______ is merely a comparison of assets to liabilities without considering whether the debtor will be able to meet future obligations as they become due.
A) Cost of living test.
B) Preferential transfer test.
C) Balance sheet test.
D) Means test.
Q3) Certain transfers of property by the debtor to a creditor within 90 days of filing may be set aside by the bankruptcy trustee as __________ transfers,and the transferred property recovered by the trustee.
A) predetermined
B) preternatural
C) preordained
D) preferential
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Chapter 35: Insurance
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Q1) If a provision in an insurance policy is ambiguous:
A) it is interpreted in favor of the insurer because the insured could have rejected the policy.
B) it is interpreted against the insurer.
C) parol evidence is admitted to show what was intended.
D) the policy is declared void and the insurer is required to return all premiums to the insured.
Q2) What type of insurance is written for a specified number of years and terminates at the end of that period?
A) term insurance
B) whole life insurance
C) endowment insurance
D) universal insurance
Q3) The fact that a partnership is terminated after a life insurance policy is obtained by one partner on another invalidates the policy.
A)True
B)False
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Chapter 36: Agency
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Q1) The scope of an agent's authority is always known by the third party.
A)True
B)False
Q2) The scope of an agent's authority may be determined from all of the following except: ______.
A) express words of the principal.
B) actions of the principal.
C) customs of the trade or business.
D) consideration paid to agent
Q3) A general agent is authorized by the principal to do all acts that can be delegated lawfully to a representative.
A)True
B)False
Q4) The acts of the agent obligate the principal to third persons and give the principal rights against third persons.
A)True
B)False
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Chapter 37: Third Persons in Agency
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Q1) Parol evidence is allowed to show whether an agent has signed in a representative or an individual capacity.
A)True
B)False
Q2) Different rules of law govern the vicarious liability of principals and employers.
A)True
B)False
Q3) Tom Creighton hired Destroy,Inc.,a demolition company,to level an old building on a busy downtown lot.Destroy,Inc.was given full rein to decide on the amount of explosives needed and the placement of the charges.Security for the site on the day of the explosion was contracted out to a private security firm.When the appointed day arrived,the building was brought down.However,the building fell in a slightly different direction than that anticipated by Destroy,Inc.Numerous pieces of adjoining property,both real and personal,were severely damaged.Creighton claims that the use of an independent contractor such as Destroy,Inc.has insulated him from liability.How do you respond to Creighton's claim?
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Chapter 38: Regulation of Employment
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Q1) ERISA establishes an insurance plan to protect employees when the employer goes out of business.To provide this protection,the statute created a: ______.
A) Pension surety system.
B) Pension Benefit Guaranty Corporation.
C) Pension Accrual Compensation System.
D) bond system of payment.
Q2) An employee differs from an agent,who can make contracts with third persons on behalf of a principal.
A)True
B)False
Q3) In older cases,the employment relationship was called the______ relationship.
A) principal-agent.
B) employer-employee.
C) boss-worker.
D) master-servant.
Q4) The Dodd-Frank Act offers no whistleblower protection to employees who would seek to provide information to the SEC or Congress.
A)True
B)False
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Chapter 39: Equal Employment Opportunity Law
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Q1) Cameo Industries desired a workplace free from all forms of sexual harassment.Accordingly,Cameo developed guidelines for its workers that specifically forbade sexual harassment.The guidelines gave examples of conduct that would not be tolerated,provided penalties,designated a company official as the proper person to whom complaints should be brought,investigated complaints thoroughly,and maintained an educational policy designed to remind employees of the policy.?Maureen,a Cameo Industries employee,made a complaint of sexual harassment,charging that her supervisor had demanded sexual favors.An investigation was performed and the charge was substantiated.The supervisor was warned not to continue this conduct,but it happened again.The supervisor was again issued a warning.Finally,Maureen brought a court action against the supervisor and Cameo.Cameo defended on the ground that it had done all in its power to rectify the situation.Decide.
Q2) The ADEA forbids discrimination by employers,unions,and employment agencies against persons:
A) over 40 years of age.
B) over 50 years of age.
C) over 60 years of age.
D) between the ages of 40 and 65.
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Chapter 40: Types of Business Organizations
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Q1) A business that complies with FTC franchise requirements meets all of the following criteria except: ______.
A) the franchisor must promise to provide a trademark or other commercial symbol.
B) the franchisor must promise to exercise significant control or provide significant assistance in the operation of the business; any current and past litigation against the franchisor.
C) the franchise must require a minimum payment of at least $540 during the first six months of operations.
D) the franchise must require a minimum payment of at least $5,400 during the first six months of operations.
Q2) A joint venture manufacturing agreement gives the manufacturer authority to manufacture products under a proprietary trademark.
A)True
B)False
Q3) A franchisee cannot be a corporation.
A)True
B)False
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Chapter 41: Partnerships
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Q1) When a partnership is dissolved by the act of a partner,notice: A) is not required.
B) must be given to the other partners only.
C) must be given to third persons only.
D) must be given to both other partners and third persons.
Q2) Theo,a member of TGI partnership,withdrew from the partnership and duly notified the other members.The firm was an at-will partnership and the parties parted amicably,posting a notice in the local newspaper of the dissolution of their firm.Cosmo,a customer who had conducted business with Theo several times,did not see the newspaper notice and was not informed of the dissolution.Later,Theo approached Cosmo concerning a transaction similar to those Cosmo had engaged in before with Theo acting on behalf of TGI.Cosmo placed an order,gave a substantial down payment to Theo,and received a receipt on TGI stationery from him.Theo thereafter absconded with the down payment,and TGI failed to honor the contract.Cosmo sued the other members of TGI partnership.Discuss their potential liability.
Q3) Under the UPA,partners hold title to firm property by tenancy in partnership.
A)True
B)False
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Chapter 42: LPs, LLCs, and LLPs
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Q1) Like a general partnership,LLC's are dissolved by all of the following situations except:
A) by the consent of the members.
B) upon the death of a member.
C) upon the expulsion of a member.
D) when a derivative suit is filed.
Q2) If a limited partnership certificate is never filed,all partners are treated as general partners.
A)True
B)False
Q3) Owners of an LLC are known as shareholders.
A)True
B)False
Q4) A limited partnership can be formed by one (1)or more __________ partners and one (1)or more __________ partners.
A) unreserved; reserved
B) active; silent
C) licensed; unlicensed
D) general; limited
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Chapter 43: Corporate Formation
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Q1) A corporation may be judicially dissolved when its management is deadlocked and the deadlock cannot be broken by the shareholders.
A)True
B)False
Q2) The corporate form of business continues regardless of changes in stock ownership.
A)True
B)False
Q3) An enterprise that conducts business following a merger or consolidation succeeds to all of the following except: ______.
A) all of the rights of the predecessor.
B) all of the property of the predecessor.
C) all of the debts and liabilities of the predecessor.
D) all of the management team of the predecessor.
Q4) A merger is subject to antitrust law,while a corporate consolidation is not.
A)True
B)False
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Chapter 44: Shareholder Rights in Corporations
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Q1) A shareholder has: ______.
A) an absolute right to dividends.
B) a right to dividends when declared.
C) a right to insist that dividends be declared.
D) to share equally all dividends with fellow shareholders.
Q2) Ownership of shares of stock may be transferred by any of the following methods except: ______.
A) delivery of the stock endorsed by its owner in blank.
B) delivery of a notice of intent to transfer.
C) delivery of the stock endorsed by its owner to a specified person.
D) delivery of the certificate and a separate power of attorney executed by the owner.
Q3) Voting trusts are usually illegal.
A)True
B)False
Q4) A contract for the sale of shares must be evidenced in writing the revised Article 8 does away with the Statute of Frauds.
A)True
B)False
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Chapter 45: Securities Regulation
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Q1) State blue sky laws typically deal with fraud and licensing.
A)True
B)False
Q2) A __________ insider is someone retained by the corporation for professional services,such as an attorney,accountant,or investment banker.
A) professional
B) corporate
C) temporary
D) virtual
Q3) An individual who receives information from an insider or temporary insider is called a:
A) tippee.
B) tipper.
C) de facto insider.
D) virtual insider.
Q4) The SEC requires that annual shareholder reports be submitted to shareholders in any proxy solicitation on behalf of management.
A)True
B)False
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Chapter 46: Accountants' Liability and Malpractice
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Q1) When an accountant negligently prepares a financial statement knowing that the client intends to use it in obtaining a loan from a bank,the accountant will be liable to whichever lender actually makes the loan under the __________rule.
A) known user
B) contact
C) foreseeable user.
D) privity
Q2) Courts generally impose liability on the accountant when a total stranger gets possession of the accountant's work and then sustains a loss because of a false statement in the work.
A)True
B)False
Q3) Sara and Sally rely on the statements of Alice,an accountant.In a lawsuit brought by Sara and Sally against Alice for fraud,Alice seeks to avoid liability based on the fact that neither Sara nor Sally was in privity of contract with Alice.Alice knew Sara might rely on the financial information provided,but Alice did not know of Sally or anyone in her position.Can Sara and Sally recover against Alice?
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Chapter 47: Management of Corporations
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Q1) To prevent conflicts of interest and covert compensation schemes,the Sarbanes-Oxley Act prohibits all loans either directly or indirectly to directors and executive officers by their corporations.
A)True
B)False
Q2) Extraordinary matters requiring shareholder votes include all of the following except: ______.
A) sale of corporate assets outside the regular course of business.
B) amendment of bylaws.
C) corporate mergers.
D) corporate dissolution.
Q3) Absent a showing of fraud,generally courts will not 'second guess' directors' right to manage the company.
A)True
B)False
Q4) A corporation itself may be convicted of a criminal offense if its agent committed the offense acting within the scope of the agent's authority.
A)True
B)False
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Chapter 48: Real Property
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Q1) Machinery and equipment that is movable is ordinarily held not to be fixtures even though it is necessary to unbolt them from the floor or disconnect electrical wires.
A)True
B)False
Q2) Tucker and Hankey were adjoining property owners.Tucker claimed that the fence separating their properties was not located properly and that it should be moved back onto Hankey's land.Hankey claimed that he owned the strip between the fence and the alleged boundary line by adverse possession.He proved that for forty (40)years there had been on the strip in question a barn with a cement floor,which had been built by the person from whom he purchased his land,and that he had been told by the former owner that the fence was the boundary line.The fence consisted of five-foot-high barbed wire set in cement.Did Hankey own the strip by adverse possession?
Q3) A landowner is not under any duty to warn of dangers or to make the premises safe to protect the trespasser from harm.
A)True
B)False
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Chapter 49: Environmental Law and Land Use Controls
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Q1) If any uncertainty exists in the interpretation of a restrictive covenant,the covenant will be construed strictly in favor of the free use of the land.
A)True
B)False
Q2) The primary federal agency responsible for federal environmental laws is the EPA.
A)True
B)False
Q3) A(n)__________ may prevent the landowner from use of the land.
A) eminent domain restriction
B) nonconforming use
C) variance restriction
D) zoning restriction
Q4) If a restrictive covenant is valid,it binds only the original grantee in the deed that created the covenant.
A)True
B)False
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Chapter 50: Leases
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Q1) Under the growing minority rule,if a tenant abandons the premise before the expiration of the lease a landlord has no duty to mitigate damages and find another tenant.
A)True
B)False
Q2) The lessor has the right to the exclusive possession of the premises during the term of the lease.
A)True
B)False
Q3) The assignment of a lease discharges the original tenant from the duty to pay rent. A)True
B)False
Q4) A tenancy for years terminates at the expiration of the specified term,regardless of whether one party gives the other any notice of termination.
A)True B)False
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Page 52
Chapter 51: Decedents' Estates and Trusts
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Q1) Being 18 years of age automatically means one has testamentary capacity.
A)True
B)False
Q2) An individual who desires to make provisions that will be effective only on her death is said to have: _______.
A) probationary intent.
B) a prejudicial interest.
C) testamentary intent.
D) attestation intent.
Q3) A will is very informal and may be created in any reasonable manner.
A)True
B)False
Q4) A written will must be signed by the testator at the bottom or end of the will.
A)True
B)False
Q5) A bequest of a pearl necklace is a: __________.
A) general legacy.
B) specific legacy.
C) specific ademption.
D) residuary ademption.
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