Legal Aspects of Business Test Preparation
Course Introduction
Legal Aspects of Business is an essential course that introduces students to the key legal frameworks governing business operations. It covers fundamental concepts such as contracts, agency, partnership, company law, sale of goods, intellectual property rights, and consumer protection. The course examines how laws and regulations affect businesses day-to-day activities and decision-making processes, emphasizing risk management, compliance, and ethical considerations. By analyzing relevant case studies and statutes, students gain practical insights into legal problem-solving and are equipped to identify potential legal issues in various business scenarios.
Recommended Textbook
Business Law 7th Edition by
Henry R. Cheeseman
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54 Chapters
4195 Verified Questions
4195 Flashcards
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Chapter 1: Legal Heritage and the Information Age
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71 Verified Questions
71 Flashcards
Source URL: https://quizplus.com/quiz/11749
Sample Questions
Q1) There has been much talk in recent years of eliminating the so-called "marriage penalty" in the tax code.This "penalty" actually consists of many different provisions,each of which results in a married couple paying greater taxes than the same two people would pay if both were single.How might the changing norms of society justify the elimination of these provisions,even though they have long been part of the tax code?
Answer: Because it is less expensive for two people to share a household than for those same two people to maintain separate households,the tax law incorporated numerous provisions providing smaller deductions or higher tax rates for married couples.One argument for eliminating the marriage penalty is that society has changed.In the past,very few couples would share a household without getting married,thus marital status was a determinant of whether people lived together and enjoyed the lower living expenses of living under one roof.In other words,if you were not married,then you must have been supporting a household with only one income.Because many couples living together today are not married,marital status is not as much of a determinant whether two persons are supporting one household or two,and thus,proponents say,not a justification for taxation differences.Thus today,many single people are living together as couples without getting married,and many people argue that a decision by these persons to marry should not increase their tax burden.
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Page 3
Chapter 2: Court Systems and Jurisdiction
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52 Verified Questions
52 Flashcards
Source URL: https://quizplus.com/quiz/11750
Sample Questions
Q1) A motion for a change of venue would typically be granted where:
A) a court does not have personal jurisdiction over the plaintiff
B) selection of an impartial jury is unlikely at the original venue location
C) the party losing a case would like a retrial in another location
D) the judge committed errors in a trial
E) the plaintiff but not the defendant requests it
Answer: B
Q2) Which of the following is generally true about federal appellate court proceedings?
A) The appeals can come only from a U.S. district court.
B) New evidence can be introduced,so long as it relates to the evidence introduced in the original trial.
C) Appeals are usually heard by a three-judge panel rather than by all the judges of the court.
D) To avoid being improperly influenced by the lower court decision,the appellate court must make its own decision on the case without knowing the outcome in the original trial.
Answer: C
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Chapter 3: Judicial, Alternative, and Online Dispute Resolution
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82 Verified Questions
82 Flashcards
Source URL: https://quizplus.com/quiz/11751
Sample Questions
Q1) Which of the following pleadings could typically be filed by a defendant in a lawsuit?
A) answer and complaint
B) complaint and cross-complaint
C) motion to intervene and complaint
D) answer and cross-complaint
E) cross-complaint and reply
Answer: D
Q2) In a civil case,the judge may not reduce the amount of monetary damages awarded by the jury.
A)True
B)False Answer: False
Q3) If a plaintiff is injured in an auto accident and is seeking damages for physical injury,a court can order that party to submit to a physical examination to determine the extent of his or her injuries.
A)True
B)False Answer: True
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Chapter 4: Constitutional Law for Business and
E-Commerce
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71 Verified Questions
71 Flashcards
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Sample Questions
Q1) Assume that there are numerous Internet service providers in a large city.Because of fierce competition,these businesses advertise heavily.One of the features that some of them provide and advertise is streamlined access to pornography sites as well as proprietary pornography sites that can be accessed only by those who subscribe with that particular service provider.This city passes an ordinance that prohibits any advertising about being able to access pornography over the Internet.One of the service providers challenges the constitutionality of this statute.Discuss how the case would turn out.
Q2) The Privileges and Immunities Clause provides which of the following?
A) It is a privilege to be granted immunity from a criminal prosecution.
B) States must generally treat nonresidents as favorably as residents.
C) Corporations receive most of the same constitutional protections as individuals.
D) The government is not subject to being sued unless the constitutional matter is a right rather than a privilege.
E) An individual has the privilege of practicing any religion,and is immune from any government interference with that right.
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6
Chapter 5: Intentional Torts and Negligence
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65 Verified Questions
65 Flashcards
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Sample Questions
Q1) Intentional infliction of emotional distress requires that the conduct be outrageous.
A)True
B)False
Q2) How is false imprisonment defined?
A) being held in jail when no formal charges have been filed
B) the intentional confinement or restraint of another without authority of justification and without that person's consent
C) the holding in prison of one who was convicted of a crime that the person did not commit
D) a confinement caused when one accidentally causes another to be confined without that person's consent
Q3) The doctrine that shifts the burden of proof from the plaintiff to the defendant is:
A) negligence per se
B) res ipsa loquitur
C) apparent negligence
D) Good Samaritan
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Chapter 6: Strict Liability and Product Liability
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Sample Questions
Q1) Strict liability would not apply to the sale of blood required for a blood transfusion.
A)True
B)False
Q2) Which of the following could not give rise to a strict liability in tort action for products liability?
A) buying a new car from a Genard Motors dealer
B) buying food at a Joke-in-the-Box restaurant
C) buying a prescription which was filled in a drug store
D) buying legal services for the drafting of a will
Q3) In order for the government contractor defense to apply,the following must be present except:
A) the government set precise specifications for the product
B) the product conformed to the government specification
C) the contractor warned the government of any known defects or dangers
D) the contractor presented the government with a proposed safer design for the product
E) all four of the above must be proven in order for the defense to apply
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Chapter 7: Intellectual Property and Cyber Piracy
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76 Verified Questions
76 Flashcards
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Sample Questions
Q1) Life forms may be patented under U.S.patent law.
A)True
B)False
Q2) A trademark can be registered even before it is actually used in commerce so long as the registrant verifies a bona fide intention to use the mark in commerce and actually does so within 6 months.
A)True
B)False
Q3) When can an ordinary word such as "window" be granted trademark protection?
A) In any situation if the applicant is the first to apply for trademark protection of that word.
B) If the applicant can prove that the use of the word is novel.
C) If the word has acquired a secondary meaning.
D) If the applicant has used the word in the name of its product for at least 10 years.
E) If the word has become a generic term.
Q4) Customer lists and compilations of data are among items considered to be trade secrets.
A)True
B)False
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Chapter 8: Criminal Law and Cyber Crimes
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86 Verified Questions
86 Flashcards
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Sample Questions
Q1) Which of the following is true?
A) Some states now group the crimes of robbery,burglary,and larceny as theft.
B) Some states now group the crimes of robbery,burglary,and theft as larceny.
C) Some states now group the crimes of burglary,theft,and larceny as robbery.
D) Some states now group the crimes of robbery,larceny,and theft as burglary.
Q2) Mens rea is the same as evil intent.
A)True
B)False
Q3) To prove a pattern of racketeering under RICO,at least ________ predicate act(s)must be committed by a defendant within a 10-year period.
A) one
B) two
C) three
D) five
Q4) A person charged with a crime in the United States is presumed innocent until proven guilty.
A)True
B)False
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Chapter 9: Nature of Traditional and E-Contracts
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Sample Questions
Q1) Tim and his boss conspire by contract to cheat the IRS out of money.The boss later changes her mind.What is the status of the contract with respect to Tim?
A) It is a valid contract.
B) It is a void contract.
C) It is a voidable contract.
D) It is a unenforceable contract.
Q2) Which of the following is an equitable doctrine designed to prevent unjust enrichment and unjust detriment where no contract exists?
A) an express contract
B) the doctrine of formal contracts
C) implied-in-law contract
D) quantum meruit
Q3) There is some variation in contract law from state to state.
A)True
B)False
Q4) Under the objective theory of contracts it is possible that one can be in a contract against his/her will.What are the advantages of the objective theory of contract formation?
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Chapter 10: Agreement
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85 Verified Questions
85 Flashcards
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Sample Questions
Q1) Which of the following is correct regarding a "counteroffer?"
A) It is no different from any other offer.
B) It is not really an offer,but operates as the revocation of an offer.
C) It operates as both an offer and an acceptance.
D) It is treated as both a rejection of an offer and a new offer.
E) It is treated as a new offer,but does not terminate the original offer.
Q2) Under the mailbox rule there is a period of time when the offeror may be in a contract and not be aware of it.If the rule were changed such that acceptances were effective upon receipt,would this eliminate the problem of someone being in a contract without being aware of it? Is there any rule or set of rules that will eliminate the problem of one party or the other having a period of uncertainty,if all correspondence is conducted through the mail? If either the offeree or offeror must go through a period of uncertainty,which should it be? Why? What can the offeror do to avoid this uncertainty? Is the mailbox becoming more important or less important?
Q3) Generally,advertisements,catalogs,price lists,etc.are not treated as offers.
A)True
B)False
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Chapter 11: Consideration and Promissory Estoppel
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67 Flashcards
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Sample Questions
Q1) Discuss whether the agreements reached in each of the following situations is enforceable.
a.Mark is the owner of A-1 Construction.He agrees to construct an addition to a client's home for a total contract price of $45,000.When the addition is completed,the homeowner complains about the quality of the workmanship and refuses to pay the full contract price.Mark talks to the homeowner and Mark agrees to accept a payment of $43,000 rather than the $45,000 in the original contract.
b.Mark is the owner of A-1 Construction.He agrees to construct an addition to a client's home for a total contract price of $45,000.When the addition is completed,the homeowner says he is short of money and can only pay Mark $43,000 even though he is satisfied with the work.Mark agrees to accept the payment.
Q2) Why does the law not enforce gratuitous promises? Are there some gratuitous promises which the courts should enforce? Which ones? Are there provisions in the law which take care of these situations?
Q3) Something of "legal" value must be given to support a contract.
A)True B)False
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Chapter 12: Capacity and Legality
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90 Verified Questions
90 Flashcards
Source URL: https://quizplus.com/quiz/11760
Sample Questions
Q1) Julie buys an auto from John when she is 17.When she turns 21,Julie decides that she does not want the automobile.The age of majority in Julie's state is 18.Can Julie disaffirm this contract?
A) Yes; all contracts made while a minor may be disaffirmed.
B) Yes; Julie has a "reasonable time" after reaching majority to disaffirm this contract,and she acted within a "reasonable time."
C) No; Julie had a "reasonable time" within which to disaffirm the contract,but a "reasonable time" has passed.
D) No; to disaffirm the contract,Julie must have acted before she turned 18. Now it is too late.
Q2) Which of the following is correct about contracts entered into by insane persons?
A) Contracts entered into by all insane persons are void.
B) Contracts entered into by all insane persons are voidable.
C) Contracts entered into by persons adjudicated insane are void,and those entered into by nonadjudicated insane persons are voidable.
D) Contracts entered into by persons adjudicated insane are voidable,and those entered into by nonadjudicated insane persons are void.
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Chapter 13: Genuineness of Assent and Undue Influence
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79 Flashcards
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Sample Questions
Q1) Neil owned a violin that he wanted to sell and Linda wanted to purchase.Both parties thought the violin to be a rare Stradivarius violin.They agreed on a price of $200,000.Later,it was discovered that the violin was just an ordinary violin,the value of which was only $10,000.Linda sues to recover her money.Discuss whether Linda is entitled to the return of her money or any other remedies.Fully discuss the legal theories involved.
Q2) Martha was selling some land she owned in Florida to Mary.Martha told Mary that there was a golf course and swimming pool in the subdivision as part of the development,and that other improvements would be made soon.Martha knew that none of these improvements existed and none were planned.Mary believed Martha and bought the land for $100,000 when it was really only worth $20,000.Mary learns of the error and sues Martha for fraud.Which of the following statements best describes this situation?
A) Mary cannot recover because the misrepresentation was not of a material fact.
B) Mary cannot recover because she can prove no damages.
C) Mary can rescind the contract because this is an innocent misrepresentation,but Mary cannot collect damages.
D) Mary can rescind or recover damages because this is clearly fraud.
E) Either party can rescind because this is a case of mutual mistake.
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Chapter 14: Statute of Frauds and Equitable Exceptions
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87 Verified Questions
87 Flashcards
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Sample Questions
Q1) For Statute of Frauds purposes,an "interest in land" includes only the land itself and any fixtures attached to the land.
A)True
B)False
Q2) What is the purpose of the parol evidence rule? Would it be better to simply allow all parol evidence in as evidence and leave it up to the jury how much weight to give to the evidence? Would this be better than not allowing the jury to see the evidence at all? What advantages and disadvantages would there be to eliminating the parol evidence rule?
Q3) An oral contract for the sale of land is:
A) void
B) enforceable
C) voidable
D) unenforceable
E) implied
Q4) The Statute of Frauds does not apply to mortgage contracts.
A)True
B)False
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Chapter 15: Third-Party Rights and Discharge
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100 Verified Questions
100 Flashcards
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Sample Questions
Q1) Joe,a well known plastic surgeon decides he would rather be golfing than perform surgery on his patient Missy's nose.As such,he delegates the job a colleague,Frank who is a highly respected foot doctor.Since Joe chose a competent medical profession to do Missy's nose,the delegation is a valid one.
A)True
B)False
Q2) Is the doctrine of commercial impracticability a good doctrine? Or,should the parties to a contract spell out in advance the exact circumstances when performance is excused? Isn't everyone who enters into a contract taking certain chances?
Q3) Someone who owes a duty under a contract is an obligor.
A)True
B)False
Q4) A force majeure clause:
A) prohibits assignment of contract rights
B) creates a third-party beneficiary
C) excuses performance in the event of a natural disaster
D) requires that the performance meet the personal satisfaction of the promisee
E) operates as a delegation of duties
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Page 17
Chapter 16: Remedies for Breach of Traditional and E-Contracts
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82 Verified Questions
82 Flashcards
Source URL: https://quizplus.com/quiz/11764
Sample Questions
Q1) George,an employee,breaches a fixed-term employment contract by quitting before the end of the term.What can his employer,MNO Inc.,recover as damages?
A) nothing,because courts do not order anyone to perform a job against his or her will
B) all amounts already paid to the employee under the contract
C) only amounts paid to the employee for which the employee has not yet done the work
D) the costs of hiring a replacement employee plus any increase in salary paid to the replacement employee
Q2) Why is the general measure of compensatory damages "benefit of the bargain" rather than a measure based on returning the parties to the position that they were in prior to the contract? What do you think is the best approach?
Q3) A liquidated damages provision will be validated if it is considered to be a penalty. A)True B)False
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Chapter 17: Internet Law and E-Commerce
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52 Verified Questions
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Source URL: https://quizplus.com/quiz/11765
Sample Questions
Q1) A printout of a contract negotiated using e-mail is usually not sufficient to meet the requirements of the Statute of Frauds because its source cannot be verified.
A)True
B)False
Q2) In order to obtain a domain name,one must:
A) obtain clearance that the name is not confusingly similar to another name,and pay the appropriate fee
B) apply for the name and,if within the waiting period,there are no objections to the applicant taking the name,pay the appropriate fee
C) verify that the name is not already taken,directly notify parties who might object to obtain their waiver of objection,and pay the appropriate fee
D) verify that the name is not already taken and pay the appropriate fee or,if already taken,negotiate to purchase the name from its current owner
E) apply for the name,state the purpose for which the name will be used,and if the use is approved,pay the appropriate fee
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Chapter 18: Formation of Sales and Lease Contracts
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Sample Questions
Q1) A homeowner orally contracted to buy some custom-made parts that the homeowner will use to build a retaining wall in the homeowner's back yard.The contract price for these materials was $2,000.The buyer refused to take delivery even though the materials were conforming.The seller is unable to sell these parts to anyone else because they were individually designed for the homeowner.In a lawsuit against the homeowner by the seller of the parts,which of the following is true?
A) The UCC would not apply because these goods will become real property when installed by the homeowner.
B) This contract is not enforceable because the price is $500 or more.
C) This contract is not enforceable,assuming that the homeowner is not a merchant in the materials purchased.
D) This contract is fully enforceable even though it is not in writing.
Q2) A sale involving both goods and services is known as a mixed sale.
A)True
B)False
Q3) The UCC applies only to sales between merchants.
A)True
B)False
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Page 20
Chapter 19: Title to Goods and Risk of Loss
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Sample Questions
Q1) If a seller delivers nonconforming goods to a buyer and the buyer rejects them,the risk of loss remains on the seller until either the defect is cured or the buyer accepts the nonconforming goods.
A)True
B)False
Q2) The entrustment rule can have harsh results.Why should the owner not be able to get back the property when it was sold by the merchant with no authorization of the owner? Should the rule be changed? What steps can an entrustor take to minimize the risk of losing the property?
Q3) For goods to be selected from like items in inventory,identification cannot occur until the specific goods for the specific customer are separated or tagged for that customer.
A)True
B)False
Q4) A breach by the buyer will shift the risk of loss to the buyer as soon as the breach occurs if the risk has not already shifted.
A)True
B)False
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Chapter 20: Remedies for Breach of Sales and Lease Contracts
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Sample Questions
Q1) If a party to a contract anticipatorily repudiates a contract,then:
A) that repudiation may not be retracted
B) that repudiation may be retracted under any circumstances
C) that repudiation may be retracted only if the aggrieved party has not changed its position,canceled the contract,or otherwise indicated that the repudiation is final
D) that repudiation may be retracted only with the consent of the other party
Q2) When the goods identified to a contract are totally destroyed through the fault of neither party before risk of loss passes to the buyer,which of the following is true?
A) The contract is void.
B) The seller is obligated to find replacement goods.
C) The contract is voidable by the buyer.
D) The seller is liable to the buyer for damages.
Q3) When goods named in a contract are held by a bailee,tender of delivery occurs when the buyer receives the goods from the bailee.
A)True
B)False
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Page 22
Chapter 21: Sales and Lease Warranties
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Sample Questions
Q1) Elvira went to the local discount store for her weekly shopping,picking up a number of items.Over the next few days,she had problems with several items.She had purchased a combination phone and answering machine,but when she opened the box,she noticed that the one inside was different than the one pictured on the package.The one inside was lacking several features of the one pictured on the box.When she opened a box of crackers to snack on before dinner,they did not look nearly as appetizing as the ones pictured on the box.Also,she prepared some brownies from a mix,but her brownies looked nothing like the ones pictured on the box.Upon closer inspection,she noticed that on the bottom of the box for the phone,it said,"The picture is for illustration purposes only.The picture might show features not included on this particular phone.Please refer to the features list on the side panel for the features on this model." Discuss whether any warranties were breached.
Q2) The implied warranty of merchantability includes a warranty that goods delivered in groups are of a consistent quality.
A)True
B)False
Q3) Written disclaimers must be conspicuously displayed to be valid.
A)True
B)False
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Page 23
Chapter 22: Creation of Negotiable Instruments
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Sample Questions
Q1) Which of the following is not one of the four general types of negotiable instruments?
A) notes
B) drafts
C) certificates of deposit
D) money orders
Q2) A promissory note for the purchase of an automobile qualifies as a negotiable instrument.
A)True
B)False
Q3) Which of the following correctly describes a certificate of deposit?
A) It is a draft that is payable by a bank.
B) It is not considered to be a negotiable instrument.
C) It is a note that is payable on demand.
D) It is a note where the maker is a bank.
Q4) Which of the following is true about drafts?
A) Drafts are two-party paper.
B) A draft must have a bank as the drawee.
C) A draft contains an order to pay.
D) All drafts are payable on demand.
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Chapter 23: Transferability and Holder In Due Course
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Sample Questions
Q1) The advantage of a holder in due course over a simple holder of an instrument is that the holder in due course can:
A) indorse the instrument "without recourse," thus limiting his liability
B) transfer the instrument to others,thus using it as a substitute for money
C) collect on the instrument even if it has been forged
D) collect on the instrument if the maker or drawer asserts a personal defense
E) collect punitive damages from a party who wrongly does not pay a negotiable instrument
Q2) In an assignment,the assignee cannot receive greater rights than those held by the assignor.
A)True
B)False
Q3) A person can become a holder in due course of an instrument that has been altered:
A) in all circumstances
B) in all circumstances so long as the person did not know of the alteration
C) only if the alteration could not reasonably be detected
D) only if the alteration was not done by the person's immediate transferor
E) under no circumstances
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25
Chapter 24: Liability,Defenses and Discharge
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Sample Questions
Q1) An accommodation party can sign:
A) only as maker or drawer
B) only as maker or indorser
C) only as maker,drawer,or indorser
D) only as acceptor or indorser
E) as maker,drawer,indorser,or acceptor
Q2) Marti issues a check payable to the order of John,who indorses the check in blank and transfers the check to Amy,who transfers the check to Bill without indorsement.Bill wishes to cash the check.Which of the following best describes the liabilities of the parties?
A) The drawee bank is primarily liable on the check.
B) At this point,no one is primarily liable on the check.
C) The drawee bank is not primarily liable on the check until it accepts the check.
D) Marti is primarily liable on the check.
E) B and C only are correct.
Q3) Contract liability is another term used to refer to signature liability.
A)True
B)False
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Chapter 25: Checks, the Banking System, and E-Money
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Sample Questions
Q1) Drew makes out a check payable to Bill.Bill alters the amount of the check from $10 to $100,and cashes the check at the local grocery store.The grocery store later cashes the check at the drawee bank,which deducts $100 from Drew's account.Drew learns of the alteration and complains to the bank.Which is true in this situation?
A) The bank must recredit Drew's account for $90.
B) The bank can collect from the grocery store for breach of presentment warranties.
C) The grocery store can collect from Bill for breach of presentment warranties.
D) A,B,and C are true.
E) A and C only are true.
Q2) Notifying a bank within 2 days of discovering a lost debit card limits liability to $50. A)True B)False
Q3) Jenny has a checking account at Intrastate Bank.Jenny loses her checkbook.Richard finds it and forges a check payable to himself.He then indorses it,and properly negotiates it to Yummy Treats Restaurant.Yummy Treats cashes the check at Intrastate.Jenny learns of the forgery and complains to Intrastate.What are the liabilities of each of the parties involved?
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Chapter 26: Creditor's and Debtor's Rights
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Sample Questions
Q1) If the non-recordation of a mortgage or deed of trust does not affect either the legality of the instrument between the mortgagor and the mortgagee or the rights and obligations of the parties,then why bother having a recording statute?
Q2) The right to redeem foreclosed property can extend beyond the date of the foreclosure sale.
A)True
B)False
Q3) Are the various requirements for filing mortgages and other security interests too burdensome on creditors? Do they work too much to the benefit of debtors?
Q4) Which of the following must be recorded in order to gain priority over later security interests in the same parcel of property?
A) deed of trust
B) mortgage
C) both a deed of trust and a mortgage
D) neither a deed of trust nor a mortgage
Q5) Unsecured credit requires collateral to protect the payment of the debt.
A)True
B)False
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Chapter 27: Secured Transactions and Electronic Filing
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98 Verified Questions
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Sample Questions
Q1) Article 9 of the UCC governs secured transactions in personal property.
A)True
B)False
Q2) Generally,if two creditors have perfected security interests in the same collateral,only one of which is a purchase money security interest,which has the superior right (priority),assuming all notice is properly given within the appropriate time periods?
A) the first to perfect
B) the first to attach
C) the purchase money security interest
D) they have equal priority
Q3) What can a lender do to make sure it remains adequately protected when it has a floating lien? What types of collateral are appropriate for a floating lien?
Q4) The filing requirements for security interests can be different in the various states,but the office of the secretary of state and the county clerk's office are often where the filing is to be made.
A)True
B)False
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Chapter 28: Bankruptcy and Reorganization
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Sample Questions
Q1) Which of the following is not part of the fresh start in bankruptcy?
A) protection for debtors from creditors' abusive actions in collecting past debts
B) preventing certain creditors from gaining unfair advantage over other creditors in the collection process
C) protecting creditors from actions by the debtor that would diminish the value of the bankruptcy estate
D) preserving existing business relations
E) preventing the debtor from incurring excessive debt following the discharge in bankruptcy
Q2) One advantage of the Bankruptcy Reform Act of 2005 is that it decreased the number of bankruptcy judges to handle bankruptcy cases,as the number of overall bankruptcy cases has decreased.
A)True
B)False
Q3) An unmatured life insurance policy owned by the debtor is exempt from the bankruptcy estate.
A)True
B)False
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Chapter 29: Agency Formation and Termination
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Sample Questions
Q1) Agnes is an agent for Pepe for maintaining Pepe's antique car collection,including the sale and purchase of antique cars.Agnes has had this position for several years,but recently Agnes has developed a cocaine habit.She recently sold one of Pepe's cars and kept some of the money herself to buy some cocaine.Soon thereafter,Agnes was declared bankrupt.The state then notified Agnes that she had sold the maximum allowable number of cars in a year without getting a dealer's license.Shortly thereafter,Pepe was on a secluded island and died,which no one knew about until 2 weeks later.Discuss the effect of these events on the existence of the agency.
Q2) The bankruptcy of which party or parties will cause an agency to terminate?
A) the principal only
B) the agent only
C) either the principal or the agent
D) neither the principal nor the agent
Q3) An agent who has negligently failed to perform as per the agency contract is liable only for breach of contract.
A)True
B)False
Q4) Why is capacity required for the principal,but not for the agent?
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Page 31
Chapter 30: Liability of Principals, Agents, and Independent Contractors
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Sample Questions
Q1) Billy owns a bike shop in a coastal California town.His shop sells and repairs bikes.One of his employees was repairing a bike with one of those pesky intermittent problems that would never occur when the repair technician was around.The customer said that the gears periodically would not shift properly.The employee took the bike out for a test ride hoping to replicate the problem.The problem did not appear.Because it was approaching noon,the employee decided to ride the bike home to have lunch.On the way back to the shop,the employee hit a small child and injured her.Discuss the liability of the employee and Billy's bike shop for the injuries to the child.
Q2) An agent has been hired to buy land for the principal for use as a factory site.The agent finds a good parcel for the purpose,and proposes it for purchase to the principal.The principal declines to purchase the property because it is too far from the interstate highway.The agent then buys this land for himself as an investment.What,if anything,has the agent done wrong?
A) usurped an opportunity
B) nothing
C) engaged in self-dealing
D) competed with the principal
E) misused confidential information
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Chapter 31: Employment,Worker Protection,and Immigration Laws
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Sample Questions
Q1) The Employee Retirement Income Security Act allows up to 25 percent of a retirement plan's assets to be invested in the securities of the sponsoring employer.
A)True
B)False
Q2) Susan begins work for a large employer on December 1st.She works an average of 50 hours per week for 40 weeks,and then has her hours reduced to 40 hours per week for the next 4 weeks,and reduced further the 30 hours per week during the next 4 week period.She has a family emergency and informs her supervisor that she must take time off to care for a sick child.If the illness is legitimate,must the employer provide leave under the Family Medical Leave Act?
A) No. She did not work the requisite number of hours to entitle her to protection under the FMLA.
B) No. She worked the proper number of hours,but not for the proper length of time,to entitle her to protection under the FMLA.
C) No. Sick children are not a legitimate reason for leave under the provisions of the FMLA.
D) Yes. She is entitled to leave under the FMLA.
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Page 33
Chapter 32: Labor Law and Collective Bargaining
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81 Verified Questions
81 Flashcards
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Sample Questions
Q1) A strike action must be ratified by a majority of the union workers.
A)True
B)False
Q2) Under an agency shop agreement,employees who are not union members are required to pay an agency fee to the union.
A)True
B)False
Q3) Employers and unions are required to negotiate in good faith.
A)True
B)False
Q4) The approximate percentage of private sector wage and salary workers who belong to a union today is:
A) 7
B) 10
C) 26
D) 34
E) 52
Q5) What practical problems are there with the notice requirements of the Plant Closing Act?
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Chapter 33: Equal Opportunity in Employment
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87 Verified Questions
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Sample Questions
Q1) The Civil Rights Act of 1964 protects against discrimination based on:
A) sex
B) sexual preference
C) both sex and sexual preference
D) neither sex nor sexual preference
Q2) If a party has presented a complaint to the Equal Employment Opportunity Commission about alleged discrimination in violation of the Civil Rights Act of 1964,and the EEOC decides not to bring a suit on behalf of the employee,the EEOC will issue a(n):
A) order of dismissal of the complaint
B) notice of the complainant's right to appeal to the appropriate court of appeals
C) judgment in the employer's favor
D) injunction to prevent the illegal behavior in the future
E) right to sue letter
Q3) Same-sex discrimination does not violate Title VII.
A)True
B)False
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Page 35
Chapter 34: Small Businesses, Entrepreneurs, and General Partnerships
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Sample Questions
Q1) A large business can be operated as a sole proprietorship.
A)True
B)False
Q2) A partnership with a fixed duration is called a partnership at will.
A)True
B)False
Q3) Patty owned a sole proprietorship.She had four salespersons selling the company's products.One of her salespersons made false statements about a competitor's products while trying to sell Patty's products.The competitor sues Patty's business and wins the lawsuit.Under what circumstances could Patty be personally responsible to pay the judgment?
A) none,because this was a debt of the business
B) if Patty was separately named in the lawsuit
C) if Patty knew about the salesperson's activities
D) if the salesperson's activities were part of a continuing pattern rather than an isolated incident
E) Patty is liable here regardless of any other circumstances.
Q4) It is difficult to transfer or sell a sole proprietorship.
A)True
B)False
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Chapter 35: Limited Partnerships and Limited Liability
Limited Partnerships
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Sample Questions
Q1) Which of the following are two names for the same item?
A) certificate of limited partnership and offering circular
B) certificate of limited partnership and limited partnership agreement
C) limited partnership agreement and articles of limited partnership
D) offering circular and articles of limited partnership
E) certificate of limited partnership and articles of limited partnership
Q2) What is the effect of a limited partner making a personal guarantee on behalf of a limited partnership of which the guarantor is a limited partner?
A) It results in the limited partner being treated as a general partner for liability purposes.
B) The guarantee is void because it goes against the nature of limited liability.
C) The guarantee would be born by the general partners because they have unlimited liability.
D) The limited partner will be held liable on the guarantee up to the amount of his investment in the limited partnership.
E) The limited partner will be liable under the terms of the guarantee,but will otherwise continue to be treated as a limited partner.
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Chapter 36: Corporate Formation and Financing
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Sample Questions
Q1) Nonprofit corporations can be formed only for certain purposes.
A)True
B)False
Q2) The procedure for incorporating a corporation is the same in every state.
A)True
B)False
Q3) Park districts may be formed as corporations.
A)True
B)False
Q4) A corporation formed for scientific purposes would be a profit corporation.
A)True
B)False
Q5) Shareholders are elected by the board of directors so that they can make policy decisions.
A)True
B)False
Q6) Termination only occurs after the winding up of the corporation's affairs.
A)True
B)False
Page 38
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Chapter 37: Corporate Governance and the Sarbanes
Oxley Act
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101 Verified Questions
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Sample Questions
Q1) The election of directors of the corporation may be held by electronic transmission. A)True
B)False
Q2) Which of the following is correct regarding the business judgment rule?
A) Directors and officers have an obligation to exercise sound business judgment,and any failure to do so is per se negligence that results in liability to the corporation.
B) Directors and officers have an obligation to exercise sound business judgment,and any failure to do so results in a rebuttable presumption of negligence.
C) Directors and officers are never liable in suits filed against them by shareholders.
D) Directors and officers are not liable for honest mistakes of judgment.
E) Directors and officers are liable for gross negligence,but not for ordinary negligence.
Q3) Shareholders have absolute liability for the debts and obligations of the corporation. A)True
B)False
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Chapter 38: Corporate Acquisitions and Multinational Corporations
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Sample Questions
Q1) In order to exercise the appraisal right where a shareholder is opposed to a merger,the shareholder must:
A) give the corporation notice of demanding cash payment for the shares,with the notice given prior to the vote on the matter
B) notify the corporation of the amount that the shareholder is demanding as cash payment for the shares
C) not vote in favor of the proposed merger
D) A and C only
Q2) In recent years shareholders have increasingly attempted to use shareholders' meetings as a forum to encourage corporations to operate in accordance with the views of one or some shareholders with respect to various policy issues.Common examples include environmental issues and human rights issues,especially for corporations with operations in other nations.Is this a proper forum for this particular type of activity? What are the arguments on each side of the issue? What other methods could these shareholders use to promote the viewpoints on these issues?
Q3) When proxies are solicited,each issue must be able to be voted on separately.
A)True
B)False
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Chapter 39: Limited Liability Companies and Limited
Liability Partnerships
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Sample Questions
Q1) Where a disassociating member of an LLC is entitled to payment for her interest,she is entitled to fair market value even if the operating agreement provides otherwise.
A)True
B)False
Q2) In a member-managed LLC,all members have agency authority to bind the LLC to contracts.
A)True
B)False
Q3) A non-manager member of an LLC is entitled to remuneration for services performed for the LLC including the winding up of the business of the LLC.
A)True
B)False
Q4) A member's distributional interest in an LLC is personal property.
A)True B)False
Q5) The name of an LLC must indicate in some fashion that it is an LLC.
A)True
B)False
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Chapter 40: Franchises and Special Forms of Business
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Sample Questions
Q1) Joint ventures are usually formed to pursue ongoing business operations rather than to focus on a single project or transaction.
A)True
B)False
Q2) Franchisors are never the owners of product formulas.
A)True
B)False
Q3) Mike is considering opening a barbecue restaurant.He can either design his own,or obtain a franchise for a "Bubba's Roadkill Barbecue House," which does not actually serve roadkill.What factors should Mike consider in deciding which course of action to take?
Q4) A franchisee is also a licensee.
A)True
B)False
Q5) Franchisors are not permitted to make sales projections to hypothetical franchisees. A)True
B)False
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42
Chapter 41: Investor Protection and Online Securities Transactions
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Sample Questions
Q1) Spruce,Inc.wishes to issue new stock to raise capital.Spruce is incorporated,and does all its business in Indiana.Spruce intends to offer and sell its new stock only to residents of Indiana,and to restrict sales to individuals from other states for the proper time.Which of the following best describes the status of Spruce's new stock?
A) This transaction is exempt as an intrastate offering.
B) This transaction is exempt as an intrastate offering,but only if Spruce sells only to accredited investors.
C) This transaction is exempt as an intrastate offering,but only if Spruce issues less than $1.5 million in securities.
D) This transaction is exempt as a private placement.
E) Since the securities are traded only in intrastate commerce,the securities themselves are exempt.
Q2) The private placement exception to registration of securities allows raising an unlimited amount of capital from an unlimited number of accredited investors.
A)True
B)False
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Page 43
Chapter 42: Ethics and Social Responsibility of Business
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Sample Questions
Q1) Under the maximizing profits theory of the social responsibility of business,it is improper for a business to undertake charitable acts for the benefit of society if doing so reduces profits.
A)True
B)False
Q2) The corporate citizenship theory of social responsibility argues that businesses have the responsibility to do good for society.
A)True
B)False
Q3) Which of the theories of the social responsibility of business includes obligations of a business to parties other than shareholders?
A) corporate citizenship only
B) stakeholder interest only
C) stakeholder interest and corporate citizenship
D) moral minimum and stakeholder interest
E) moral minimum,stakeholder interest,and maximizing profits
Q4) Social audits have recently become mandatory for publicly traded corporations.
A)True
B)False
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Chapter 43: Administrative Law and Regulatory Agencies
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Sample Questions
Q1) It is unconstitutional for an administrative agency to act beyond its specifically delegated powers.
A)True
B)False
Q2) The Government in the Sunshine Act opens most federal administrative agency meetings to the public.
A)True
B)False
Q3) Which of the following statutes allows a party to recover attorney's fees from an agency if that agency has engaged in outrageous conduct in connection with an agency action?
A) the Freedom of Information Act
B) the Government in the Sunshine Act
C) the Administrative Procedure Act
D) the Equal Access to Justice
E) the Privacy Act
Q4) Administrative agencies may not issue subpoenas.
A)True
B)False
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Chapter 44: Consumer Protection and Product Safety
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Sample Questions
Q1) Under the federal rules regulating food and drugs,which of the following is true?
A) Food must be pure 100 percent before it can be sold to consumers.
B) Food may contain certain impurities,such as insect parts,as long as it is not adulterated.
C) If a food contains impurities,such as insect parts,these impurities must be disclosed on the food label.
D) All food must be inspected by the government before it is sold.
E) Food labels must contain a notice that all impurities cannot be eliminated.
Q2) Regulations under the Nutrition Labeling and Education Act require food processors to establish standard definitions for light,low fat,natural,and other routinely used terms. A)True
B)False
Q3) A private party may not sue to prevent violations of the CPSC rules and regulations. A)True
B)False
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Chapter 45: Environmental Protection and Global Warming
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Sample Questions
Q1) Which of the following is true about the Clean Air Act?
A) Congress set national ambient air quality standards for a number of pollutants.
B) Congress set goals,but not standards for a number of pollutants.
C) Congress directed the EPA to set ambient air quality standards for certain pollutants,but the EPA has not yet set the standards due to scientific uncertainty.
D) Congress directed the EPA to set ambient air quality standards for certain pollutants,and standards have been set thus far for carbon monoxide and sulfur oxide,among others.
E) Congress ordered the states to set ambient air quality standards,and most states have thus far set at least some ambient air quality standards.
Q2) The federal government is primarily responsible for enforcing the Safe Water Drinking Act.
A)True
B)False
Q3) Congress set national ambient air quality standards in the Clean Air Act.
A)True
B)False
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Chapter 46: Antitrust Law and Unfair Trade Practices
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Sample Questions
Q1) If a textbook publisher acquired a paper mill,it would be a backward vertical merger.
A)True
B)False
Q2) Antitrust laws apply to which of the following?
A) labor unions
B) professional football
C) professional baseball
D) agricultural cooperatives
E) All of these are correct.
Q3) Under Section 2 of the Sherman Act,possession of monopoly power is wrongful regardless of how the monopoly power was obtained.
A)True
B)False
Q4) Plaintiffs often argue for a narrow definition of the defendant's product or service market.
A)True
B)False
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Chapter 47: Personal Property and Bailment
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Sample Questions
Q1) Dean is preparing to go into surgery.He tells his friend,Jerry,"You have been such a good friend to me all of my life.I want you to take this ring and keep it if anything should happen to me in surgery." Jerry is uncomfortable and reluctant to accept the ring.Dean insists.Dean does well in surgery,and subsequently asks Jerry to return the ring.Must he?
A) No; this was a clear gift inter vivos,made during the life of Dean.
B) No,because Dean insisted that Jerry accept the ring.
C) Yes; Dean lacked the capacity to make such a gift during the duress of pending surgery.
D) Yes; Dean's death was a condition requisite for the gift to take effect.
Q2) Real property can become personal property if it is removed from the land.
A)True
B)False
Q3) Property that is permanently affixed to the land is called a fixture.
A)True
B)False
Q4) Catching fish with a license is an example of the acquisition of property by possession or capture.
A)True
B)False
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Chapter 48: Real Property
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Sample Questions
Q1) Gloria owns a piece of real property.She sells one-half of this property to Sam,but reserves the rights to cross over Sam's land to get to her remaining one-half.Gloria has created a(n):
A) easement in gross
B) easement appurtenant
C) easement a pendre
D) license
E) profit
Q2) The owner of a condominium unit also owns the common elements in joint tenancy with the other condominium unit owners.
A)True
B)False
Q3) The United States generally does not put restrictions on the ability of foreigners to own United States real estate whereas many other nations do.Should the United States impose such restrictions? If so,what kinds of restrictions?
Q4) In a cooperative,an owner owns shares in a corporation that owns the entire building.
A)True
B)False
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Chapter 49: Landlord Tenant Law and Land Use Regulation
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Sample Questions
Q1) The Civil Rights Act is a state statute that prohibits racial discrimination in the transfer of real property.
A)True
B)False
Q2) A lease for a fixed term of 8 months is a tenancy for years.
A)True
B)False
Q3) Any lease that specifies a term,but states that payments are to be made at periodic intervals,is periodic tenancy.
A)True
B)False
Q4) The Fair Housing Act is a federal statute that states that it is all right for property owners to sell their homes to anyone whom they choose,regardless of reason,as that is only fair because the owners are the sellers.
A)True
B)False
Q5) The right of possession granted to a tenant in a lease is nonexclusive.
A)True
B)False
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Chapter 50: Insurance
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Sample Questions
Q1) The McCarran-Ferguson Act provides that insurance is regulated by the states.
A)True
B)False
Q2) Which of the following is true about no-fault auto insurance?
A) It means that if there is no fault on the part of the insured,there will be no payment by the insured's insurer.
B) A driver's insurer pays for the injuries to that driver regardless of who is at fault in the accident.
C) No-fault insurance is broad,usually providing coverage for lost wages,pain and suffering,and punitive damages.
D) No-fault insurance is lower cost coverage available only to good drivers who have never been at fault in an accident.
Q3) When major natural disasters strike,there are some insurance companies that are not able to pay their claims because they have not purchased adequate reinsurance.How might this problem be minimized? Would disclosure requirements or reinsurance coverage requirements be better?
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Chapter 51: Accountants' Liability
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Sample Questions
Q1) The guidelines that accountants must follow in conducting an audit are the:
A) generally accepted accounting principles
B) Securities and Exchange Commission Auditing Rules and Procedures
C) the Department of Treasury Audit Processes
D) generally accepted auditing standards
Q2) Accountants are not liable for failing to find misstatements or omissions of facts in a registration statement.
A)True
B)False
Q3) On which of the following theories under common law can an accountant be held liable to parties with whom the accountant is not in privity?
A) breach of contract
B) fraud
C) breach of contract or fraud
D) neither breach of contract nor fraud
Q4) Actual fraud happens when the accountant acts with "reckless disregard" for the truth or the consequence of his or her actions.
A)True
B)False
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Chapter 52: Wills, Trusts, and Elder Law
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Sample Questions
Q1) A document executed with the formalities of a will in order to modify an existing will is called a(n):
A) rider
B) ademption
C) nuncupative addendum
D) endorsement
E) codicil
Q2) An inter vivos trust is what kind of trust?
A) Any trust where the settlor determined the terms of the trust while the settlor was living.
B) Any trust where beneficiaries receive benefits only while living.
C) Any trust that lasts beyond the death of the settlor.
D) Any trust in which all beneficiaries are already living when it is created.
E) Any trust that first takes effect while the settlor is living.
Q3) With a trust,all aspects of title to the trust property are transferred to the trustee.
A)True
B)False
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Chapter 53: Family Law
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Sample Questions
Q1) Why are prenuptial agreements important in some relationships?
Q2) Parents are liable for their children's actions if the parents were negligent in causing the child's act.
A)True
B)False
Q3) Barbara and Joe want to get married in the Catholic church,but Joe has been divorced.The church is refusing to allow the couple to exchange their vows in the church.Which of the following should the couple consider so that they can be married at the church?
A) They should go to another Catholic church and not mention Joe's divorce.
B) They should get the marriage legally annulled.
C) They should ask the church for forgiveness.
D) They should get the marriage legally annulled as well as annulled by the church if required.
Q4) Debts that are incurred during the marriage for necessities are the joint responsibility of each spouse.
A)True
B)False
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Chapter 54: International and World Trade Law
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Sample Questions
Q1) Which of the following is not true about the United Nations?
A) It was founded in 1918 at the end of World War I.
B) Most nations of the world are members.
C) There are only five permanent members of the Security Council.
D) It contains a number of autonomous agencies that deal with specialized problems.
E) Its headquarters are in New York City.
Q2) The World Trade Organization was created by:
A) the United Nations
B) the North American Free Trade Agreement
C) the International Monetary Fund
D) Negotiations on the General Agreement on Tariffs and Trade
E) the European Union
Q3) In which of the following circumstances would a foreign government not be subject to suit in a U.S.court according to the Federal Sovereign Immunities Act?
A) If the foreign government has explicitly waived immunity.
B) If the foreign government has impliedly waived immunity.
C) If the action is based on a tort committed by the foreign government.
D) If the action is based on commercial activity by the foreign government.
E) B and C only.
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Page 56