Legal Environment of Business
Chapter Exam Questions
Course Introduction
The Legal Environment of Business explores the foundational principles and structures governing legal aspects of business operations. This course examines key topics including contracts, torts, agency relationships, intellectual property, employment law, and governmental regulation. Students will analyze case studies and real-world scenarios to understand how laws affect business decision-making and strategy. Emphasis is placed on recognizing legal risks, ensuring compliance, and appreciating the ethical implications of business conduct within the framework of U.S. and international law.
Recommended Textbook Fundamentals of Business Law Summarized Cases 9th Edition by Roger LeRoy Miller
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Page 2
Chapter 1: The Legal and Constitutional Environment of Business
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Q1) Hawaii enacts a state law that violates the U.S.Constitution.This law can be enforced by
A)no one.
B)the federal government only.
C)the state of Hawaii only.
D)the United States Supreme Court only.
Answer: A
Q2) Administrative agencies are established to perform specific functions.
A)True
B)False
Answer: True
Q3) Most state trial court decisions are not published.
A)True
B)False
Answer: True
Q4) Equity is a branch of unwritten law that seeks to supply remedies of equal measure to the parties in a legal dispute.
A)True
B)False
Answer: False
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Chapter 2: Traditional and Online Dispute Resolution
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Q1) Most online dispute resolution services apply general,universal legal principles to resolve disputes.
A)True
B)False
Answer: True
Q2) A court's review of an arbitrator's award may be restricted.
A)True
B)False
Answer: True
Q3) The United States Supreme Court cannot review a decision by a state's highest court.
A)True
B)False Answer: False
Q4) Edie files a suit against Frank.If this suit is like most cases,it will be
A)dismissed during a trial.
B)dismissed or settled before a trial.
C)resolved only after a trial.
D)settled at a trial.
Answer: B
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Chapter 3: Ethics and Business Decision Making
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Q1) Global Distribution Corporation suggests that its employees apply the "categorical imperative" to ethical issues that arise at work.This requires that the employees
A)categorize the issues according to legality,morality,and profitability.
B)consider only the benefits that would accrue to them personally.
C)look only at the result,regardless of the means to attain it.
D)weigh the consequences that would follow if everyone acted the same.
Answer: D
Q2) One guideline to evaluating the ethics of a particular action is to "let your conscience be your guide."
A)True
B)False
Answer: True
Q3) Businesspersons who would choose to act unethically may be deterred from doing so because of public opinion.
A)True
B)False
Answer: True
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Chapter 4: Torts and Cyber Torts
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Q1) Liz trespasses on Mega Corporation's property.Through the use of reasonable force,Mega's security guard Ned detains Liz until the police arrive.Mega is liable for A)assault and battery.
B)false imprisonment.
C)intentional infliction of emotional distress.
D)none of the choices.
Q2) The purpose of tort law is to provide remedies when various protected interests have been invaded.
A)True
B)False
Q3) Bella owns a farm in Colorado.Doyle drives his sport utility vehicle off a highway and onto Bella's land.Doyle commits trespass if he
A)does not have Bella's permission to drive on the property.
B)drives onto the property for recreational purposes.
C)harms the property in a material way.
D)harms the property in any way.
Q4) Defamation is one person's use of another's name without permission.
A)True
B)False
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Chapter 5: Intellectual Property and Internet Law
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Questions
Q1) Li'l Canine Company (LCC)uses a trademark that neither LCC nor anyone else has registered with the government.Under federal trademark law,LCC
A)can register the mark for protection.
B)cannot register a mark that has been used in commerce.
C)has committed trademark infringement.
D)must put off registration until the mark is out of use for six months.
Q2) A famous trademark may be diluted only by the unauthorized use of an identical mark.
A)True
B)False
Q3) Anyone who writes a book has automatic copyright protection in every country in the world.
A)True
B)False
Q4) Patent protection begins on the date that a patent is issued.
A)True
B)False
Q5) A license permits the use of intellectual property for certain limited purposes.
A)True
B)False
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Chapter 6: Criminal Law and Cyber Crime
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Q1) On the orders of their corporate employer,Della and Efron,employees of Fabulous Fashionista,a clothing store,switch trademarks on clothing that comes into the store to be sold to consumers.This is A)forgery.
B)larceny.
C)obtaining goods by false pretenses.
D)no crime.
Q2) A crime can be committed only against persons.
A)True
B)False
Q3) The only defense to criminal liability that justifies the use of force is self-defense. A)True
B)False
Q4) Identity theft occurs when a wrongdoer steals another's form of identification.
A)True
B)False
Q5) Only blue-collar crimes are prosecuted under RICO. A)True
B)False
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Chapter 7: Nature and Classification
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Q1) One of the requirements of a valid contract is its acceptance.
A)True
B)False
Q2) Greco promises to buy illegal copies of CDs and DVDs from Fava,who promises to deliver on April 15.These promises are most likely
A)enforceable.
B)valid.
C)void.
D)voidable.
Q3) One of the requirements of a valid contract is a fair price.
A)True
B)False
Q4) A promise is an assertion that something will or will not happen in the future.
A)True
B)False
Q5) Contract law shows what excuses our society accepts for breaking certain types of promises.
A)True
B)False
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Chapter 8: Agreement in Traditional and E-Contracts
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Q1) A forum-selection clause indicates the place for the resolution of a dispute arising under a contract.
A)True
B)False
Q2) Overnight Delivery Service delivers a package to Pam.At the request of Overnight's delivery person,to acknowledge receipt Pam signs a digital pad.This signing creates
A)a cybernotarized signature.
B)a digitized handwritten signature.
C)an asymmetric cryptosystemic signature.
D)a public-key infrastructure digital signature.
Q3) Flem,a user of GameCenter.com's Web site,can download gaming software for free if he first clicks on "I accept" after viewing certain terms.This is
A)a contract that does not include the terms.
B)a contract that includes the terms.
C)not a contract but the terms are enforceable.
D)unenforceable.
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Chapter 9: Consideration,capacity,and Legality
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Q1) Cielo is fifteen.In most states,Cielo would be considered a minor because she is under the age of A)sixteen.
B)eighteen.
C)twenty.
D)twenty-one.
Q2) Refer to Fact Pattern 9-3.The agreement between Dex and Carmen is A)a covenant not to sue.
B)an accord and satisfaction.
C)a release.
D)promissory estoppel.
Q3) Refer to Fact Pattern 9-1.Eva's forbearance from towing is legally sufficient consideration
A)because it is a promise of something of value.
B)only if Dave's customers park in Eva's lot.
C)only if Eva's customers cannot park in her lot because it is full.
D)under no circumstances.
Q4) The doctrine of promissory estoppel requires a clear and definite promise. A)True
B)False
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Chapter 10: Defenses to Contract Enforceability
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Q1) Refer to Fact Pattern 10-1.Moore's misstatement of the price is
A)a bilateral mistake.
B)a fraudulent misrepresentation.
C)a unilateral mistake.
D)unconscionable.
Q2) To recover for fraud,a plaintiff must be under twenty-one years of age.
A)True
B)False
Q3) Intent to deceive is an element of fraud.
A)True
B)False
Q4) To be enforceable,a contract for a sale of goods priced at $50 or more must be in writing.
A)True
B)False
Q5) An innocent party can enforce a fraudulent contract.
A)True
B)False
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Chapter 11: Third Party Rights and Discharge
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Q1) Vicky contracts with Warren for the delivery of hospice services to benefit Xavier.This is
A)a delegation.
B)an assignment.
C)a third party beneficiary contract.
D)a novation.
Q2) A contract can prevent the assignment of the right to receive funds.
A)True
B)False
Q3) A right to receive damages on a breach of a contract for a sale of goods cannot be assigned.
A)True
B)False
Q4) Clem attempts to free himself from the duties of his contract with Drew by telling Drew to find someone else to perform them.This is
A)a delegation.
B)an assignment.
C)a third party beneficiary contract.
D)none of the choices.
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Chapter 12: Breach and Remedies
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Q1) Normally,when a nonbreaching party has been damaged by a breach of contract,he or she has a duty to mitigate those damages.
A)True
B)False
Q2) Fashion Retail Center enters into a contract with Great Promotions,Inc. ,to provide Fashion with a plan to retool its merchandising strategy.If Great Promotions breaches the contract,Fashion has a duty to A)reduce the damages that Fashion might otherwise suffer. B)reduce the loss that Great Promotions might otherwise suffer. C)punish Great Promotions and deter others from similar acts. D)take no action.
Q3) Restitution involves one party's recapture of a benefit through which another party has been unjustly enriched.
A)True
B)False
Q4) Consequential damages are foreseeable damages that arise from a party's breach of a contract.
A)True
B)False
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Chapter 13: The Formation of Sales and Lease Contracts
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Q1) Timber Products,Inc. ,and Walt,a consumer,enter into a contract for a sale of plywood.If the contract includes a clause that is perceived as grossly unfair to Walt,its enforcement may be challenged under the doctrine of A)good faith.
B)square dealing.
C)the mere image rule.
D)unconscionability.
Q2) Unless a contract provides otherwise,it is assumed to be a destination contract. A)True
B)False
Q3) Raw Material,Inc. ,and Sewn Fabric Corporation enter into a contract for a sale of muslin.The terms do not clearly indicate whether it is a destination or shipment contract.A court would most likely presume that it is A)a bailment contract.
B)a destination contract.
C)a shipment contract.
D)a transportation contract.
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Chapter 14: Performance Breach of Sales Lease Contracts
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Q1) If the parties to a sales contract state that a certain remedy is exclusive,then it is the sole remedy.
A)True B)False
Q2) A buyer's breach of a contract will not usually give the seller the right to cancel the contract.
A)True B)False
Q3) International Gem Corporation agrees to sell Jewel Outlets,Inc.(JOI),fifty new diamonds,but the contract does not specify a place of delivery.JOI is expected to pick up the goods.The place of delivery is
A)International's place of business.
B)JOI's place of business.
C)the Annual Gems and Jewels Convention.
D)the U.S.Postal Service office nearest to JOI's place of business.
Q4) The term cure refers to the right of the seller to reject,adjust,or replace nonconforming goods.
A)True B)False
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Chapter 15: Warranties and Product Liability
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Q1) Warranties of title do not arise in most sales contracts.
A)True
B)False
Q2) Strict liability applies to the suppliers of component parts.
A)True
B)False
Q3) In sales law,a warranty is an assurance by one party of the existence of a fact on which the other party can rely.
A)True
B)False
Q4) The Magnuson-Moss Warranty Act modifies UCC warranty rules to some extent in consumer transactions.
A)True
B)False
Q5) To succeed in a strict product liability suit,an injured plaintiff must show that a product's defect was the proximate cause of the injury.
A)True
B)False
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Chapter 16: Negotiability,transferability,and Liability
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Q1) Bob writes a check on his account at County Bank to Dona,a famous singer.The person claiming to be Dona is an imposter,however,named Edy.Edy indorses the check to Frank,for whom County Bank cashes it.Ultimately,the loss will most likely fall on A)Bob.
B)County Bank.
C)Dona.
D)Frank.
Q2) Refer to Fact Pattern 16-1.The instrument that Ewa signed is most likely
A)a certificate of deposit.
B)a draft.
C)an order to pay.
D)a promissory note.
Q3) Wilbur signs a note that includes a clause under which the note's holder can delay the date of its payment indefinitely.This is
A)an acceleration clause.
B)an extension clause.
C)an immaturity clause.
D)a stop-payment clause.
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Chapter 17: Checks and Banking in the Digital Age
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Q1) A bank cannot recover from a holder who cashes a check bearing a forged indorsement once the bank has accepted and paid the item.
A)True
B)False
Q2) A forged signature is effective as the signature of a drawer to the extent that is resembles the drawer's actual signature.
A)True
B)False
Q3) Dina's debit card,issued by Eminent Bank,is stolen and used without Dina's permission.Dina tells Eminent Bank within thirty days.Dina may be required to pay no more than
A)$5.
B)$50.
C)$500.
D)$5,000.
Q4) The death of a customer revokes a bank's authority to pay an item.
A)True
B)False
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Chapter 18: Security Interests in Personal Property
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Q1) Middling Credit Corporation asks Little Supply Company to agree to a security agreement that provides for coverage of the proceeds from the sale of after-acquired property.This is
A)a first-in,first-out rule.
B)a floating lien.
C)a funds guaranty.
D)in violation of secured transactions law.
Q2) An improper filing renders a secured party unperfected.
A)True
B)False
Q3) A purchase-money security interest in consumer goods is perfected automatically at the time of a credit sale.
A)True
B)False
Q4) A secured party can release the collateral described in a filed financing statement only if the debtor has paid the debt.
A)True
B)False
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Chapter 19: Creditors Rights and Bankruptcy
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Q1) Under federal law,an employer can dismiss an employee because his or her wages are being garnished.
A)True
B)False
Q2) Tippi believes that she needs to obtain a discharge in bankruptcy through an individual's repayment plan.This proceeding can be initiated by a filing of a petition by A)a creditor.
B)a debtor.
C)a corporation.
D)a partnership.
Q3) Mac files a petition for a discharge in bankruptcy.Mac's failure to appear at a meeting of the creditors listed in Mac's schedules may result in Mac being A)denied a discharge of bankruptcy.
B)fined.
C)held in contempt.
D)imprisoned.
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Chapter 20: Mortgages Foreclosures After the Recession
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Q1) The annual percentage rate is the actual cost of a loan on a yearly basis.
A)True
B)False
Q2) If a lender fails to provide certain material disclosures,a borrower has up to seven years to rescind the mortgage.
A)True
B)False
Q3) Federal law encourages private lenders to modify mortgages so as to lower the monthly payments of borrowers who are in default.
A)True
B)False
Q4) A lender's failure to comply with federal mortgage disclosure requirements extends the borrower's right to rescind the loan to no more than seven days.
A)True
B)False
Q5) Lenders can require balloon payments for loans with terms of five years or less.
A)True
B)False
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Chapter 21: Agency Relationships
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Q1) For an agent's implied authority to be effective,a principal must confirm it in writing.
A)True
B)False
Q2) All employment laws apply to independent contractors.
A)True
B)False
Q3) Jim agrees to act on Kit's behalf,subject to Kit's control,and Kit trusts Jim to so act.This describes a relationship between
A)a business and its competitors.
B)a government and its governed.
C)a parent and a child.
D)a principal and an agent.
Q4) Picabo drives a truck as an employee for Quik Delivery,Inc.Picabo would most likely be considered acting outside the scope of her employment if she
A)crashed into a car at the airport while off duty.
B)hit a pedestrian in a parking lot during a "working" lunch.
C)ran over an attendant at a gas station while refueling the truck.
D)smashed into a store-front while intoxicated on-duty.
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Chapter 21: Management Perspective:
Independent-Contractor Negligence
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Q1) AgriEquip Service & Supply,Inc. ,sends Merilyn an e-mail in which AgriEquip offers to employ her for certain hours and a specific amount of money over a limited period of time.She responds with a counteroffer that reduces the hours and increases the money.AgriEquip e-mails an acceptance.Merilyn performs,but AgriEquip refuses to pay.She files a suit against AgriEquip for breach of contract.The court is most likely to rule that the e-mail
A)showed only an agreement to agree.
B)was an agreement to the essential terms of an employment contract.
C)constituted an unenforceable,non-existent contract.
D)contained a contract but is unenforceable because it is electronic.
Q2) Gass Propane Company hires Hick,an independent contractor,to make deliveries.During a delivery,Iggy is killed in an accident caused by Hick's negligence.Iggy's widow Jade files a suit against Gass,asserting that the employer is liable.Gass argues that it had no control over the manner in which Hick did his work.The court is most likely to hold that Gass is
A)liable because Gass employed Hick.
B)liable because Gass should have investigated Hick's qualifications.
C)not liable because Gass did not control Hick's work.
D)not liable because the delivery vehicle was probably faulty.
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Chapter 22: Employment, immigration, and Labor Law
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Q1) Unity Production Company is suspected of employing illegal immigrants.The government conducts random compliance audits and other enforcement measures against those who might violate immigration laws through A)the CIS.
B)the H1-B.
C)the ICE.
D)the NLRB.
Q2) Olly applies for a job with Petro Company.Petro does not hire Olly because of his ethnicity,or national origin.This is
A)desperate-measure discrimination.
B)disparate-impact discrimination.
C)disparate-treatment discrimination.
D)not discrimination.
Q3) All employers in the United States are subject to federal employment discrimination laws.
A)True
B)False
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Chapter 23: Sole Proprietorships, partnerships, Limited Liability Co
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Q1) Refer to Fact Pattern 23-1.Desi and Gwen are
A)not partners,because Gwen does not have an ownership interest or management rights in eSites.
B)not partners,because the pay includes an hourly wage.
C)not partners,because the pay includes only 10 percent of the profits.
D)partners in a partnership for two years.
Q2) The liability of the members of a limited liability company is limited to the amount of their investments.
A)True
B)False
Q3) A sole proprietor owns the entire business but does not receive all of the profit. A)True
B)False
Q4) Refer to Fact Pattern 23-1.Desi and Fred are
A)not partners,because Fred does not have an ownership interest or management rights in eSites.
B)not partners,because the lease includes a "base rental."
C)not partners,because the rent includes only 10 percent of the profits.
D)partners in a partnership for two years.
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Chapter 24: Corporate Formation, financing, and Termination
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Q1) The state can bring an action to dissolve a corporation that has failed to pay its annual taxes.
A)True
B)False
Q2) Common stock provides a proportionate interest in the corporation with regard to control.
A)True
B)False
Q3) Through a certain transaction,Corporate Properties,Inc. ,acquires all of the shares of Downtown Realty Corporation for some of Corporate Properties's shares.Both Corporate Properties and Downtown Realty continue to exist.This is
A)a consolidation.
B)a share exchange.
C)a short-form merger.
D)a hold-up.
Q4) Federal securities laws strictly control the terms,duration,and circumstances under which most tender offers are made.
A)True
B)False
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Chapter 25: Corporate Directors, officers, Shareholders
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Q1) Lexy and Mort act as the incorporators for NuGame Corporation.After the first board of directors is chosen,subsequent directors are elected by a vote of NuGame's A)board of directors.
B)employees.
C)officers.
D)shareholders.
Q2) A corporation cannot refuse a shareholder's request to inspect corporate records. A)True
B)False
Q3) Kelly transfers shares of stock that she owns in Lone Starz Company to Max.A shareholders' meeting takes place before Max's ownership is entered in Lone Starz's stock book.A vote at the meeting can be cast by A)Kelly and Max.
B)Kelly only.
C)Max only.
D)neither Kelly nor Max.
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Chapter 26: Investor Protection, insider Trading, Corp Gov
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Q1) Fresh Seasonal Fruit Company has assets of less than $10 million and fewer than fifty shareholders.Gourmand Pastries,Inc. ,has assets of more than $50 million and more than five hundred shareholders.The Securities Exchange Act of 1934 applies to
A)Fresh Seasonal Fruit and Gourmand Pastries.
B)Fresh Seasonal Fruit only.
C)Gourmand Pastries only.
D)neither Fresh Seasonal Fruit nor Gourmand Pastries.
Q2) Private parties cannot sue violators of Section 10(b)and Rule 10b-5.
A)True
B)False
Q3) Catalina promises high returns to Darby and other investors,who then agree to trust their funds to Catalina.She uses these funds to pay previous investors.This is
A)a Ponzi scheme.
B)a stock option.
C)an accredited investor.
D)a tombstone ad.
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Chapter 27: Personal Property and Bailments
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Q1) Patty's parents give her a car as a graduation present.While Patty spends the summer in Europe,her friend Rita agrees to keep the car in her garage.On Patty's part,this is acquisition of property by A)bailment.
B)capture.
C)find.
D)gift.
Q2) Property used by a government for a public purpose such as a park is community property.
A)True
B)False
Q3) Owen takes a Paisley-made pinball machine to Quality Games,Inc. ,for repair.Lacking certain parts,Quality ships the game to Regal Repair Company.While in Regal's possession,the game is damaged.Quality can recover for the damage from A)no one.
B)Owen.
C)Paisley.
D)Regal.
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Chapter 28: Real Property and Landlord-Tenant Law
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Q1) A license is the revocable right of a person to come onto another person's land.
A)True
B)False
Q2) A special warranty deed provides the most protection against defects of title.
A)True
B)False
Q3) An item cannot be a fixture unless it is physically attached to the land.
A)True
B)False
Q4) Elsa,the owner of Fertile Farm,sells Gina a right to camp on Fertile land overnight.Gina's right is
A)a leasehold estate.
B)a license.
C)an easement.
D)a profit.
Q5) An easement arises when the owner of one piece of land occupies the real property of a neighbor and eventually acquires title to it.
A)True
B)False
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Chapter 29: Insurance, wills, and Trusts
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Q1) Benny dies without a will,with no surviving spouse or child.Benny's survivors include his granddaughter Callie,his nephew Duncan,and his cousin Earl.In most states,his estate would pass to
A)Callie.
B)Duncan.
C)Earl.
D)the state.
Q2) The trustee is the person for whose benefit a trust is held.
A)True
B)False
Q3) Root & Branch Lumber Company obtains a fire insurance policy from Statistical Insurers,Inc. ,on a $400,000 warehouse.The policy includes an 80-percent coinsurance clause.Root & Branch insures the property for $320,000.In a fire,the warehouse suffers $200,000 in damage.Root & Branch can recover
A)$400,000.
B)$320,000.
C)$200,000.
D)$80,000.
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Chapter 30: Liability of Accountants Other Professionals
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Q1) Under rules of professional misconduct,an attorney should not engage in conduct involving deceit.
A)True
B)False
Q2) Dominique,a certified public accountant,provides accounting services to Eagle Corporation.The services include preparing Eagle's financial reports and issuing opinion letters based on the reports.In 2008,Eagle falls into serious financial trouble,but neither Dominique's reports nor her opinion letters indicate this situation.Relying on Dominique's portrayal of Eagle's financial situation,Eagle borrows a large sum of money to build a new shipping facility.In lending Eagle the money,First National Bank relies on Dominique's opinion letter.Dominique is aware of this reliance.If Dominique did not engage in intentional fraud but was negligent,what is her potential liability?
Q3) Lars accuses Moe,an attorney,of committing malpractice.Malpractice is
A)a breach of ethics.
B)a defalcation.
C)a mistake in judgment.
D)professional negligence.
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Page 33
Chapter 31: International Law in a Global Economy
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Q1) The Foreign Sovereign Immunities Act spells out the particulars of what constitutes a commercial activity.
A)True
B)False
Q2) Dumping is the exporting of environmentally polluting goods to a foreign market.
A)True
B)False
Q3) Firms overseas have almost total legal protection against government acts in the countries in which they operate,under the act of state doctrine.
A)True
B)False
Q4) Michael,a citizen of Ireland,and Nina,a citizen of the United States,enter into a contract.When Nina breaches the contract,Michael obtains an award of damages in an Irish court.He asks a U.S.court to enforce the award.The U.S.court defers to and enforces the Irish court's decree.This is
A)a travesty of justice.
B)the act of state doctrine.
C)the doctrine of sovereign immunity.
D)the principle of comity.
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Chapter 32: Adapting the Law to the Online Environment:
The Supreme Court Upholds a Law That Prohibits Pandering
Virtual Child Pornography
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Q1) Federal law requires new car labels to state fuel economy estimates.California state law proscribes deceptive advertising.Chad buys a new car from Drive-Away Sales in California.Later,Chad files a suit against the car's manufacturer,claiming that the car does not attain the fuel economy estimate and thus its maker engaged in deceptive advertising in violation of state law.In the opinion of the dissent in Paduano v.American Honda Motor Co. ,the court should hold that
A)the federal law does not preempt Chad's state law claim.
B)the federal law preempts Chad's state law claim.
C)California's state law preempts the federal fuel economy law.
D)the federal and state laws preempt each other.
Q2) World Investment & Trading,Inc.(WIT),encourages its employees to build trust with its customers and other companies.Unfounded complaints and exaggerated charges leveled against WIT online would most likely be regarded by a court as A)an expression of fact.
B)a form of speech protected by the First Amendment.
C)an inappropriate online disclosure.
D)libelous.
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Sample Questions
Q1) One night,Bertram discovers Clu,an intruder,in Bertram's Deli Delite store after the store is closed.Bertram shoots and kills Clu.With respect to criminal prosecution for this use of deadly force,under a duty-to-retreat law Bertram
A)is presumed innocent or may be exempt from prosecution.
B)must prove that he first told Clu to "Get out!" or to "Retreat!"
C)must prove that he first tried to retreat or that his life was in danger.
D)must prove that Clu did not try to retreat or acted without regard for his own life.
Q2) O.K.Valve Company applies for a patent for a valve.Meanwhile,O.K.licenses its products,including the valve,to Petro Pumps,Inc. ,which uses the valve to make oil pumps.Under the terms of the license,Petro agrees to pay royalties on O.K.'s "patented" products.When a patent is granted on the valve,O.K.asks Petro to pay royalties on the sales of its pumps.Petro wants to challenge the validity of O.K.'s patent.According to the majority in MedImmune,Inc. ,v.Genentech,Inc.case,a patent licensee can challenge the validity of a licensed patent
A)only after breaching the license agreement.
B)only before breaching the license agreement.
C)without breaching the license agreement.
D)under no circumstances.
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Chapter 35: Management Perspective: E-Mailed
Credit-Card Receipts
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Q1) In the Braddock case,in weighing the facts that made up the elements of the plaintiff's claim,the majority cited as a significant factor
A)assurances that were not incorporated into written documents.
B)the arms' length business transactions between the parties.
C)the expectation of the good faith of a family member.
D)the plaintiff's business and professional experience in the industry.
Q2) The truncation (shortening)requirement of the Fair and Accurate Credit Transactions Act of 2003 applies only to receipts that are "electronically printed." Eagle Motorcycle Rents accepts reservations on-site and online.On-site customers are given tangible paper receipts.Online customers are sent an online confirmation.The truncation requirement applies to
A)Eagle's online confirmations only.
B)Eagle's tangible paper receipts only.
C)Eagle's online confirmations and tangible receipts.
D)none of Eagle's confirmations or receipts.
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Chapter 34: Case Study With Dissenting Opinion: Prestridge
V Bank of Jena
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Q1) In the facts of the previous question,suppose that Thalia had had access to Rhett's checks through his carelessness.The majority in the Prestridge case would then most likely hold Silverado liable for A)all checks.
B)checks that were cashed less than thirty days after the statement. C)checks that were cashed more than thirty days after the statement. D)no checks.
Q2) In the situation set out in either of the previous questions,the dissent in the Prestridge case would most likely hold Silverado liable for A)all checks.
B)checks that were cashed less than thirty days after the statement. C)checks that were cashed more than thirty days after the statement. D)no checks.
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Chapter 36: Adapting the Law to the Online Environment: The Thorny
Issue of Taxing Internet Sales
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Q1) According to the dissent in Casserlie v.Shell Oil Co. ,an inquiry into a seller's motive in setting prices is necessary to determine if the seller acted
A)in good faith.
B)with the motive of driving competitors out of business.
C)with the intent of making the most profit in the least time.
D)to set commercially unreasonable and discriminatory prices.
Q2) New York enacts a statute that requires a label on a video game to warn parents when "the range of options available to a player include dismembering or sexually assaulting the image of a human being." On appeal from a challenge by gamemakers,the state asks a federal court to enforce the statute.Based on the decisions of other federal courts in cases involving similar statutes,the court in this case is most likely to
A)refuse to extend restrictions on sex-based content to violence in video games.
B)expand the label's warning to include other forms of violence.
C)impose market-share liability on makers of violent video games.
D)replace the voluntary rating system currently in use.
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The Debt That Never Goes Awayits Discharged in
but Still on the Debtors Credit Report
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Q1) Orly's debts are discharged in a liquidation bankruptcy.Pester & Recover,Inc. ,buys the discharged debt obligations.With respect to these debts,Pester
A)can do nothing.
B)can pressure Orly into paying them.
C)must give Orly additional help to rebuild her life after the discharge.
D)must report the debts to credit reporting agencies as "discharged."
Q2) Unicameral Production,Inc. ,files for bankruptcy.Vance,Unicameral's bankruptcy trustee,wants to recover a transfer that Unicameral made to Wisconsin State University (WSU)less than ninety days earlier.WSU asserts its sovereign immunity.Under the majority's holding in Central Virginia Community College v.Katz,the party most likely to prevail in this situation is
A)both Vance and WSU.
B)neither Vance nor WSU.
C)Vance.
D)WSU.
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Q1) Rewind Investments Inc.owns 90 percent of Swift Blades Inc.(SBI).Rewind's majority shareholders are also its directors and the directors of SBI.SBI's business is the design and assembly of wind-driven turbines.SBI is offered the opportunity to buy Typhoon Turbines,Inc. ,a competitor,but SBI's board turns it down.Within six months,Rewind buys Typhoon.Based on the court's reasoning in Notz v.Everett Smith Group,Ltd. ,,a minority SBI shareholder could bring
A)a claim against Typhoon's former directors.
B)a direct claim against SBI's majority shareholders.
C)a shareholder's derivative suit against Rewind.
D)no claim.
Q2) In the facts of the previous question,under the dissent's reasoning in Notz v.Everett Smith Group,Ltd. ,,a minority BC shareholder could bring
A)a claim against Typhoon's former directors.
B)a direct claim against SBI's majority shareholders.
C)a shareholder's derivative suit against Rewind.
D)no claim.
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Chapter 39: Case Study With Dissenting Opinion: Kovarik V
Kovarik
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Q1) In the facts in the previous question,according to the dissent in the Kavarik case,with respect to Glen and Heidi's marital estate,the CDs are
A)not included because Heidi's parents did not intend to give them to her.
B)not included because Irene cashed them without sharing the proceeds.
C)included because Glen and Heidi were married when the CDs were acquired.
D)included because Heidi's parents gave up control when the CDs were placed in the names of Heidi and Irene.
Q2) In the facts in the previous question,if the CDs are seen as the property of Heidi and Irene,the sisters are most likely
A)joint tenants.
B)tenants at sufferance.
C)tenants by the entirety.
D)tenants in common.
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42
Chapter 40: Unit Case Study With Dissenting Opinion: Dole
Food Co V Patrickson
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Q1) Amigos,Ltd. ,and Bueno,S.A. ,are Chilean firms.Amigos owns a majority of the shares of Bueno.The government of Chile owns a few shares of Amigos.Under the decision in Dole Food Co.v.Patrickson,parties who are immune from suit in U.S.courts under the Foreign Sovereign Immunities Act,as instrumentalities of foreign states,would include A)Amigos and Bueno.
B)neither Amigos nor Bueno.
C)only Amigos.
D)only Bueno.
Q2) In the facts of the previous question,according to the reasoning of the dissent in Dole Food Co.v.Patrickson,parties who would be potentially subject to suit in U.S.courts would include
A)Amigos and Bueno.
B)neither Amigos nor Bueno.
C)only Amigos.
D)only Bueno.
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Page 43