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1. The U.S. Constitution is the supreme law of the United St
1. The U.S. Constitution is the supreme law of the United States. (Points: 2) True False 2. Common law is a term for social manners and customs that are familiar to most of us. (Points: 2) True False 3. The state governments retain all powers not specifically delegated to the federal government. (Points: 2) True False 4. A state court can exercise jurisdiction over a nonresident by showing that he or she had minimum contacts with the state. (Points: 2) True False 5. To have standing to sue, a party must have been harmed or have been threatened with harm by the action about which he or she complains. (Points: 2) True False 6. To act ethically is to think narrowly about what is best in the short run for one’s employer. (Points: 2) True False 7. Ethical reasoning is the process through which an individual rationalizes whatever action he or she chooses to take. (Points: 2) True False 8. The roles that women play in some foreign countries may present some difficult ethical problems for firms doing business internationally. (Points: 2) True False 9. In theory, causation in fact is limitless. (Points: 2) True False 10. A defendant is strictly liable for the results of his or her acts only if he or she intended those results. (Points: 2) True False 11. There are no statutes regulating the use of spam. (Points: 2) True False 12. An applicant cannot register a trademark on the basis of an intention to use the mark in commerce. (Points: 2) True False 13. Because the Internet is vast, the unauthorized use of another's mark in a domain name is generally permissible. (Points: 2) True False 14. A patent cannot be obtained for a plant or an animal. (Points: 2) True False 15. A federal judge must adhere strictly to federal sentencing guidelines. (Points: 2) True False 16. A promisee is a person who makes a promise. (Points: 2) True False 17. Three elements—agreement, consideration, and contractual capacity—are sufficient to form a binding contract. (Points: 2) True False 18. Parties can form a contract without putting the terms in writing. (Points: 2) True False 19. A transaction that lacks a bargained-for exchange lacks an element of consideration. (Points: 2) True False 20. Rescission is the substitution of one party to a contract for a third party, who agrees to assume the contractual duties. (Points: 2) True False 21. A minor who affirmatively misrepresents himself or herself to be an adult will not be able to disaffirm a contract in most states. (Points: 2) True False 22. Parents are required by law to provide necessaries for their minor children. (Points: 2) True False 23. Most courts are usually very concerned about the fairness of contracts. (Points: 2) True False 24. Justifiable reliance on a misrepresentation is an element of fraud. (Points: 2) True False 25. To be enforceable, any assignment must be in writing. (Points: 2) True False 26. Alienation is a transfer of the ownership of land. (Points: 2) True False 27. Complete performance occurs when conditions in a contract are fully satisfied. (Points: 2) True False 28. The four broad types of damages in contract law are compensatory, consequential, punitive, and actual damages. (Points: 2) True False 29. A party seeking to recover compensatory damages may also be entitled to recover incidental damages. (Points: 2) True False 30. Specific performance is the remedy customarily used when there is no actual contract or agreement between two parties. (Points: 2) True False 31. Recovery under quasi contract may be used when one party partially performs under a contract that is unenforceable. (Points: 2) True False 32. To date, most courts have applied traditional common law principles to cases arising in e-commerce. (Points: 2) True False 33. Browse-wrap terms are generally enforceable. (Points: 2) True False 34. A principal has a duty to cooperate with the agent. (Points: 2) True False 35. Apparent authority exists if a principal causes a third party reasonably to believe that an agent has authority to act. (Points: 2) True False 36. To recover workers' compensation, an employee must prove that an injury was not the fault of the employer. (Points: 2) True False 37. An employer must verify documents establishing a prospective worker's identity and eligibility to work in the United States. (Points: 2) True False 38. An employer must modify its job-application process so that those with disabilities can compete for jobs with those who do not have disabilities. (Points: 2) True False 39. A limited liability company cannot be taxed as a corporation. (Points: 2) True False 40. A business trust is somewhat similar to a corporation. (Points: 2) True False 41. Directors are rarely compensated, but when they are, they cannot set their own compensation. (Points: 2) True False 42. A corporate officer is not expected to be informed on corporate matters. (Points: 2) True False 43. Preemptive rights entitle shareholders to bring a derivative suit against the corporation. (Points: 2) True False 44. Damages awarded in a shareholder's derivative suit go to the shareholder personally. (Points: 2) True False 45. Any corporation with more than $10 million in assets and 500 or more shareholders must register with the Securities and Exchange Commission. (Points: 2) True False 46. State securities laws apply only to interstate transactions. (Points: 2) True False 47. The U.S. Congress enacts a new federal statute that sets different standards for the liability of businesses selling defective products. This statute applies (Points: 2) only to matters not covered by state law. only to those states that adopt the statute. to all of the states. to none of the states. 48. The Uniform Commercial Code has been adopted, at least in part, in (Points: 2) all states. 45 states. 25 states. no states. 49. Household Furnishings, Inc., distributes its merchandise on an interstate basis. Under the commerce clause, Congress has the power to regulate (Points: 2) any commercial activity in the United States that substantially affects interstate commerce. only activities that are in intrastate commerce. only activities that are in local commerce. only activities that are not in commerce. 50. Inferior Company sells products that are poorly made. Jack, who has never bought an Inferior product, files a suit against Inferior, alleging that its products are defective. The firm's best ground for dismissal of the suit is that Jack does not have (Points: 2) certiorari. jurisdiction. standing. sufficient minimum contacts. 51. Cody wants to appeal his case against Digital Corporation to the United States Supreme Court. Cody must ask the Court to issue a writ of (Points: 2) certiorari. jurisdiction. standing. venue. 52. Lora files a suit in Michigan against Ned over the ownership of a boat docked in a Michigan harbor. Lora and Ned are residents of Ohio. Ned could ask for a change of venue on the ground that Ohio (Points: 2) has a sufficient stake in the matter. has jurisdiction. has sufficient minimum contacts with the parties. is a more convenient location to hold the trial. 53. Leo, a resident of Missouri, owns a warehouse in Nebraska. He becomes involved in a dispute over the ownership of the warehouse with Opal, a resident of Kansas. Opal files a suit against Leo in Nebraska. Regarding this suit, Nebraska has (Points: 2) diversity jurisdiction. in personam jurisdiction. in rem jurisdiction. no jurisdiction. 54. In studying the legal environment of business, Professor Dooley’s students also review ethics in a business context. Ethics includes the study of what constitutes (Points: 2) fair or just behavior. financially rewarding behavior. legal behavior. religious behavior. 55. Dion, an accountant for Engineering Associates, Inc., attempts to apply the duty-based approach to ethical reasoning in conflicts that occur on the job. This approach is based on the idea that a person must (Points: 2) achieve the greatest good for the most people. avoid unethical behavior regardless of the consequences. conform to society’s ethical standards. place his or her employer’s interest first. 56. In making business decisions, Brian, personnel manager for Conservative Investments, Inc., applies his belief that all persons have fundamental rights. This is (Points: 2) a religious rule. the categorical imperative. the principle of rights. utilitarianism. 57. Callie, a lawyer on the staff of Droll International Ltd., applies the utilitarian theory of ethics in business contexts. Utilitarianism focuses on (Points: 2) moral values. religious beliefs. the consequences of an action. the nature of an action. 58. Molly shoots Norm with Opal’s pistol. The proximate cause of Norm being shot is most likely attributable to (Points: 2) Molly and Opal. Molly only. Opal only. neither Molly nor Opal. 59. Amber pushes Brad into the path of an oncoming car driven by Carol. Don tries to rescue Brad, but the car hits both of them. Amber is liable for the injuries of (Points: 2) Brad and Don. Brad only. Don only. neither Brad nor Don. 60. George owns Murphy's Grill, a restaurant in a small town in Ohio. Without George's consent, Food Business, Inc., opens a club in New York City called Murphy’s and begins to use "murphys" as part of the URL for the club's website. Food Business has committed (Points: 2) copyright infringement. patent infringement. trademark dilution. none of the choices. 61. Rory designs a new computer hard drive, which he names "Sci Phi." He also writes the operating manual to be included with each final product. Rory could obtain patent protection for (Points: 2) the hard drive only. the name only. the operating manual only. the hard drive, the name, and the operating manual. 62. In 2009, Sara writes Terror at the Track, a novel about racecar driving. Sara does not register the work with the appropriate government office. Under federal copyright law, Sara’s work is protected (Points: 2) for ten years. for twenty years. for the life of the author plus seventy years. forever. 63. Portia, a businessperson, is convicted of RICO offenses. Portia's penalties may include (Points: 2) dissolution of her business but not forfeiture of its assets or imprisonment. forfeiture of the business assets but not dissolution of the business or imprisonment. imprisonment and dissolution of her business but not forfeiture of its assets. dissolution of her business, forfeiture of its assets, and imprisonment. 64. Mary, who is charged with a crime, claims that Nick, a government agent, entrapped her. For entrapment to be a valid defense (Points: 2) Mary must not have been predisposed to commit the crime. Nick must have pressured Mary into committing the crime. Nick must have suggested that the crime be committed. all of the choices. 65. Lara is indicted for a crime. Mac, the arresting officer, advises Lara of her right to counsel. Lara waives the right and confesses to the crime. Later, Lara claims that her confession should be excluded as evidence from her trial. The statement will most likely be (Points: 2) admitted because Lara knew she did the crime and confessed. admitted because Lara made it after being advised of her rights. excluded because a confession is not admissible in a criminal trial. excluded because it was elicited before Lara was advised of her rights. 66. Britney promises to deliver a certain couch to Dan, who promises to pay for the service. Britney does not perform. She may be required to (Points: 2) do nothing. make another promise. pay damages. perform a different service. 67. Jay tells Kim that he will buy her textbook from the last semester for $80. Kim agrees. Jay and Kim have (Points: 2) an express contract. an implied-in-fact contract. an implied-in-law contract. a quasi contract. 68. Geof offers to sell his Honda for $10,000 to Ilsa, who says, "I'll pay no more than $5,000." Geof says, "Forget it. I changed my mind." Geof's offer was terminated by (Points: 2) Geof and Ilsa. Geof. Ilsa. the market prices of similar vehicles. 69. Retail Investment Company offers to sell a certain mall to Shopping Stores, Inc., if it accepts before 10 A.M. Monday. A contract is formed if Shopping Stores' acceptance is received (Points: 2) any time on Monday. before 10 A.M. Monday. before 11 A.M. Monday. within twenty-four hours of 10 A.M. Monday. 70. Quality Steel Corporation files a suit against Rite Tool Company, claiming that the consideration for their contract is inadequate. The court will most likely not examine the adequacy of the consideration if (Points: 2) it is obvious that the consideration is adequate. Rite Tool asserts that there is adequate consideration. something of value passed between the parties. the consideration is worth more than $100. 71. Eastside Warehouse offers to sell a forklift to Forest Lumber Company, but it is stolen before Forest accepts. Eastside must obtain (Points: 2) a forklift for Forest, if Eastside's insurance covers the loss. a forklift for Forest, if it wants one. nothing for Forest, because that would extend the time of the offer. nothing for Forest, because the theft terminated the offer. 72. Quix Fix-It, Inc., offers Polly a job as a plumber. No time for acceptance is specified in the offer. The offer will terminate (Points: 2) after a reasonable period of time. after a typical work week (five business days). after a usual month (thirty calendar days). never. 73. On Tad's 18th birthday, he decides that he no longer wants to keep a car he bought from U-Pick Autos, Inc., when he was 17. His right to disaffirm the deal will depend on (Points: 2) the car's condition when Tad bought it. the car's current condition. whether Tad acts within a reasonable period of time. whether U-Pick has the right to disaffirm. 74. While a minor, Jason buys a car that he continues to use and keep in repair after reaching the age of majority. Jason has (Points: 2) disaffirmed the contract. ratified the contract. rejected the contract. rescinded the contract. 75. National Insurance Company violates a statute when selling an insurance policy to Opal. The policy may be enforced by (Points: 2) National Insurance only. National Insurance or Opal. no one. Opal only. 76. Joy induces Kelly to enter into a contract for the purchase of a condominium about which Joy knowingly misrepresents a number of material features. When Kelly discovers the truth, Kelly can (Points: 2) enforce the contract and seek damages. enforce the contract but not seek damages. neither enforce the contract nor seek damages. seek damages but not enforce the contract. 77. Gregor uses duress to force Honi to agree to pay him for protecting Honi's Coffee Shop against vandalism and destruction. Honi may (Points: 2) avoid the contract or choose to carry it out. do nothing once she has agreed to pay. recover from her insurer for a failure to direct her "protection." recover from the local police for a failure to protect her "direction." 78. Clay buys an MP3 player for $200 and a pair of stereo speakers for $600 from a Discount City store, and downloads $300 worth of digital music from E-Music.com. To be enforceable, the contract that must be in writing is the purchase of (Points: 2) the digital music, the MP3 player, and the speakers. the MP3 player and the speakers only. the MP3 player only. the speakers only. 79. Protective Finishes, Inc. (PFI), agrees to paint Quinn's house, using a particular brand of "discount" paint. PFI completes the job but uses a different brand of discounted paint. This is most likely (Points: 2) a complete excuse for Quinn's refusal to pay. a material breach. complete performance. substantial performance. 80. Rural Development Corporation (RDC) and Sid enter into a contract for the clear-cutting of RDC’s 50-acre tract for which RDC agrees to pay Sid. Sid transfers his duty to log the tract under the contract to Timber Logging Company. Timber is (Points: 2) a delegatee. an assignee. an obligee. a prohibitee. 81. Julio contracts to provide lawn-mowing services to Kevin for $140 per month. Julio cannot transfer this duty (Points: 2) under any circumstances. without continuing to be potentially liable. without Kevin’s consent. without paying Kevin at least one monthly fee. 82. Outstate Properties, Inc. (OPI), agrees to sell certain acreage to Pia. OPI repudiates the deal. Pia sues OPI and recovers damages. Pia can now obtain (Points: 2) an amount in quasi contract. damages representing restitution. specific performance of the deal. nothing more. 83. Musicology Instrument Company and Noisemakers, Inc., enter into an e-contract. A dispute arises, and Musicology files a suit against Noisemakers. Like most courts to date, the court that hears this suit will probably apply (Points: 2) Article 2 of the Uniform Commercial Code. Article 2B of the Uniform Commercial Code. nontraditional e-commerce law principles. traditional common law principles. 84. High-Tech Services, Inc., and Internet Investments Corporation enter into a con¬tract that would otherwise be subject to the UETA but purports to "opt out." The UETA covers (Points: 2) none of the contract. only the part of the contract that concerns computer information. only the part of the contract that does not concern computer information. the entire contract. 85. Omni Products, Inc., and Plenty Sales Corporation transact a deal over the Internet. Their contract does not mention the UETA. The UETA covers (Points: 2) none of the contract. only the part of the contract that does not involve e-commerce. only the part of the contract that involves e-signatures. the entire contract. 86. Genetic Seed Company hires Howie to work in its shipping office, accepting deliveries and dealing with other companies' drivers. With respect to Genetic, Howie is most likely (Points: 2) an agent. an independent contractor. a principal. a work for hire. 87. Cody contracts with Drew to act as her agent in a fraudulent marketing scheme. Cody does not successfully complete the scheme. Drew can recover from Cody for (Points: 2) breach of contract. breach of implied warranty. breach of the duty of performance. none of the choices. 88. Sunny is a salesperson for Tech Instruments, Inc. (TI). She misrepresents to Universal Piping Company, a customer, that a certain device has a certain capability. In reliance, Universal buys the device. Liable for this misrepresentation is (Points: 2) Sunny and TI. Sunny only. TI only. Universal but neither Sunny nor TI. 89. Ida hires Jim, a real estate broker, to act as her agent to sell her land for $100,000. Oil is discovered beneath the land, causing its market value to increase 100-fold. The agency agreement is likely (Points: 2) still in force if Ida gives Jim additional consideration. still in force if Jim does not mention the oil to prospective customers. terminated by mutual consent of the parties. terminated by operation of law. 90. Fruits & Vegetables, Inc., employs hundreds of seasonal and permanent workers, both skilled and unskilled, in seven states. Fruits & Vegetables can hire illegal immigrants (Points: 2) if either the employer or the immigrants file special forms. only if the employer files a special form. only if the immigrants file special forms. under no circumstances. 91. B2B, LLC, is a limited liability company. Among its members, a dispute arises that the operating agreement does not cover. The dispute is governed by (Points: 2) the applicable state LLC statute. a federal Uniform LLC Law. the principles of partnership law. a state corporation statute. 92. Like the bylaws of other corporations, the bylaws of Retail Sales, Inc., (Points: 2) establish the operating name of the corporation. establish the value and classes of corporate stock. were adopted at its first organizational meeting. were submitted for approval to the public official in charge. 93. Salt Corporation wants to acquire or merge with Pepper Corporation. The board and the shareholders of Pepper are resisting. Salt should (Points: 2) file a plan of merger with the secretary of state. file an article of merger with Pepper. make a tender offer to the shareholders of Pepper. make a tender offer to the shareholders of Salt. 94. Flite-Craft Corporation makes and sells aircraft parts. In most states, the minimum number of directors that must be present before Flite-Craft's board can transact its business is (Points: 2) all of the directors authorized in the articles or bylaws. a majority of the number authorized in the articles or bylaws. any odd number. one. 95. Nina is a director of Omega, Inc. Under the standard of due care owed by directors of a corporation, Nina's decisions must be (Points: 2) ambiguous and questionable. arguable and defensible. informed and reasonable. perfect and unassailable. 96. Odell, Prince, and Quinn are shareholders of Rite Corporation. Before a shareholders' meeting, they agree in writing to vote their shares together in a certain manner. Usually, such agreements are held to be (Points: 2) invalid and unenforceable. oppressive and irresponsible. suspect and voidable. valid and enforceable. 97. Cole is a shareholder of Donut Holes, Inc. Cole will be deemed to have a fiduciary duty to Donut Holes and its minority shareholders if he has (Points: 2) a restriction on the transferability of his shares. a right of first refusal. a sufficient number of shares to exercise de facto control. watered stock. 98. Mit-E Clean Corporation wants to make an offering of securities to the public. This offering is not exempt from registration under the Securities Act of 1933. Before the firm sells its securities, it must provide investors with (Points: 2) a forward-looking financial forecast. an investment contract. a prospectus. a road show. 99. Kirk is the chief financial officer of Lemon Corporation, which is required to file certain financial statements with the Securities and Exchange Commission (SEC). Under the Sarbanes-Oxley Act of 2002, Kirk must personally (Points: 2) certify that the statements are accurate. delegate the responsibility for preparing the statements. deliver the statements to the appropriate SEC officer. prepare the statements. 100. Heavy Hauling, Inc., is a public company whose shares are traded in the public securities markets. Under the Sarbanes-Oxley Act of 2002, to ensure that Heavy Hauling’s financial results are accurate and timely, the firm’s senior officers must set up and maintain (Points: 2) internal "disclosure controls and procedures." external "release and reveal timetables." personal "peruse and review liability policies." public "information and discussion forums." --------------------------------------------------------------------------------
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