Business Law 80% correct answers

Question 1
1.	Which of the following is correct about Venue?
 
	It is an alternative to meeting jurisdiction requirements.
 
	Its requirements must be met in addition to meeting jurisdiction requirements.
 
	In most cases, venue selection is up to the defendant.
 
	It allows a party to select the court most likely to decide a case in its favor.
0.5 points   
Question 2
1.	Which of the following is not true regarding common law?
 
	The common law of the United States originally came from England.
 
	Judges must strictly follow precedent in all cases.
 
	A drawback of common law is that legal decisions may be followed after they have become outdated or no longer relevant.
 
	Common law is called common law because judges in England were intended to apply laws similarly is all jurisdictions, thereby making the law common to all.
0.5 points   
Question 3
1.	Damages intended to punish a defendant and deter the defendant from engaging in the same tortious conduct in the future are called:
 
	Penalty damages.
 
	Retribution damages.
 
	Punitive damages.
 
	Preventative damages.
0.5 points   
Question 4
1.	Which of the following is true?
 
	Voting trusts and voting agreements both require the transfer of stock certificates to a trustee.
 
	In a voting trust, the shareholder grants the trustee the right to vote the shares, but in a voting agreement the shareholders vote their own shares.
 
	Voting agreements, but not voting trusts, must be accompanied by proxies executed by the shareholders.
 
	Voting trusts are irrevocable, while voting agreements can be either revocable or irrevocable.
0.5 points   
Question 5
1.	What third party cannot sue to enforce rights in the original contract?
 
a.	A third party creditor beneficiary
 
b.	A third party done beneficiary
 
c.	A third party incidental beneficiary
 
d.	An assignee.
0.5 points   
Question 6
1.	Which of the following is true about the Uniform Partnership Act?
 
	It is a federal statute which covers all partnerships.
 
	It is the statute which set up partnerships as pass-through entities for tax purposes.
 
	It is a model statute which has been enacted by nearly all states as state law governing the formation and operation of partnerships.
 
	It can apply only if there is no other statute or common law principle covering the applicable condition.
0.5 points   
Question 7
1.	Article 2 of the UCC covers which types of transactions:
 
	Sales of goods and sales of real property.
 
	Sales of goods and leases of goods or real property.
 
	Sales of goods and contracts for the providing of services.
 
	Sales of goods and leases of goods.
0.5 points   
Question 8
1.	Which of the following is a false statement?
 
A.	An agency relationship can be created by mutual agreement.
 
B.	An agency relationship can be created by ratification.
 
C.	An agency relationship can be created under the apparent agency doctrine by the acts of the “agent.”
 
D.	An agency relationship can be created under the apparent agency doctrine by the acts of the “principal.”
0.5 points   
Question 9
1.	Which of the following statements is a false one?
 
	Violators of emission standards in the U.S. can be subject to civil penalties pursuant to the Clean Air Act.
 
	Under no circumstances in the U.S. can waste be discharged into navigable rivers since that is pollution.
 
	Companies in the United States can legally buy and sell rights to pollute in the form of so-called emission credits or pollution permits.
 
	The common law doctrine of nuisance can be used to obtain an injunction to stop pollution.
0.5 points   
Question 10
1.	Which of the following is TRUE about warranties under the Uniform Commercial Code?
 
a.	A disclaimer of the implied warranty of merchantability generally must use the word "merchantability" in the disclaimer.
 
b.	The implied warranty of merchantability is made by any person who sells goods.
 
c.	The implied warranty of merchantability if made by a merchant can never be disclaimed since it would not be fair to the consumer.
 
d.	Express warranties can never be made by pictures, samples, or models of goods since express written words are required.
0.5 points   
Question 11
1.	In order to satisfy the Statute of Frauds sufficiency of writing requirement, generally a writing must:
 
	Be a formal, written, sealed document.
 
	Be any written memorandum containing the essential terms of the parties' agreement.
 
	Be signed by the party against whom enforcement is sought.
 
	B and C.
0.5 points   
Question 12
1.	"Piercing the corporate veil" typically can occur and thus personal liability imposed on the purported shareholders when:
 
a.	The alleged corporation is "thinly capitalized."
 
b.	Corporate "formalities," such as issuing shares, electing directors, and appointing officers, are not adhered to.
 
c.	An important motive of the incorporators for incorporating the business was the desire to achieve limited liability.
 
d.	a. and b.
0.5 points   
Question 13
1.	Which of the following is true about sexual harassment in the workplace?
 
	If a supervisor approaches someone and asks that person out for a social date, if the supervisor acts in socially customary manner, it generally will be sexual harassment.
 
	The standards for a hostile or offensive work environment are very vague and depend on all the facts and circumstances.
 
	Sexual harassment claims require that persons of both sexes be involved.
 
	Sexual harassment is covered under OSHA as part of workplace safety.
0.5 points   
Question 14
1.	The seller can recover the purchase price for the goods only under certain circumstances, including when:
 
	The buyer accepts, but fails to pay for the goods.
 
	The goods are destroyed after risk of loss passes to the buyer.
 
	The buyer rejects specially manufactured goods that cannot be resold.
 
	A, B and C.
0.5 points   
Question 15
1.	Which of the following is a false statement?
 
	 To exercise the power of acceptance, the common law requires an offeree to accept the offeror- offer unconditionally and unequivocally.
 
	The death of a party to a contract will always result in the automatic termination of that contract since it would not be right to burden the surviving spouse or other heirs with business matters.
 
	The common law “mirror image” rule generally requires an acceptance of an offer to adhere exactly to the terms of the offer.
 
	A counteroffer under the common law does terminate an offer.
0.5 points   
Question 16
1.	Even an employee at-will can sue for wrongful discharge when he or she:
 
a.	Is discharged in violation of Title VII of the Civil Rights Act.
 
b.	Is discharged in violation of the Public Policy doctrine.
 
c.	Is negligently discharged by the employer.
 
d.	All of the above.
0.5 points   
Question 17
1.	The EPA standards for toxic air pollutants:
 
	Require that all such pollutants which have any risks to humans be eliminated.
 
	Require that companies use the best available technology to minimize these pollutants, regardless of cost.
 
	Allow for safe levels of these pollutants to exist.
 
	A and B only.
0.5 points   
Question 18
1.	Which of the following is a true statement?
 
	In a limited liability company in the U.S., members cannot participate in management.
 
	In a limited liability company in the U.S. members must participate in management.
 
	The typical state limited liability company (LLC) statute in the U.S. would provide that unless the members agree otherwise, all profits of the LLC will be divided equally.
 
	Corporations do not possess any rights under the U.S. Constitution since corporations are artificial legal entities and not real persons.
0.5 points   
Question 19
1.	As to all tort lawsuits:
 
a.	There must be a legal duty owed to the plaintiff by the defendant.
 
b.	There must be the intent to harm by the actor.
 
c.	There must be the showing of a defect.
 
d.	None of the above.
0.5 points   
Question 20
1.	Which is TRUE regarding the employment at-will doctrine in the United States?
 
a.	It can result in a legal but immoral discharge of an employee.
 
b.	It cannot be changed by a contract between the employer and the employee.
 
c.	It is operable in the U.S. and can result in a discharge without notice or cause or good cause but the employer based on federal law has to pay severance to the discharged employee based on the number of years he or she has worked for the firm.
 
d.	It supersedes and prevails over Title VII of the Civil Rights Act.
0.5 points   
Question 21
1.	Which of the following constitutes illegal discrimination pursuant to Title VII of the Civil Rights Act?
 
a.	A shoe store refuses to hire Hispanics as employees.
 
b.	A sporting goods store excludes applicants over the age of 40.
 
c.	A large department store refuses to hire anyone in a wheel chair.
 
d.	None of the above.
0.5 points   
Question 22
1.	If a corporation is properly incorporated in one state and wants to do business in a second state, the corporation:
 
	Must incorporate in the second state.
 
	Must do nothing because being incorporated in one state entitles the corporation to do business in all states.
 
	Register with the Interstate Commerce Commission.
 
	May be required to obtain a certificate of authority from the second state. 

0.5 points   
Question 23
1.	State law provides that existing shareholders may buy new issues of stock in the same proportion as their current holdings. This is done to allow the current stockholders to keep the same voting and dividend rights they had before the new issue. This right is known as a right of:
 
	Redemption.
 
	Ratification.
 
	Preemption.
 
	First refusal.
0.5 points   
Question 24
1.	What is a FALSE statement regarding monopolization analysis pursuant to Section 2 of the Sherman Act?
 
a.	One generally cannot be guilty of or liable for monopolization without having a monopoly first.
 
b.	One can have a monopoly but not have monopoly power and thus not be a monopolizing company.
 
c.	All monopolies are illegal since they are inherently unfair to consumers.
 
d.	Wrongful conduct by a monopoly to establish the legal wrong of monopolization includes illegal AND unethical, predatory, or abusive conduct (which is not necessarily illegal).
0.5 points   
Question 25
1.	335.Which of the following statements is not correct?
 
	Generally, a state court can exercise jurisdiction over a nonresident by showing that he or she had sufficient contacts with the state.
 
	A lawsuit involving a federal question can originate in a federal court in the United States.
 
	The United States Supreme Court has automatic appellate authority over all cases decided in the state courts.
 
	An answer to a lawsuit can admit to allegations made in a complaint in the U.S. civil law system.
0.5 points   
Question 26
1.	All of the directors of a typical business corporation must be:
 
	shareholders of the corporation.
 
	residents of the state and citizens of the United States
 
	incorporators of the corporation
 
	None of the above
0.5 points   
Question 27
1.	Which of the following is a false statement?
 
	 The breach of duty element in the test for negligence liability in the U.S. is governed predominantly by the reasonable person standard.
 
	The doctrine of res ipsa loquitur can apply if an event causing the harm normally does not occur in the absence of negligence.
 
	A battery occurs only if the victim suffers actual serious physical harm, that is, the victim is “battered.”
 
	One may be able to recover damages for emotional distress in a tort lawsuit for negligence.
0.5 points   
Question 28
1.	Under the UCC, if a purported acceptance to an offer contains additional terms:
 
	It is treated as a rejection and counteroffer.
 
	If both parties are merchants, there is a contract and the additional terms may or may not become part of the contract.
 
	If neither party is a merchant, there is no contract.
 
	It is treated as a counteroffer, but it does not reject the original offer.
0.5 points   
Question 29
1.	Which of the following is a true statement?
 
A.	The doctrine of strict liability has completely eliminated the doctrine of negligence as a possible legal theory for an injured person to recover for harms caused by a product.
 
B.	In order to recover for the tort of intentional misrepresentation (or fraud) the victimized plaintiff must have reasonably relied on the misrepresentation.
 
C.	The doctrine of strict tort liability applies to the sale and lease of products and services.
 
D.	Strict liability can be effectively disclaimed or excluded from the transaction by a conspicuous and clear disclaimer.
0.5 points   
Question 30
1.	Which of the following events would probably excuse performance of a contract because of commercial impracticality?
 
	The price of the commodity increases slightly so that the contract will not be as profitable.
 
	There is an unforeseeable trade embargo causing commodity prices to triple.
 
	The promisor of a personal service contract dies.
 
	The subject matter of the contract is destroyed by fire.
0.5 points   
Question 31
1.	What is true about a partner's right to participate in the management of the partnership?
 
	It exists only if the partner has been elected as an officer or management committee member.
 
	It exists only if the partnership agreement gives the partner this right.
 
	It exists automatically, but can be eliminated in the partnership agreement.
 
	It exists automatically and cannot be eliminated in the partnership agreement.
0.5 points   
Question 32
1.	The following are required to be proven in a negligence case except:
 
	The defendant owed a duty or care to the plaintiff.
 
	The defendant was fully aware of the consequences of his actions when they were done.
 
	The defendant breached the duty of care.
 
	The defendant- conduct was an actual cause, in fact, of the injury to the plaintiff.
0.5 points   
Question 33
1.	Which of the following is not a correct statement?
 
	Under the principle of comity, a foreign business that deals with a U.S. business in the U.S. may be subject to U.S. law.
 
	Alternative dispute resolution refers to methods for resolving a dispute outside the traditional court system.
 
	An arbitrator can never render a legally binding decision since he or she is not a traditional judge.
 
	Most online dispute resolution services automatically apply the laws of India since that country is well known as a “high-tech” academic and business center.
0.5 points   
Question 34
1.	A sole proprietor has unlimited liability for:
 
	Personal, but not business debts.
 
	Business, but not personal debts.
 
	Both business and personal debts.
 
	Neither business nor personal debts.
0.5 points   
Question 35
1.	A computer retailer sells some computer games to a minor. This contract is:
 
	Unenforceable.
 
	Voidable.
 
	Void.
 
	Enforceable.
0.5 points   
Question 36
1.	Who can be deemed liable for trading on material inside information based on U.S. securities laws?
 
a.	Misappropriators of inside information
 
b.	Insiders and tipees in conspiracy with insiders
 
c.	Inadvertent tipees who are in a fiduciary relationship with the disclosing party
 
d.	All of the above.
0.5 points   
Question 37
1.	The distinguishing feature of a common law system is:
 
	Requiring guilt to be proven beyond a reasonable doubt.
 
	Using juries to decide cases.
 
	Having both civil and criminal cases.
 
	Following precedent in making decisions.
0.5 points   
Question 38
1.	Which of the following situations, by itself, typically would not
justify a court disregarding the corporate entity?
 
	The corporation failed to follow the necessary corporate formalities.
 
	The corporation is severely undercapitalized.
 
	The corporation does not have enough current assets to pay all its liabilities.
 
	The shareholders have looted the corporation.
0.5 points   
Question 39
1.	The term for jurisdiction based on the location of a piece of property is:
 
	Long arm jurisdiction.
 
	In personam jurisdiction.
 
	In rem jurisdiction.
 
	Subject matter jurisdiction.
0.5 points   
Question 40
1.	Under which of the following types of misrepresentation is the innocent party usually not able to rescind a contract?
 
	Fraud in the inducement.
 
	Fraud in the inception.
 
	Silence as misrepresentation.
 
	Misrepresentation of law.