BUL EXAM 2
All forms of business organizations limit the liability of their owners
False
An undisclosed principal is a principal whose identity is unknown to the third party with whom the agent is involved.
False
Because value is variable, mistakes of value affect the enforceability of contracts.
False
Both parties to an agency relationship have the power and the right to terminate the relationship at any time.
False
Disparate-impact discrimination occurs when a protected class is adversely affected by the practice or procedure of an employer who intended that result
False
If a member of a limited liability company dissociates from the firm, the other members can continue the firm's business, and the dissociated member can continue to act as an agent for the firm
False
If a seller fails to deliver the goods, the buyer can purchase other goods to substitute fir those due under the contract, but cannot then sue for consequential damages
False
If an employer sued for an adverse employment action on the basis of discrimination articulates a legal reason for the action, the employer wins
False
In a sole proprietorship, the owner is not the business
False
Most states apply to a limited liability company formed in another state the law of the state in which the fir currently does most of its business
False
One of the requirements of a valid contract is an adequate market for the deal's goods or services
False
The Americans with Disabilities Act defines disability to include a physical or mental impairment that causes "undue hardship"
False
To apply the doctrine of promissory estoppel in a given situation, there must exist no clear or definite promise
False
When a person who is not a partner holds himself or herself out as a partner, a court may impose liability- and partnership rights0 on the alleged partner
False
When an agent's act create the appearance of an agency that does not in fact exist, the principal is estoppel to deny the agency relationship
False
When the time for performance under a contract expires, the seller or lessor's right to cure also expires
False
Generally, if an acceptance to a sales contract between merchants includes terms additional to those in the offer, the terms automatically become part of the deal
True
If a business says it is corporation, and a third party deal with is as a corporation, neither party can question the validity of the business's status
True
If the members of a limited liability company want to reinvest profits in the business, they may opt for the firm to be taxed as a corporation.
True
In some situations, the courts find an agency relationship where there is no formal agreement
True
The Age Discrimination in Employment Act extends to federal government employees but state employers are usually immune from age-based claims
True
The contracts entered into by a minor are voidable at the option of that minor
True
When an agent, acting within the scope of his or her authority, contracts with a third party, a disclosed principal is liable to the third party
True
The agent must maintain separate accounts for the principal's funds and for the agent's personal funds, but may intermingle these accounts.
False
The law considers all new businesses to be soles proprietorships
False
The measure of compensatory damages does not vary by type of contract
False
The offeror's intention to become bound by the offer must be subjectively clear
False
To avoid conflicts with the First Amendment, no state requires a franchiser to submit ads aimed at prospective franchisees to the state for approval
False
Under the Americans with Disabilities Act, employees with disabilities must reasonably accommodate the needs of their employers
False
When the member of a limited liability company engaged in fraud on the firm;s behalf, the member is not likely to be held personally liable
False
When the owner of a sole proprietorship dies, the business does not dissolve-it is automatically transferred to family members or other heirs
False
Without copyright or patent protection, a business firm's competitor cannot simply copy the firm's product
False
Data Analytics LLC is a limited company. Unless the firm's articles of organization specify otherwise, it will most likely be assumed that the firm is
Member-managed
Punitive damages may be recovered in a case of discrimination against a private employer if the employer acted with malice or reckless indifference
True
Risk of loss cannot pass from seller to buyer unless the goods are identified in the contract.
True
Sometimes, when a buyer breaches a contract for a sale of goods and the seller has not yet produced the goods, the seller can recover the lost profits
True
The directors of a benefit corporation must, during the decision-making process, consider the impact of a decision on society and the environment
True
The operating agreement of a limited liability company and a state's LLC statute can be applied together to determine the outcome of a dispute between the firm;s members
True
To bring a Title VII claim as a class action, employees must prove a company-wide policy of discrimination that has a common effect on all of the plaintiffs
True
To make informed decisions and supervise corporate officers and employees, the directors need an unrestricted right to inspect corporate books and records
True
Under the UCC, if a dispute occurs over the existence of a contract, a purchase order can be sufficient to indicate that there is a contract.
True
When Title VII applies to an employer, any employee—including an undocumented worker—can bring an action for employment discrimination.
True
When a lapse of time and a change in circumstances make it substantially more burdensome for the parties to perform, a contract is discharged
True
When the goods delivered are not as promised, the measure of damages equals:
True
Actual authority in an agency relationship arises from what a principal makes clear to a third party
False
Because it may result in a piercing of the corporate veil, shareholders' continuous use of corporate property should most especially be avoided by
A close corporation
Bib replaces Chloe in her job at Data Market Corporation. To succeed with an age-discrimination claim against Data Market, Chloe will have to show that
Chloe is qualified for the job.
With respect to a corporation, an officer's rights are defined by
Employment contracts
EverSafe Corporation in New York sells a truckload of protective suits, masks, and other safety gear to Foundry Inc. in Connecticut, "F.O.B. New York." EverSafe arranges with Geo Truckline to transport the goods. The cost of the transport will be paid by
EverSafe
A corporate officer is liable to the corporation or its shareholders for a bad business decision
False
Luc, a vehicle dealer, offers to sell Mel a truck and trailer, which Luc claims can haul a certain weight. He knows nothing about the capability of the truck, but it is not as he asserts. Mel buys the truck. On learning the truth, Mel confronts Luc, who says he was not trying to fool Mel—he was only trying to make a sale. This is
Fraudulent misrepresentation
Sol and Thom agree to form a partnership to sell real property . To be enforceable, their agreement must be
In writing
Jon contracts with Kino to buy a certain number of sheep for Kino's Animal Farm. Jon makes a deal with Lila for the sheep, but neither Jon nor Kino pays the price. Lila sues Jon for breach. Jon's right to hold Kino liable for any damages is the right to
Indemnification
Jon, a paraplegic, applies for a broadcaster's job with a radio station. The manager says, "You meet all our requirements. But we need someone who can move around the studio without accommodation." Most likely, Jon could recover from the station under
The Americans with Disabilities Act
Espresso Brew Inc. uses a Web site to provide downloadable information to prospective franchises. This electronic information is the equivalent that must comply with
The Federal Trade Commission's Franchise Rule
Olin is a partner in Precision Plumbing. When the partners decide to dissolve the firm, Olin collects and distributes the assets. This results in
The termination of the firm's legal existence
Otto is a limited partner in Port Exports, a limited partnership. By participating in the firm's management, Otto is liable for its obligations
To the full extent
A click-on agreement can indicate the acceptance of an online offer
True
A corporation is intangible and invisible, and exists only in the contemplation of the law
True
Corporate shareholders will most likely be held personally liable for the firm's debts if they
Use the firm to penetrate a fraud
Brie buys a subscription to music provided by Concerto, an online streaming service. Before gaining access, Brie must agree to a provision stating that she will not make and sell copies of the music. This provision is
a click-on agreement
Metro Fabrication Inc. may be liable for the sexual harassment of an employee if the company knew or should have known about the harassment, failed to take immediate action, and the harassment was committed by
a company supervisor
State University provides housing on campus and in some adjacent off-campus neighborhoods. To lease a university house or apartment, a person must be a student at State. This requirement is
a condition
Brooke is an art collector and hires a broker to buy and sell artworks on her behalf. Under the UCC, in those transactions, Brooke has the status of
a merchant
Power Company offers to buy from Quality Transformers LLC a specific quantity of a certain type of transformer for a stated price. Quality can accept the offer by
a promise to ship the goods
Mining Corporation purchases the business assets of Open Pit Inc., including its equipment and supplies, for an agreed-to price, payable in installments. Under the UCC, this transaction is
a sale
Outdoor Outfitters Store contracts to buy fifty tents from Pitched Camp, Inc. Unless the contract states otherwise, it is assumed to be
a shipment contract
Trucking LLC enters into a contract to deliver a certain quantity of potatoes to United Foods's refrigerated warehouse in exchange for a specified payment. Trucking delivers the spuds to the location. United's duty to pay is
absolute
Dona, a fifty-five-year-old member of a racial minority with a disability, believes that she is a victim of employment discrimination. Potentially the most widespread form of discrimination is based on
age
Watercraft Inc. employs Vern as a sales agent for a trial period. At the end of the period, Watercraft and Vern disagree on the amount of the commissions Vern is due for sales that he made. Vern may demand
an accounting
Rosa introduces Sal to her friend Trey as "my associate." Sal purports to act as Rosa's agent in a business transaction with Trey. If Rosa is liable for Sal's actions, it will be because their relationship is
an agency by estoppel.
Ensure Care LLC's owners are Fez and Guan. As a limited liability company, Ensure Care enters into contracts
as a legal entity apart from its owners.
Vera is a purchasing agent for Wild-Caught Fish Inc., with the authority to buy a sea fisher's catch up to a certain quantity. After the fish is bought, the agency relationship terminates
automatically
Lisa brings a successful suit against her employer Mold & Die Corporation for employment discrimination. Lisa may be awarded
back pay, retroactive promotions and damages
Dory enters into a contract with Eaton for the construction of a Fast Food franchise, according to a certain schedule. The parties perform some preparatory steps, but Erin materially and willfully fails to begin work on the specified date. To rescind the contract, Dory must show that the parties can
be restored to the status quo
Analytics LLC processes misinterpreted data furnished by Botch Services to propose a marketing plan for Clientele Inc. Analytics and Clientele are both ignorant of the mistaken data. Their contract can be rescinded on the basis of
bilateral mistake
East Bay Café orders seafood from Fresh Catch Company. Fresh places the goods at East's disposal. Fresh's performance under the contract is
complete
Curly Fries Inc. grants its agent Dian an exclusive territory in which to sell its products. The company cannot compete with Dian in that territory under the duty of
cooperation
Dom enters into a contract to buy Ezra's office building for a certain price subject to an appraiser's evaluation of the structure's condition. If the appraiser deems the condition to be substandard, the parties' obligations will be
discharged
Start-Up LLC is a limited liability company without a written operating agreement. Among the members, a dispute arises concerning the division of profits. Under most LLC statutes, the profits will be
divided equally among the members
Home Furnishing Store's contract for a sale of it appliances provides that the only remedy for breach is replacement, repair, or refund of the purchase price. With respect to this provision, on a customer's suit for breach, a court is most likely to
enforce it
Romero employs Supply Procurement Service as an agent under a written agreement that describes the rights and duties of both parties. This is
express authority
Del and Efron want to form a limited partnership to do general business bookkeeping with an emphasis on tax accounting. In most states, a limited partnership will be created when Del and Efron
file a certificate of limited partnership
With respect to taxes imposed on limited liability companies, most states
follow the federal rules
Raceway LLC licenses the trademarks to its products to Stadium Markets Inc. to reproduce on clothing and other goods for sale. This is
franchise
Holiday Corporation sells Idyll brand campers and trailers. Under most circumstances, Holiday will be presumed to have warranted that its title to the goods is
good and valid
Ira serves in a representative capacity for Jett. Key is injured through Ira's negligence. Jett may be liable to Key if Ira's conduct occurred
in the course and scope of Ira's employment
To open and operate Boo! City, a Halloween costume and paraphernalia shop, Dwayne and Erica form a business organization that combines the limited liability aspects of a corporation with the tax advantages of a partnership. Their form of business organization is
limited liability company
To be certain to transact business in states other than its state of formation with no limitations, Real Estate Investment Trust should choose as its form of business organization
limited partnership
Gil and Hera are employees of IT Solutions Inc. Under the Equal Pay Act, IT Solutions can legitimately pay different wages to male and female employees on the basis of
merit
Maia, a limited partner in Nano Investors, consults with Odet, the firm's general partner, regarding partnership business. For this activity, Maia is
none of the choices
Obie operates Pizza Palace. Obie hires Qua to take and fill customers' orders at an hourly wage of $15.00, plus tips. Obie and Qua are
not partners, because Qua does not have an ownership interest or management rights in Pizza Palace
Open Range agrees to sell Pinewood Ranch a remote parcel of land for $15,000. Both parties believe the land to be worthless, but beneath it is shale rock containing oil. A court would
not rescind the contract
Paolo, Quito, Reyes, and Sari form Toda el Mundo LP, a limited partnership to import and sell clothing made in remote global locales. In the absence of an agreement among the partners to the contrary, profits will be shared
on the basis of percentages of capital contributions
Rex forms Shell Company to assume debts that he does not wish to pay. The firm is not intended to make a profit, and Rex does not provide it with sufficient capital. This most likely warrants
piercing Shell's corporate veil.
Bianca, a minor, enters into a contract to buy two all-season passes from Chalet Ski Park. The contract will be made enforceable if Bianca
ratifies it.
To avoid sharing control with someone they do not know or like, it would be most effective for the shareholders of a close corporation to
restrict the transferability of shares to outside persons
Primo tries to start his car with no success. He yells that he will sell the car to anyone for $10. Quanto, a passerby, hears Primo's yell. This is not an effective offer because it lacks
serious intent
The state of Nevada enacts a usury statute. With respect to different types of transactions, including ordinary loans, the purpose of the statute is to
set a maximum rate of interest.
Raj defends against a breach-of-contract suit by Student Loan Corporation by claiming that their deal—a student loan—was unfair because the consideration for the contract was inadequate. With respect to Raj's defense, the court will most likely rule in favor of the lender on the ground that
the adequacy of the consideration is not for the court to determine.
Retail LLC contracts with Paving Inc. to grade and pave a parking lot. The contract provides that it cannot be assigned without Retail's consent. Later, Paving assigns the contract to Roadwork Company without obtaining Retail's consent. Retail could most successfully argue that the contract cannot be assigned because
the contract prohibits assignment.
Cindy, a real estate agent, sells her friend Doug's house without charging a commission. In return, Doug promises to give Cindy $1,000. This promise is not an enforceable contract because
the house has already been sold—the consideration is past.
Builder Inc. and Concrete Supply Company enter into a contract for a sale of cement. Concrete delivers, but Builder does not pay. Concrete can recover as damages
the purchase price plus incidental damages
Minh owns a beach house that she rents to vacationers. Minh gives her son Ngo a trip to Omaha on his graduation from community college. Minh sells her car to her neighbor Phan for $4,500. UCC Article 2 covers
the sale to Phan
Runners Feet, a shoe store, orders one hundred pair of athletic shoes from Speedster Inc. Absent a contrary agreement between the parties, title will pass to Runners Feet when
the seller physically delivers the goods
Marv files a suit against the state of New Hampshire, alleging employment discrimination under the Age Discrimination in Employment Act. The state asks the court to dismiss the suit. The court is most likely to rule that
the state is immune from the suit
Ewa is induced by her guardian Filo to sign a contract to invest funds in Gold Inc. through Filo's investment firm. Unknown to Ewa, Filo realizes a commission from the investment. Most likely, Ewa can rescind the contract on the basis of
undue influence
A contract to do something that is prohibited by statute is
unenforceable
Sweetwater Corporation is incorporated in Texas. Outside that state, within the United States, the firm is
A foreign corporation
Erin, a shareholder of Finance Inc., demands the right to inspect corporate records to determine whether management has engaged in self-dealing that impacts the company. The firm refuses the request. On Erin's challenge, a court is most likely to hold that her request constitutes
A proper purpose
Qin applies for a job at Rocket Science Inc. He passes a test to determine which applicants are eligible for hiring, but Rocket discards the results, and Qin is rejected. To support a claim for discrimination against the employer under Title VII of the Civil Rights Act, Qin must be a member of
A protected class
Maeve sells New Energy, a sole proprietorship that makes and sells solar panels, to Olaf. This
A transfer of the ownership of the business
San buys a franchise from Taco Mission Inc. This relationship, like all other franchise relationships, is governed by
All of the choices
Under the Equal Pay Act, an employer can legitimately pay different wages to male and female employees on the basis of
All of the choices
Ota works at Pumps Inc. She works on the company's engineering department, interacting with third parting only to discuss technical issues. With respect to third parties Ota is
An employee only
Bhat and Cho do business as Data Security, a partnership. In most states, for the purposes of collecting judgements and having accounting performed, this firm would be treated as
An independent entity
A corporation is not liable for the misconduct of its agents or officers
False
A foreign corporation that has not obtained a certificate of authority to do business in a state can nevertheless maintain an action in the state's courts
False
A franchiser does not have good cause to terminate a franchisee's failure to meet specified sales quotas
False
A limited liability company is an aggregate of its members, not a separate legal entity
False
A limited partner can force the dissolution of a limited partnership even if the other partners want to continue the business
False
A partner always has the right to dissociate from the partnership
False
A promise made in return for an act or event that has already taken place is fully enforceable.
False
A seller who places goods at the disposal of a buyers has tendered delivery but cannot yet demand payment
False
A single pero son carrying on a business for profit, with control over its operation, can constitute a partnership
False
A statute of limitations limits the amounts of damages that the non reaching party can obtain for a breach
False
Agency relationships cannot exist outside an employment, so agency law has a narrower reach than employment law
False
Agency relationships come about by voluntary consent and agreement of the parties-consideration is required, and the agreement must be in writing
False
An employer must reasonably accommodate its employee's religious practices, but only if they are based on the doctrines of a traditionally recognized religion
False
Any contract involving consumer goods must be in writing to be enforceable.
False
If the acceptance to a sales contract between non-merchants includes terms different from those in the offer, no contract is formed in the UCC
False
In a limited partnership, every partner has full responsibility for the management of the partnership and its obligations
False
Like other types of law, contract law is distinct from our social values, interests, and expectations at any given point in time
False
Many states have their own laws that protect employees against discrimination, but none provide more protection to employees than federal laws
False
Most contracts needs to be performed to the personal satisfaction of each contracting party
False
On a contract-"F.O.B. New York"-for a sale of almond by a broker in California, the risk of loss passes to the buyer when conforming goods are placed in the possession of the carriers
False
Only a mistake of value or quality makes a contract voidable.
False
Shrink-wrap terms are enforceable even if a buyer does not discover them until after the parties have entered into a contract
False
To avoid a liability for misconduct in corporate operations, directors can refrain from reasonable supervision of work delegated to
Non of the choices
Beth and Connie do business as Dig Excavators. In acting on the firm's behalf, Beth makes an honest error in underestimating the cost of a certain project. In this situation, to her firm, Beth is liable for a breach of the duty of
None of the choices
Sara believes that she was rejected for a position at Tour & Travel Agency on the basis of her race. Sara files a suit against Trek n' Travel under the Civil Rights Act of 1964. To establish a prima facie case of employment discrimination, Sara must show all of the following except that
Other persons of her race hold similar positions with similar employers
Pay-Most Convenience Stores, Inc., is a franchiser. Randy operates a Pay-Most franchise. Seth is one of Randy's employees. As a franchiser, if Pay-Most controls the day-to-day operations of the business to a significant degree, it may be liable for tortious acts by
Pay-Most, Randy, or Seth
Once performance has been tendered, the party making the tender has done everything possible to carry out the terms of the contract
True
A corporation's authority to act and its liability for those actions is, with respect to the firm's owners
Separate and apart
Acceptance is timely if it is effective before the offer is terminated.
True
All of the statutory and common law rules governing partnerships apply to a limited liability partnership (LLP), except those modified by the applicable LLP statute.
True
Among the factors an entrepreneur will consider in selecting an organizational form for a business are tax considerations
True
As in a partnership, a limited liability company may pay no taxes—profits can be passed through to the members, who pay personal taxes on the profits.
True
Because each type of warranty is created in a different way, the manner in which a warranty can be disclaimed varies with the type of warranty.
True
Because of the potential for punitive damages, plaintiffs often include a claim for fraudulent misrepresentation in their contract disputes
True
Because state corporate laws differ, persons wishing to incorporate may look for the state that offers the most advantageous tax or other provisions.
True
By using agents, a principal can conduct multiple business operations simultaneously in various locations
True
If a board attempts to manipulate the shareholders election of a director to reduce the shareholders influence the shareholders can challenge the election in court.
True
If the seller is a merchant who is holding the goods for the buyers to pick up, the risk of loss passes when the buyer takes physical possession of the goods
True
Rene is a delivery driver for Sicilian Pasta Company. Rene does exactly what the company tells her. Rene is
an employee
Jess, a salesperson for Kitchens Inc., shows Lane, a buyer for Metro Diner, display items in Kitchens' showroom, stating that any purchased equipment will match the display. This is
an express warranty
Lon says to Misty, "I would like to sell you my sofa." This statement is
an invitation to negotiate, not an offer.
Levon, an agent for Milled Grains LLC, executes an unauthorized contract with National Grocers Inc. The deal is highly advantageous to Milled Grains, and the company ratifies the contract. The contract is
valid
Seb is mentally incompetent but has not been adjudged by a court to be incompetent. Seb enters into a contract with Toby for the sale of Seb's warehouse. Most likely, the contract is
voidable if Seb did not comprehend the consequences.
Paving LLC is a foreign limited liability company in the state of Ohio. In dealing with Paving, Ohio will apply the law of the state where the firm
was formed
