Business Law 335 - Section 2 - True and False

A competent party may delegate his or her service on a jury to another by appointing an agent.

False

A contract for labor and materials must always be in writing, regardless of the amount of money involved.

False

A limited partner is allowed to participate in the overall management of the business, and at the same time maintain limited liability.

False

A specific oral promise made by a seller is an implied warranty.

False

Accounting professionals have a duty only to their client.

False

All bankruptcy filings are involuntary.

False

An accountant who deliberately falsifies financial data can be charged only with negligence.

False

An alteration that a buyer makes in a product is known as a product flaw.

False

An architect who designs a building that is later destroyed in a windstorm cannot be charged with negligence because architects have no control over the weather.

False

An employee who performs only mechanical acts under the employer's direction and is subject to the employer's control is legally an agent.

False

An insurance agent or broker can be charged with negligence only if he or she cancels a policy against the wishes of the owner.

False

Any warranty can be canceled if the seller claims that it is causing him or her to lose money.

False

Both breach of warranty and product liability lawsuits are based on tort law rather than contract law.

False

Chapter 9 bankruptcy is sometimes referred to as straight or liquidation bankruptcy.

False

Clergy cannot be charges with negligence.

False

Corporations may freely give both charitable contributions and political contributions.

False

In a Chapter 11 bankruptcy, all daily business decisions must be made and implemented by the bankruptcy court.

False

In a partnership, it is necessary that profits and losses be shared in the same percentages.

False

In a partnership, the expulsion of one of the partners must always be for cause.

False

In an agency exists "at will" the principal has the right to revoke the agency agreement and discharge the agent only if such discharge is for a good reason

False

It is perfectly safe to purchase prescription drugs over the Internet.

False

Nurses cannot be found to be negligent because they work under the direct supervision of a doctor.

False

Only manufacturers can be held liable in product liability lawsuits.

False

Persons familiar with good accounting practices recognize that assets should never exceed liabilities

False

Promises and statements issued after the sale have no effect on the warranty of a product.

False

Sales talk, or puffing, is considered a warranty.

False

The 'reasonable person' doctrine is concerned with the appeal to a jury to assume how a person would behave under the best conditions.

False

The National Highway Traffic Safety Administration has the responsibility of controlling automobile emissions.

False

The buyer of goods that have been shipped FOB destination must bear the loss if the goods are lost or damaged in transit.

False

The great majority of small business in the U.S. are organized as limited liability companies.

False

The implied warranty of merchantability means that all merchants warrant their goods to be of the highest quality.

False

The parol evidence rule allows a court to consider oral statements of warranties even if these are inconsistent with the written express warranties.

False

The shareholders who own the corporation directly manage the activities of the firm.

False

The tort of libel is concerned with injury to a person's reputation caused by false statements that are used in testimony in court.

False

Title to goods shipped FOB shipping point remains with the seller until delivery is made to the buyer.

False

When goods are sold on approval, the buyer has title during the trial period.

False

While there are express warranties that relate to quality, there are no implied warranties to such.

False

A bankruptcy court may disallow a petition for a Chapter 7 bankruptcy if the individual does not meet the standards of the means test.

True

A buyer whose goods are not delivered within a reasonable time has the right to "cover" - that is, to purchase substitute goods from another seller.

True

A common carrier is a firm in the business of transporting goods or person-by rail, truck, plane or any other mode of transportation.

True

A contract for sale differs from a contract to sell primarily in the point at which title passes.

True

A contract for special manufacture, construction, or design of goods is considered a contract for labor and materials.

True

A contract for the sale of various, unrelated articles is considered a divisible contract.

True

A corporation usually has bylaws, which provide rules for the meetings of the corporation.

True

A design defect is a hazardous condition that exists throughout an entire product line.

True

A disadvantage of a sole proprietorship is the difficulty the owner faces in raising money to finance the operations of the business.

True

A disclaimer of a warranty of fitness for a particular purpose is effective if it includes expressions such as "as is" or "with all faults"

True

A financial planner can be sued for deliberately obstructing his or her client's desire to transfer one or more accounts to another professional.

True

A general agent is a person authorized to assume complete charge of his or her principal's business.

True

A person who defames another individual by exhibiting an insulting drawing in a public place could be charged with libel.

True

A principal is liable for an agent's torts and crimes if they were committed in the ordinary course of the agent's performance of authorized duties

True

A psychiatrist who learns from a patient that the patient intends to do harm to another has the legal duty to inform the intended victim or the authorities.

True

A tort is a violation of the rights of a particular person.

True

Acts of an employee who performing duties of employment are considered the acts of the employer.

True

Advertising of drugs is legal so long as detailed information about the drug being advertised is disclosed.

True

All debtors wishing to file for bankruptcy must receive individual or group credit counseling from an approved, not-for-profit, individual or group budget or credit counseling agency.

True

An agent is liable to the principal for any losses that result from the agent's neglect or incompetence.

True

An agent is reasonable in assuming that he or she has the authority that is related to the responsibilities covered in the contract of agency.

True

An agent representing a partially disclosed principal becomes a party to the contract.

True

An implied warranty of fitness may exist even if the buyer does not make his or her intended use of the merchandise known to the seller.

True

An insurance agent or broker can be charged with negligence for failing to recommend appropriate amounts of insurance coverage.

True

Bankruptcies are governed under both federal and state law.

True

Chapter 12 bankruptcy was specifically created to adjust the debts of family farmers or fishers who earn an annual income

True

Chapter 13 bankruptcy is sometimes referred to as reorganization bankruptcy.

True

Contracts for sale can be oral or written, express or implied.

True

Corporations continue to live on unless some formal action is taken to discontinue the business.

True

Courts have granted corporations similar constitutional rights to those granted to individuals.

True

Custom of the marketplace can be applied by a court when a warranty is vague and indefinite.

True

Defamation includes both libel and slander.

True

Directors and officers of corporations can be charged with breach of their duty resulting from action or inaction.

True

During the winding up period, there is an orderly liquidation of the partnership assets.

True

Each partner is an agent for all other partners.

True

Good Samaritan laws provide medical professionals who render routine care or treatment to individuals immunity from malpractice lawsuits.

True

Goods that physically exist and are owned by the seller at the time of sale are considered existing goods.

True

In Phase II of the drug-testing process, the effectiveness of the drug is measured by comparing subjects who receive the drug to those who receive a placebo.

True

In a partnership, the shares of the partners might be equal, or they might vary according to an agreement between or among the partners.

True

In determining whether a defendant has breached his or her duty in a malpractice lawsuit, the defendant's act or failure to act is measured against the standard of care required by a reasonable professional in the same field.

True

In most cases of the sale of future goods, title remains with the seller until the goods are in a deliverable state.

True

In most instances, when bankruptcy is filed, the debtor's assets are sold and the money is distributed among the debtor's creditors to pay the debt that is owed.

True

Liability is the state of being responsible for a wrong or injury.

True

Manufacturers and retailers have a duty to warn users of dangerous or hazardous characteristics of products.

True

Negligence per se occurs when a defendant in a case of negligence has violated a law that was enacted in order to prevent the type of injury that occurred.

True

One consequence of strict liability is that companies are sometimes hesitant to introduce new or innovative products because of the fear of liability lawsuits.

True

The Consumer Product Safety Commission regularly conducts tests of consumer products sold in the United States.

True

The UCC clearly specifies requirements that manufacturers or sellers must follow in making disclaimers.

True

The buyer to goods sold on approval can indicate his or her consent to keep the goods by retaining them for longer than the agreed time or a reasonable time.

True

The four elements of a malpractice lawsuit are duty, breach, proximate cause , and damages.

True

The four elements of a product liability lawsuit are duty, breach, proximate cause, and damages.

True

The implied warranty of merchantability means that all merchants warrant their goods to be of the highest quality.

True

The major disadvantage of a sole proprietorship is the fact that the owner of the establishment has unlimited liability.

True

The manufacturer is in a better position than the user of a product to prevent injuries because the company has the opportunity to design safe products.

True

The notations in an auctioneer's book of sales of more than $500 satisfies the requirements of the UCC that such contracts be in writing to be enforceable.

True

The sale of food involves the implied warranty of merchantability.

True

The title to goods sold with right of return passes to the buyer at the time of sale.

True

The tort of conversion is concerned with acts that deny a person the possession of his or her property.

True

The tort of negligence is a form of carelessness.

True

The tort of nuisance does not entail taking another's property, only detracting from his or her enjoyment of it.

True

The tort of slander is concerned with injury to a person's reputation caused by false statements that are spoken.

True

There is an implied warranty of title with the sale of merchandise that means the seller actually owns the goods.

True

Tort law is concerned with compensation for losses suffered by injured parties.

True

Two defenses to charges of defamation are truth and privilege.

True

Under the doctrine of comparative negligence, juries attempt to determine how much in percentage terms the plaintiff was at fault and then reduce the verdict by that amount.

True

Under the terms of the Master Settlement Agreement, cigarette packages must contain a warning from the surgeon general regarding the dangers of smoking.

True

Vicarious liability means that one person can be held responsible for the negligent acts of another.

True

Warranties are promises or statements made by manufacturers or sellers.

True

While a partnership itself does not pay federal income taxes, it does complete an informational tax return.

True

While the law dealing with warranties is intended to protect the general public, it often has the effect of limited the seller's obligations and responsibilities.

True

While the term malpractice is usually applied to physicians, dentists, attorneys, and accountants, it may be applied to all professions.

True