Business Law Final Exam

A business cannot use puffery without liability for fraudulent misrepresentation.

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A choice-of-law clause permits a party to choose which nation's law to apply to a dispute arising under an international contract.

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A citation is a regulation enacted by a city or county legislative body.

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A court should overturn its precedents unless there is a compelling reason not to.

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A court's review of an arbitrator's decision is the same in scope as an appellate court's review of a trial court's decision.

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A default judgment is a judgment entered by a court in a case in which neither party prevails.

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A defendant cannot be liable in an intentional tort action if he or she did not intend to cause harm to the plaintiff.

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A false statement made with actual malice can constitute defamation, unless the statement is about a public figure.

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A federal statute applies only to those states that agree to apply it within their borders.

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A law based on a suspect trait will not stand under the equal protection clause even if it is necessary to promote a compelling government interest.

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A manufacturer does not need to inspect and test any purchased components used in the final product to avoid product liability.

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A person who enters into a risky situation, knowing the risk involved, can nevertheless recover for a resulting injury or harm for reasons of public policy.

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A person who is injured by a defective product can bring a negligence suit only if he or she was the one who purchased the product.

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A person who wrongfully hurts another's good name or reputation orally may be liable for libel.

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A product made in conformity with a manufacturer's design specifications is not considered defective regardless of a flaw in the design.

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A request for admission can lengthen a trial because the parties have to take the time to prove facts on which they may already agree.

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A resident of one state, when in another state, can be denied the privileges and immunities of that state for any reason.

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A secondary source of law establishes the law on a particular issue.

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A social media post cannot be used to invalidate a settlement agreement.

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A social media post is not subject to discovery in litigation.

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A state may not restrict certain kinds of advertising, even in the interest of preventing consumers from being misled.

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A state's prosecution of a crime prevents a separate federal prosecution relating to the same activity.

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A statute is a secondary source of law.

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A statute that prohibits theft by means of false pretenses usually applies only to goods, not to services or cash.

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Administrative law plays a relatively insignificant role in the regulatory environment of business.

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After a patent is issued, there is a nine-month limit before it can be challenged.

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All courts use the same test for legal insanity.

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An act of omission cannot be a crime.

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An appellate court will not challenge a trial court's finding of fact, even if the finding is clearly erroneous.

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An award of grossly excessive punitive damages is normally available in a suit involving gross negligence.

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An employer can use his or her power and control to engage in an intentional pattern of outrageous abuse against an employee without potential tort liability.

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An overemphasis on long-run profit maximization is a common reason for ethical problems that occur in business.

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An unauthorized reproduction must be exactly the same as the original, and reproduce the original in its entirety, for infringement of copyright to occur.

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An unusual or fanciful trade name is not protected under trademark law.

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Any court can exercise jurisdiction over any person.

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Any party who gives information to the Federal Trade Commission concerning possible deceptive conduct in a foreign jurisdiction is immune from liability.

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Anyone can circumvent encryption software or other technological antipiracy protection without penalty.

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Because the Internet is international in scope, no party to an online dispute resolution proceeding can appeal to a court at any time.

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Before a trial begins, the jury renders a preliminary verdict to indicate to the attorneys what they must attempt to prove during the course of the trial.

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Certain business processes are copyrightable.

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Congress does not pass laws based on ethics.

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Courts will not grant an equitable remedy unless the remedy at law is adequate.

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Crimes are sometimes prosecuted by crime victims rather than by a public official.

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Cybersquatting is legal when the person offering for sale a domain name that is the same as another's trademark intends to profit from the sale.

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Discovery is the process of serving a summons and a copy of a complaint on a defendant.

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Doing business within a jurisdiction is not enough for most courts to compel a defendant to appear.

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Embezzlement includes the making or altering of any writing in a way that changes the legal rights and liabilities of another.

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Employers are prohibited from taking actions against employees or applicants based on their social network postings.

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Even if it conflicts with the U.S. Constitution, a state constitution is supreme within that states' borders.

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False imprisonment occurs only when a person justifiably restrains another.

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Federal law permits the sending of unsolicited commercial e-mail to randomly generated e-mail addresses.

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For cause in fact to become a relevant issue in a product liability suit, a plaintiff must first establish proximate cause.

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If a product was delivered in a safe condition and subsequent mishandling made it harmful to the user, the seller is usually strictly liable.

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If a restriction imposed on speech by the government is content neutral, then a court will not allow it.

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If an appellate court affirms a jury's finding on one issue, the court cannot remand the case for further proceedings on another issue.

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In a criminal case, the defendant must convince the court that based on the evidence it is more likely than not that the defendant is not guilty.

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In a criminal case, the object is to obtain a remedy.

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In a criminal case, typically only three-fourths of the jurors need to agree in order to convict the defendant.

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In a successful tort suit, an individual is awarded compensatory damages to put him or her in a better position than the party who committed the tort.

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In most states, a merchant can use undue force to detain a person suspected of shoplifting without liability for false imprisonment.

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In posting statements or photos to a social media site, a person clearly has a reasonable expectation of privacy.

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In some jurisdictions, defendants who agree to waive formal service of process receive a reduction in the amount of an ultimate finding of liability.

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In the American governmental system, applying the laws to specific situations is the essential role of Congress.

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Independent regulatory agencies are not subject to the authority of the president.

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Information that cannot be patented, copyrighted, or trademarked cannot be protected as a trade secret.

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Intentional deceit for personal gain may be unethical but it does not give rise to liability for fraud.

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It is not a crime to use income obtained from racketeering activity to buy an interest in a legitimate enterprise as long as the deal is otherwise legal.

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Judging a job applicant based on what an online search reveals about the applicant's activities outside the workplace universally is viewed as ethical.

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Judicial review is the process through which Congress approves or rejects judicial appointments.

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Larceny involves force or fear, but robbery does not.

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Liability is imposed on a manufacturer for a manufacturing defect only when the manufacturer's quality control efforts were "reasonable."

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Making ethical decisions is most often best done by analyzing objective standards (such as profit or number of people fired) instead of subjective impacts on stakeholders.

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Misconduct by the participants in a trial can cause the judge to grant a motion for a new trial.

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No court has held that it is legally acceptable for law enforcement to set up a phony social media account to catch a suspect.

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On appeal of a court's grant or denial of a motion for summary judgment, the appellate court must defer to the trial court's ruling on the issue.

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Once a company has investigated any foreign suppliers, it is unnecessary to continue to monitor those suppliers.

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Once a law is passed to codify an ethical requirement, the ethical aspect of the action is no longer important.

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Once a manufacturer's trademark is established, another manufacturer may use it without permission.

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One of the purposes of criminal law is to compensate the victims.

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Online conduct gives rise to only a narrow variety of legal actions.

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Only big businesses face potential liability for the products they sell.

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Privacy rights receive no protection under federal law.

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Rationalization is the process of making a logical decision based in evidence and an analysis of the ethical dimensions of the decision.

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Service marks are not protected in the same way as trademarks.

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State governments do not have any authority to regulate interstate commerce.

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Tapping into a competitor's computer to obtain confidential business data is not a theft of trade secrets.

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Testimony by a party in court in support of a statement made by someone else who testified is referred to as gainsay evidence.

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The European Union's copyright rules limit the royalty protection for musicians to ten years.

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The Fifth Amendment allows persons to be deprived of property without due process of law.

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The U.S. Constitution divides powers among four branches of government.

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The United States can prosecute foreign counterfeiters under U.S. law.

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The attempt to influence a public official to act in a way that serves a private interest is no crime.

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The commerce clause has never been held to support the federal regulation of noncommercial activities that take place wholly within a state's borders.

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The federal courts are an independent system of courts superior to the state courts.

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The free exercise clause prohibits the government from passing laws that have any impact on religion.

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The law does not prohibit the creation or shipment of counterfeit labels unless they are attached to products.

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The manufacturer of a product may incur liability when a defect causes injury to a user but not when the defect causes property damage to a bystander.

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The registration of a copyright is not evidence that the copyright is valid.

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The rights secured by the Bill of Rights are absolute.

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The study of business law does not involve an ethical dimension.

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The term moral minimum is best defined as the highest degree of ethical behavior expected of a firm.

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The uncertainties of the litigation process are lessened by the fact that any judgment will be enforceable.

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There are no international conventions or treaties to assist in the enforcement of arbitration clauses because their enforcement is a national domain.

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There is one right answer to every legal question.

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Those who do not make goods, but only sell or lease them, cannot be held liable for harm caused by those goods to a consumer.

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To gain a share of a market, a businessperson can interfere in another's business, even if the behavior is predatory.

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To maintain a claim of trademark dilution, the products involved must be similar.

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To meet the standard of proof of preponderance of the evidence, a party must prove its case beyond a reasonable doubt.

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To use arbitration as a method of dispute resolution, the parties must agree to arbitrate any dispute before it arises.

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Trademark dilution cannot occur online.

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Under the Communications Decency Act, Internet service providers are liable as publishers of defamatory statements that come from a third party.

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Under the First Amendment, every U.S. citizen has a right to be forgotten with respect to outdated personal information otherwise searchable online.

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Under the principle of rights theory, the key factor in a decision is how the result may harm the rights of the company to make money.

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Warrants are required for searches of businesses in highly regulated industries.

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When profit maximization is the goal, a company does not benefit from ethical behavior.

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With a motion to strike, a party asks a court for permission to delay the start of a trial in protest of certain aspects or conditions of the plan of litigation.

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A business firm has a duty to exercise reasonable care to protect its business invitees.

true

A constitution is a primary source of law.

true

A corporation's compliance with the laws of any jurisdiction in which it does business is complicated by the fact that those laws can be very different.

true

A defendant's motion for a directed verdict, if granted by the court, can end a trial before the defendant presents witnesses.

true

A descriptive term is protected under trademark law if it acquires a secondary meaning.

true

A false statement about a person's business can give rise to liability for defamation.

true

A landlord is expected to use reasonable care to ensure that his or her tenants are not harmed in common areas.

true

A law that that limits a fundamental right may be held to violate substantive due process.

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A license may limit the use of a software application to a specific device.

true

A local ordinance commonly has to do with a matter concerning only a local governing unit.

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A mistake of fact can often excuse criminal responsibility.

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A motion for summary judgment can assert that the plaintiff failed to state a claim for which the court can grant relief.

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A motion to dismiss asserts that a claim has no basis in law.

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A patent applicant must demonstrate that an invention is useful to receive a patent.

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A person who accesses a computer online without authority to obtain protected data is subject to criminal prosecution.

true

A product will be considered defective when the omission of reasonable warnings renders the product not reasonably safe.

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A question of law is generally the focus of an appellate court.

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A trade name is used to indicate all or part of a business's name.

true

An Internet service provider that terminates subscribers who infringe copyrights can qualify for a "safe harbor" under the Digital Millennium Copyright Act.

true

An act intended to make another person fearful of an immediate physical harm is an assault if the threat is reasonably believable.

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An economically injurious falsehood about a business's product can support a tort action for disparagement of property.

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An illegal act committed by a business using nonviolent means to obtain a business advantage is a white-collar crime.

true

An online retailer can track a user's web activities with cookies without violating the person's right to privacy.

true

As part of the IDDR approach described in the text, it is important to list many possible actions and analyze them using several different ethical theories.

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Because the Internet is international in scope, it raises international jurisdictional issues.

true

Because the courts have defined interstate commerce broadly, arbitration agreements only slightly connected to interstate commerce may be enforced.

true

Before a lawsuit is initiated, a plaintiff should consider whether the defendant is able to pay the damages sought.

true

Company codes of conduct outline company policies on particular issues and how employees are expected to act.

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Congress or a state legislature establishes an administrative agency to perform a specific function.

true

Controlling precedents are binding authorities.

true

Corporate social responsibility links the responsibility of citizenship with the strategy and key principles of a business.

true

Digital sampling can constitute copyright infringement.

true

Duty-based ethics is based in the idea that every business has certain duties to others.

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Each member country to the TRIPS agreement must include in its domestic laws broad intellectual property rights and effective remedies for violations.

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Ethics is a branch of philosophy that focuses on morality.

true

Every criminal statute prohibits certain behavior.

true

Federal guidelines allow a company to disclose material information about itself through social media as long as investors are notified in advance.

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In a product liability suit based on negligence, the plaintiff must show that the defendant's conduct was the "cause in fact" of an injury.

true

In a response to an allegation of a defendant's negligence, the defendant's assertion of the plaintiff's negligence is an affirmative defense.

true

In deciding a claim of design defect, a court can consider the relative advantages and disadvantages of an alternative design for a product.

true

In entering personal information to a banking site online, a person may have a reasonable expectation of privacy.

true

Intellectual property is property resulting from intellectual, creative processes.

true

Intent can be transferred when an individual intends to harm one individual but unintentionally harms another.

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Intentional physical contact with another is not a battery unless the contact is unexcused, harmful, or offensive.

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Jurors must decide a case based only on the information that they learn during the trial.

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Liability for injuries based on proportionate negligence is allowed by most states.

true

Local governments, including cities, exercise police powers.

true

Manufacturers are commonly held liable when their negligence causes users of their products to be injured.

true

Many states require the sender of an e-mail ad to tell recipients how to opt out of receiving future e-mail ads from the sender.

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Most crimes require an act of commission.

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Often, more than one rule of law will be applicable to a case.

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Only if a state legislature adopts a uniform law does that law become part of the statutory law of that state.

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Outcome-based ethics determines what is ethical by looking at the potential benefits and harms of a given action.

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Parties to international business transactions should include certain clauses, including arbitration clauses, in their contracts to avoid added complexity in related legal proceedings.

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Phishing is a distinct form of identity theft and cyber fraud.

true

Picking a jury is an important aspect of litigation strategy.

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Preemption occurs when Congress chooses to act exclusively on a subject over which the federal government shares power with the states.

true

Sanctions for spoliation of e-evidence can include the entire cost for restorative recovery efforts.

true

Some business processes can be protected as trade secrets.

true

State law may protect individuals from having to disclose their social media passwords to potential employers.

true

State regulatory powers are often referred to as police powers.

true

Taking personal property from its owner, without permission or just cause, is trespass—retaining it is conversion.

true

That a favorable court decision will be likely to remedy an injury is an element of standing.

true

The Federal Trade Commission can effectively force a private company to consent to the agency's review of the company's privacy and data practices.

true

The Fourth Amendment protects only against searches that violate a person's reasonable expectation of privacy.

true

The Sarbanes-Oxley Act was enacted to reduce the number of unethical business decisions by requiring the accountability of publicly traded companies.

true

The United States Supreme Court has held that a constitutional right to privacy is implied by several of the amendments in the Bill of Rights.

true

The basis of a civil law system is a written code of laws.

true

The doctrines and principles announced in court decisions govern all areas not covered by statutory or administrative law.

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The effect of the minimum-contacts standard is that a business firm has to comply with the laws of any jurisdiction in which it targets customers.

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The elements of an action in strict product liability include that a plaintiff must have incurred harm by the use or consumption of a product.

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The first step in making an ethical decision is to understand the problem.

true

The first ten amendments to the U.S. Constitution are commonly known as the Bill of Rights.

true

The need to protect intellectual property is recognized in the U.S. Constitution.

true

To obtain copyright protection under federal law, a work must be original.

true

Under a state long-arm statute, a court can exercise jurisdiction only over certain nonresident defendants.

true

Under the Ninth Amendment, people have rights in addition to those specified in the Constitution.

true

Under the federal law protecting trademarks, "bad faith intent" is one element of a claim of illegal cybersquatting.

true

Using another's trademark as a meta tag may be permissible.

true

Voir dire refers to the jury selection process.

true

When making ethical decisions, a business should evaluate the financial implications.

true

When religious practices work against public policy, the government can act.

true

When someone suffers injury because of another's failure to live up to a required duty of care, negligence occurs.

true

With respect to a patented process, all steps or their equivalent must be copied for infringement to occur.

true