Business Law II-Exam 4 (Chapters 41, 42, 43)

The element that distinguishes a contract from a gift is a) performance of the offeror's or donor's promise b) the element of consideration which is present in a contract, but not in a gift c) whether or not the offeree or donee accepts the offer d) whether or not the subject of the gift or contract is illegal

b) the element of consideration which is present in a contract, but not in a gift

James and his band played a very familiar song. However, they made up different words for the song that were intended to be funny. James's version of the popular song with different words is known as: a. a "knock off." b. a parody. c. a "mockarama." d. a "link."

b. a parody.

In which of the following scenarios has a gift been made? a) Alice takes her vacuum cleaner to the repair shop to be fixed. The owner tells her he won't be able to get to the repair for two weeks. "OK," says Alice. "Keep it until then and go ahead with the repair." b) Tim knows that Noah likes his collection of Spiderman comics. He tells Noah, "Even though my comics are worth $500, you can have them for $100." Noah agrees and pays Tim the reduced price. c) Grandpa chuckles as Jessica admires his pocket watch. "Go on, put it in your own pocket, Jessica," he tells her. "You can have it." Jessica thanks her grandpa and happily tucks the watch into her pocket. d) Edith tells her friends, Mateo, that he may have her antique Victrola record player after she passes away. Mateo gratefully thanks Edith for her kindness.

c) Grandpa chuckles as Jessica admires his pocket watch. "Go on, put it in your own pocket, Jessica," he tells her. "You can have it." Jessica thanks her grandpa and happily tucks the watch into her pocket.

A copyright is valid for 28 years after it is obtained and can be renewed for another 28 years (True or False).

False

All bailments have to be by agreement between the bailor and bailee. (True or False)

False

Stephen wants to give his niece, Dawn, a piece of jewelry as a gift. Stephen gives Tracy, his agent, the bracelet to take to Dawn. The delivery element of making a gift has been completed. (True or False)

False

The Supreme Court has held that parody of copyrighted material is a violation of copyright law (True or False)

False

The Trademark Law Treaty made it more difficult to apply for trademarks around the world (True or False).

False

A bailment was created for the parties' mutual benefit. This means that the bailee must use ordinary care with the property. (True or False)

True

Dersett Trucking hauls granite for the major granite companies in Minnesota. Dersett Trucking does not make its trucking services available to the general public. Dersett Trucking is a contract carrier and does not incur strict liability. (True or False)

True

Only civil penalties can be incurred under the Uniform Trade Secrets Act. (True or False)

True

Jared owns 100 acres of woodland. One day, he and Margie are hiking through Jared's woods and Margie finds a gold ring. The true owner is never discovered. Which of the following statements about this situation is correct? a) Because the ring was found on Jared's property, he is probably entitled to keep it. b) Margie found the ring, and since the true owner is unknown the ring now belongs to her. c) By law, Margie needs to return the ring to the spot where she found it, just in case the true owner returns for it. d) The ring must be sold and the profit split evenly between Jared and Margie.

a) Because the ring was found on Jared's property, he is probably entitled to keep it.

Jason and Stacey posted a copy of their favorite movie, Frozen, on YouTube. When YouTube realized it was posted, it removed it to avoid breaking copyright laws and was not liable for the posting. This is known as a) a legal reaction b) a safe harbor c) the digital solution d) copyright liability

b) a safe harbor

A security interest in real property is called a a) lien b) mortgage c) grant easement d) reversion

b) mortgage

A new savings and loan bank called Federal Deposit Bank applied for a trademark of its name. Why will this bank probably not receive trademark approval? a) It is similar to an existing mark b) It is a generic trademark c) It is a deceptive trademark d) It is a scandalous or immoral mark

c) It is a deceptive trademark

When farmer Joe sold his land to an oil company, he wanted to keep the right to use the lake on the land for fishing. What would give him the right to do this? a) a grant b) an easement by implication c) an easement by prescription d) a reservation

d) a reservation

The Good Housekeeping Seal of Approval is an example of a a) trademark b) service mark c) collective mark d) certification mark

d) certification mark

Under the fair use doctrine, instructors cannot be liable for copyright violations. (True or False)

False

Identify the main provisions of the Digital Millennium Copyright Act.

1-It is illegal to delete copyright information 2-It is illegal to falsify copyright information 3-It is illegal to circumvent encryption 4-It is illegal to use tools or technology to circumvent encryption

The Rameys are selling their home. They did not set forth in the sales agreement whether the washer and dryer, the draperies, and a cherry corner cabinet that was in the dining room were to be included in the sale or whether they were planning to take these items with them. The buyers are claiming these items are fixtures and should stay with the house. The Rameys are claiming they are movable goods and they should not be part of the real estate that was sold. Define "fixtures," identify the tests used to determine whether an item is a fixture, and explain whether you think each of the contested items is a fixture and why or why not.

A fixture is an item that is permantely attached to real property. One test is to see if it will cause any damage to the property if the item was to be removed. The washer and dryer are easily movable and will not cause any damage to the property, therefore they are not fixtures and are not apart of the real estate sale. The cherry corner cabinet is not easily movable and will cause damage to the property, therefore it is a fixture and is apart of the real estate sale.

Sandra and Joe own a hobby farm as tenants in common. They also own a vacation home as joint tenants. What is the difference between the tenancy in common and the joint tenancy?

A tenancy in common is where 2 or more people share an equal interest without a right to survivorship. A joint tenancy is where 2 or more people share an equal interest with a right to survivorship.

After a meeting with his advisor to register for a class at State University, Ron forgot his calculator in the dean's outer office. Theresa, another student, found the calculator. The calculator is treasure trove and Theresa may keep it. (True or False)

False

Bisha created a new recipe for a sandwich spread and applied for a patent to protect her trade secret. She is likely to receive this patent. (True or False)

False

Charles agrees to store Tuan's car in Charles's garage for the winter months while Tuan visits his grandmother in California. As a bailee, Charles is automatically entitled to use Tuan's car while Tuan is away. (True or False)

False

If property is mislaid, the finder of the property will have a superior claim to possession of the property against everyone except the true owner. (True or False)

False

In January, Erwin told David, his nephew, that he would give him a car when he graduates from college. David graduated in May. If Erwin refuses to give David a car, David can sue him for breach of an inter vivos gift (True or False).

False

Jimmy stole Dave's Motorcycle and completely revamped the engine and changed the body. These accessions were very expensive, but Jimmy was completely satisfied with the results, intending to sell the motorcycle for a huge profit. If the motorcycle is recovered from Jimmy, Dave must pay Jimmy for the improvements. (True or False)

False

Jody loaned her neighbor, Phil, her snow blower. Phil set it near his driveway and later accidentally ran over and destroyed it. In a suit to recover damages, Jody as a plaintiff has the burden of proving that Phil was negligent and caused the destruction of her snow blower. (True or False)

False

Martina developed a new type of apple tree which could be reproduced through grafting. She cannot protect her rights in this tree by obtaining a plant patent since the tree cannot be reproduced by planting its seeds. (True or False)

False

The difference between an inter vivos gift and a gift causa mortis is that the inter vivos gift is made during the donor's lifetime and a gift causa mortis is a gift made after the donor's lifetime by the donor's estate. (True or False)

False

The landlord's duty to provide quiet enjoyment of the premises and the landlord's duty to deliver and maintain the premises in a habitable condition are one and the same (True or False).

False

The name "Johnson Garage Doors" cannot be a trademark because a surname is already being used and other people have the right to continue to use the name. (True or False)

False

Most of the goods contained in a freight train (a common carrier) were destroyed when a tornado wrecked the train. The carrier was sued for damages by all the shippers that had merchandise on the train. Is the carrier strictly liable for the damage done to the goods by the tornado?

Generally common carriers are strictly liable for harm to the bailor's goods. In this case since the train is a common carrier, they are strictly liable for the damage done to the goods.

Derrick buys a CD, but after listening to it, decides he doesn't like the music. May he legally sell the CD to someone else? If he thinks his cousin would enjoy the music, may he legally copy the CD for her?

If Derrick decided to not keep the CD anymore, he may sell it under the First Sale Doctrine. However, if he thinks his cousin would enjoy the music then he may not legally copy the CD for her. He can still sell the CD to her or giver it to her as a gift.

Ed wants to give Howard his old car, but Howard says he doesn't want it. Howard later reconsiders and tells Ed he does want the car His previous repudiation means there is no gift, and Howard has no rights in the car. (True or False)

True

If one party makes accession without agreement and the improvements can be "undone" without damaging the property, the improver must undo them. (True or False)

True

In many states today a landlord must use reasonable care to maintain safe premises and is liable for foreseeable harm. (True or False)

True

Juan has the right to walk (or drive) across his neighbor's property to reach the highway. Juan's right is referred to as an easement, which allows use of the land. (True or False)

True

Landlords have the right, and may have a duty, to evict tenants who seriously disturb others. (True or False)

True

Mega Corporation, the bailor, negotiates a bailment agreement with Huge Corporation, the bailee. Huge Corporation insists that an exculpatory clause be included in the terms and conditions of the bailment agreement. Later, Huge Corporation negligently (ordinary negligence, not gross negligence) damages the property that is the subject of the bailment. Most courts will allow Huge Corp. to stand behind its exculpatory clause and deny liability. (True or False)

True

Southern Bar-B-Q owns a special, secret recipe for sauce which it guards because it gives the restaurant a competitive advantage. If Mort willfully misappropriates the recipe, a court may hold him liable to Southern for double damages. (True or False)

True

Alexander loans Miko his baking dish so she can make lasagna for dinner tonight for her family. What kind of bailment is this? a) bailor benefit bailment b) bailee benefit bailment c) constructive bailment d) mutual benefit bailment

b) bailee benefit bailment

Christy's new office lease states that rent will increase by 2% per year to cover tax increases. This is known as a(n) a) tax mitigation b) escalator clause c) fee escalation d) tax abatement

b) escalator clause

NikeShoes.com produces a running shoe that it sells in the United States. The shoe has a check mark on the side, uses inferior material, and is made using child labor. Nike, Inc. sues NikeShoes for trademark infringement under the Federal Trademark Dilution Act of 1995. What is likely to be the grounds for this suit? a) NikeShoes is diluting the value of Nike, Inc.'s product and tarnishing its image b) NikeShoes is not paying Nike, Inc. a percentage of its sales c) Nike, Inc. does not want its products compared to competitors d) NikeShoes should not have been awarded a trademark for the check mark on its shoes

a) NikeShoes is diluting the value of Nike, Inc.'s product and tarnishing its image

Ted and Janet were married and owned a piece of jungle property in a tenancy by the entirety. When Janet died, her will left all of her real property to T.J., their adult son. T.J. claims he is the sole owner of the jungle property. Ted objects and files a lawsuit for sole ownership of the jungle property. a) Ted will win because property owned in a tenancy by the entirety includes rights of survivorship for the surviving spouse. Ted will get the title to the entire property. b) Ted will win only a one-half interest in the jungle property. T.J. will own the other one-half interest because Janet had the right to will her half of the property to anyone she chose c) Ted will lose and forfeit his entire interest in the whole property because a tenancy by the entirety means that one party owns the entire property d) T.J. will be required to sell his share in the property to Ted

a) Ted will win because property owned in a tenancy by the entirety includes rights of survivorship for the surviving spouse. Ted will get the title to the entire property.

A college professor copies seven chapters from a book called "How to Get Better Grades-A Creative Approach to College Success!" There are ten chapters in the book. She incorporates this material into a packet that is printed in her college's copy center. The packet is then placed on the required materials list for students to purchase and is sold in the local book store. The author of the book believes the professor has violated his copyright. a) The author is right. The professor should not have copied the chapters and placed them for sale in the bookstore b) The author is technically correct. However, even though an infringement occurred, he cannot sue the professor since educational personnel are exempt from liability under copyright law c) The author is not correct. Under the "fair use doctrine," a college professor can copy material and distribute it to students for educational purposes d) The author is not correct. It does not appear that the professor actually made any money from the alleged copyright infringement

a) The author is right. The professor should not have copied the chapters and placed them for sale in the bookstore

Buck, fearing death from severe injuries suffered in a machinery accident, assigned over a certificate of deposit worth $100,000 and delivered the certificate to Pearl, a friend, who gladly accepts. Buck ends up recovering from the injuries. Why must Pearl give the certificate of deposit back to Buck? a) This type of gift is known as a git causa mortis. It is a conditional gift which is conditional on Buck actually dying. Because Buck recovered, the gift is automatically revoked. b) This is an inter vivos gift because Buck was still alive when the gift was made. Any inter vivos gift is revokable because there is no consideration to make Buck's delivery of the certificate binding under contract law c) This is an inter vivos gift and due to state laws, gifts in contemplation of death must be written into a valid will or otherwise the deceased's assets will be distributed according to state statute d) This gift is an ordinary gift, but it is revocable because we don't know if the certificate of deposit has matured or not.

a) This type of gift is known as a git causa mortis. It is a conditional gift which is conditional on Buck actually dying. Because Buck recovered, the gift is automatically revoked.

Jeannie carelessly packed her grandmother's antique glassware and had it shipped to her 30-year-old daughter, Abby, via Common Freight Carriers. When the china arrived at Abby's house, most of the pieces were broken. As between Jeannie and Common Freight Carriers, who will bear the loss? a) Under the Carmack amendment, Jeannie is liable for the loss if Common Freight Carriers shows it was not negligent and that the loss was caused by Jeannie's failure to wrap and pack the glassware properly b) Under the Carmack Amendment, Common Freight Carriers is liable. A common carrier is strictly liable. c) Under the Carmack Amendment, Common Freight Carriers is liable because of its negligence in not inspecting Jeannie's packing job. d) Liability is governed by state statute and will depend on which state law will control.

a) Under the Carmack amendment, Jeannie is liable for the loss if Common Freight Carriers shows it was not negligent and that the loss was caused by Jeannie's failure to wrap and pack the glassware properly

Ali and Latosha bought a house through a mortgage they secured form their local bank. When they failed to make their mortgage payments, the bank used __ to foreclose on the property and sell it. a) a lien b) adverse possession c) easement by prescription d) reversion

a) a lien

Which of the following occurs when a person uses labor and/or materials to add value to personal property belonging to another? a) accession b) bailment c) an inter vivos gift d) a mutual-benefit bailment

a) accession

Louie subdivides his oceanfront property with a boat ramp and sells several parcels that do not reach the ocean, promising all purchases use of the boat ramp. Bernie buys one of the parcels. His right to enter Louie's property to reach the boat ramp is a) an easement by implication b) a profit appurtenant c) an easement by reservation d) a profit in gross

a) an easement by implication

The landlord's first important duty to a tenant is to a) deliver possession b) maintain premises c) pay the security deposit d) provide eminent domain

a) deliver possession

Grandpa owns a farm. In a signed writing, Grandpa gave Sue the irrevocable right to use a road on his farm so that Sue could more easily reach her own property. What kind of interest in land did Grandpa give to Sue? a) easement by grant b) easement by implication c) reserved easement d) easement by prescription

a) easement by grant

Which of the following would NOT be considered personal property? a) collection of vinyl record albums b) filed of soybeans c) antique quilt d) None of these are correct

b) filed of soybeans

McDonlad's famous golden arches and other marks used by the company illustrate a a) suggestive mark b) service mark c) certification mark d) collective mark

b) service mark

Farmer Fred is leasing pasture land from Wealthy Warren. Farmer Fred is working the soil to turn the pasture land into land that will be able to grow crops. As Farmer Fred is preparing the field, he discovers a treasure chest full of gold and silver coins. The coins are all dated before 1810. A finder of treasure trove under common law: a) is entitled to keep the treasure trove b) is required to turn the property over to the owner. Here, under common law, Farmer Fred is required to turn the treasure trove over to Wealthy Warren c) is required to turn the treasure trove over to the state d) is required to turn the treasure trove over to the federal government who will give the treasure trove to the closest Native American reservation

a) is entitled to keep the treasure trove

The bank who lends money in exchange for a mortgage on the borrower's house is considered to be the a) mortgagee b) mortgagor c) profitor d) profitee

a) mortgagee

What is the name of the treaty that allows American patents to be recognized and enforced in member countries? a) the Paris Convention for the Protection of Industrial Property b) the International Treaty of Trademarks and Patents c) the World Agreement of London d) the Berne Convention

a) the Paris Convention for the Protection of Industrial Property

Lacy set her textbook under her chair in her business law class and then forgot to take it with her when she left the classroom. A janitor later discovered the textbook and gave it to the Dean of the Business College. In this situation, a) the college is a constructive bailee, obligated to return the textbook to Lacy, and until it does, it is liable for harm to the property b) the college is a bailee by agreement because holding items in a lost and found box is generally part of the college-student agreement when the student enrolls for classes c) the college is responsible for the discovered textbook because in this situation, the college is subject to implied warranties unless the college has disclaimed such warranties in the student handbook d) this is a bailment for the sole benefit of the bailee.

a) the college is a constructive bailee, obligated to return the textbook to Lacy, and until it does, it is liable for harm to the property

Select the correct answer: a) Rosie rents a locker at the airport, and she puts a bag in the locker. Rosie keeps the locker key. In this case, the bag has been delivered to and accepted by the airport. The airport is a bailee. b) Hill rents a boat to Dan. The boat is located at a lake 30 miles away. Hill gives Dan keys to the boat. Dan drives to the lake and takes possession of the boat. In this case, the boat has been delivered to and accepted by Dan, and Dan is a bailee. c) Unknown to Lon, Jeff left a bike at Lon's house. Lon has not found the bike, and he is not likely to find it because Jeff left the bike under the front porch. In this case, Lon is a bailee of the bike. d) Ken parked a car in a self-service lot, and Ken kept the keys. The parking lot is a bailee.

b) Hill rents a boat to Dan. The boat is located at a lake 30 miles away. Hill gives Dan keys to the boat. Dan drives to the lake and takes possession of the boat. In this case, the boat has been delivered to and accepted by Dan, and Dan is a bailee.

Jake owns an old piece of exercise equipment. He has been using the equipment merely to hang his clothes on, so Jake decides to get rid of the thing. He takes the unused exercise machine to the landfill and throws it off the back of the truck. Maggie, a teenager, is at the landfill rummaging for useful items. Maggie sees the exercise equipment and decides it is just the thing to give her sister for Christmas, so she decides to take it home. As she is loading it into the back of her pickup truck, Jake stops and tries to get it back. The landfill owner sees the commotion and decides he would like to have the equipment as well. Who has the best rights in the exercise equipment? a) they are all joint owners b) Maggie c) Jake d) the landfill owner

b) Maggie

Ollie leased a building in Old Town. Ollie installed a washer and dryer unit and a new furnace in the basement of the building with new duct work throughout the building. Upon expiration of the lease, Ollie intends to remove the washer and dryer, but not the furnace. The washer and dryer can easily be removed without harming anything. Removal of the furnace, however, will damage the building. Are the washer, dryer, and furnace fixtures? a) The washer, dryer, and furnace are all fixtures b) The furnace is a fixture, but the washer and dryer are not c) The washer and dryer are fixtures, but the furnace is not d) The furnace and the washer are fixtures, but the dryer is not

b) The furnace is a fixture, but the washer and dryer are not

Jacques informed his tenants that the railing on their balcony was unstable and he was in the process of repairing it. In the meantime, one of the tenants stepped out onto the balcony and fell through the railing. The tenant sued Jacques. Under common law, is the landlord liable? a) The landlord is liable because there was an understanding that the premises would be kept in a safe condition b) The landlord is not liable because he informed the tenant of the safety issue c) The landlord is liable because he did not complete the repair in a timely manner d) The landlord is not liable because there was no expectation of safety

b) The landlord is not liable because he informed the tenant of the safety issue

Mrs. Larkin rents an apartment to a couple who argue continually, disturbing other tenants. Without going through the lawful eviction procedure in court, one day she waits until the couple is out of town and changes all the locks. What has occurred? a) a constructive eviction b) an actual eviction c) an easement d) a variance

b) an actual eviction

If Cub Cadet wins a trademark infringement suit by proving the defendant's trademark, Kub Kadet, is likely to deceive customers about who made the goods, Cub Cadet is entitled to: a) up to twice the actual damages b) an injunction to prevent further infringement c) any profits Kub Kadet makes on its infringing product going forward d) a public apology

b) an injunction to prevent further infringement

The Solomans own a cabin on the south side of Mount Henry. The Solomans told Bernie and Claudia they could live in the cabin and use it as they wished until the Solomans wanted to use it again. Twelve years later, the Solomans informed Bernie and Claudia that they were going to spend the summer at the cabin and that Bernie and Claudia would have to make other arrangements for the summer. Bernie and Claudia claimed that they had acquired title by adverse possession, because they had occupied the property for the period of time required for adverse possession under state law (10 years in that state). Are Bernie and Claudia correct? a) Yes, Bernie and Claudia were living on the property with exclusive, open possession for a continuous period of time for the required 10 years b) Yes, Bernie and Claudia had the Soloman's permission, therefore the possession was not illegal c) No, Bernie and Claudia's possession was with the Soloman's permission, and therefore the claim was not adverse to the Solomans d) No, there was no warranty deed transferred to Bernie and Claudia

c) No, Bernie and Claudia's possession was with the Soloman's permission, and therefore the claim was not adverse to the Solomans

Which of the following is/are generally subject to a standard of strict liability for bailed goods? a) contract carriers and common carriers b) common carriers and innkeepers c) common carriers d) contract carriers

c) common carriers

Paul and Diana are married and own a home. Both of their names are on the mortgage. This is an example of a a) tenancy in kind b) tenancy at will c) concurrent estate d) shared estate

c) concurrent estate

Intellectual property is a) protected in the same way as land b) exclusive c) expensive to produce but cheap to reproduce and transmit d) expensive to produce, copy, and transmit

c) expensive to produce but cheap to reproduce and transmit

A bailment is different from a gift because a) a gift requires consideration, but a bailment does not b) a gift requires delivery, but a bailment does not c) in a bailment, only possession of the property is transferred to the bailee, whereas with a gift, both possession and ownership must pass to the donee d) a gifts is always a contract, but a bailment is generally not a contract

c) in a bailment, only possession of the property is transferred to the bailee, whereas with a gift, both possession and ownership must pass to the donee

Ali took a seat at a booth at Midway Diner. Between the salt and pepper shakers, Ali noticed something glittering. It was a diamond ring. The ring is a) abandoned property b) an accession c) mislaid property d) treasure trove

c) mislaid property

In the Tannenbaum v. New York Dry Cleaning, Inc. case, a) there was a bailment for hire, and the fact that the bailee was unable to return the bailed item except in a damaged condition created an irrebuttable presumption that the damage to the item was attributable to the bailee's negligence b) the court stated that a company cannot, under New York law, use an exculpatory clause to relieve itself from liability for the consequences of its own negligence c) the court found that the claimant was not bound by the terms of the dry cleaning company's limitation clause because, even if it applied to the situation before the court, the claimant had not read the clause nor had he assented to its terms d) the court found that the claimant was negligent in not reading the limitation clause on the back of the his claim ticket, so he could not recover the cost of his shirt

c) the court found that the claimant was not bound by the terms of the dry cleaning company's limitation clause because, even if it applied to the situation before the court, the claimant had not read the clause nor had he assented to its terms

While digging in his backyard to plant a pear tree, Jonah discovers a bag of gold coins-all of which were minted in the 1800s. The bag of coins would most likely be considered a) lost property b) mislaid property c) treasure trove d) abandoned property

c) treasure trove

The vast majority of patents that are issued are a) design patents b) plant patents c) utility patents d) intellectual patents

c) utility patents

Beth owned an original United States flag. She had previously loaned the flag to Ross, a lawyer, so that he could display the flag on the wall behind his office desk. One day while visiting Ross in his office and admiring the flag, Beth said to Ross, "You are so fond of that flag, I would like you to have it!" Ross responded with a gracious "thank you." In this situation: a) Beth has not made a valid, binding gift of the flag because gifts are never binding and can always be revoked by the donor b) Beth has not made a valid, binding gift of the flag because the donor must deliver the property to the donee, which was not done here c) Beth has made a valid, binding gift if Beth agreed to give the flag in exchange for Ross's legal services d) Beth has made a valid, binding gift because she intended to transfer present ownership to Ross and Ross accepted the flag

d) Beth has made a valid, binding gift because she intended to transfer present ownership to Ross and Ross accepted the flag