BLAW 3312 EXAM 3
Hearing procedures vary widely from agency to agency. Administrative agencies generally exercise substantial discretion over the type of procedure that will be used. Frequently, disputes are resolved through informal adjudication proceedings.
845? what happenes if you have a hearing before an administrative law judge much more informal things can be presented like hear-say
Sometimes, a trust will be imposed (implied) by law, even in the absence of an express trust. Implied trusts include constructive trusts and resulting trusts. Copyright | CENGAGE Learning | Business Law | Edition 13 | [email protected] | Printed from www.chegg.com
A constructive trust is imposed by a court in the interests of fairness and jus-tice. In a constructive trust, the owner of the property is declared to be a trustee for the parties who are, in equity, actually entitled to the benefits that flow from the trust. Courts often impose constructive trusts when someone who is in a confidential or fiduciary relationship with another person, such as a guardian to a ward, has breached a duty to that person. A resulting trust arises from the conduct of the parties. Here, the trust results, or is created, when circumstances raise an inference that the party holding legal title to the property does so for the benefit of another. The trust will result unless the inference is refuted.
Can you set limits on where product is sold and for how much?
A vertical restraint of trade results from an agree-ment between firms at different levels in the manu-facturing and distribution process. In contrast to horizontal relationships, which occur at the same level of operation, vertical relationships encompass the entire chain of production. Copyright | CENGAGE Learning | Business Law | Edition 13 | [email protected] | Printed from www.chegg.com
what happens in ch 7 when you complete bankruptcy with regard to your debts?
Chapter 7 provides for liquidation proceedings (the selling of all nonexempt assets and the distri-bution of the proceeds to the debtor's creditors).
The moment a petition, either voluntary or involuntary, is filed, an automatic stay, or suspension, of all actions by creditors against the debtor or the debtor's property normally goes into effect. In other words, once a petition has been filed, creditors cannot contact the debtor by phone or mail or start any legal proceedings to recover debts or to repossess property.
EXCEPTIONS TO THE AUTOMATIC STAY The Code pro-vides the following exceptions to the automatic stay: 1. Collection efforts can continue for domestic- support obligations, which include any debt owed to or recoverable by a spouse, a former spouse, a child of the debtor, that child's parent or guard-ian, or a governmental unit. 2. Proceedings against the debtor related to divorce, child custody or visitation, domestic violence, and support enforcement are not stayed. 3. Investigations by a securities regulatory agency (see Chapter 42) can continue. 4. Certain statutory liens for property taxes are not stayed.
Notice-and-comment rulemaking involves three basic steps: notice of the proposed rulemaking, a comment period, and the final rule.
When a federal agency decides to create a new rule, the agency publishes a notice of the proposed rulemaking pro-ceedings in the Federal Register.
Charges that an individual or firm violated a federal administrative rule are initially brought before: a. an administrative law judge (ALJ). b. a federal district court. c. a state trial court judge. d. a federal appellate court.
a. an administrative law judge (ALJ).
Which of the following debts IS dischargeable in a liquidation bankruptcy? a. A loan taken out to pay for home repairs. b. A loan taken out to pay federal taxes. c. The full amount of back taxes. d. Child-support obligations.
a. A loan taken out to pay for home repairs.
Which of the following is a type of agreement that is considered to be so blatantly and substantially anticompetitive that it will be deemed a per se violation of Section 1 of the Sherman Act? a. A price-fixing agreement. b. A vertical merger. c. A divestiture. d. A resale price maintenance agreement.
a. A price-fixing agreement.
Joellen's General Store advertises cans of X-brand whole tomatoes for 50 cents per can, although she doe not have any in stock. When customers arrive to buy the tomatoes, Joellen tells them that her stock of X-brand canned tomatoes has been sold out and that she cannot obtain more at the lower price. She then informs the customers that she has Y-brand canned tomatoes in stock, for 85 cents per can, and that the Y-brand canned tomatoes are far superior to the X-brand canned tomatoes. What do you call Joellen's behavior? a. Bait-and-switch advertising. b. Counteradvertising. c. A cease-and-desist order. d. A violation of Regulation Z.
a. Bait-and-switch advertising.
The type of bankruptcy proceeding used most commonly by corporate debtors to reorganize their debt is: a. Chapter 11. b. Chapter 12. c. Chapter 13. d. Chapter 7.
a. Chapter 11.
Section 1 of the Sherman Antitrust Act prohibits which activities? a. Contracts, combinations, or conspiracies in restraint of trade. b. Monopolization or attempts to monopolize. c. Conducting test marketing. d. Predatory pricing.
a. Contracts, combinations, or conspiracies in restraint of trade.
The Equal Credit Opportunity Act (ECOA) prohibits the denial of credit based solely on several characteristics. Which of the following is NOT one of these characteristics? a. Disability. b. Age. c. Marital status. d. Race.
a. Disability.
Chapter 12 of the Bankruptcy Code is aimed at helping which group? a. Family farmers. b. Landfill operators. c. Chemical companies. d. Charitable institutions.
a. Family farmers.
When a federal administrative agency decides to create a new rule, what must it do as a first step? a. Publish a notice of the proposed rulemaking proceeding in the Federal Register. b. Issue the rule. c. Gather information through an on-site inspection. d. Issue a subpoena.
a. Publish a notice of the proposed rulemaking proceeding in the Federal Register.
Which of the following does NOT prosecute or sue for violations of the antitrust laws? a. The Environmental Protection Agency (EPA). b. The U.S. Department of Justice (DOJ). c. The Federal Trade Commission (FTC). d. Private parties.
a. The Environmental Protection Agency (EPA).
47. Which of the following IS NOT one of the necessary elements in a lawsuit for negligence against a professional? a. The defendant must be a member in good standing of a professional organization. b. The plaintiff's injury must be proximately caused by the defendant's breach of his duty of care. c. The plaintiff must suffer an injury. d. A duty of care must exist.
a. The defendant must be a member in good standing of a professional organization.
Section 11 of the 1933 Securities Act imposes what duty on accountants? a. The duty of due diligence. b. The duty of care. c. The duty of proximate care. d. The duty of the Samaritan.
a. The duty of due diligence.
Under CERCLA, a party who is subject to liability for costs associated with the clean-up of a hazardous waste site is known as: a. a potentially responsible party. b. a CERCLA-dependent party. c. a joint and several party. d. a perpetually liable party.
a. a potentially responsible party.
Those who violate the Clean Air Act may be subject to: a. civil and criminal penalties. b. the penalties prescribed by FIFRA. c. environmental community service. d. civil penalties only.
a. civil and criminal penalties.
Another term for defalcation is: a. embezzlement. b. fraud. c. nuisance. d. trespass.
a. embezzlement.
The major difference between independent regulatory agencies and executive agencies is that: a. executive agencies are subject to the authority of the president to a greater degree than independent regulatory agencies. b. executive agencies only report to Congress. c. executive agencies are directly controlled by courts. d. independent regulatory agencies are subject to the authority of the Congress.
a. executive agencies are subject to the authority of the president to a greater degree than independent regulatory agencies.
Malpractice may best be defined as: a. professional negligence. b. a breach of an ethical duty. c. third party liability. d. constructive fraud.
a. professional negligence.
The "adequate protection doctrine" provides that: a. secured creditors should not lose their security as a result of an automatic stay. b. creditors must be protected against all losses in bankruptcy. c. all debtors must receive adequate physical protection from creditors. d. unsecured creditors should be protected from the aggressive conduct of secured creditors.
a. secured creditors should not lose their security as a result of an automatic stay.
The primary federal agency regulating environmental law is: a. the Environmental Protection Agency. b. the Nuclear Regulatory Commission. c. the U.S. Department of the Environment. d. the Environmental Preservation Agency.
a. the Environmental Protection Agency.
31. The two main goals behind U.S. bankruptcy laws is: a. to give debtors a fresh start and provide equitable treatment to creditors competing for debtor assets. b. to make loans more available to those who have fallen on hard times and ensure that third parties will guarantee loans. c. to protect creditors' real property and encourage creditors to continue extending credit to borrowers. d. to hide debtor's assets to the greatest extent possible and relieve debtors of all debts owed to banks.
a. to give debtors a fresh start and provide equitable treatment to creditors competing for debtor assets.
If an accountant files misstatements or omits material facts from a registration statement for a security, the accountant will be liable: a. under Section 11 of the 1933 Securities Act. b. for defamation. c. under the Sherman Act. d. under Section 6694 of the Internal Revenue Code.
a. under Section 11 of the 1933 Securities Act.
If the executives in Question #5 join two other major dog-food manufacturers in an agreement not to purchase any corn from the Iowa Corn Growers' Cooperative, what kind of anticompetitive action would this be? a. A tying arrangement in which the purchase of corn is tied to the sale of dog food. b. A group boycott. c. Price discrimination. d. A horizontal market division by competing firms.
b. A group boycott.
The federal legislation governing the clean-up of leaking hazardous waste disposal sites is the: a. Toxic Substances Control Act. b. Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), commonly known as Superfund. c. Clean Water Act. d. Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA).
b. Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), commonly known as Superfund.
43. In order to create a federal administrative agency, what kind of legal action is taken? a. The president issues an executive order. b. Congress passes enabling legislation. c. Agencies may be created without any formal action at all. d. Congress issues an injunction against all state activity in an area.
b. Congress passes enabling legislation.
Which of the following is NOT a violation of the Clayton Act? a. Price discrimination. b. Price fixing. c. Exclusive dealing. d. Tying arrangement.
b. Price fixing.
Which of the following is NOT an element of the permit system under the Clean Water Act? a. Water-quality standards set by the states under EPA supervision. b. Regulation of discharges from non-point sources of pollution, such as small farms. c. A discharge permit program that sets water-quality standards to limit pollution. d. National effluent (pollution) standards set by the EPA for each industry.
b. Regulation of discharges from non-point sources of pollution, such as small farms.
In order for the Food and Drug Administration (FDA) to approve a drug for sale, what must a pharmaceutical company show? a. That the drug will cure all people who take it. b. That the drug is both effective and safe. c. That the drug is safe. d. That the drug is not a medical device.
b. That the drug is both effective and safe.
Which of the following would NOT be a defense in a case of negligence brought against an attorney? a. The attorney's client was negligent. b. The attorney breached her duty of care. c. The attorney was simply not negligent. d. The attorney's negligence was not the proximate cause of the client's loss.
b. The attorney breached her duty of care.
When a court determines whether a firm has a dominant market share, what does the court consider in defining the relevant market? a. The number of competitors for the good or service. b. The product market and geographic markets for the good or service. c. How easy it is for new companies to enter a market. d. When new products are likely to be introduced into the existing market.
b. The product market and geographic markets for the good or service.
Which of the following is NOT a legal duty of a trustee? a. To furnish complete and accurate information to beneficiaries. b. To provide sound investment advice to beneficiaries. c. To keep clear and accurate accounts of the trust's administration. d. To act with honesty, good faith, and prudence while administering the trust.
b. To provide sound investment advice to beneficiaries.
Arlen, in his will, leaves $5,000 to his friend Pete. Later, he and Pete have a falling out, so Arlen decides to change his will to give the $5,000 to his friend John instead. Arlen tells John of his intention, but before he has a chance to change his will, Arlen dies. Is Pete entitled to anything under Arlen's will? a. No. Pete will get nothing because Arlen told John that he wanted to change the will and that John would get the $5,000. b. Yes. Pete will take the $5,000 because Arlen never changed his will. c. Yes. Pete will take the $5,000 but only if John agrees. d. Yes. Pete will take the $5,000 but only if the relevant intestacy statute permits such gifts.
b. Yes. Pete will take the $5,000 because Arlen never changed his will.
Assume that executives from competing producers of the two leading dog-food brands get together and decide to charge a certain price for their lamb and rice dog food. This would be an example of: a. a vertical restraint of trade. b. a horizontal restraint of trade. c. a violation of an antitrust exemption. d. a violation of the Clayton Act.
b. a horizontal restraint of trade.
Bob states in his will that his assets should be divided in the following manner: "to my children Scott, Eric, and Jean equally OR, in the event that anyone of them predecease me, their one-third portion to their heirs, if they have any." This kind of distribution is known as: a. a per capita distribution. b. a per stirpes distribution. c. a per annum distribution. d. an equitable distribution.
b. a per stirpes distribution.
If, in a particular case, the court concludes that granting relief under Chapter 7 would constitute a "substantial abuse" of the law, the court may: a. file a harassment suit against the debtor. b. dismiss the petition for bankruptcy relief. c. assign the debtor's property to the U.S. Trustee. d. settle all claims against the debtor without a hearing.
b. dismiss the petition for bankruptcy relief.
Bankruptcy proceedings are held in: a. state bankruptcy courts. b. federal bankruptcy courts. c. state probate courts. d. federal appellate courts.
b. federal bankruptcy courts.
"Cooling-off" laws are laws that: a. allow consumers to rescind real estate contracts within three days. b. permit buyers of goods sold door to door to cancel their contracts within three business days. c. prohibit companies from selling their goods door to door. d. permit lenders to wait three days before extending credit to a woman who asserts her rights under the Truth-in-Lending Act.
b. permit buyers of goods sold door to door to cancel their contracts within three business days.
The National Environmental Policy Act of 1969 requires which of the following: a. that polluters use the best available technology to deal with water pollution. b. that an environmental impact statement be prepared for every major federal action that significantly affects the quality of the environment. c. that people receive permits from the Army Corps of Engineers before they fill or dredge wetlands. d. a definition of "mobile sources of pollution."
b. that an environmental impact statement be prepared for every major federal action that significantly affects the quality of the environment.
One of the advantages of Chapter 13 repayment plans is that: a. there is no need for a bankruptcy court to become involved. b. they are less expensive and less complicated than reorganization proceedings or liquidation proceedings. c. they are available only to salaried employees, and thus the procedures are uniform and quickly handled. d. the payments under the plan need not be completed for twenty-five years.
b. they are less expensive and less complicated than reorganization proceedings or liquidation proceedings.
The Restatement (Third) of Torts states that accountants will be liable to third parties for their negligent acts: a. at no time. b. when the persons who are harmed were foreseeable, or known, users. c. only when the third parties were clients. d. whenever any third party relies on the accountant's statements or reports.
b. when the persons who are harmed were foreseeable, or known, users.
If a creditor fails to follow exactly the provisions of the TILA, what may happen? a. A court may order a novation. b. A court may impose punitive damages. c. A court may rescind the credit contract. d. A court may reform the credit contract.
c. A court may rescind the credit contract.
What is a cease-and-desist order? a. An order to provide testimony before a court. b. An order to correct earlier false claims. c. An order requiring that unfair or deceptive advertising stop. d. An order to perform a specific task the person contracted to do.
c. An order requiring that unfair or deceptive advertising stop.
With respect to administrative agency investigations, a subpoena duces tecum does what? a. It compels an individual to submit interrogatories to an administrative agency. b. It compels an individual to testify before an administrative agency. c. It compels an individual or organization to hand over books, papers, records, or documents to an administrative agency. d. It compels an individual to appear at a deposition.
c. It compels an individual or organization to hand over books, papers, records, or documents to an administrative agency.
45. If a business engages in ultrahazardous activities, what will happen if someone is injured as a result of that activity? a. Because people should take extra care in these situations, the company will not be liable for harms. b. The company will be liable only if it acted negligently. c. The company will be strictly liable for these harms. d. If the company acts with due diligence, it will not be liable.
c. The company will be strictly liable for these harms.
In order to make a valid will, which of the following is NOT necessary? a. The testator must have legal capacity. b. The testator must sign the will. c. The testator must acknowledge the provisions of the will on his or her deathbed. d. The testator must understand what he or she is doing when he or she makes the will.
c. The testator must acknowledge the provisions of the will on his or her deathbed.
Predatory pricing occurs when: a. competitors agree to charge the same price for similar goods. b. a firm's market share decreases. c. a firm prices products substantially below cost to drive competitors out of the market. d. a firm raises its prices over that of its competitors.
c. a firm prices products substantially below cost to drive competitors out of the market.
In her will, Lourdes gives Marie her Steinway grand piano. This is known as: a. a devise. b. a general legacy. c. a specific bequest. d. an annulment.
c. a specific bequest.
Joint and several liability under CERCLA means that: a. liability for clean-up costs under CERCLA can never be imposed on more than one person. b. liability under CERCLA can never be imposed on just one party when several parties contributed to the problem. c. all "potentially responsible parties" may be liable jointly or individually for clean-up costs. d. all parties who contributed in any way to the problem are liable jointly but not individually.
c. all "potentially responsible parties" may be liable jointly or individually for clean-up costs.
Following a hearing, an administrative law judge (ALJ) renders: a. a subpoena. b. an objection. c. an initial order. d. a final summation.
c. an initial order.
A nuncupative will may be defined as: a. a will written under duress. b. a will that is written but not signed. c. an oral will made before witnesses. d. a will that includes later additions.
c. an oral will made before witnesses.
A living trust is: a. created by a beneficiary for a trustee. b. created through the provisions of a will. c. executed by a grantor during his or her lifetime. d. always irrevocable.
c. executed by a grantor during his or her lifetime.
44. Deceptive advertising occurs: a. if advertising claims are puffery. b. only if an advertiser intended an ad to be deceptive. c. if a reasonable consumer is misled by an advertising claim. d. if advertising claims are obvious exaggerations.
c. if a reasonable consumer is misled by an advertising claim.
51. Intestacy laws are: a. laws that establish the requirements of a valid will. b. laws that protect insured parties from duress. c. laws that specify how property will be distributed if someone dies without a will. d. laws that govern the formation of Totten trusts.
c. laws that specify how property will be distributed if someone dies without a will.
Regulation Z involves: a. rules implementing the Federal Food, Drug and Cosmetic Act. b. the prohibition of pyramid schemes in sales. c. rules designed to implement the provisions of the Truth-in-Lending Act. d. comprehensive rules regulating consumer safety.
c. rules designed to implement the provisions of the Truth-in-Lending Act.
Most federal environmental laws provide that citizens can sue to enforce environmental regulations if government agencies fail to do so or can sue to protest agency actions. Typically, a threshold hurdle in such suits is meeting the requirements for: a. venue. b. derivative litigation. c. standing to sue. d. jurisdiction.
c. standing to sue.
In 1976, in response to the ever-increasing concern about the effects of hazardous waste materials on the environment, Congress passed: a. Superfund. b. the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA). c. the Resource Conservation and Recovery Act (RCRA). d. the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA).
c. the Resource Conservation and Recovery Act (RCRA).
Accountants may be liable for violations of the securities laws under Section 10(b) of the 1934 Securities Exchange Act. The provisions of this act that apply to accountants are: a. the libel provisions. b. the defamation provisions. c. the antifraud provisions. d. the environmental provisions.
c. the antifraud provisions.
The working papers of an accountant may best be defined as: a. the privileged communications between an accountant and his attorney. b. the materials the accountant uses during the course of a typical business day. c. the documents used and developed by an accountant during an audit. d. depositions conducted by the accountant's attorney.
c. the documents used and developed by an accountant during an audit.
Administrative agencies are often referred to as: a. the judicial branch of the U.S. government. b. the legislative branch of the U.S. government. c. the fourth branch of the U.S. government. d. the confiscatory branch of the U.S. government.
c. the fourth branch of the U.S. government.
Market power is defined as: a. a market in which there is a single seller or a limited number of sellers. b. the ability of a firm to dictate prices and exclude competition in a given market. c. the power of a firm to affect the market price of its product. d. a type of anticompetitive agreement.
c. the power of a firm to affect the market price of its product.
Assume that before he became ill, Roland had an attorney draft a document stating that in the event of a future accident resulting in a situation where Roland would continue to live only through the use of life-support equipment, Roland preferred not to be connected to such equipment. What is this kind of document called? a. A living trust. b. A durable power of attorney. c. A codicil. d. A living will.
d. A living will.
Which of the following does the Fair Packaging and Labeling Act NOT require on food product labels? a. The size of a serving (if the number of servings is stated). b. The net quantity of the contents. c. Identification of the manufacturer. d. Alternative uses such as recipes and more than one set of cooking instructions.
d. Alternative uses such as recipes and more than one set of cooking instructions.
The basis for all administrative law is: a. the U.S. Supreme Court decision in Wickard v. Filburn. b. the Declaration of Independence. c. Article III of the U.S. Constitution. d. Article I of the U.S. Constitution.
d. Article I of the U.S. Constitution.
The Ultramares rule requires what before accountants will be liable to third parties? a. Scienter. b. A declaration of intent. c. Foreseeability of the harm. d. Privity or near privity of contract.
d. Privity or near privity of contract.
Which of the following statements is true with respect to state consumer protection laws? a. State consumer laws offer far less protection for consumers than do federal laws. b. State consumer protection laws do not exist; only the federal government has the authority to enact laws governing consumer protection. c. Only the state governments have the authority to enact laws governing consumer protection; federal consumer protection laws do not exist. d. State consumer protection laws often provide more sweeping and significant protections for consumers than federal laws do.
d. State consumer protection laws often provide more sweeping and significant protections for consumers than federal laws do.
Which of the following is an example of an independent federal regulatory agency? a. The U.S. Department of Justice. b. The Internal Revenue Service. c. The U.S. Department of the Treasury. d. The Securities and Exchange Commission.
d. The Securities and Exchange Commission.
Frank dies intestate (without a valid will). He leaves an estate worth close to $2 million. Who will settle Frank's affairs and oversee the distribution of his estate? a. His executor. b. The trustee. c. The county clerk. d. The administrator.
d. The administrator.
46. The basis of antitrust law is what? a. To encourage monopolization. b. To prevent degradation of the environment. c. To encourage all horizontal mergers. d. To foster competition.
d. To foster competition.
A Chapter 7 (straight) bankruptcy proceeding is commenced by: a. filing an automatic stay. b. selling the property of the estate. c. discharging all debt. d. filing a petition in bankruptcy.
d. filing a petition in bankruptcy.
The most familiar type of bankruptcy proceeding is: a. family farmer protection under Chapter 12. b. proceedings under Chapter 13. c. corporate reorganization under Chapter 11. d. liquidation proceedings under Chapter 7.
d. liquidation proceedings under Chapter 7.
The Government in the Sunshine Act requires that: a. the federal government to disclose all records. b. the states to create parallel administrative agencies. c. the federal government to disclose certain records to any person on request. d. the meetings of federal administrative agencies to be open to public observation.
d. the meetings of federal administrative agencies to be open to public observation.
TYPES OF GIFTS Whether they are devises or bequests, gifts in a will can be specific, general, or residuary. Specific. A specific devise or bequest (legacy) describes particular property (such as "Eastwood Estate" or "my Cartier watch") that can be distinguished from the rest of the testator's property. General. A general devise or bequest (legacy) uses less restrictive terminology. For instance, "I devise all my lands" is a general devise. A general bequest often specifies a sum of cash instead of a particular item of property, such as a watch or an automobile. For instance, "I give to my nephew, Carleton, $30,000" is a general bequest. If a testamentary gift is conditioned on the com-mission of an illegal act or an act that is legally impos-sible to fulfill, the condition will be invalid. ▶ Case in Point 51.1 A testator made a charitable bequest of $29 million to a nursing home on the condition that the funds be used only to help white patients. Because this condition was impossible to fulfill without violating laws prohibiting discrimination, the court ruled that the illegal portion of the gift was invalid. Essentially, the court invalidated the condition (that the funds be used for only white patients) and allowed the nursing home to receive the funds without any conditions on their use. 3 ◀ Residuary. If any assets remain after specific gifts have been made and debts have been paid, they are called the residuary (or residuum ) of the estate. A will may provide that these assets are to be given to the testa-tor's spouse, distributed to the testator's descendants, or disposed of in some other way. If the testator has not indicated what party or parties should receive the residuary of the estate, the residuary passes according to state laws of intestacy.
residuary is whats left