BUS Law quiz questions

The seller's right to repair, adjust, or replace defective or non-conforming goods, as long as it gives prompt notice of the intent to cure and in fact cures within the contract time for performance, is known as the right to __________

Cure

Which of the following is a true statement regarding discrimination based on sexual orientation?

Currently, there is no federal legislation that prohibits discrimination based on sexual orientation

Civil law A)Involves rights in relationships between persons B) Involves responsibilities in relationships between persons C) Involves remedies available when someone's rights are violated D) All of the above

D) All of the above

Which of the following is a purpose of law? A) Provide order B) Encourage social justice C) Guarantee personal freedoms D) All of the above

D) All of the above

The __________ defense applies if the idea for a crime originated with a police officer or some other government official who suggested it to the defendant, who would not otherwise have committed the crime

D) Entrapment

The __________ rule holds that all evidence obtained in violation of the constitutional rights spelled out in the Fourth, Fifth, and Sixth Amendments to the U.S. Constitution is normally not admissible at trial. Such evidence is considered "fruit of the poisonous tree" because it is the result of an illegal procedure

D) Exclusionary

__________ law governs the conduct of states and international organizations and their relationships with one another and natural and juridical persons, while __________ law is the study of legal systems of different nation states

D) International; comparative

All of the following include relevant areas of business law with respect to corporate management except A) White collar crimes B) Antitrust law C) Employment law D) Property law

D) Property law

Under the UCC, liquidated damages are

Damages identified before a breach occurs

When directors or officers violate their duty of loyalty, they are self-__________

Dealing

Proving disparate-treatment discrimination involves all but which of the following steps?

Defendant-employer must demonstrate the existence and use of a legitimate affirmative action plan

Types of jurisdiction include all of the following except

Deferred

At a[n] ______, attorneys examine a witness under oath with a court reporter present.

Deposition At a deposition, attorneys examine a witness under oath, and a court reporter (stenographer) records every word the witnesses and attorneys speak.

If corporate directors fail to sue when the corporation has been harmed by an individual, another corporation or a director, individual shareholders who held stock at the time of the alleged wrongdoing can file a shareholder's __________ suit on behalf of the corporation

Derivative

An ethical __________ is a problem about what a firm should do for which no clear, right decision is available

Dilemma

Major obstacles to legal assent include all but which of the following?

Dire straits

The three (3) major groups of individuals within a corporation are __________

Directors, officers, and shareholders

__________ is defined as the change in the relation of the partners caused by any partner's ceasing to be associated with the carrying on, as distinguished from the "winding up," of the business

Dissolution

_____ is complete when any partner stops fulfilling the role of a partner to the business, either by choice or by default.

Dissolution Dissolution is complete when any partner stops fulfilling the role of a partner to the business by choice or default. Before any partnership can be considered completely terminated, it must go through the dissolution stage and the winding-up stage.

Through the __________ method of franchising, the franchisor manufactures a product and licenses a dealer to sell it in an exclusive territory

Distributorship

A "severable" contract is also known as a __________ contract

Divisible

When courts attempt to determine whether a reasonable person would have owed a duty to others, they consider all but which of the following questions?

Does the defendant in the subject litigation have a prior criminal record, and if so, what is the nature of the prior criminal record (both in terms of the number and types of prior criminal offenses)?

The essential element of undue influence is the existence of a(n) __________ relationship

Dominant-subservient

A(n) __________ beneficiary is a third party who benefits from a contract in which a promisor agrees to give a gift to the third party

Donee

In a __________ defense, the defendant demonstrates that he/she investigated the registration statement and had reasonable grounds to believe that the registration statement was accurate and had no legal omission of material facts

Due diligence

__________ is the practice wherein an exporter sells products in a foreign state for less than the price charged for the same or comparable goods in the exporter's home market

Dumping

Which of the following is a practice wherein an exporter sells products in a foreign state for less than the price charged for the same or comparable goods in the exporter's home market?

Dumping Dumping is the practice wherein an exporter sells products in a foreign state for less than the price charged for the same or comparable goods in the exporter's home market.

A __________ power of attorney is a written document, created by a principal, expressing his or her wishes for an agent's authority not to be affected by the principal's subsequent incapacity

Durable

Agency relationships can be created based on all but which of the following forms of authority?

Durable agency

Agency relationships can be created based on all but which of the following forms of authority?

Durable agency Agency relationships can be created based on expressed agency, implied authority, and ratification.

When an agent makes authorized expenditures in the course of working on behalf of the principal, and the principal refuses to pay the agent, the principal is violating his or her

Duty to reimburse A principal has a duty of reimbursement and indemnification to an agent. If the agent makes authorized expenditures in the course of working on behalf of the principal, the principal has a duty to reimburse the agent for that amount of money.

According to the Uniform Commercial Code (UCC), parole evidence is admissible for the sake of clarification if it addresses __________ dealings between the parties or __________ of trade in the business they are operating

Prior; usages

Which type of legal system exists in North Korea?

Socialist legal system Socialist legal systems, such as exist in Cuba and North Korea, are based on the premise that the rights of society as a whole outweigh the rights of the individual.

Under The Employee Retirement Income Security Act (ERISA), employers must provide pension and health plan participants with all but which of the following?

The option of selecting an employer-administered "defined benefit" plan

Under the UCC, which of the following is true if goods are identified at the time the parties entered into a contract and these goods are destroyed through no fault of the parties before risk passes to the buyer or lessee?

The parties are excused from performance. Under UCC Sections 2-613 and 2A-221, if goods are identified at the time the parties entered into a contract and these goods are destroyed through no fault of the parties before risk passes to the buyer or lessee, the parties are excused from performance.

A __________ partnership is an agreement between at least one general partner and at least one limited partner.

limited A limited partnership is an agreement between at least one general partner and at least one limited partner.

A partner who dissolves the partnership in violation of the partnership agreement can be held liable for __________ dissolution

Wrongful

What is the mission of the World Trade Organization (WTO?)

B) To facilitate international cooperation in opening markets, and to provide a forum for future trade negotiations and the settlement of international trade disputes

__________ refers to the history of dealings between the parties involved in the present contract

Course of performance

All but which of the following conditions would permit a court to invalidate a contract on the grounds of unilateral mistake?

The mistake was so serious that the contract is conscionable

The __________ holds an accountant liable to any third party that was or should have been foreseen as a possible user of the accountant's work product, and that, in fact, did use and rely on that work product for a proper business purpose

"Reasonably foreseeable users test"

Under the __________, an accountant is liable to known third-party users of the accountant's work product and also to those in the limited class whose reliance on the work the accountant specifically foresaw

"Restatement rule"

If Occupational Safety and Health Act (OSHA) inspectors find violations in the workplace, they may issue citations. Penalties for violations may range from $0 to __________ per violation, depending on the likelihood that the violation would lead to serious injury to an employee.

$70,000

According to the __________ Amendment to the U.S. Constitution, all powers that the Constitution neither gives exclusively to the federal government nor takes from the states are reserved for the states

10th

A(n) __________ taking, entitling a property owner to just compensation, occurs when a regulation deprives the property owner of all economically beneficial uses of the land

14th

The Securities Act of __________ regulates how companies issue corporate securities, while the Securities Exchange Act of __________ oversees the purchase and sale of securities

1933, 1934

The course of performance rule is defined in UCC

208(1) Under UCC 208(1), course of performance refers to the history of dealings between the parties in the particular contract at issue. This rule states that when a contract for sale involves repeated occasions for performance by either party with the other's knowledge of the nature of the performance and opportunity for objection to it, any course of performance accepted or acquiesced to without objection is relevant to determine what the parties' agreement means.

UCC Section 2-718 pertains to liquidated damages and allows the non-breaching seller to claim against a breaching buyer __________ percent of the purchase price or __________, whichever is __________, as liquidated damages

20; $500; less

Which amendment to the U.S. Constitution provides that in light of the need for a well-regulated militia for security, the government cannot infringe on citizens' right to bear arms?

2nd

The concept of __________ sees our proper role as obedience to duly authorized law A) Deism B) Legal positivism C) Legal realism D) Natural law

B) Legal positivism

The Age Discrimination In Employment Act of 1967 (ADEA) was enacted to prohibit employers from refusing to hire, discharging, or discriminating in terms and conditions of employment against employees or applicants age __________ or older

40

Which amendment to the U.S. Constitution protects citizens from "unreasonable searches and seizures?"

4th

The value of "security" includes all of the following alternative meanings except

A citizen's willingness to compromise basic constitutional freedoms in return for government-provided security

Which of the following statements is true of working papers?

A client has a right to access working papers on request. Although an accountant is the legal owner of the working papers, the information contained within them belongs to the client. Accordingly, the client has a right to access working papers on request.

Which of the following contracts does not "fall within" the Statute of Frauds writing requirement?

A contract for the sale of goods totaling $50

Which of the following agreements is likely to be held in violation of public policy?

A contract in restraint of trade An unconscionable contract

Which of the following is not an exception to the parole evidence rule?

A contract involving real estate

Which of the following is not an exception to the parol evidence rule?

A contract involving real estate. A contract involving real estate is not an exception to the parol evidence rule.

Breach of duty in a negligence case refers to________?

A failure to live up to the standard of care a reasonable person owes to others.

For a mutual mistake to interfere with legal consent it must involve all but which of the following?

A non-material effect on the agreement

The United States Supreme Court is most likely to issue a writ of certiorari in all but which of the following instances?

A state court of last resort has ruled that a state law is invalid

Which of the following represents discharge of the contract by operation of law?

A) Bankruptcy B) Tolling of the statute of limitations C) Impossibility of performance D) All of the above

The Uniform Partnership Act (UPA) defines "persons" as

A) Individuals B) Partnerships C) Corporations D) All of the above

When courts rely on precedent, they are obeying the principle of __________ A) Stare decisis B) Nolo contendere C) Res ipsa loquitur D) Lux libertas

A) Stare decisis

An accountant may not disclose working papers unless

A) The client consents B) The court orders the documents C) A. or B.

Which of the following is not a recognized purpose of the Statute of Frauds?

A) The statute attempts to ease contractual negotiations by requiring sufficiently reliable evidence to prove the existence and specific terms of a contract B) The statute prevents unreliable oral evidence from interfering with a contractual relationship C) The statute prevents parties from entering into contracts with which they do not agree D) All of the above are recognized purposes of the Statute of Frauds

In a(n) __________, the parties agree that one party will perform his or her duty differently from the performance specified in the original agreement; after the new duty is performed, the party's duty under the original contract becomes discharged

Accord and satisfaction

If it becomes impractical to carry out the business of the partnership (i.e., continuation of the partnership will only result in lost profits), a partner may seek to dissolve the partnership by __________

Act of the court

Which of the following is one of the three basic types of subsidies?

Actionable subsidy

If a partner acts with authority specified in the partnership and establishes an agreement in which he/she binds the partnership to the agreement, the partner is said to have acted with __________ authority

Actual

___________ is also known as "cause in fact," while __________ is sometimes referred to as "legal cause"

Actual cause; proximate cause

___________ is also known as "cause in fact," while __________ is sometimes referred to as "legal cause."

Actual cause; proximate cause

Which of the following is a recognized exception to the preexisting duty rule?

Additional work

An agreement in which a party is given an offer without the right to negotiate its terms is called a(n) ____________ contract.

Adhesion

Apparent agency is also known as __________

Agency by estoppel

In an agency relationship, the __________ is authorized to act for and on behalf of the __________, who hires the __________ to represent him/her

Agent, principle, agent

Employees are __________ of an employer

Agents

A corporation is a(n) __________ corporation if it is incorporated in another country

Alien

The Uniform Commercial Code (UCC) has been adopted by __________ states

All fifty (50)

Which of the following is not a proper method of service of process?

All of the above are proper methods of service of process

A(n) __________ beneficiary is a third party that benefits from a contract in which the promisor agrees to pay the promisee's debt

Creditor

An agreement is based upon

An offer and an acceptance

The Securities and Exchange Commission defines an accredited investor as which of the following?

Any natural person who has a net worth of at least $1 million

Courts of __________ jurisdiction have the power to review previous judicial decisions to determine whether trial courts erred in their decisions

Appellate

Which of the following is the part of the Uniform Commercial Code governing contracts for the sale of goods?

Article 2 A part of the Uniform Commercial Code relevant to contracts is Article 2, which governs contracts for the sale (exchange for a price) of goods (tangible, movable objects).

The only authority possessed by corporations is the power granted to them in their __________ and through state incorporation statutes

Articles of incorporation

The "universalization" test

Asks us to consider what the world would be like if our decisions were "copied" by everyone else

__________ occurs when one person places another in fear or apprehension of an immediate, offensive bodily contact

Assault

Carrie and Clayton enter into a contract. Carrie transfers her rights under the contract to Tamir. What is this transfer of rights called?

Assignment Assignment occurs when a party to a contract transfers his or her rights to receive something under the contract to a third party.

A person who transfers his or her contractual rights to a third party is an __________, while the third party who receives these contractual rights is an __________

Assignor; assignee

To use the __________ doctrine successfully, a defendant must prove that the plaintiff voluntarily and unreasonably encountered the risk of the actual harm

Assumption of the risk

To use the __________ doctrine successfully, a defendant must prove that the plaintiff voluntarily and unreasonably encountered the risk of the actual harm.

Assumption of the risk To use the assumption of risk doctrine successfully, a defendant must prove that the plaintiff voluntarily and unreasonably encountered the risk of the actual harm.

The Sarbanes-Oxley Act of 2002 encourages auditor independence by prohibiting registered public accounting firms from engaging in all but which of the following non-auditing acts?

Attending professional sporting events with clients

When an agent breaches an agency contract or his fiduciary duties, the principal may use her right of __________ to nullify at her discretion any contract the agent negotiated

Avoidance

An alternative name for "case law" is A) Corpus juris secundum B) Common law C) Statutory law D) Executive order

B) Common law

Commonly-used theories of recovery in product liability cases include all of the following except:

Criminal liability

A __________ contract is defined as a promise made in exchange for a promise

Bilateral

Which of the following provides the potential for international dispute settlement?

Both litigation and arbitration

The Insider Trading and Securities Fraud Enforcement Act of 1988 subjects more individuals to civil liability for insider trading and grants the Securities and Exchange Commission (SEC) power to award __________ (government rewards for acts beneficial to the public) to insider-trading "whistle-blowers"

Bounty payments

UCC Sections 2-703(f) and 2A-523(1)(a) allow a seller or lessor to cancel the contract if the buyer or lessee is in __________

Breach

__________ is the offering, giving, soliciting, or receiving of money or any object of value for the purpose of influencing the judgment or conduct of a person in a position of trust

Bribery

According to the __________ rule, directors and offices are not liable for decisions that harm the corporation if they were acting in good faith at the time of the decision

Business judgment

When an employer shares profits with an employee as payment for work, or when a landlord accepts shares of profits for payment of rent, there is no partnership.

Businesspeople

Which of the following is not an appropriate category/classification of law? A) Civil law B) Private law C) "Quasi-criminal" law D) Cyberlaw

C) "Quasi-criminal" law

False imprisonment may occur by

C) Physical restraint

Which of the following laws requires employers to pay a minimum wage to employees?

C) The Fair Labor Standards Act

Which of the following organizations operates specifically under the principle that "labor should not be regarded merely as a commodity or article of commerce?"

C) The International Labor Organization (ILO)

Which of the following is an example of a major federal administrative agency (executive agency)? A) The Consumer Product Safety Commission B) The Republican National Committee C) The Veteran's Administration D) The Committee to Re-elect the President

C) The Veteran's Administration

The __________ laws include sales laws and other regulations affecting commerce, such as bank deposits and collections, title documents, and warranties A) Compendium of State Commercial Codes (CSCC) B) Non-Uniform Sales Code (NUSC) C) Uniform Commercial Code (UCC) D) Uniform International Commercial Code (UICC)

C) Uniform Commercial Code (UCC)

Which country is not a party to the Central American Free Trade Agreement?

Canada Canada is not a party to the Central American Free Trade Agreement.

A person who has legal ______ to contract is one who has the mental ability to understand his or her rights and obligations under a contract and, therefore, will presumably be able to understand how to comply with the terms of the agreement.

Capacity

A person who has legal __________ has the mental ability to understand his or her rights and obligations under a contract

Capacity

A __________ partnership is an agreement between at least one general partner and at least one limited partner

Certificate of limited partnership

In a __________-style business operation, the franchise operates under the franchisor's business name and is required to follow the franchisor's standards and methods of business operation

Chain

__________ -held corporations generally do not offer stock to the general public

Closely

A secondary obligation, which falls within the scope of the statute of frauds writing requirement, occurs when a party outside a primary agreement promises to fulfill one of the original party's (primary debtor's) obligations if the original party fails to fulfill it. A secondary obligation is also called a __________ promise

Collateral B) Suretyship

Which provision of the U.S. Constitution is the primary source of authority for federal regulation of business?

Commerce Clause The Commerce Clause is the provision of the U.S. Constitution that is the primary source of authority for federal regulation of business.

Which rule/doctrine would be relevant if a change in government regulation that neither party contemplated forbids the import or export of a particular item the parties had agreed would be shipped?

Commercial impracticability

Which of the following is defined as "the exchange of tangible personal property between merchants in return for consideration?"

Commercial sale of goods

An alternative name for "case law" is

Common law

Sources of contract law include

Common law and the Uniform Commercial Code

In which type of legal system are judges typically appointed or elected?

Common law system

___________ damages are damages awarded to compensate the victim for all harm caused by the defendant tortfeasor

Compensatory damages

Because the primary objective of tort law is to compensate victims, the primary type of damages is ___________.

Compensatory damages Because the primary objective of tort law is to compensate victims, the primary type of damages is compensatory damages.

__________ performance occurs when all aspects of the parties' duties under the contract are carried out perfectly

Complete

A __________ is a particular event that must occur in order for a party's duty to arise

Condition precedent

A __________ is a future event that terminates the obligation of the parties when it occurs

Condition subsequent

__________ damages include damages for lost profits, as long as such damages are not too __________

Consequential; speculative

__________ is required in every contract

Consideration

__________ is what a person will receive in return for performing a contract obligation

Consideration

The obligations of sellers/lessors and buyers/lessees are determined by all but which of the following?

Constitutional law

Unlike negligence and strict liability theories, breach of warranty stems from __________ theory rather than __________ theory

Contract; tort

If the defendant successfully proves __________, no matter how slight the plaintiff's negligence, the plaintiff will be denied any recovery of damages

Contributory negligence

__________ occurs when a person permanently removes personal property from the owner's possession and control

Conversion

Which of the following does not determine what market participants may or may not legally do?

Corporations

Which of the following does not determine what market participants may or may not legally do? A) Constitutions B) Corporations C) Legislatures D) Courts

Corporations

The UCC defines _____ as previous commercial transactions between the same parties.

Course of dealing UCC 1-205(1) defines course of dealing as previous commercial transactions between the same parties.

Under the Federal Unemployment Tax Act (FUTA,) __________ pay taxes to the __________, which deposit the money into the __________ government's Unemployment Insurance Fund

Employers, states, federal

When an assignor assigns two (2) or more parties the same right and confusion arises as to which party has the right to the contract, a minority of states have adopted the __________ rule, which states that the first assignee to give notice of assignment to the obligor is the party with rights to the contract

English

Under the __________ rule, contracts that would normally fall under the statute of frauds and need a writing if negotiated by the principal must be in writing even if negotiated by an agent

Equal dignity

The value of justice includes all but which of the following alternative meanings?

Escaping the cares and demands of this world entirely

Courts uphold modifications or limitations to remedies unless the remedies fail in their __________

Essential purpose

If a non-partner has represented himself or herself as a partner and a third party reasonably relies on this information to his or her detriment, the non-partner can be held liable for the third party's damages. This is known as a partnership by __________

Estoppel

An __________ clause releases one of the contracting parties from all liability, regardless of who is at fault or what injury is suffered.

Exculpatory

Under UCC Sections 2-613 and 2A-221, if goods are identified at the time the parties entered into a contract and these goods are destroyed through no fault of the parties before risk passes to the buyer or lessee, the parties are

Excused from performance

In typical negligence cases, courts rarely award punitive damages, or __________ damages, which are imposed to punish the offender and deter others from committing similar offenses

Exemplary

__________ assumption of the risk occurs when the plaintiff expressly agrees (usually in a written contract) to assume the risk posed by the defendant's behavior

Express

__________ contracts have all their terms clearly set forth in either written or spoken words

Express

__________ is when the means by which acceptance can occur is expressly stated in the offer

Express authorization

What is the key difference between an express and an implied condition?

Express conditions are clearly stated while implied conditions are inferred. Express conditions are explicitly stated in the contract. Implied conditions are those that are not explicitly stated but are inferred from the nature and language of the contract.

__________ occurs when, after reaching the age of majority, the person states orally or in writing that he or she intends to be bound by the contract entered into as a minor

Express ratification

An __________ is an affirmative representation about a product that becomes part of the "basis of the bargain"

Express warranty

__________, otherwise known as blackmail, is the making of threats for the purpose of obtaining money or property

Extortion

A promise to stop doing something in the future is not valid consideration.

False

All employees are agents of their employers, and all agents are employees.

False

Fraudulent misrepresentation and intentional misrepresentation are not the same thing.

False

In a bilateral contract, consideration for a promise is a completed act.

False

The lack of a feasible way to make a safer product prevents liability based upon an alleged defective product as a matter of law.

False

Partnership by estoppel applies only when there is no partnership agreement in place; when there is a written partnership agreement, partners not named in the agreement can deny they are partners.

False Parties not named in partnership agreements can sometimes be partners.

Daily management of a corporation is the direct responsibility of the shareholders.

False Shareholders are not directly responsible for the daily management of the corporation, but they elect the directors who are.

The court will never look at adequacy of consideration.

False The court will look at adequacy of consideration if the court believes fraud or undue influence occurred.

The First Amendment to the U.S. Constitution is the primary source of authority for federal regulation of business

False The primary source of authority for federal regulation of business is the commerce clause, located in Article I, Section 8, of the Constitution.

In relation to contracts, the term "consideration" pertains to parties acting in an ethical manner.

False Consideration is the bargained-for exchange or what each party gets in exchange for his or her promise under the contract.

In an unliquidated debt, the parties agree on whether money is owed and agree upon the amount but disagree on the repayment schedule.

False In an unliquidated debt, the parties either disagree about whether money is owed or dispute the amount.

Because ethical issues vary from country to country, international business persons should not take ethical considerations into account in the decision-making process.

False International business persons must take ethical considerations into account in the decision-making process.

__________ are investment banking firms that purchase securities from an issuing corporation with the intent to sell them to brokerage houses, which then sell them to the public

Underwriters

If a minor enters into contract with an adult, both parties may disaffirm a contract based upon the minor's lack of majority.

False It is only the minor who has the right to disaffirm, never the adult with whom the minor entered into the agreement.

Once a young person reaches the age of majority and ratifies a contract made as a minor, he or she has a reasonable period of time to void the contract.

False Once a person reaches the age of majority, he or she may ratify, or legally affirm, contracts made as a minor. Once ratified, the contract is no longer voidable.

__________, a privacy tort, is closely related to defamation and occurs when publicity about a person creates an impression about an individual that is not valid. It could involve attributing characteristics or beliefs to a person that he or she does not possess, or creating the impression that an individual has taken certain actions he or she has not taken

False light

Which of the following is a false document or sign of existence used to perpetrate fraud, such as making counterfeit money?

False token According to Exhibit 7-1, the crime of "false token" involves a false document or sign of existence used to perpetrate a fraud, such as counterfeit money.

The U.S. Constitution establishes a system of government based on the principle of __________, according to which the authority to govern is divided between federal and state governments

Federalism

The U.S. Constitution establishes a system of government based on the principle of __________, according to which the authority to govern is divided between federal and state governments.

Federalism The U.S. Constitution establishes a system of government based on the principle of federalism, according to which the authority to govern is divided between federal and state governments.

An agency relationship is a(n) __________ relationship of trust, confidence, and good faith

Fiduciary

When an assignor assigns two (2) or more parties the same right and confusion arises as to which party has the right to the contract, most states use the __________ rule, which gives the contractual right to the first party granted the assignment

First-assignment-in-time

A corporation is a(n) __________ corporation in states in which it conducts business but is not incorporated

Foreign

The Fair Labor Standards Act mandates that employees who work more than __________ hours in a week be paid no less than __________ times their regular wage for all hours they work beyond __________ during a given week

Forty (40); 1 ½; forty (40)

The Uniform Commercial Code (UCC) creates a statute of limitations for bringing a lawsuit arising under a breach of contract for the sale of goods. UCC Section 2-725(1) states that __________ year(s) is the time frame for a plaintiff to file suit once a cause of action accrues

Four

Government and law enforcement officials can conduct a search on personal property only if they have a court issued search warrant. This right is given to the U.S. citizens by the _____ to the Constitution.

Fourth Amendment

The value of __________ includes the following alternative meanings: the ability to act without restriction from rules imposed by others; the right to possess the capacity or resources to act as one wishes; and the choice to escape the cares and demands of this world entirely

Freedom

Sometimes, when a contract is entered into, both parties recognize that the contract is to fulfill a particular purpose, and the happening of that purpose is said to be a basic assumption on which the contract is made. If, due to factors beyond the control of the parties, the event does not occur, and neither party had assumed the risk of the event's nonoccurrence, the contract may be discharged based on the __________ doctrine

Frustration of purpose

Which of the following refers to agreements in which parties pay consideration for the chance, or opportunity, to obtain an amount of money or property?

Gambling The term gambling refers to agreements in which parties pay consideration (money placed during bets) for the chance, or opportunity, to obtain an amount of money or property. Industry officials, however, prefer to use the term gaming.

In a(n) __________ partnership, partners divide the profits (usually equally) and management responsibilities and share unlimited personal liability for the firm's debts

General

Which of the following statements is/are correct concerning contracts made by intoxicated persons?

Generally, contracts made by intoxicated persons are voidable B) If the intoxication just causes the person to exercise poor judgment, the contract is not voidable unless the other party unfairly capitalized on the impaired judgment C) When the intoxicated person becomes sober, the contract can be ratified or disaffirmed; however, the courts will fairly liberally interpret behavior that seems like ratifying the contract once the intoxicated person becomes sober D) All of the above statements are correct

he __________ Termination Protection Act of 2004 provides that, in the absence of detrimental behavior, employees of "works" with more than ten (10) employees can be terminated for operational reasons only if the termination is "socially justified." Social justification depends on the worker's age, years of service, disability, and number of dependents

German

Uniform Commercial Code (UCC) Section 2-105 defines __________ as "all (tangible) things...which are movable at the time of identification to the contract for sale"

Goods

A __________ agent is one who acts without consideration

Gratuitous

To recover workers' compensation benefits, the injured party must demonstrate:

He/she is an employee The injury occurred on the job

Between merchants, the UCC imposes the good faith obligation of __________ and __________

Honesty in fact; reasonable commercial standards of fair dealing

__________ work environment is a recognized form of sexual harassment

Hostile

In which of the following scenarios could the courts pierce the corporate veil? If a corporation followed statutory mandates regarding corporate business. If the corporation has been legally incorporated. If a corporation did not follow statutory mandates regarding corporate business. If the shareholders resisted. All of these are correct.

If a corporation did not follow statutory mandates regarding corporate business. Courts are likely to pierce the corporate veil when: • A corporation lacked adequate capital when it initially formed. • A corporation did not follow statutory mandates regarding corporate business. • Shareholders' personal interests and corporate interests are commingled such that the corporation has no separate identity. • Shareholders attempt to commit fraud through a corporation.

Which of the following is an inappropriate interpretation of the Uniform Commercial Code (UCC) when a term is left open in a contract for the sale of goods?

If the quantity term is missing, a "reasonable quantity" must be delivered at the time and place at which the buyer is to receive the goods

A(n) __________ contract arises not from words, but from the conduct of the parties

Implied

_________ conditions are those that are not explicitly stated but are inferred from the nature and language of the contract

Implied

__________ occurs when a former minor takes some action after reaching the age of majority consistent with intent to ratify the contract

Implied ratification

An __________ assumes that the buyer is relying on the seller's skill and judgment to select certain goods

Implied warranty of fitness for a particular purpose

An __________ means that the goods are fit for the ordinary purpose for which they are sold and used

Implied warranty of merchantability

__________ jurisdiction is a court's power to render a decision affecting the rights of specific persons before the court

In personam

When contracting parties do not intend to benefit someone but unintentionally do so, that third party is a(n) __________ beneficiary

Incidental

__________ beneficiaries cannot sue to enforce contract obligations

Incidental

Accountants may be liable to individuals in all but which of the following groups?

Incidental users

The document a corporation files with the state explaining its organization is known as the articles of __________

Incorporation

A(n) __________ is a person who contracts with another to do something for him/her, but who is not controlled by the other nor subject to the other's right to control with respect to his/her physical conduct in the performance of the undertaking

Independent contractor

What is not an advantage of the partnership?

Individual partner liability for all partnership losses

__________ contracts are called __________ because no formalities are required in making them

Informal; simple

A(n) __________ results from a false statement about a fact material to an agreement that the person making it believed to be true

Innocent misrepresentation

UCC Sections 2-502 and 2A-522 allow buyers and lessees to recover the goods identified in the contract if the seller or lessor becomes __________ after receiving the __________ payment due under the agreement

Insolvent within ten (10) days; first

__________ contracts are written contracts intended to be the complete and final representation of the parties' agreement

Integrated

Which of the following is not an essential element of negligence?

Intent to cause harm

A fraudulent misrepresentation is also referred to as __________ misrepresentation

Intentional

Disparate treatment is sometimes referred to as __________ discrimination

Intentional

The tort of __________ occurs when someone engages in outrageous, intentional conduct likely to cause extreme emotional distress to the party toward whom the conduct is directed

Intentional infliction of emotional distress

The term "computer crime" refers to any wrongful act that

Is directed against computers B) Uses computers to commit a crime C) Involves computers D) All of the above

Physically, a security __________

Is merely a piece of paper

Which of the following is true regarding awards of punitive damages in the U.S.?

It is not always easy to predict what a court will do regarding punitive damages in any given case.

Which of the following is not a responsibility of the Securities and Exchange Commission?

It is responsible for policing and enforcing the "fairness" doctrine

The Uniform Electronic Transactions Act allows for which of the following?

It seems to create an electronic version of the mailbox rule.

A __________ is a partnership agreement in which company members hold transferable shares while all the goods of the company are held in the names of the partners

Joint stock company

According to the Uniform Partnership Act (UPA), if a partnership is liable, each partner has unlimited personal liability. That is, all partners are __________ liable for the partnership's debts

Jointly

Commonly-recognized defenses to claims under Title VII of the Civil Rights Act of 1964 include all but which of the following?

Judicial fiat

Kim negligently hits Lennithia with her car. Which of the following is true?

Kim has a duty to come to the aid of Lennithia because she negligently hit her.

The __________ doctrine allows the plaintiff to recover damages, despite proof of contributory negligence, as long as the defendant has a final clear opportunity to avoid the action that injured the plaintiff

Last-clear-chance

Section 10(b) and Rule 10b-5 of the Securities Exchange Act of 1934 define "insiders" as __________

Lawyers B) Consultants

"Stakeholders" of a firm are ordinarily thought to include all of the following except

Legislators

A __________ is a person who acquires the right to possession and use of goods under a lease

Lessee

A __________ is a person who transfers the right to possession and use of goods under a lease

Lessor

Which of the following does not constitute a valid offer?

Preliminary negotiations B) Advertisements

A(n) __________ partnership is an agreement between at least one general partner and at least one limited partner

Limited

When a partnership adds another partner, the new partner assumes __________ liability for any obligations that occurred before the partner was added

Limited

In which form of organization may investors share in profits but not in management responsibilities while avoiding personal liability?

Limited partnership In a limited partnership, the general partners assume unlimited personal liability for the partnership's debts, but the limited partners assume no liability beyond the capital they have invested in it and no part in its management.

In a(n) __________ debt, there is no dispute about the fact that money is owed, and the amount of money owed

Liquidated

Most states have enacted __________ statutes, which enable the court to serve defendants outside the state as long as the defendant has sufficient minimum contacts within the state and it seems fair to assert jurisdiction over him or her

Long-arm

According to the __________ rule, an acceptance is valid when the offeree places it in the mailbox, whereas a revocation is effective only when the offeree receives it

Mailbox

Which of the following considerations is not included in the "WPH Framework" for business ethics?

Managerial decisions are made in an attempt to circumvent the law

Under a strict product liability theory, who may be held liable to an injured party?

Manufacturers, distributors, and retailers. Under strict product liability, courts may find the manufacturer, distributor, or retailer liable to any reasonably foreseeable injured party.

When an individual product has a defect making it more dangerous than identical products, that individual product is said to have which of the following defects?

Manufacturing When an individual product has a defect that makes it more dangerous than other identical products, this individual product has a manufacturing defect.

The terms that would allow a court to determine what the damages would be in the event that one of the parties breaches the contract, are the __________ terms of a contract.

Material

__________ terms in an offer and its resulting contract allow a court to determine damages in the event that one of the parties breaches the contract. They include the subject matter, price, quantity, quality, and parties

Material

A(n) ____________ occurs when a party unjustifiably fails to substantially perform his or their obligations under the contract.

Material breach A breach occurs whenever a party fails to perform their obligations under the contract. If the breach is a minor one, it may entitle the nonbreaching party to damages but it does not discharge the nonbreaching party from the contract. A material breach, however, discharges the nonbreaching party from his obligations under the contract.

__________________occurs when a party to a contract unjustifiably fails to substantially perform his obligations under the contract.

Material breach A material breach occurs when a party unjustifiably fails to substantially perform his obligations under the contract. It is often difficult to know when the court is going to determine that a breach is material.

Which term describes when a party unjustifiably fails to substantially perform his or her obligations under the contract?

Material breach A material breach occurs when a party unjustifiably fails to substantially perform his or her obligations under the contract.

After the dissolution of a partnership, the remaining partners __________

May continue the partnership

If the terms of acceptance of a contract do not reflect the terms of the offer, which of the following prevents a contract from being formed?

Mirror-image rule The mirror-image rule requires that the acceptance mirror the offer in a contract.

A __________ is an untruthful assertion by one of the parties about a fact material to their agreement

Misrepresentation

In contract law a __________ is an erroneous belief about the facts of the contract __________

Mistake of fact; at the time the contract is concluded

A(n) __________ defense tries to prove the defendant made an honest and reasonable mistake that negates the guilty-mind element of a crime

Mistake-of-fact

Which of the following are two (2) primary pretrial motions?

Motion for judgment on the pleadings; motion for summary judgment

A __________ mistake is an error made by both parties to the agreement

Mutual

The first major piece of federal legislation adopted explicitly to encourage the formation of labor unions and provide for collective bargaining between employers and unions as a means of obtaining the peaceful settlement of labor disputes was the __________ Act. A) Hoffa B) Taft-Hartley C) Landrum-Griffin D) None of the above

NONE OF THE ABOVE

An accountant is liable for __________ if he or she fails to exercise the care of a competent, reasonable professional and that failure causes loss or injury to the client

Negligence

When a law establishes labeling, design, or content requirements for products, the manufacturer has a duty to meet these requirements. Failure by the manufacturer to meet those standards resulting in harm to a plaintiff constitutes __________

Negligence per se

In some contract negotiations, one party makes a statement of material fact that he or she thinks is true. If he or she could have known the truth by using reasonable care to discover or reveal it, the statement is a(n) __________ misrepresentation

Negligent

To bring a successful case based on __________, the plaintiff must demonstrate that the defendant knew or should have known that without a warning, the product would be dangerous in its ordinary use (or in any reasonably foreseeable use,) yet the defendant still failed to provide a warning

Negligent failure to warn

The __________ is an international agreement governing the arbitration of private international disputes. This agreement applies when an award is made and one party seeks enforcement in the territories of the contracting states, and requires that each state recognize written arbitration agreements and arbitral awards as enforceable in its national courts.

New York Convention

The __________ is an international agreement governing the arbitration of private international disputes. This agreement applies when an award is made and one party seeks enforcement in the territories of the contracting states, and requires that each state recognize written arbitration agreements and recognize arbitral awards as enforceable in its national courts

New York Convention

It is a generally accepted precaution for dentists to warn patients of risks and exercise extra caution if patients are on anticoagulants (blood thinners) and must undergo dental procedures. A dentist fails to alert a patient (who the dentist knows is on anticoagulants) of the risks of a procedure the patient is about to undergo that is dangerous to someone on blood thinners. The patient experiences near-fatal bleeding due to the procedure. The plaintiff decides to sue for malpractice but the dentist says he was unaware of the need to warn patients on blood thinners of possible risks. Is the dentist going to be successful in his defense?

No because a professional cannot defend against a negligent suit by claiming ignorance of generally accepted principles in his or her field of expertise. A professional cannot defend against a negligent suit by claiming ignorance of generally accepted principles in his or her field of expertise.

Viv entered into a contract with Rodin, an assassin, to kill her ex-husband. She pays him $50,000, but he does not perform the deed. She now wants her money back. Must Rodin return the money?

No, the contract is void because it is illegal. The contract is void, because it is illegal to carry out its terms, and thus neither party has any obligation.

Which of the following is not a characteristic of a corporation?

Non-transferability of corporate shares

In a(n) __________, the original parties and a third party all agree that the third party will replace one of the original parties and that the original party will then be discharged

Novation

Which of the following occurs when the parties to the agreement wish to replace one of the parties with a third party?

Novation Sometimes the parties to the agreement want to replace one of the parties with a third party. This substitution of a party is called novation.

Offeror intent is determined based upon a(n) __________ standard

Objective

The __________ theory of contracts means that the existence and interpretation of a contract is based on the outward manifestations of intent by the parties

Objective

Both parties to a contract are __________, contractual parties who agree to do something for the other party, and __________, contractual parties who agree to receive something from the other party

Obligors; obligees

__________ obligations are debts incurred in an initial contract. Such obligations are not within the statute of frauds; therefore, they need not be in writing to be enforceable

Primary

The person who makes an offer is called a[n] ___________.

Offeror

Formation of a contract begins when the party initiating the contract, called the __________, makes an offer to another party, called the __________

Offeror; offeree

__________ typically manage the "day-to-day" business of the firm

Officers

An S corporation cannot have more than __________ shareholders

One hundred (100)

Mail fraud is a federal crime.

One of the most frequently prosecuted frauds is mail fraud, the use of mail to defraud the public, which is a federal crime under the Mail Fraud Act of 1990.

Courts of __________ jurisdiction have the power to hear and decide cases when they first enter the legal system

Original

The __________ rule states that oral evidence of an agreement made prior to or contemporaneously with the written agreement is inadmissible when the parties intend to have a written agreement be the complete and final version of the agreement

Parole evidence

A __________ is an association of two or more persons to carry on as co-owners a business for profit

Partnership

A(n) __________ is an agreement that does not specify the objective or duration of the partnership

Partnership at will

With regard to the enforceability of a present promise, which of the following is an accurate statement regarding past consideration?

Past consideration is no consideration at all

The Uniform Partnership Act (UPA) establishes that when a partnership has debt, the distribution of liquidated assets must take the following order:

Payment to creditors of the partnership; payment of refunds or loans to partners for loans made to the firm; payment of partners for the capital they invested; payment of profits distributed to partners on the basis of the partnership agreement

The negligence __________ (literally, "negligence in or of itself") doctrine applies to cases in which the defendant has violated a statute enacted to prevent a certain type of harm from befalling a specific group to which the plaintiff belongs

Per se

The Uniform Commercial Code (UCC) and the common law differ in terms of tender of delivery, with the UCC requiring __________, and the common law requiring the lesser standard of __________

Perfect tender; substantial performance

Which of the following is not a prohibited type of discrimination in violation of The Civil Rights Act of 1964?

Personal appearance

The __________ rule states that if a writing, or a term in question, appears to be __________ on its face, we must determine its meaning from just "the four corners" of the document, without resorting to outside evidence, and give the words their ordinary meaning

Plain meaning; unambiguous

When determining whether a contract falls under the Uniform Commercial Code (UCC), first determine if the sale is for goods and then determine if the contract is __________ for the sale of goods

Predominantly

According to the __________, performance of a duty you are obligated to do under the law is not good consideration

Preexisting duty rule

In obtaining "cover", the buyer must demonstrate all but which of the following?

Purchase of substitute goods from a non-commercial seller

The __________ placed new statutory obligations on accountants by requiring them to use adequate procedures when performing an audit, so they can detect any illegal acts committed by the audited company. It also lists a specific set of actions and guidelines an accountant must follow after identifying a potentially illegal activity

Private Securities Litigation Reform Act of 1995

A __________ occurs when a person uses her property in an unreasonable manner that harms a neighbor's use or enjoyment of his property

Private nuisance

A __________ occurs when a person uses her property in an unreasonable manner that harms a neighbor's use or enjoyment of his property.

Private nuisance A private nuisance occurs when a person uses her property in an unreasonable manner that harms a neighbor's use or enjoyment of his property.

Haru, a successful restaurateur from New York, wanted to expand his business to Houston, Texas. He was, however, unable to get a license from the regulatory authorities in Houston on the grounds that he was a nonresident. This is a blatant violation of the

Priveleges and immunities clause This is a blatant violation of the privileges and immunities clause. The privileges and immunities clause prohibits states from discriminating against citizens of other states when those nonresidents engage in ordinary and essential activities. For example, according to the privileges and immunities clause, a state cannot prohibit nonresidents from opening restaurants in the state.

Under the "Ultramares rule," an accountant will be held liable for negligence only to those with whom he or she had __________, meaning the client and anyone for whose __________ benefit the accounting statements were prepared

Privity of contract; primary

Perhaps the most important factor in determining whether a partnership exists is whether __________

Profits are shared

__________ occurs when one party makes a promise knowing the other party will rely on it, the other party does rely on it, and the only way to avoid injustice is to enforce the promise

Promissory estoppel

All of the following include relevant areas of business law with respect to corporate management except

Property law Each of the six functional areas of business—management, production and transportation, marketing, research and development, accounting and finance, and human resource management—sits on a foundation of business law.

Which of the following is not an advantage of a sole proprietorship?

Proprietor is personally liable for all losses

If you decide to go into business on your own, you are creating a sole __________, an unincorporated business organization in which you, as the sole owner, are in complete control of the management and profits of the business

Proprietorship

Because shareholders cannot always attend shareholder meetings, they can authorize a third party to attend and vote in their place. This authorization is called a(n) __________

Proxy

Corporate directors have all but which of the following rights within a corporation?

Publicity

__________ consists of oral statements so inherently harmful that general damages are presumed

Slander per se

Which of the following is not a state-created exception to the employment-at-will doctrine allowing an employee to sue for wrongful discharge?

Quasi-contract

__________ sexual harassment cases occur when a supervisor makes a sexual demand on someone of the opposite sex and this demand is reasonably perceived as a "term or condition" of employment

Quid pro quo

A __________ prospectus is a prospectus with a warning written in __________ print at the top of the page warning investors that the registration statement has been filed with the Securities and Exchange Commission but not yet approved

Red herring, red

Under the UCC, the seller can presume acceptance if the buyer fails to __________ the goods within a reasonable time

Reject

Canceling the contract is the __________ from the UCC's perspective

Remedy of last resort

Embezzlement

Requires entrustment

Either party can choose to ______ the contract in cases where both parties to a contract are mistaken about either a current or a past material fact.

Rescind When both parties are mistaken about a current or past material fact, either can choose to rescind the contract. Rescission is fair because any agreement was an illusion.

Because the relationship between corporations and their directors, officers, and employees is an agency relationship, corporations are liable for torts and crimes committed by their agents during the scope of their employment. Courts refer to this liability as the doctrine of __________

Respondeat superior

According to the ___________ doctrine, a court may find a corporate officer criminally liable regardless of the extent to which the officer took part in the criminal activity

Responsible person

Just as the original Uniform Partnership Act governs partnerships in the absence of an express agreement, the __________ Uniform Partnership Act (__________) has significantly changed several laws that relate to partnerships

Revised; RUPA

Which of the following is not a partner right?

Right to a reasonable wage or salary

If the Equal Employment Opportunity Commission decides not to sue, it notifies the plaintiff-employee of his/her right to file an action, and issues the plaintiff-employee a __________

Right-to-sue letter

Contractual rights that cannot be assigned include

Rights whose assignment is prohibited by contract

A __________ consists of the passing of title from the seller to the buyer for a price

Sale

Article 2 of the Uniform Commercial Code (UCC) governs __________ contracts, while Article 2(A) governs __________ contracts

Sales; lease

The Corporate and Criminal Fraud Accountability Act is also known as the __________ Act

Sarbanes-Oxley

__________ typically approve/disapprove of major decisions of the board

Shareholders

To prevent statutory insiders from using inside information for their personal gain, Section 16(b) of The Securities Exchange Act of 1934 requires that statutory insiders return all _________, or profits made from the sale of company stock within any __________ period by a statutory insider, to the company

Short-swing profits; six-month

Which of the following is not a type of formal contract?

Simple contracts

Concurrent conditions exist when the parties are to perform their obligations for each other

Simultaneously

Within the statute of frauds, "land" encompasses

The land and soil itself, as well as anything attached to the land

The remedy of __________ performance usually requires that the seller or lessor deliver the particular goods identified in the contract

Specific

Which of the following is true regarding proof of design defect?

States are not in agreement concerning what proof is required to establish a design defect. It is sometimes difficult to prove that a design is defective. States are not in agreement concerning the proof required to establish a design defect.

__________ provide a statutory defense to product liability lawsuits by barring actions arising more than a specified number of years after the product was purchased. __________ are usually much longer than __________, generally running at least ten (10) years.

Statutes of repose; Statutes of repose; statutes of limitations Statutes of repose provide a statutory defense to product liability lawsuits by barring actions arising more than a specified number of years after the product was purchased. Statutes of repose are

__________ provide a statutory defense to product liability lawsuits by barring actions arising more than a specified number of years after the product was purchased. __________ are usually much longer than __________, generally running at least ten (10) years

Statutes of repose; statutes of repose; statutes of limitations

Only certain crimes, typically violations of regulatory statutes, allow punishment without proof of guilty mind. This liability without fault, or __________ liability, applies to actions that, regardless of the care taken, are specifically prohibited, such as selling cigarettes or alcohol to a minor

Strict

__________ liability is liability without fault

Strict

__________ jurisdiction is a court's power to hear certain kinds of cases

Subject matter

Promoters begin the corporate creation and organization process by arranging for necessary capital, financing, and licenses. They raise capital for the infant corporation by making __________ agreements with __________ who agree to purchase stock in the new corporation

Subscription; subscribers

__________ performance occurs when nearly all of the terms of the agreement have been completed, there has been a good faith effort on the part of the obligor to complete all of the terms of the agreement, and there has been no "willful departure" from the terms of the agreement

Substantial

Which of the following refers to the basic fairness of laws that may deprive an individual of her life, liberty, or property?

Substantive due process

Which of the following is not a measure of damages recoverable in a tort case?

Supplemental damages

An investment group that comes together for the explicit purpose of financing a specific large project is a(n) __________

Syndicate

The Fifth Amendment to the U.S. Constitution provides that when government takes private property for public use, it must pay the owner just compensation, or fair market value, for his property. This provision is called the __________ clause

Takings

Uniform Commercial Code (UCC) Sections 2-503(1) and 2A-508(1) state that __________ of delivery requires that the seller/lessor have and hold conforming goods at the disposal of the buyer/lessee and give the buyer/lessee reasonable notification to enable him or her to take delivery

Tender

For diversity-of-citizenship, which of the following is needed?

That the plaintiff and the defendant reside in different states and that the controversy concerns an amount in excess of $75,000.

Which of the following is an example of a major independent federal administrative agency?

The Consumer Product Safety Commission. The Consumer Product Safety Commission (CPSC) is an independent federal administrative agency.

Which of the following is not true about the European Union (EU)?

The EU was expanded in 2004 to include the United States. The European Union (EU) is a customs union. The modern EU had its inception in three treaties from the 1950s. The EU expanded in 2004, 2007 and 2013, which created the largest regional trading bloc in the world, containing more than 500 million people.

Which amendment to the U.S. Constitution protects freedom of religion, press, speech, and peaceable assembly?

The First Amendment

Which of the following laws prohibits U.S. companies from offering or paying bribes to foreign government officials, political parties, and candidates for office for the purpose of obtaining or retaining business?

The Foreign Corrupt Practices Act (FCPA)

Which provision of the U.S. Constitution prohibits states from discriminating against citizens of other states when those non-residents engage in "ordinary and essential" activities?

The Privileges and Immunities Clause

Which amendment to the U.S. Constitution provides that in light of the need for a well-regulated militia for security, the government cannot infringe on citizens' right to bear arms'?

The Second Amendment.

Which of the following is true regarding privacy rights?

The U.S. Supreme Court has found that U.S. citizens have a right to privacy based upon the U.S. Constitution. Courts have interpreted the Ninth Amendment, together with the First, Third, Fourth, and Fifth amendments, as providing individuals with a right to privacy.

Which of the following is false regarding the Private Securities Litigation Reform Act?

The act makes no reference to notifying the SEC of wrongdoing although it does reference notifying the applicable company's board of directors.

According to the "mirror-image" rule, if the terms of the acceptance do not mirror the terms of the offer

The attempted acceptance is a counteroffer

Under a strict product liability theory, who is considered a reasonably foreseeable party who may recover if injury is sustained?

The buyer, the buyer's family, the buyer's guests, and foreseeable bystanders.

Which of the following occurrences is not covered by the Family and Medical Leave Act?

The care of a seriously ill friend

Which of the following is not an essential element of accountant fraud liability?

The client unjustifiably relied on the misrepresentation

Which of the following is not an essential element of accountant fraud liability?

The client unjustifiably relied on the misrepresentation.

Which of the following tests is set out in the Restatement (Second) of Torts as a method by which to prove a design defect?

The consumer expectations test.

If an offer merely authorizes a certain method of acceptance but does not condition acceptance on the use of this method, and the offeree uses an unauthorized means of acceptance

The contract is not formed until acceptance is received by the offeror

All of the following are requirements necessary for an "accord and satisfaction" to be enforceable, except

The debt is liquidated

Which of the following is false regarding the duties a principal owes to an agent?

The duty of reimbursement applies to employees only, not to independent contractors.

In determining contract formation, what is the overriding focus of the Uniform Commercial Code (UCC)?

The intent of the parties to be bound by the contract

A limited partner's limited personal liability depends on all but which of the following conditions?

The limited partner has education, skill and experience in the nature of the limited partnership business

What is the outcome if a defendant successfully proves contributory negligence?

The plaintiff will be denied any recovery of damages. If the defendant successfully proves contributory negligence, no matter how slight the plaintiff's negligence, the plaintiff will be denied any recovery of damages.

Which of the following is not a requirement for agency by ratification?

The principal must have incomplete knowledge of all material facts regarding the contract

What are the two common elements necessary for recovery in any product liability case?

The product is defective, and the defect existed when the product left the defendant's control

A corporation's articles of incorporation must include all but which of the following?

The purpose(s) of the corporation

Which of the following statements is true of the specific obligations of buyers and lessees?

The right to inspect is seldom waived unless the buyer expressly waives the right. The right to inspect is seldom waived or held by courts to have been waived unless the buyer expressly waives the right. The concept of reasonableness governs the inspection process. Once the buyer or lessee inspects the goods, he or she decides whether to accept the goods.

If the government wants to build an interstate highway over Gretel's farm, without paying her compensation for the use of the land, which amendment would the government be violating?

The takings clause of the Fifth Amendment.

Camila, wanting to sell a used business law book, calls Jada and tells her that if she does not hear from her within twenty-four hours, she will assume that Jada wishes to purchase the book for $50. Which of the following is correct regarding the status of the proposed book sale?

There is no contract because in this situation silence cannot be used to form a contract.

Suppose Don enters into an agreement for a one-year gym membership, conditioned on his not moving out of the state for a new job. If he finds a new job out of the state, his obligation to be bound by the gym contract is discharged. Why?

This contract contains a condition subsequent A condition subsequent is a future event that terminates the obligations of the parties when it occurs.

Which of the following would constitute false imprisonment?

Threatening to use immediate physical force to detain someone; refusing to release property; or physical restraint, such as tying someone to a chair; but not moral pressure.

The value of efficiency includes which of the following meanings?

To maximize the amount of wealth in society

Which of the following is not a purpose of tort law?

To punish the defendant for committing a wrong against society

Product liability is primarily based on __________ law

Tort

If an offer authorizes certain means of acceptance, use of an unauthorized means of acceptance is acceptable but the contract is not formed until the acceptance is received by the offeror.

True

Once a case is in the proper court system, venue determines which trial court in the system will hear the case.

True

Presidents base the power to issue executive orders on Article II, Section 1 of the Constitution, which establishes the constitutional power of the president to "take care that the laws be faithfully executed."

True

The statute of frauds includes in its scope contracts related to an interest in land.

True

A strict-liability tort occurs when a defendant acts with the intention of engaging in a specific act that ultimately results in injury.

True A strict liability tort occurs when a defendant takes an action that is inherently dangerous and cannot be undertaken safely.

Directors and officers have a fiduciary duty of care.

True Directors and officers have duties to the shareholders and to the corporation. Their two primary fiduciary duties are the duty of care and the duty of loyalty.

A corporation can raise capital by issuing stock.

True It is easy for a corporation to raise capital by issuing stock.

Tort law is primarily state law.

True Tort law is primarily state law, so states may have slightly different definitions of each tort.

The term __________ refers to the fact that the agreement in question is so unfair that it is void of conscience

Unconscionable

A corporation cannot be considered a criminal under common law because it is not an actual person and, thus, does not have a mind.

True Under the common law, a corporation could not be considered a criminal because it was not an actual person and thus did not have a "mind."

A creditor beneficiary is the third-party beneficiary who is in the strongest legal position to enforce a contract.

True A creditor beneficiary is the third party beneficiary who is in the strongest legal position because he can sue both the person who made the contract on his behalf and the person who was supposed to perform for him.

In determining whether a party is an incidental or intended beneficiary, one factor courts consider is whether the contract directly states that the third party is the benefiting party.

True A third factor the courts examine in determining the type of third-party beneficiary is whether the contract directly states that the third party is the benefiting party.

An accountant who commits fraud is liable to those parties he or she reasonably should have foreseen would be injured through a justifiable reliance upon the fraudulent information.

True An accountant who commits fraud is liable to those parties he or she reasonably should have foreseen would be injured through a justifiable reliance on the fraudulent information.

Under the UCC, almost any kind of documentation is usually sufficient to satisfy the writing requirement of the statute of frauds.

True Any kind of documentation is usually sufficient, under the UCC, to satisfy the writing requirement of the statute of frauds.

Proving that consent occurred is a defense to battery.

True Consent mitigates the element of "unwanted". A person cannot commit a battery if the other party consented to the contact.

The purpose of a covenant not to compete, in the employer/employee context, is to restrict what an employee may do after leaving a company.

True Covenants not to compete restrict what an employee may do after leaving a company.

When hired to perform a task, the accountant enters into a contract called an engagement letter with the client that makes explicit and implicit promises, which, if not fulfilled, subject the accountant to liability.

True Failure to fulfill the explicit and implicit agreements in an engagement letter can subject an accountant to liability based on breach of contract.

No duty to warn exists for dangers arising from either unforeseeable misuses of the product or from obvious dangers.

True No duty to warn exists for dangers arising either from unforeseeable misuses of a product or from obvious dangers.

Only the offeree to whom an offer is directed can accept the offer.

True Only the offeree (or his agent acting on his behalf) can accept the offer.

Parties can discharge their duty under a contract by tendering performance.

True Parties discharge their duty by making an offer to perform, and being ready, willing, and able to perform. This offer of performance is known as a tender.

Reasonably definite terms are one of the elements of an offer.

True Reasonably definite terms are one of three elements of an offer.

A seller or lessor is allowed to sell goods to another buyer when the original buyer is in breach and the goods have not yet been delivered.

True Sellers or lessors are allowed to sell the goods to another buyer or dispose of the goods when the buyer is in breach and the goods have not yet been delivered.

No partnership is created based upon an employer sharing profits with an employee as payment for work.

True When an employer shares profits with an employee as payment for work, or when a landlord accepts shares of profits for payment of rent, there is no partnership.

Whenever a written agreement under the statute of frauds contains a serious, and obvious, typographical error, parol evidence is admissible to demonstrate that the error was indeed an error, as well as to set forth the proper term.

True Whenever a written agreement under the statute of frauds contains a serious, and obvious, typographical error (typo), parol evidence is admissible to demonstrate that it was a typo, as well as to set forth the proper term.

Under the Restatement test, regarding liability for negligence to third parties, an accountant is liable to known third-party users of the accountant's work product and also to those in the limited class whose reliance on the work the accountant specifically foresaw.

True he Restatement test holds an accountant liable to known third-party users of the accountant's work product and also to those in the limited class whose reliance on the work the accountant

Subject-matter jurisdiction is a court's power to hear certain kinds of cases.

True Subject-matter jurisdiction is a court's power to hear certain kinds of cases. Subject matter jurisdiction also determines which court system may hear a particular case.

Under the Family and Medical Leave Act (FMLA), an "eligible employee" is one who has worked at least __________ hours per week for each of the __________ prior to the leave

Twenty-five (25); twelve (12) months

The Counterfeit Access Device and Computer Fraud and Abuse Act of 1984 prohibits which of the following categories of computer crimes?

Unauthorized use of a computer to collect financial or credit information protected under federal privacy law B) Modification of data that impedes medical treatment to individuals BOTH

A __________ contract represents a situation where the offeror seeks performance from the offeree to form the contract

Unilateral

In a[n] _____________ contract, the offeror wants a performance to form the contract.

Unilateral

Which of the following statements accurately brings out the difference between bilateral and unilateral contracts?

Unilateral contracts call for actions, not promises, whereas bilateral contracts involve promises in exchange for promises. If the offeror wants a promise from the offeree to form a binding contract, the contract is a bilateral contract, commonly defined as a promise in exchange for a promise. In a unilateral contract, the offeror wants the offeree to do something, not to promise to do something.

Disparate impact is often referred to as __________ discrimination

Unintentional

According to the Uniform Partnership Act (UPA), if a partnership is liable, each partner has __________ personal liability

Unlimited

Which of the following is not a characteristic of a corporation?

Unlimited liability of shareholders

In a(n) __________ debt, the parties either disagree about whether money is owed or dispute the amount

Unliquidated

When a debt is __________, the parties may enter into a(n) __________

Unliquidated; accord and satisfaction

__________ is defined by the UCC as any practice that members of an industry expect to be part of their dealings

Usage of trade

A[n] _____________ contract is one that contains all the legal elements of a contract.

Valid A valid contract is one that contains all the legal elements of a contract.

__________ of rights refers to the maturing of rights such that a party can legally act on the rights

Vesting

When an agreement is deemed illegal, courts will label the contract __________

Void

As a general rule, any contract entered into by a minor is __________ by the minor until he or she __________

Voidable; reaches the age of majority or a reasonable time thereafter

Once the potential jurors have reported for jury duty, the __________, or jury selection, process begins

Voir dire

All but which of the following categories of employees are excluded from coverage under the Fair Labor Standards Act?

Wage employees

A shareholder who receives __________ stock, or stock issued below its fair market value, is individually liable for the difference between the price she paid for the shares and their stated corporate value

Watered

If nothing is stated to the contrary in the terms of an auction, the auction is presumed to be __________, which means that the seller is merely expressing intent to receive offers

With reserve

In an auction __________, the seller is treated as making an offer to accept the highest bid and therefore must accept it

Without reserve

___________ are the various documents used and developed during an audit, including notes, calculations, copies, memorandums, and other papers constituting the accountant's work product

Working papers

According to the Revised Uniform Limited Partnership Act (RULPA), a limited partnership can be dissolved for all but which of the following reasons?

Written consent of a majority of the limited and general partners

If a state passed a law prohibiting the use of contraceptives, would a court likely find this law to be unconstitutional?

Yes, because it violates individuals' right to privacy. In the 1965 case Griswold v. Connecticut, the Supreme Court ruled that a Connecticut law prohibiting the use of contraceptives was unconstitutional because it violated individuals' right to privacy.

Sally overhears a phone conversation in an elevator of her office building in N.Y.C. discussing top secret financial matters regarding a corporation. After hearing the conversation, she believes she has a strong basis to make a lot of money, so she buys a ton of the company's stock after hearing this inside information. Can Sally be held liable for insider trading? Yes, under the misappropriation theory. No, she is not an insider. Yes, she is a tipper. Yes, but only if she is in some way affiliated with the company. No, she is a statutory insider.

Yes, under the misappropriation theory. Misappropriation theory holds that if an individual wrongfully acquires (misappropriates) and uses inside information for trading for her personal gain, she is liable for insider trading.

The elements of a crime include

actus reus mens rea

The scope of the Uniform Commercial Code (UCC) is to

allow each state to rewrite parts of the UCC for its own purpose. When a state adopts the UCC, that code becomes part of the law of that particular state; it becomes the commercial code for that state. Each state is allowed to rewrite parts of the UCC to reflect the wishes of its state legislature.

Consideration is

is required in every contract.

A professional making a misstatement of a material fact that a client relies on to his or her detriment is subjected to _____.

liability for fraud

Nominal damages

are paid to plaintiffs who do not sustain compensable damages.

Under the Uniform Commercial Code (UCC) Sections 2-613 and 2A-221, when goods which are identified in a contract are destroyed through no fault of the parties, the parties are excused from performance

before risk passes to the buyer or lessee. Under UCC Sections 2-613 and 2A-221, if goods are identified at the time the parties entered into a contract and these goods are destroyed through no fault of the parties before risk passes to the buyer or lessee, the parties are excused from perforance

Legal interpretations by judges are called common law, which is also know as

case law.

A(n) _____ occurs when a party outside a primary agreement promises to fulfill one of the original party's obligations if the original party fails to fulfill it.

collateral promise A secondary obligation occurs when a party outside a primary agreement promises to fulfill one of the original party's (primary debtor's) obligations if the original party fails to fulfill it. These secondary obligations are also called secondary promises, collateral promises, or suretyship promises.

Sources of contract law include

common law and the Uniform Commercial Code. Sources of contract law include Common law and the Uniform Commercial Code

When an entire contract is conditioned on something else occurring first, that first event is known as a(n)

condition precedent. When an entire contract is conditioned on something else occurring first, that first event is known as a condition precedent. Evidence of the existence of a condition precedent agreed to orally is admissible, as stated previously, because the contract is not modified by such evidence; rather, its enforceability is called into question.

As per Section 1-205(1) of the Uniform Commercial Code (UCC), _____ is best described as previous commercial transactions between the same parties to a contract.

course of dealing Uniform Commercial Code (UCC) 1-205(1) defines course of dealing as previous commercial transactions between the same parties. In addition to its requirement on usage of trade, the UCC requires that courts consider the ideas of course of dealing and course of performance.

According to the New York Convention, _____.

each member state will have to recognize arbitration awards as enforceable in its national courts The New York Convention applies when an award is made and one party seeks enforcement in the territories of the contracting states. It requires that each state recognize written arbitration agreements and recognize arbitral awards as enforceable in its national courts.

Under the Private Securities Litigation Reform Act, if an accountant believes that he or she has discovered fraud and fails to report it, this silence is

enough to constitute aiding and abetting.

The __________ defense applies if the idea for a crime originated with a police officer or some other government official who suggested it to the defendant, who would not otherwise have committed the crime.

entrapment

An accountant can be held liable for negligence when the accountant

fails to detect fraud or misconduct that a normal audit would uncover. An accountant who fails to comply with GAAP and GAAS or to detect fraud or misconduct that a normal audit would uncover may be held liable for negligence. An accountant is not required to have perfect judgment; she or he will not be held liable simply for errors in judgment that were made in good faith while operating in accordance with GAAP and GAAS.

Janet was using her cell phone while driving on the road. Her car hit a lady crossing the road. Janet got out of the car and rushed over to the victim. The victim was unconscious and bleeding. In this situation, Janet

has a duty to remove the victim from further harm.

Appellate courts

have the power to review previous judicial decisions passed by trial courts.

An __________ assumes that the buyer is relying on the seller's skill and judgment to select certain goods.

implied warranty of fitness for a particular purpose

A defendant who engages in purposeful, outrageous conduct, which is likely to cause extreme emotional distress to the plaintiff, commits

intentional infliction of emotional distress. A defendant who engages in purposeful, outrageous conduct, which is likely to cause extreme emotional distress to the plaintiff, commits intentional infliction of emotional distress.

When HKP Inc. and Univon Inc. were drafting a sales contract, the contract document mentioned that if either of the parties had to breach the contract, they were liable to pay $30 million dollars to the injured party. This is an example of

liquidated damages. Liquidated damages are damages identified before the breach occurs. The parties are free to negotiate, as part of the contract, a liquidated-damage clause in which the parties agree in advance what the damages will be for each party should a breach occur.

A(n) __________ defense tries to prove the defendant made an honest and reasonable mistake that negates the guilty-mind element of a crime.

mistake-of-fact A mistake-of-fact defense tries to prove the defendant made an honest and reasonable mistake that negates the guilty-mind element of a crime.

A contract that combines a good with a service is a(n) __________ sale

mixed

Commonly used theories of recovery in product liability cases include

negligence, strict liability, and breach of warranty.

The _____ states that we base the existence of a contract on the parties' outward manifestations of intent and we base its interpretation on how a reasonable person would interpret it.

objective theory of contracts

The employment-at-will doctrine that governs the employment relationship in the United States

prohibits termination of employment for whistleblowing. The employment-at-will doctrine that governs the employment relationship in the United States prohibits termination of employment for whistleblowing. The employment-at-will doctrine has been modified over the years by federal and state laws prohibiting the termination of employment on the basis of certain statuses such as race, gender, age, and disability.

The Supremacy Clause

provides that any state or local law that directly conflicts with the U.S. Constitution or federal laws is void.

If the offer is for a unilateral contract, the offeree can accept only by __________________.

providing the requested performance If the offer is for a unilateral contract, the offeree can accept only by providing the requested performance. If Bill offered to pay $500 to anyone who returned his lost dog to him, Mary could accept the offer only by returning the dog.

Civil law involves

responsibilities between people and people as their government. Civil law involves the rights and responsibilities found in relationships between people and people as their government.

Article 2 of the Uniform Commercial Code (UCC) governs __________ contracts, while Article 2(A) governs __________ contracts.

sales; lease Article 2 of the Uniform Commercial Code (UCC) governs sales contracts, while Article 2(A) governs lease contracts

The English rule states that

the first assignee to give notice of assignment to the obligor is the party with rights to the contract. The English rule states that the first assignee to give notice of assignment to the obligor is the party with rights to the contract. Especially in a state using the English rule, parties are well advised to give notice of assignments to ensure that they maintain their assigned rights.

Under the Fifth Amendment, a government may take private property for public use under

the takings clause.

Product liability is primarily based on __________ law.

tort Product liability is primarily based on tort law.

Securities issued by financial institutions and supervised by banking associations are _______________ securities.

unregistered and unrestricted The 1933 act provides that certain securities are exempt from the registration procedures. These securities are unregistered unrestricted securities, and they include (1) securities issued by governments, including municipal, state, and federal governments; (2) securities issued by nonprofit issuers, such as religious institutions or charitable organizations; (3) securities issued by financial institutions supervised by banking associations; (4) securities issued as a result of corporation reorganization in which one security is exchanged for another security; (5) stock dividends and stock splits; (6) insurance or annuity contracts issued by insurance companies; (7) securities issued by federally regulated carriers (i.e., railways); (8) short-term notes with a maturity date that does not exceed nine months; (9) securities sold before July 27, 1933; (10) an issuer's offer of up to $5 million in securities in a 12-month period.