Business Law Test 3

Fact Pattern 14-1 Mary's home is in a state that has a $30,000 homestead exemption. Mary defaults on a $60,000 debt that she owes to Nina. Mary's home is sold at auction for $80,000. Refer to Fact Pattern 14-1. Mary will receive

$30,000.

Fact Pattern 14-1 Mary's home is in a state that has a $30,000 homestead exemption. Mary defaults on a $60,000 debt that she owes to Nina. Mary's home is sold at auction for $80,000. Refer to Fact Pattern 14-1. Nina may recover

$50,000.

Consolidated Trucking Company transports radioactive materials. Darla suffers from cancer. To succeed in a suit against Consolidated on the ground of strict liability, Darla must show that her injury was caused by Consolidated Trucking Company transports radioactive materials. Darla suffers from cancer. To succeed in a suit against Consolidated on the ground of strict liability, Darla must show that her injury was caused by

Consolidated's operation.

Drew and Earl are brothers. They agree to act as guarantors on a loan made by their sister, Flo. Flo defaults on the payments and Drew refuses to pay. Earl pays the debt. Earl can recover from

Drew under the right of contribution and Flo under the right of subrogation.

A disclosed principal is a principal whose identity is not known by the third party at the time the contract is made by the agent.

False

A fixed-rate mortgage is a standard mortgage with a rate of interest that changes periodically.

False

A plaintiff alleging wage discrimination must file a complaint within a certain period of time of the decision that set the discriminatory pay.

False

An adjustable-rate mortgage is a standard mortgage with an unchanging rate of interest.

False

An independent contractor is an employee.

False

Bankruptcy law is state law.

False

Child-support debts will be suspended by a bankruptcy filing.

False

Children must be at least thirteen years old to work in hazardous occupations.

False

Employees are entitled to overtime pay only at their employer's discretion.

False

Forbearance is a process that allows a lender to legally repossess and auction off the property securing a loan.

False

Foreclosure is the postponement, for a limited time, of part or all of the payments on a loan in jeopardy of repossession and sale.

False

Generally, employers can monitor employees' electronic communications made in the ordinary course of business, as well as employees' personal communications.

False

Sexual harassment occurs only if sexual favors are demanded of an employee.

False

State laws may not regulate a business's disposal of toxic wastes.

False

States may not restrict emissions from motor vehicles.

False

The Civil Rights Act of 1964 does not prohibit job discrimination in the hiring process.

False

The basis for an employee's contribution to Social Security is the employee's age.

False

Those who knowingly violate the Clean Air Act are exempt from liability.

False

Title VII of the Civil Rights Act of 1964 prohibits only intentional discrimination.

False

Under the Age Discrimination in Employment Act of 1967, a plaintiff must prove that he or she was replaced by a person "outside the protected class."

False

Under the common law doctrine of nuisance, persons may be liable if they file a suit against a business polluter that views the suit as a nuisance.

False

When a release of hazardous chemicals from a site occurs, potentially responsible parties can avoid liability through transfer of ownership.

False

A petition for a discharge in bankruptcy under Chapter 13 may be filed by

Gracie, the sole proprietor of Home Net Services.

Lee is seventy years old and Mira is gay. Based on this information, members of protected classes include

Lee only.

Which of the following is not a common form of electronic surveillance of employees in the workplace?

Requiring employees to wear electronic location monitoring bracelets

A borrower has a right to rescind a mortgage within three business days.

True

A guarantor is secondarily liable on an obligation.

True

A husband and wife may file a joint petition for bankruptcy.

True

A lien is an encumbrance on property to satisfy a debt or protect a claim for the payment of a debt.

True

A mechanic's lien can be enforced to obtain payment for work that adds value to real property.

True

A principal owes an agent a duty of compensation.

True

An employer may be liable for the harassment by nonemployees if the employer knew about the harassment and failed to take corrective action.

True

An employer may hire replacement workers to substitute for the workers who are on strike

True

An employer may not hire an illegal immigrant who lacks work authorization

True

Any point source emitting pollutants into water must have a permit.

True

Bankruptcy proceedings are held in federal courts.

True

Because a mortgage involves a transfer of real property, it must be in writing.

True

Creditors can agree with a debtor to discharge the debtor's debts on payment of a sum less than that owed.

True

Disparate-impact discrimination occurs when a protected class of individuals is adversely affected by an employer's practices, even though they do not appear to be discriminatory.

True

Gender can be a bona fide occupational qualification.

True

Home equity is the portion of a home's value that is "paid off."

True

If a homeowner defaults, the lender has the right to foreclose on the mortgaged property.

True

If a job applicant or an employee with a disability, with reasonable accommodation, can perform essential job functions, the employer must make the accommodation.

True

If an employee dies in a work-related incident, the employer must notify OSHA within eight hours.

True

In most states, state law determines the amount of a debtor's property that is exempt from distribution on bankruptcy.

True

It is a violation of federal law to destroy or deface any labeling required on a pesticide or herbicide.

True

One goal of bankruptcy law is to protect a debtor.

True

States may restrict a business's discharge of chemicals into the air or water.

True

The Civil Rights Act of 1964 prohibits job discrimination against majority group individuals, such as white males.

True

The Environmental Protection Agency periodically updates the pollution standards.

True

The loan that a lender provides to enable a borrower to purchase real property is a mortgage.

True

When an owner is unable to make mortgage payments, a lender may agree to a short sale.

True

Before being transported, hazardous waste generated by Xtreme Industries, Inc., must be properly labeled and packaged under the Resource Conservation and Recovery Act by

Xtreme Industries, Inc.

Silky Coordinates, a women's clothing store, employs female attendants to assist customers in the dressing rooms. Radley, a forty-one-year-old male, applies for an attendant's job, but is not hired. In Radley's suit against Silky for employment discrimination under Title VII, the store has

a bona fide occupational qualification defense.

Fact Pattern 15-1 Northeast Bank makes mortgage loans to consumers, including Mai, to buy homes. Refer to Fact Pattern 15-1. Under federal law, disclosures with respect to one of Northeast's loans must be provided

a certain number of days before the loan is finalized.

Greta is the only female employee in the maintenance department of Hydraulics Inc. Greta's supervisor and co-workers tease and play tricks on her so relentlessly that she feels compelled to quit. This is

a constructive discharge.

Donna goes through an involuntary bankruptcy proceeding. An involuntary bankruptcy occurs when

a debtor's creditors force the debtor into bankruptcy proceedings.

Valley Disposal Center operates a recycling plant. Wendy and other Valley neighbors file a suit, alleging injuries from the plant. To succeed, they must show that Valley failed to use reasonable care if the suit is based on

a negligence theory.

Timberline Plywood Company discharges its untreated wastewater into Urban City's storm drainage pipes, which empty into Valley Creek. Under the Clean Water Act, this discharge is most likely

a violation

A court awards a judgment to Alice, who is the creditor, against Ada, who is the debtor. After the judgment, Alice requests a court order to seize Ada's property to ensure that the judgment will be collectible. This is

a writ of execution.

Arcata, California, passes an ordinance to regulate waste disposal. The disposal of waste may also be regulated by

all other levels of government.

Ridgeline Bank provides Stanley with a mortgage to buy a home. The rate of interest is fixed for three years and then adjusts annually. This is

an adjustable-rate mortgage.

Roland files for Chapter 7 bankruptcy. After all his assets have been sold and the proceeds distributed among his creditors, Roland's remaining debts

are discharged.

Lisa brings a lawsuit against her employer for unlawful discrimination. Lisa is successful in proving that she was unlawfully discriminated against by her employer. Lisa may be awarded

back pay, retroactive promotions and damages.

Dag is an employee of Ridge Mining Company. Under federal labor law, Dag and other employees have the right to

bargain collectively with Ridge through their representatives.

Green River Energy Corporation wants to begin operations that include the discharge of waste into navigable waters. Under the Clean Water Act, Green River must install certain equipment

before beginning operations.

Tyrone is seventeen years old. Under the Fair Labor Standards Act, he

cannot work in a hazardous occupation.

Dina asks Edie to co-sign a credit application so that she can borrow money and buy a truck from First Street Motors. If, after the loan agreement is signed, Dina agrees to a higher rate of interest without telling Edie, then Edie is

discharged from the agreement.

Olivia applies for a job with Petro Company. Petro does not hire Olivia because of her ethnicity, or national origin. This is

disparate-treatment discrimination.

Julia is an agent who purchases wool for Kara's Knitting Company. In the course of her performance for Kara's Knitting Company, Julia pays for the gas for the company car and for some storage boxes for the wool. Kara's Knitting Company must reimburse Julia because of the principal's

duty of reimbursement.

Pork & Poultry Packing Corporation is a U.S. employer. Pork & Poultry, and other U.S. employers, must perform I-9 verifications for

each new hire.

Denise borrows $90,000 from Clear Lake Credit Union to buy a home. Denise loses her job and fails to make payments on the mortgage, but assures Clear Lake Credit that she will soon secure a new job. The lender agrees to postpone the payments. This is

forbearance.

Clive works for Digby Excavation Corporation. While operating a backhoe, Clive suffers an injury. Clive will be compensated under state workers' compensation laws only if

his injury was accidental.

Money Mortgage Mart makes a mortgage loan to Natalie to allow her to buy a home and establishes an escrow account. Most likely, this account holds payments for

homeowners' insurance and property taxes.

Fact Pattern 18-1 Rock Mining Company operates a gravel pit next to Sid's residence. Sid files a suit against Rock, alleging that the pit is a nuisance and unreasonably interferes with Sid's enjoyment of his property. Refer to Fact Pattern 18-1. The court is most likely to award Sid damages

if letting the pollution continue is less harmful than stopping it.

Milo borrows $125,000 from North State Bank to buy a home. To comply with applicable statutes (including the Statute of Frauds), the mortgage must be

in writing.

Hubert borrows $100,000 from Integrity Mortgage Mart to buy a home. Soon after obtaining the mortgage, Integrity convinces Hubert to refinance. This is

loan flipping.

Fried Food, Inc., operates a commercial frying plant, discharging pollutants into the air. Greg reports the violations to the Environmental Protection Agency. Greg

may be paid up to $10,000.

Phyllis intentionally injures herself while performing her job for Stone Cutters, Inc. Phyllis will be entitled to

no workers' compensation.

Fruitful Garden Company makes and sells pesticides. For the pesticides to remain on the market, the acceptable level of risk to people of developing cancer from exposure to the products is

one-in-a-million.

Fact Pattern 14-1 Mary's home is in a state that has a $30,000 homestead exemption. Mary defaults on a $60,000 debt that she owes to Nina. Mary's home is sold at auction for $80,000. Refer to Fact Pattern 14-1. If Nina recovers less than she is owed, she can realize the difference from

only nonexempt property that Mary owns.

Ruth is a supervisor for Subs & Suds, a restaurant. Tim is a Subs employee. The owner announces that some employees will be discharged. Ruth tells Tim that if he has sex with her, he can keep his job. This is

quid pro quo harassment.

Dick works for First City Bank. When his spouse Elin is diagnosed with Lou Gehrig's disease, Dick asks to take temporary leave to care for her. Instead, First City discharges him. He files a suit against the bank under the Americans with Disabilities Act of 1990. Most likely, Dick can

recover for association discrimination.

Harbor Bay Bank has made mortgage loans to consumers that qualify for the Home Affordable Modification Program (HAMP), which offers incentives to lenders to change the terms of certain loans. The purpose of HAMP is to

reduce monthly payments to levels that homeowners can pay.

Conrad and Delilah are employees of AgriBio Feed & Seed Corporation. Under the Equal Pay Act of 1963, AgriBio can legitimately pay different wages on the basis of

seniority.

Tracy borrows $30,000 from Secure State Bank. The lender accepts Tracy's equity in her home as collateral, which can be seized if the loan is not repaid on time. With respect to any proceeding that occurs if Tracy fails to make the payments, this loan is subordinated. This means that it

takes a lower priority

Kendra believes that she is a victim of a form of employment discrimination that falls under Title VII of the Civil Rights Act. Compliance with this statute is monitored by

the Equal Employment Opportunity Commission.

Lorna borrows $175,000 from Mountainside Credit Union to buy a home. Among the terms that must be disclosed under federal law is the annual percentage rate. This is

the actual cost of the loan on a yearly basis.

Network Industries, Inc., wants to monitor its employees' electronic communications. To avoid liability under laws related to employee monitoring, Network should announce the monitoring to

the employees.

The operations of Metal Refining Industries, Inc., are major sources of air pollution. These operations must use

the maximum achievable control technology.

Little City Company operates a public water supply system. Little must send to every household that it supplies with water an annual statement describing

the source of the water, and any contaminants and health concerns.

Erica is sixty-year-old woman with cerebral palsy. Erica is a member of

three protected classes.

Café Cuisine Dining, Inc., employs one hundred workers at three locations in two states. Under federal law, Café Cuisine must provide its employees, during any twelve-month period, family or medical leave of up to

twelve weeks.

The Employee Polygraph Protection Act of 1988 prohibits most private employers from doing all of the following except

using lie-detector tests to investigate losses due to theft.

Michael contracts with Jill to fix the brakes on her Honda Civic. Jill leaves her car with Michael, but refuses to pay when the work is done. Michael refuses to return the car until she pays. Michael's lien on Jill's car will end

when Michael voluntarily surrenders possession of the car.

Fact Pattern 15-1 Northeast Bank makes mortgage loans to consumers, including Mai, to buy homes. Refer to Fact Pattern 15-1. For Mai's loan, Northeast provides all required disclosures. Mai has a right to rescind the mortgage

within three business days.