Exam 3 Legal Environment CH. 17-20
Jasper, Saul, and Kenyon plan to open a new business providing sky-diving lessons and selling sky-diving equipment. Each of them plans to contribute the same amount of money to get the business started, and each will work for the business. Jasper is concerned about the possibility of being liable for the acts of Saul and Kenyon. Jasper also wants to make sure he does not pay more taxes than required. After reviewing the types of business entities available, Jasper suggests to Saul and Kenyon that they organize their new business as a(n): close corporation. partnership. corporation. LLC.
LLC
Heather is an artist and has several watercolors she would like to sell. Heather orally asks Rylee to sell the paintings for her and directs Rylee that each painting should be sold for at least $100. Rylee schedules a showing in her art gallery to display Heather's paintings. On the day of the showing, a customer offers to buy one of the paintings for $100, and Rylee accepts. When Heather finds out the price the painting sold for, she tries to get the painting back from the customer. Heather claims that she and Rylee did not have a written agency agreement, and, therefore, an agency relationship did not exist between them. Is Heather correct? Yes. Allowing this agency agreement to stand would violate the statute of frauds. No. Agency agreements are never in writing. Yes, most agency agreements must be in writing to be effective. No, most agency agreements do not have to be in writing to be effective.
No, most agency agreements do not have to be in writing to be effective.
You are an experienced server and have worked at many restaurants. An English pub is opening in town and is seeking waiters and waitresses. You are interested in applying, but the job description states, "Seeking people of British nationality only." Even though you are not British, you apply for the job. You are invited to an interview. While there, the restaurant manager thanks you for your interest, but says she will not hire you because you are not British. The manager explains she wants to hire British servers because, in her opinion, they will best portray the theme of the restaurant as an authentic English pub. Has the restaurant violated any anti-discrimination laws? Yes, the restaurant must hire the first applicant with experience as a server. No, the restaurant has the defense of bona fide occupational qualification. Yes, the restaurant has discriminated on the basis of national origin. No, a restaurant can refuse to hire on any grounds.
Yes, the restaurant has discriminated on the basis of national origin.
You are thinking about buying a restaurant with some of your buddies from college. One of the first things you need to discuss is what kind of business entity you want to create. You want to make sure that you are liable for only what you do, not what any of your buddies do. However, you're also concerned about getting the best tax deal. Do you think there is a way to organize your business so that you are not liable for your buddies' actions or debts without risking paying more taxes? Yes, you could organize your business as a limited liability company. Yes, you could organize your business as a sole proprietorship. Yes, you could organize your business as a corporation. Yes, you could organize your business as a partnership.
Yes, you could organize your business as a limited liability company.
Onida is an employee at Kale's Manufacturing Company. The company makes bicycle tires, and Onida's job is to inspect the inner tubes before they are inserted into the tires. She recently noticed that the inner tubes are thinner than the safety specifications require. Onida tells her supervisor, Tom, about the problem, and is instructed to ignore it because these thinner tubes save the company money. Onida cannot ignore this problem in good conscience, so she tells Tom that if he is not going to report the problem, she will. Tom then fires Onida. Kale's Manufacturing Company is in an employment-at-will state. If Onida brings a lawsuit for wrongful termination, she will likely: be unsuccessful because she refused to follow her supervisor's directions. be successful because she was fired for an unlawful reason. be successful because employment at will means that a company must have a valid reason for terminating an employee. be unsuccessful because employment at will means that an employee can be fired at any time for any reason.
be successful because she was fired for an unlawful reason
Gerald has been a sales representative for Goldsmith's Department Store for the past five years. When Gerald was hired, the general manager told Gerald that he would have a job there as long as he made $3,000 in sales each month. Every month, Gerald has exceeded that level in sales, so he is surprised when his supervisor calls him into the office and fires him. Gerald tells the supervisor about the promise from the general manager not to fire him as long as his sales were $3,000 each month. The supervisor responds by telling Gerald that the law in this state is employment at will, so he can fire him at any time for any reason. If Gerald sues Goldsmith's for wrongful termination, he will likely: not be successful because the promise from the general manager was not in writing. be successful because the general manager orally promised him that he would remain in his job as long as his sales stayed at a specific level, and he has maintained that level. be successful because employment at will does not mean that an employee can be fired at any time for any reason. not be successful because employment at will means that an employee can be fired at any time for any reason.
be successful because the general manager orally promised him that he would remain in his job as long as his sales stayed at a specific level, and he has maintained that level.
Bernard and Hilda have both worked for Home Refinance Inc. for many years. Bernard has been with the company for fifteen years, and Hilda has been with the company for nine years. Both Bernard and Hilda are loan managers for the company, so they perform the exact same duties. Hilda discovers that Bernard's salary is twenty percent higher than hers. She cannot believe that she is paid less for the same job just because she is a woman. If Hilda sues the company over the disparity in pay, Hilda's lawsuit will likely: fail because companies do not have to pay men and women the same salary. fail if Home Refinance can prove the difference in pay is due to Bernard's seniority. succeed if Hilda can get their paycheck stubs admitted into evidence. succeed because companies must pay men and women the same salary for the same work.
fail if Home Refinance can prove the difference in pay is due to Bernard's seniority.
Tala operates Sunshine Event Planning as a sole proprietorship. Lately, Tala has become dissatisfied with her employee, Leon. Leon continually refuses to follow directions, calls in late to work, and generally is not performing up to Tala's standards. Before Tala can fire Leon, she must obtain approval from: no one. the shareholders of Sunshine Event Planning. the Board of Directors of Sunshine Event Planning. the partners of Sunshine Event Planning.
no one
Johnson lives near Dollywood, a popular theme park in Tennessee. Johnson decides to begin a new money-making venture selling screen printed t-shirts from a booth just down the road from the theme park, to take advantage of the traffic that flows by on its way to the park. Johnson's t-shirts, however, will not be Dollywood-themed t-shirts; they will be Johnson's own creations. Johnson's daughter Susan helps him in his new venture by manning the booth from time to time, but Johnson has total control over everything about the business—from ordering the t-shirts, paying the bills, pricing the t-shirts, paying the taxes on his sales, and receiving all the profits from the venture. Even though Johnson put no thought into what kind of business venture he was creating when he started his business, Johnson has effectively created a: franchise. limited liability company. sole proprietorship. corporation.
sole proprietorship.
Benjamin works for The Cabinet Maker, a large manufacturing plant that makes ready-to-hang cabinets for the kitchen and bath. Benjamin is running a table saw that cuts wood into strips to make a cabinet. As Benjamin loads wood onto the conveyer belt, he slips on the concrete floor and falls into the table saw. Benjamin's face and arms are severely injured by the table saw, and he is rushed to the hospital. Benjamin's injuries are so severe that he is admitted to the hospital for four days. The Cabinet Maker must file a report of Benjamin's work-related injury with the Occupational Safety and Health Administration (OSHA) within: twenty-four hours. one week. forty-eight hours. eight hours.
twenty-four hours.
Bill and Mark have lived together for twenty years, and they finally decide to get married. Three days after their marriage, Bill returns to his job at Hometown Furnishings. When his supervisor finds out that Bill has just gotten married to a man, she immediately fires Bill. Bill is devastated; he has worked for Hometown Furnishings for five years and never had an issue of any kind. The next day, Bill and Mark go to see an attorney to discuss Bill's options. The attorney will likely advise Bill that: Hometown Furnishings firing him is a violation of the Lily Ledbetter Fair Pay Act. Hometown Furnishings firing him is reverse discrimination and, therefore, illegal. Hometown Furnishings firing him because he is gay violates the Civil Rights Act of 1964. Hometown Furnishings could fire him for any reason, based on the principle of employment at will.
Hometown Furnishings firing him because he is gay violates the Civil Rights Act of 1964.
Rosemary's son Dave is a United States Marine. Dave was recently injured in a covert operation in the Middle East and now needs round-the-clock care. Rosemary works at the Silver Spoon Café, which has 63 employees. Rosemary advises her supervisor that she needs to take time off to care for Dave. Rosemary quickly uses up all her accrued leave time, so she applies for time off under the Family and Medical Leave Act (FMLA). Under the FMLA, Rosemary may take unpaid time off to care for her injured son for up to: ten weeks. fifteen weeks. twelve weeks. twenty-six weeks.
twenty-six weeks.
Roland and Alfreeda enter into a written agency agreement in which Alfreeda will represent Roland as his agent to obtain acting jobs for Roland. No termination provisions are included in the written agreement. If Roland wishes to terminate his agreement with Alfreeda: Roland may do so by providing notice to Alfreeda in any reasonable manner. Roland must do so in writing because the agency agreement is in writing. Roland must do so by sending the termination notice to Alfreeda by certified mail. Roland must do so in person only.
Roland must do so in writing because the agency agreement is in writing.
Isaiah wants to build a new shopping complex. He is afraid that once news gets out about his plans, the price of the land where he wants to build the shopping complex will increase in price. Isaiah, therefore, hires Landon to purchase the parcels of land for him and to keep the fact that Landon is working for Isaiah a secret. Landon enters into a written contract for the sale of the land with Miriam and does not tell Miriam that Landon is an agent for anyone else on the deal. Isaiah refuses to buy the property from Miriam. Is Landon obligated to perform the contract with Miriam? Yes, he is because agents are always liable for performance on contracts they enter into on behalf of their principal. Yes, he is because there was an undisclosed principal who failed to perform. No, he is not because the purchase of the land benefits only the principal, Isaiah. No, he is not because Landon is not the principal.
No, he is not because Landon is not the principal.
Grover is a sales representative for Avon Products Inc., a company that sells beauty and gift products door-to-door. Ruby, Grover's manager, assigns Grover a certain territory in which to work. The territory that Grover is assigned has historically had one of the highest sales records in the state. Ruby is concerned that Grover is not adequately working the territory, so she allows Regina to also sell in that same territory. Does Grover have any grounds on which to file a lawsuit against Ruby? No, Ruby is just looking out for the best interests of the company. No, Ruby is just helping Grover fulfill his full potential. Yes, Ruby has violated a principal's duty of cooperation and may be liable to Grover for Grover's lost profits. Yes, Ruby has violated the duty of compensation and may be liable to Grover for Grover's lost profits.
Yes, Ruby has violated a principal's duty of cooperation and may be liable to Grover for Grover's lost profits.
You are an accounting student at a university and also a talented guitar player. During summer vacation, you are hired full time to do bookkeeping for a computer store. You work during normal business hours at the computer store. Your work there is supervised by the office manager, and you are paid an hourly wage. On Saturday nights, you play guitar at a pub. You bring your own instrument and you decide what music to play. You are paid a set price for this gig. A question arises at both the store and the pub as to whether you are an employee or an independent contractor. This question is important because employers have certain obligations to employees that do not apply to independent contractors. For example, employers are liable for the wrongful acts of employees but generally not for the acts of independent contractors. Likewise, employers must withhold payroll taxes for employees but not for independent contractors. Are you an employee or an independent contractor at the store and at the pub? You are an employee of the computer store and an independent contractor of the pub. You are an independent contractor of the computer store and an employee of the pub. You are an employee of both the computer store and the pub. You are an independent contractor of both the computer store and the pub.
You are an employee of the computer store and an independent contractor of the pub.
Bart, Sam, and Greg create Big Barns Sales LLC, a company that builds pre-constructed barns. They file the certificate of organization with the secretary of state and create an operating agreement for the LLC. The operating agreement, however, does not address the method by which the LLC will be managed. Because management of the LLC is not addressed in the operating agreement, it is assumed the LLC will be: manager-managed; the members will designate a person or persons to manage the LLC, and none of the managers can be members. member-managed; all members will vote on decisions of the LLC, and the majority vote controls. member-managed, and the member with the largest capital investment will control the decisions of the LLC. manager-managed, and the members will designate a person or persons to manage the LLC, which may include nonmembers.
member-managed; all members will vote on decisions of the LLC, and the majority vote controls.
Marlo is about to be transferred overseas and wants to sell her house. Julianna, who is not a real estate agent, offers to sell the house for Marlo for free. Marlo jumps at the chance to get such a valuable service for free! Because Julianna offered to sell the house for free, Julianna owes Marlo: no duty to sell the house, but if Julianna does attempt to sell the house, she owes Marlo the duty to use reasonable diligence and skill in performing the task. the duty to perform as a reasonable real estate agent would perform in selling the house. no duty at all, because there was no compensation flowing from Marlo to Julianna. the duty to use reasonable diligence and skill to sell the house.
no duty to sell the house, but if Julianna does attempt to sell the house, she owes Marlo the duty to use reasonable diligence and skill in performing the task.
The faculty at Hopeland University have always been predominantly white. Concerned that it may be discriminating against potential nonwhite faculty members, Hopeland institutes an affirmative action program that provides that fifty percent of any new faculty positions at the university will be reserved for nonwhite applicants. Clara, who is white, applies for a faculty position at Hopeland. The position is given to a black applicant, even though Clara has more teaching experience and higher educational credentials. When Clara challenges the hiring decision by claiming that the Hopeland University affirmative action program violates the Equal Protection Clause of the Fourteenth Amendment: she will not be successful because the Hopeland University affirmative action program does not use quotas. she will not be successful because the Hopeland University affirmative action program uses quotas. she may be successful because the Hopeland University affirmative action program uses quotas. she may be successful because the Hopeland University affirmative action program does not use quotas.
she may be successful because the Hopeland University affirmative action program uses quotas.
Lola, Jacy, and Tate plan to create a company to manufacture bicycles. After reviewing the pros and cons of the various forms of business enterprises, they decide to create a limited liability company. To create a limited liability company: they must file a certificate of organization and an operating agreement with the secretary of state. they must file an operating agreement with the secretary of state and should create a certificate of organization, although a certificate of organization is not required. they must file a certificate of organization with the secretary of state and should create an operating agreement, although an operating agreement is not required. they must file a certificate of organization with the county clerk and should create an operating agreement, although an operating agreement is not required.
they must file a certificate of organization with the secretary of state and should create an operating agreement, although an operating agreement is not required.
Mateo is sixteen years old and just got his first job bagging groceries at Harry's Market, a local grocery store. During the school year, Mateo works limited hours after school and on the weekends. Now that school is out, Harry's Market increases Mateo's hours to six days a week and eight hours a day. Mateo's mother Isabel is concerned about Mateo working such long hours. She knows there is a federal law, the Fair Labor Standards Act (FLSA), that protects children from working long hours and too many days per week. When Isabel raises the issue with Mateo's supervisor, Mateo's supervisor explains to Isabel that: under the FLSA, children under eighteen must work less than forty hours per week. under the FLSA, children who are sixteen or seventeen years old may work unlimited hours as long as they work in nonhazardous jobs. under the FLSA, children under eighteen must work less than thirty hours per week. under the FLSA, children under eighteen must work less than thirty-five hours per week.
under the FLSA, children who are sixteen or seventeen years old may work unlimited hours as long as they work in nonhazardous jobs.
Maya is an undocumented alien. She wants to provide her family with a good life in the United States, so she moves to a small town in West Virginia with her two daughters, Anita and Luisa. When school starts, she goes to the local elementary school to register the children. The principal of the school denies her request to enroll the children in school based on a West Virginia statute that authorizes school districts to deny enrollment to undocumented aliens. The principal's action in denying access to an education for the two children based on their status as undocumented aliens: does not violate the Equal Protection Clause of the Fourteenth Amendment. violates the Equal Protection Clause of the Fourteenth Amendment. violates the Due Process Clause of the Fourteenth Amendment. violates the Equal Education Clause of the Fourteenth Amendment.
violates the Equal Protection Clause of the Fourteenth Amendment.
Fritz applies for a job as a waiter at Mexico Cantina. Three positions are available, but he is not hired for any of them. Fritz inquires about his application and is informed by the restaurant manager that they could not hire him because he is not Hispanic. Fritz is told that Mexico Cantina wants its patrons to experience an authentic Mexican dining event in its restaurant, so Mexico Cantina will only hire female Mexican wait staff, who are then required to dress in traditional Mexican outfits. Fritz sues for employment discrimination, claiming that Mexico Cantina discriminated against him because he is not Hispanic. Mexico Cantina responds to the lawsuit by claiming that being female and Hispanic are bona fide occupational qualifications (BFOQ). Fritz will probably: win the lawsuit because gender is a bona fide occupational qualification. lose the lawsuit because race is a bona fide occupational qualification. win the lawsuit because race is not a bona fide occupational qualification. lose the lawsuit because gender is a bona fide occupational qualification.
win the lawsuit because race is not a bona fide occupational qualification.
Your favorite singer is Lady Gaga. Your friend, who knows about your interest in Lady Gaga, was looking on Craigslist and saw two tickets for sale in the third row of the Lady Gaga concert in your city two weeks from now. Your friend knows that if he doesn't act immediately and checks with you first, the tickets will likely be gone. So, your friend contacts the seller and arranges to buy the tickets. Your friend expects that you will pay for these tickets. When your friend tells you what he did, you are thrilled and tell your friend that you will pay for the tickets. Are you legally bound to purchase the tickets? No, because you did not authorize your friend to purchase the tickets. Yes, you are, because your friend did you a favor. No, you aren't, because you did not ratify your friend's actions. Yes, you are, because you ratified your friend's actions.
Yes, you are, because you ratified your friend's actions.
