HFT1600 Hospitality Law Exam 2
The legal entity which is taxed twice, once when revenue is earned and then again when the profits are distributed to the owners is known as a?
"C" Corporation.
A type of business entity that offers liability protection to all owners and is exempt from taxation on its profits is?
"S" corporation.
The best way to ensure legal protection for a hotelier and to indicate acceptance of an offer is?
Agree to the offer in writing.
An enforceable contract contains an offer, and acceptance and?
Consideration.
In a lawsuit, the person or entity against which litigation is initiated is known as the?
Defendant.
Owner-operator is a type of operating structure in which the owners of a business are directly responsible for its day-to-day operation. Also know, in some cases, as an "independent."
True.
The two most common types of dispute resolution alternatives are?
Arbitration and mediation.
A contract has to be in writing to be enforceable by the courts.
False.
A sole proprietorship is the safest legal entity for a new business owner to create as it includes limited liability from negligence claims.
False.
In a limited partnership, the limited partner has unlimited liability.
False.
In all cases, it is unlawful to breach a contract.
False.
It is the responsibility of the courts to decide the relative fairness of consideration.
False.
Limited liability companies are formed under federal and not state law.
False.
REITs must pay corporate income tax and state income tax.
False.
The UCC is the acronym for the laws regulating purchase and sale agreements for land, which gives protections only to buyers.
False.
The Uniform Commercial Code requires you to?
Fulfill any promises made in a purchasing or sales contract.
Which of the following organizational structures is least desirable from a liability perspective?
General Partnership.
When drafting a hospitality contract, you should do all of the following except?
Get the best deal possible, even if your actions are somewhat ethically questionable.
Two advantages of owning a franchise as a franchisee include?
Greater ability to secure financing and mandatory disclosures by the franchisor.
"Consideration" in the hospitality industry is often?
Money, use of property, and the promise to act of not to act. All of the above.
In a lawsuit, the person or entity that initiates litigation against another is known as the?
Plaintiff.
The owners of a corporation are called?
Shareholders.
Organizational operating a business under assumed name or a trade name?
Should file a certificate disclosing the ownership structure of the organization.
The earliest known franchisor is?
Singer Sewing Machine Company.
The least complex of all organizational structures is?
Sole proprietorship.
The type of relationship in hospitality which is known as the employer-employee relationship is also called?
The Master-Servant Relationship.
The Latin phrase "Caveat Emptor" in the hospitality industry refers to?
The burden of determining the quality and price of a product falls to the buyer.
"Capacity to contract" means?
The individuals creating a contract must meet minimum age and mental requirements in order to make the contract legal.
A hybrid hotel consists of condos, typically full-time residences, as well as traditional hotel rooms.
True.
A valid contract needs consideration flowing to both parties.
True.
Acceptance of an offer must mirror exactly the terms of the offer in order for the acceptance to make the contract valid.
True.
All contracts, whether verbal or written, must be for a legal purpose and in order to be enforceable, must consist of an offer, acceptance and consideration.
True.
The Foreign Corrupt Practices Act is a law that applies to U.S. companies when doing international transactions with non-U.S. business partners.
True.
The UCC is the acronym for the law regulating purchasing agreements, which gives protection to buyers, sellers and financial lenders when goods are purchased under contract.
True.
The applicable law that governs a business entity is determined by where that entity, say a corporation, has filed its creation documents.
True.
The conduct of individual employees has a direct effect on the liability of a business.
True.
The fees charged to a hotel owner to manage a hotel by a hotel management company commonly ranges between 1%-5% of the hotel's monthly gross revenue.
True.
The owners of a LLC are called members.
True.
When drafting international contracts, it is wise to provide for a dispute resolution format with a provision that has senior executives trying to resolve disputes first.
True.
Under the principal/agent relationship theory, an agent?
Will have a fiduciary responsibility to the principal.