Law and Society Final

Business ethics looks at whether business decisions

are right or wrong

In a consolidation, two or more corporations combine in such a way that only one of the corporations continues to exist.

false

If a company strictly complies with existing laws, the firm will

fulfill some business ethics obligations.

DIY, a retail hardware store, must use reasonable care on its premises to warn its invitees of

hidden dangers

Ford is the sole proprietor of Go, a game subscription service. As a sole proprietor, on the business's profits, Ford pays

only personal income taxes

Adrian operates a recycled metals business and contracts to provide ten tons of scrap steel at $500 per ton to be delivered to Build-It-Rite Materials, Inc., in seven months. An unforeseen shortage of scrap steel suddenly develops, making it impossible for Adrian to fulfill the contract for less than $5,000 per ton. Adrian's best defense against performing the contract would be that

performance of the contract is commercially impractical

Posing as eBank, Frank e-mails Grace, asking her to update her credit-card information through a link in the e-mail. She clicks on the link and types in the data, which Frank promptly sells to Hector. This is

phishing

As a means of controlling quality, a franchise agreement can limit the franchisee's ability to sell the franchise to another party

true

Because no one can actually hold a piece of land, certain rights and duties are recognized to constitute the ownership interests in real property.

true

Dissociation terminates some of the rights of the dissociated partner, requires the firm to buy his or her interest, and alters the parties' liability to third parties.

true

If a director commits a breach of fiduciary duty, the shareholders have the inherent power to remove the director from office by a majority vote.

true

Many bailments do not include all of the elements of a contract.

true

Watercraft Inc. employs Vern as a sales agent for a trial period. At the end of the period, Watercraft and Vern disagree on the amount of the commissions Vern is due for sales that he made. Vern may demand

an accounting

Nina, the owner of Organic Farm, a sole proprietorship, wants to obtain additional capital to operate. This can be accomplished by

any of the choices

Trespass to land is committed if, without the permission of the property owner, a person

causes water to back up onto the property.

Fern, who owns and operates Garden Farm, agrees to sell Harvest Grocery a minimum quantity of fresh fruits and vegetables every week for three months. If bad weather destroys Fern's crops, the obligation to deliver produce to Harvest is

discharged

Start-Up LLC is a limited liability company without a written operating agreement. Among the members, a dispute arises concerning the division of profits. Under most LLC statutes, the profits will be

divided equally among the members

Dim threatens physical harm to force Ed to sell his Flower Shop to Dim for a below-market price. This is

duress

A corporate director may not

engage in self dealing

A federal form of government is one in which the national government shares sovereign power with

the states

In many instances, agency law governs the relationships among partners.

true

One of the essential elements of a general partnership is a right to participate in the control of a business

true

Cal, Dex, and Erin agree to be partners in Fajitas, splitting the profits equally. Cal contributes 65 percent of the capital. When Fajitas is dissolved, its liabilities are greater than its assets. The losses are paid by

all the partners in proportion in their shares of the profits

Rene contracts with Scot to pay him $5,000 for repairs to Rene's lake cabin. After Scot performs, Rene tells him that she cannot pay him in full immediately. They sign an agreement in which Rene promises to pay $2,500 now instead of $5,000 later. This is

an accord and satisfaction

Builders Corporation files a suit against Concrete Company to enforce a written contract. If the court finds that the parties intended the contract to be the final statement of their agreement, parol evidence can be admitted to prove

an orally agreed on condition

Cass, a certified public accountant, agrees to perform an audit for Drone Distribution Inc. These parties are most likely to follow the rules of contract law in order to

avoid potential disputes

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

before beginning operations

A misunderstanding concerning a basic assumption on which a contract is made will support the rescission of the deal if the mistake is

bilateral

Credit Loan Company extends credit in the ordinary course of its business. Under the Truth-in-Lending Act, Credit Loan must inform potential borrowers of

credit loans credit terms

Health Clinic Inc. has no written employment manual or oral discharge policy, avoids abusive treatment of its staff, and acts to prevent illegal and unsafe activities. The clinic freely hires and fires its employees, who are similarly free to quit at any time. With respect to the employment-at-will doctrine, this is

exemplary of the doctrine

A corporate officer is liable to the corporation or its shareholders for a bad business decision.

false

A creditor can always require the signature of a cosigner on a credit application.

false

A de jure corporation is one that is formed to accomplish a single purpose within a limited time.

false

A finder of mislaid property has no obligation to return the property to the true owner

false

A license is a personal privilege that cannot be withdrawn or revoked.

false

A minor can disaffirm a contract at any time but remains legally obligated to perform it.

false

A partner can be held liable for a partnership obligation only if he or she participated in, or knew about, whatever it was that gave rise to the obligation.

false

A party who confers a benefit on someone else unnecessarily can obtain its fair value by invoking the doctrine of quasi contract.

false

A payment of funds or a delivery of goods must take place for a bilateral contract to be formed.

false

A promise to pay another's debt only if that party fails to pay does not need to be in writing to be enforceable

false

A short-form merger is the acquisition of control over a corporation through a purchase of stock

false

A specified state of mind, or intent, is not necessary to establish criminal liability.

false

A takeover is the acquisition of control over a corporation through a purchase of substantially all of its assets

false

A whistleblower is an employee who publicly reveals a co-worker's unsafe or illegal activity.

false

Accession occurs when someone acquires title to a valuable piece of personal property by assuming a position of power.

false

Actual authority in an agency relationship arises from what a principal makes clear to a third party.

false

If contracting parties attach materially different meanings to a contract word or term subject to more than one reasonable interpretation, the contract is void.

false

It is the motive behind the intent—not the intent—that is important in tort law.

false

The equal dignity rule requires that a principal and an agent act in good faith and with mutual respect in their dealings with each other.

false

The management of a limited liability company must include at least one of the members.

false

The most common way to terminate contractual duties is by repudiation.

false

The offeror can revoke the offer only be expressly repudiating it

false

The owner of a life estate has the same rights as a fee simple owner, including the right to sell the property or pass it to his or heirs.

false

To gain a share of a market, a businessperson can interfere in another's business, even if the behavior is predatory.

false

Under the Uniformed Services Employment and Reemployment Rights Act, any person who has served in the military is entitled to more favorable treatment in the workplace than a co-worker who has not served.

false

Warrants are required for searches of businesses in highly regulated industries.

false

When a joint tenant dies, his or her interest in the property passes to his or her chosen heirs.

false

the federal courts are independent system of courts that is superior to the state courts

false

to be a fixture, an item of personal property must be physically attached to the land in some way.

false

Sean promises to pay his personal assistant Terry $50,000 in consideration of the services she provided over the years. Sean never makes the payment. Sean's

not enforceable because the consideration is in the past.

Ivy slips and falls on the deck of Jet's Tour Boat and is injured. She incurs medical expenses of $500,000, and files a suit against Jet to recover. Under the "50 percent" rule, if Ivy is more than 50 percent at fault, she will recover

nothing

Pay-More Convenience Stores, Inc., is a franchisor. Randy operates a Pay-More franchise. Seth is one of Randy's employees. As a franchisor, if Pay-More controls the day-to-day operations of the business to a significant degree, it may be liable for tortious acts by

pay more, randy, or seth

Mike owns a beach house in North Carolina in fee simple. This ownership interest is

potentially infinite in duration

For a court to determine if a contract has been breached and to give an appropriate remedy, the offer must include terms that are at least

reasonably definite

A contract for a sale of land from Beachfront Properties Inc. to City Development Corporation contains an erroneous legal description. The appropriate remedy for these parties is most likely

reformation

Good faith in collective bargaining between a union and an employer does not include

rejecting a proposal without offering a counterproposal.

Barb, a computer operator for Cloud Corporation, is arrested in her employer's parking lot on suspicion of larceny. Barb must be informed of her right to

remain silent

Revenue Inc. owns more than 90 percent of the shares of Sales Corporation. A copy of a plan for a merger of Revenue and Sales must be sent to each shareholder of

sales

Sid offers Tina, a city inspector, money to overlook health code violations in his restaurant. Tina accepts the money and overlooks the violations. Sid is charged with the crime of bribery. The crime occurred when

sid offered the bribe

In a digital ad, Geo Treks, a retail sports equipment store, falsely accuses its competitor Headwaters of selling stolen kayaks and other gear. Headwaters' sales decrease. Geo Treks has most likely committed

slander of title

Ivy orally agrees to buy a unique collection of sports memorabilia for $10,000 from Jess and sends $2,500 as an initial payment. When Ivy pays the rest of the price, Jess refuses to ship the collection. In a suit for breach, Ivy should seek

specific performance

Lance enters into a contract to mow Mary's yard every week for the summer. Mary sells her house and yard to Nora, and assigns the right to receive Lance's services to Nora. Mary is

the assignor

The federal government has the power to regulate commercial activities among the states under

the commerce clause

Generally, given the broad language of the Constitution, the line between state and national powers is often determined by

the courts

For a price, Rose agrees to unload the catch from fishing boats that dock at Seafood Shipping. Rose delegates this duty to Tina, who then owes performance of the duty to the warehouse. Tina is

the delegatee

Physicians Clinic orders by phone seven cases of disposable nitrile gloves from Quality Medical Supplies, Inc. After three cases are delivered and accepted, the clinic repudiates the contract. Quality Medical can enforce the contract to

the extent of the three accepted boxes.

Omar asserts that a deal he entered into with Pat to sponsor and host a motivational conference for independent sales representatives was formed as the result of a mistake. Omar's best defense to the enforcement of this contract is

the lack of a partys voluntary consent

Zoey is accused of auto theft. She refuses to give information related to her alleged criminal activities because she suspects it will be used to prosecute her. This is

the privilege against self-incrimination.

A speedy trial, a trial by jury, a public trial, and the right to confront witnesses are guaranteed by

the sixth amendment

Franny is charged with a crime. Almost all federal courts and some state courts would not hold Franny liable if, at the time of the offense, as a result of a mental disease or defect, she lacked substantial capacity to obey the law and to appreciate

the wrongfulness of her conduct

A principal who creates an exclusive agency and then competes with the agent can be held liable for the agent's lost profits or sales.

true

A promisee has the right to expect or demand that something will or will not happen in the future.

true

Any beneficiary to a contract who is not deemed an intended beneficiary is an incidental beneficiary.

true

Because of the potential for punitive damages, plaintiffs often include a claim for fraudulent misrepresentation in their contract disputes

true

Because state corporate laws differ, persons wishing to incorporate may look for the state that offers the most advantageous tax or other provisions.

true

Contests and lotteries are unilateral contracts

true

During collective bargaining sessions, both parties may engage in hard bargaining, but the process must be geared to reaching a compromise.

true

If the members of a limited liability company want to reinvest profits in the business, they may opt for the firm to be taxed as a corporation.

true

In effect, a counteroffer converts the original offeror into an offeree with the power of acceptance

true

In rare circumstances, a price list may be construed as an offer

true

Like partners, unless otherwise agreed, joint venturers have an equal voice in controlling a venture-related project.

true

Limited legal liability can be an advantage for a small business wishing to raise capital.

true

Merger and consolidation refer to two legally distinct proceedings, but consolidation is also used to refer to all types of corporate combinations.

true

Preemption occurs when Congress chooses to act exclusively on a subject over which the federal government shares power with the states.

true

The Telemarketing Sales Rule applies to any offer—domestic or foreign—made to consumers in the United States

true

The board of directors hires the corporation's officers, and normally can remove them at anytime with or without cause.

true

The business judgment rule may apply to determine whether directors acted reasonably in resisting a takeover attempt.

true

The delivery of documents that represent the rights to property can be sufficient to transfer that property to the recipient.

true

The distinction between real and personal property is important because how property is acquired is determined by its classification.

true

With respect to bailed goods, common carriers are absolutely—strictly—liable.

true

With respect to consideration, a bargained-for exchange distinguishes a contract from a gift.

true

he initial board of directors of a corporation is normally appointed by the incorporators when the corporation is created.

true

Eugene, an accountant, convinces his client Faye to enter into a contract to invest her savings in Gathering, a non-existent social media site. There is clear and convincing evidence that Faye did not act out of her free will. This is

undue influence

A contract to do something that is prohibited by statute is

unenforceable

Len, a MedCo Supplies salesperson, follows Nan, a salesperson for Optima Health Products (a MedCo competitor) as she visits locations to make sales. Len solicits each of Nan's customers. Len is most likely liable for

wrongful interference with a business relationship

Criminal statues proscribe

wrongs committed against society for which society demands redress

Gretchen is adjudged by a court to be mentally incompetent. Gretchen

cannot form a legally binding contract with another party.

Kelly offers to sell a certain used forklift to Lumber Outlet, but Kelly dies before Lumber accepts. Most likely, Kelly's death

terminates the offer

Berry Farm hires Chun to repair its irrigation system on site by a certain date for $2,500, but Chun fails to perform. Berry Farm hires Diego to do the job for $2,000. In a suit for breach, Berry Farm may recover from Chun

nominal damages

As a director of InstaTalk Inc., Jim has a right of inspection. This right can be restricted by

none of the choices

An agency relationship can arise by ratification, which involves a determination of intent expressed by words or conduct.

true

As a general rule, most any duty can be delegated

true

Digital goods, including virtual goods, are personal property with real value.

true

In a criminal case, the state must prove its case beyond a reasonable doubt.

true

There is a remedy available for nearly every breach of contract

true

The Americans with Disabilities Act permits employers to take adverse employment actions based on assumptions about individuals who associate with people who have disabilities.

false

The Equal Pay Act requires equal pay for male and female employees working at the same establishment, regardless of the work they do

false

The Uniform Partnership Act governs the operation of partnerships in spite of a different agreement among the partners.

false

Alyssa hires Bret to mow Alyssa's lawn every Friday. Although they do not discuss the terms of payment, after each of the first three Friday mows, Alyssa pays Bret on Saturday. The payment term is

implied

Marketing Solutions Inc. promises to employ Niki as a software engineer. In reliance on the promise, Niki quits her job with Online Ad Agency, but Marketing Solutions does not hire her. Most likely, Marketing Solutions is

liable to Niki under the doctrine of promissory estoppel.

Emmett, an agent for Fridley, signs an agreement with Glover on Fridley's behalf but neglects to tell him that the agreement requires the payment of a certain tax. The government prosecutes Fridley for failing to pay the tax. He is

liable, because notice to emmett is notice to fridley

In an online blog, Oren states that Publicity Corporation invaded the privacy of individuals to collect marketing data for its clients. If the firm can prove all of the elements of defamation and Oren cannot assert a sufficient defense, Oren is most likely liable for

libel

Rosario is a chef and caterer who hires out on a per-project basis to companies with on-location work sites, as well as to the hosts of banquets and other events. In this capacity, Rosario is

an independent contractor

Lon says to Misty, "I would like to sell you my vinyl records." This statement is

an invitation to negotiate, not an offer.

Ichiro is injured in a two-car accident and sues Heather, the driver of the other vehicle, alleging negligence. Heather claims that Ichiro was driving more carelessly than she was. Comparative negligence may reduce Ichiro's recovery

even if Ichiro was only slightly at fault

Before being transported, hazardous waste produced by the operations of Fabrication Inc. must be properly labeled and packaged under the Resource Conservation and Recovery Act by

fabrication inc

A belief in the possibility that a person committed a crime is sufficient probable cause to support the issuance of an arrest warrant

false

A contract that calls for an action contrary to public policy is illegal but not unenforceable.

false

Larceny involves force or fear, but robbery does not.

false

Negotiation requires the use of a neutral third party to facilitate a settlement.

false

Normally, a court will evaluate the adequacy of consideration based solely on the comparative value of the things exchanged as part of agreement

false

One corporation that owns all of the shares of another corporation is a subsidiary corporation.

false

Riley commits an act via e-mail against State Bank, a business in Texas, where the act is a cyber crime. Riley resides in Utah where the act is not a crime. Prosecution of Riley in Texas involves questions of

jurisdiction

Khan takes a rock from a pile of stones on Lamb's property and throws it intending to hit Minh, but misses and hits Nasir instead. For the tort of battery, Nasir can sue

kahn

Steel Mill Inc., employs five hundred workers. For the Occupational Safety and Health Administration, Steel must do all of the following except

keep occupational injury and illness records for each employee

An ethical code of conduct is not

law

Ethics is important because laws may not always be easy to interpret or apply. This is because

laws represent the will of the people and that will is often changing.

An ad for the New Plays Festival asks playwrights to submit their work and "we might produce it for the world." Oded submits a play with a note that states, "I accept." Between the Festival and Oded, there is

none of the choices

jana, a nurse practitioner, renders aid to Kurtz, who is injured and unconscious. Jana can recover the cost of the aid from Kurtz

on quasi contract theory

Gaia tells Franco that she will pay him $50 to haul lawn debris from her property. Franco's acceptance is complete

only after he hauls away the debris

Bey indicates that he is acting as an agent on behalf of an unidentified client—Cuisine LLC—when he enters into a contract with Diners Bistro. Cuisine is

partially disclosed principal

Duty-based ethical standards are most likely to derive from

philosophical reasoning

Erol works for Food Packing Company. Erol's supervisor Gwen writes a negative review of Erol's performance. Gwen believes the statements are true, and limits their communication to the firm's management. In a tort action for defamation, Gwen can most likely assert as a successful defense

privilege

At Mattress Store, Nate signs a contract to buy bedroom furniture. The contract sets a schedule of $500 monthly payments, subject to a late fee of 15 percent. Nate finds the language of the contract difficult to understand. This is most likely

procedural unconscionability

Traditionally, the hundreds of thousands of acts defined as criminal in federal, state, and local laws have been grouped into broad categories, including

property crime

The purpose of the right to disaffirm a contract is to

protect minors

Armand orally agrees to pay Borges to seed and harvest a quarter of Armand's farm acreage for four planting seasons. After Borges prepares the land and plants the first crop, Armand says that the deal is off. Borges can most likely recover on a theory of

quasi contract

Blanche, a minor, enters into a contract to buy two all-season passes from Chalet Mountain Resort. The contract will be made enforceable if Blanche

ratifies it

Compliance with Title VII of the Civil Rights Act is monitored by

the equal employment opportunity commission

A novation requires

the existence of a previous, valid obligation.

Interstate Commodities Inc. keeps a file of I-9 verifications forms, which are required by the Immigration Reform and Control Act. To monitor compliance with the act, random audits and enforcement actions are conducted by

the federal government

Espresso Brew Inc. uses a Web site to provide downloadable information to prospective franchisees. This electronic information is the equivalent of an offer that must comply with

the federal trade commissions franchise rule

Compliance with the law is not always sufficient to determine "right" behavior because

the law does not codify all ethical requirements.

For a price, Ray agrees to unload trucks that make deliveries to Shoppers Warehouse. Ray delegates this duty to Tim, who then owes performance of the duty to the warehouse. Ray is

the obligor

Rich, an auctioneer, puts a sailboat up for auction. Rich is

the offeree

Susan enters into a contract with Trey to act as his personal sports trainer. If a dispute later arises, the court will interpret the contract according to

the parties' intent at the time they entered into the contract.

The term checks and balances refers to the system under which

the powers of government are divided among its branches, each of which exercises a check on the actions of the others.

Consumer Staples Inc. includes in its advertising obvious exaggerations, vague generalities, and puffery about its products. The firm may be subject to sanctions for

the puffery

Ben makes an appointment for a $50 haircut, buys a bike for $250, and agrees to work for Coding Associates for one year for $5,000 per month, starting at the beginning of next month. To be enforceable, a writing is required for

the purchase

After a dinner at Rosario's Diner, Sharon believes that she was overcharged and shoves Tom, the waiter, who is injured when he falls. Tom sues Sharon, alleging that the shove was a battery. Sharon is liable if

the shove was offensive

Maya and Nick enter into a contract. To be enforceable, the contract must include

the signature of the party against whom enforcement is sought

Otto is a limited partner in Port Exports, a limited partnership. By participating in the firm's management, Otto is liable for its obligations

to the full extent

Under the doctrine of respondeat superior, a corporation can be held liable for

torts committed by its agents or officers

Megan gives out a business card with an e-mail address on it. It is reasonable to infer that Megan has consented to

transact business electronically.

A bailee has a right to the reimbursement of costs incurred in keeping the bailed property, even in a gratuitous bailment.

true

A breach of contract occurs when a party fails to perform part or all of the required duties under a contract.

true

A business necessity is a defense against employment discrimination based on the genuine requirements of a business.

true

A business that believes a federal agency's action threatens the environment can use an environmental impact statement as a means to challenge it.

true

A constitution is a primary source of law.

true

A contract must be in writing to be enforceable if it cannot by its terms be performed within one year from the day after the contract's formation.

true

A cooperative can be incorporated.

true

A corporation is recognized under U.S. law as a person.

true

A corporation needs to be careful about whom it hires because a firm may be liable for the misconduct of its employees

true

A court can order the dissolution of a partnership if the business can only be operated at a loss.

true

A court will pierce the corporate veil of a corporation when the corporate privilege is abused for personal benefit

true

A fact that is important and central to the subject matter of a contract is a material fact.

true

A limited liability partnership allows professionals to avoid personal liability for the malpractice of other partners.

true

A liquidated damages provision specifies an amount to be paid in the event of a future default or breach of contract

true

A mistake of fact can often excuse criminal responsibility.

true

A partner who withdraws from a partnership for a term before its expiration date can be held liable for any resulting losses.

true

A party who can show that he or she did not genuinely agree to the terms of a contract has a defense against its enforcement.

true

A share exchange can be used to create a holding company.

true

A syndicate may be organized as a corporation or a partnership, or in some situations as no recognizable form of business organization.

true

Adverse possession is a means of obtaining title to land without delivery of a deed

true

Among the factors an entrepreneur will consider in selecting an organizational form for a business is the liability of the owners for the acts of the firm.

true

An ad is more likely to be considered fair if its benefit to consumers or the competition outweighs any injury it might cause to the interests of consumers

true

An employer may be able to avoid liability for sexual harassment by taking prompt remedial action.

true

Contracting parties are bound only by terms that can be objectively inferred from promises made.

true

Controlling precedents are binding authorities.

true

Global businesses need to be conscious of the impact of different religious principles on ethics.

true

The dormant commerce clause comes into play when state regulations affect interstate commerce.

true

Under a state long-arm statute, a court can exercise jurisdiction over certain nonresident defendants.

true

When a member of a limited liability company guarantees payment of a loan to the firm, the member is personally liable for the obligation.

true

When concurrent jurisdiction exists, the decision of whether to litigate in a federal or state court can be affected by the availability of different remedies.

true

When dissolution takes place by voluntary action, the members of the board of directors act as trustees of the corporate assets.

true

When the promoter of a limited liability company enters into a preformation contract on the firm's behalf, the company must adopt the contract to enforce it.

true

With a tenancy at will, either party can terminate the tenancy without notice.

true

Yuri agrees to zed.com's terms of service and downloads the site's app. Yuri then reverse-engineers the app to create a competing product. This is

a breach of contract

a precedent is

a court decision that furnishes an example for deciding subsequent cases involving similar or identical facts or principles.

Stare decisis is best defined as

a doctrine under which judges follow established precedents.

To gain a share of a market, a businessperson can interfere in another's business, even if the behavior is predatory.

a felony

Sweetwater Corporation is incorporated in Texas. Outside that state, within the United States, the firm is

a foreign corporation

Corner Store posts on its website an offer of a reward for information leading to the apprehension of a certain criminal. This offer could normally be terminated by

a post on the website

Without creating a separate business organization, Rey starts up Street Cruisers, a pre-owned auto sales enterprise. This enterprise is

a sole proprietorship

On Monday, Neil tells Outdoor Landscaping, Inc., that he will pay Outdoor $500 if a variety of tasks are completed by Friday. On Wednesday, when Outdoor is more than half done with the work, Neil says that he has changed his mind. These parties had

a unilateral contract as soon as outdoor began to perform

Without a permit from the U.S. Army Corps of Engineers, Condos Corporation fills a wetlands area that it owns in preparation for the construction of a housing complex. Under the Clean Water Act, this is most likely

a violation

Denny works for Engineers P.A. While working on an Engineers project, Denny is injured. Under state workers' compensation laws, he will be compensated only if the injury was

accidental

Robotics Inc. is a corporation. Its express powers can be found in

all of the choices

Farah makes and sells camping gear. Farah and Gobi enter into a contract for a delivery of the gear to Gobi's Outfitters retail locations for an invoiced price. Farah transfers the right to payment under the contract to Haulers Distribution Inc. This transfer is

an assignment

Questions of what is ethical involve the extent to which a company has

an ethical duty beyond those duties mandated by law.

Apps LLC enters into a contract with Birk, the chief executive officer of Corporate Sales Inc., to create an app for the firm. To fulfill the contract, Apps hires Dave as a student intern. With respect to the app contract, Dave is

an incidental beneficiary

If intoxication is purely voluntary, the intoxicated person's contracts are not voidable.

False

In the context of fraudulent misrepresentation, an opinion is objective and verifiable, whereas a fact is subject to debate.

False

Special damages that compensate for a loss caused by circumstances beyond the contract itself are incidental damages

False

When the doctrine of promissory estoppel is applied, the promisor is estopped, or barred, from performing the promise.

False

A lender who makes a loan at an interest rate above the lawful maximum commits usury.

True

Mica is an employee of Natural Gas Company and a member of a union of company employees. Under federal law, Mica and other union members have the right to

bargain collectively with their employer through their representative.

To constitute consideration, there must be

bargained for exchange

County Title Company processes information furnished by others to transfer title to real estate from Dale to Ezra. The furnished information is mistaken. The contract between Dale and Ezra may be rescinded

because the mistake is about a material fact

Bev owns and operates City Delivery Service as a sole proprietorship. When she dies, the business will automatically

dissolve

Jurisdiction refers to the right of a citizen to bring a case before a court.

false

Only one of the boards of directors of the corporations involved must approve a merger.

false

Only one party entering into a contract must possess characteristics that qualify him or her as competent for a valid contract to exist.

false

Parties are not usually free to bargain as they wish

false

Procedural due process focuses on the content of legislation.

false

Publication of false information about another's property is not a tort.

false

Putting up an item for sale on an online auction site is an offer.

false

Shareholders, not directors, make major corporate policy decisions.

false

Shrink-wrap terms are enforceable even if a buyer does not discover them until after the parties have entered into a contract.

false

Substantive due process requires that a person have an opportunity to object to a proposed action before a fair, neutral decision maker.

false

The Age Discrimination in Employment Act prohibits employment discrimination on the basis of age against individuals up to forty years of age.

false

Reliance on a certain type of oral contract can be enough to remove it from the Statute of Frauds.

true

Restitution may be available in situations when damages cannot be proved or are difficult to prove.

true

Situations in which agreements lack consideration include those involving a preexisting duty.

true

Taking personal property from its owner, without permission or just cause, is trespass—retaining it is conversion

true

Tender is an unconditional offer to perform by a person who is ready, willing, and able to do so.

true

The Immigration Act limits the number of legal immigrants entering the United States

true

The effect of the minimum-contacts standard is that a business firm has to comply with the laws of any jurisdiction in which it targets customers

true

The offeree must accept the offer without adding or changing any terms.

true

The owner of real property has relatively exclusive rights to the airspace above the land.

true

The standard of reasonable care for a professional is the same as that of an ordinary person

true

To focus on individual subjects and increase efficiency, a corporate board can delegate certain tasks to committees of directors.

true

To prevent deception, all representations by a franchisor to a prospective franchisee must have a reasonable basis at the time they are made.

true

Two parties can mutually agree to rescind a contract only to the extent that it has been executed—otherwise, there is nothing to rescind.

true

Under the Fair Credit Reporting Act, a consumer can request the identity of anyone who has received a credit agency's report on the consumer.

true

Affirmative action programs are often found to be unconstitutional because they deprive members of protected classes of equal protection.

false

An easement is the right to go onto land owned by another and take away some part of the land itself or some product of the land.

false

An employer must reasonably accommodate its employees' religious practices, but only if they are based on the doctrines of a traditionally recognized religion.

false

An innocent party who does not suffer harm as a result of a misrepresentation can nevertheless collect damages.

false

An offer must express reasonably definite terms to be effective—no term may be reasonably inferred

false

Anyone can avoid a contractual obligation by claiming that he or she did not read the contract

false

Apparent authority in an agency relationship arises when the principal causes the agent to reasonably believe that he or she has the authority to act.

false

Because courts of law and equity have merged, the principles of equity are no longer applied.

false

Because of their positions within the corporation, directors cannot be held liable for the crimes of corporate employees.

false

Both parties to an agency relationship have the power and the right to terminate the relationship at any time.

false

Contract law does not distinguish between moral and legal obligations.

false

Disparate-impact discrimination occurs when a protected class is adversely affected by the practice or procedure of an employer who intended that result.

false

During an employee's leave under the Family and Medical Leave Act, an employer must continue to compensate the employee to avoid the potential negative effect of unpaid leave on interstate commerce.

false

According to most states' laws, to be enforceable as a contract under the Statute of Frauds, a writing must

name the parties

Lipstick Inc. merges with Mascara Inc. Only Mascara remains. The articles of merger

amend the articles of mascara

The sale and distribution of the assets of a business on its termination is

liquidation

One party wants to file a suit against another. For a court to hear the case,

the court must have jurisdiction

Jade owns a loft that she leases to Key and Liu. If Jade sells the loft, Key and Liu

become the tenants of the new owner

Roy is a director of Sales Inc. Sales enters into a contract with TeleCenter Corporation in which Roy has a personal interest. Roy must

make a full disclosure of the conflict of interest

Gary owns two all-terrain vehicles (ATVs), worth $1,000 and $500, respectively. Helen enters into a contract to buy "Gary's ATV" for $750. Gary believes, in good faith, that he is selling the $500 ATV. Helen believes, in good faith, that she is buying the $1,000 ATV. In this situation

the contract is not enforceable.

A lease between Mia and Niles for residential property contains an exculpatory clause. This clause is most likely

unenforceable

Del owns Everlast Painting, a sole proprietorship. Del's liability is

unlimited

Paving LLC is a foreign limited liability company in the state of Ohio. In dealing with Paving, Ohio will apply the law of the state where the firm

was formed