MM - BLAW FINAL!

Design patents are valid for 14 years

True

Implied ratification of an agent's unauthorized acts can occur through the silence of the principal.

True

In agreeing to act on behalf of the principal, the agent becomes a fiduciary.

True

In determining whether a use is "fair use" of copyrighted material, the effect of that use upon the potential market for the work is often the most important factor.

True

Patents are valid for 20 years from the date of filing the application

True

Principals may be held liable for the torts of independent contractors involving highly dangerous acts.

True

conventional (C) corporations

-a state-chartered legal entity with authority to act and have liability separate from its owners (its stockholders)

s corporations

-a unique government creation that looks like a corporation but is taxed like sole proprietorships and partnerships - have shareholders, directors, and employees, plus the benefit of limited liability -profits are taxed only as the personal income of the shareholder

leveraged buyout (LBO)

-an attempt by employees, management or group of investors to buy out the stockholders in a company

who can incorporate?

-anyone: truckers, doctors, plumbers, athletes, and small business owners can incorporate -normally, stock is not issued when individuals incorporate so the advantages and disadvantages are not exactly the same as for large corporations -major advantages are limited liability and possible tax benefits

vertical merger

-join two firms in different stages of related business -a merger between a soft drink company and an artificial sweetener marker would ensure the merged firm a constant supply of an ingredient the soft drink manufacturer needs

horizontal merger

-joins two firms in the same industry and allows them to diversify or expand their products -a soft drink company and a mineral water company that merge can now supply a variety of drinking products

9. As a realtor, Finley never acts on behalf of a potential client until both parties have signed an agreement. This is called implied authority rule.

False

A copyright is a tangible property right; this means that you can touch and feel it.

False

A master-servant agency is a type of modern day slavery that is illegal.

False

Any changes to a proposed rule require an additional public comment period.

False

Case 5.1, Meinhard v. Salmon (1928), involved the question of respondeat superior.

False

Federal law provides that electronic agents may legally bind a user to click-wrap agreements.

False

If a business process, and information relating to that process, cannot be patented, copyrighted, or trademarked, there is nothing a business can do to protect it.

False

In all cases, an agency agreement must be written in order to be enforceable.

False

Leased workers are precluded from being considered employees of the company for which they are doing work because they are on the payroll of an employment agency.

False

Once an agency has been created, it cannot be abolished.

False

Some federal agencies are not subject to the requirements of the Administrative Procedure Act.

False

The first sale doctrine prohibits a person who owns a lawfully made copy of a copyrighted work to sell or otherwise dispose of the copy.

False

What determines how a franchise is terminated?

The written franchise agreement

Bureaucracy

A large organization that is structured hierarchically to carry out specific functions.

Types of Franchises (3)

1) Chain Style Business Operation 2) Distributorship 3) Manufacturing Arrangement

Under the Fair Labor Standards, which of the following scenarios is legal?

12-year-old Molly works several hours per day on her family's farm picking vegetables

Example 2 & 3

2. once the notice of the proposed rulemaking is published, the agency should make available sufficient time for individuals to give comments 3. agency must not consider info that is not part of the rulemaking record

a patent lasts for__ years

20

The Small Business Regulatory Enforcement Fairness Act gives Congress_____ days to review new federal regulations to be sure that they do not unduly burden small businesses.

60

An entrepreneur who wishes to start a business with little delay or hassle, and who wants to be his or her own boss, should organize the business as a: A. sole proprietorship. B. cooperative. C. C corporation. D. general partnership.

A

Compared to a sole proprietorship, which of the following is considered an advantage of a general partnership? A. Ability to pool financial resources B. Unlimited liability for all owners C. Division of profits among owners D. Ease and flexibility in transferring shares of ownership to others

A

Kali owns Dog Trotters, a dog-walking business that she started to earn money after school and supplement her allowance. She planned to keep all the profits, and has kept things simple by putting a flier on the bulletin board at the local grocery store announcing that she was available to provide this service. Kali's business is a: A. sole proprietorship. B. franchise. C. S corporation. D. partnership.

A

Unlimited liability means: A. when you own your own business you are responsible for all the business debts. B. you are only liable for the money you invest in the business. C. as a franchisee your franchisor is responsible for the debts of the franchise. D. you are liable for whatever advertising promises your firm makes.

A

20. The term customary authority refers to authority that agents must have by law.

False

When a sole proprietor dies: A. the sole proprietor's heirs have the option of taking over the business. B. the business is sold to a larger corporation. C. the company continues to function as it always has. D. the company always closes down.

A

Pass-Through Entity

A business entity that has no tax liability; the entity's income is passed through to the owners of the entity, who pays taxes on it.

stock option

A certificate that grants the owner the option to buy a given number of shares of stock, usually within a set time period.

Amendment

A change to the Constitution

nuisance

A common law doctrine under which persons may be held liable for using their property in a manner that unreasonably interferes with others' rights to use or enjoy their own property.

investment company

A company that acts on behalf of many smaller shareholder-owners by buying a large portfolio of securities and professionally managing that portfolio.

Delegation Doctrine

A constitutional rule that allows congress to give some of its authority to agencies

Which of the following is not usually considered an independent contractor?

A delivery driver working for a delivery service

Dividends

A distribution of profits or income to shareholders

prospectus

A document required by federal or state securities laws that describes the financial operations of a corporation, thus allowing investors to make informed decisions.

Which of the following is NOT a category of trade secret?

A marketing logo

horizontal merger

A merger between two firms that are competing in the same market

tippee

A person who receives inside information.

Name an involuntary method of transferring a title

Adverse Possession

Variances

Allows and exception to the zoning rules

______ is not copyrightable.

An original idea

A good reason why partners should spell out the details of their partnership arrangements in writing is: A. the partnership is not a legally recognized business unless they do so. B. a written agreement will help reduce misunderstandings and disagreements among the partners. C. putting the agreement in writing will limit the liability of each partner to a specified level. D. doing so will make it easier to convert the business to a corporation at a later date.

B

A partner (owner) who invests money in a business does not take an active role in managing the operation, and is only subject to losing the funds he/she invested. A. implied partner. B. limited partner. C. partial partner. D. corporate partner.

B

Although sole proprietors do not pay any special taxes, as the owner of the business you are also an employee of the business, which requires you to: A. pay income tax only one time each year. B. pay self-employment taxes. C. pay for the right to get an employee identification number. D. file an income tax return for the business.

B

Javier is the sole proprietor of a golf shop. Because he is a sole proprietor, any profit Javier's business earns is: A. totally tax-free. B. taxed only as Javier's personal income. C. taxed twice, once as business income, then again as Javier's personal income. D. taxed only if and when it is distributed to investors.

B

Which of the following is not a disclosure that should be part of a partnership agreement? A. The way profits will be divided among partners. B. The list of personal assets of each partner. C. The specific responsibilities of each partner. D. The salaries and drawing accounts of each partner.

B

5. An independent contractor is considered an employee of the person for whom work is being done.

False

Buyout Price

Based on the amount that would have been distributed to the partner if the partnership had been wound up on the date of dissociation.

An agency relationship can be created by:

Both by an express contract and an implied contract

Brian conveys a vineyard in trust to Cheryl, with the instruction that any income derived from the vineyard be used for Tanya's medical care. Describe the relations of these parties

Brian is the trustor, Cheryl is the trustee and Tanya is the beneficiary.

Which Supreme Court case had the most influence on the passage of the Civil Rights Act of 1964

Brown v. Board of Education

Being your own boss means: A. reducing your working hours. B. having the freedom to set your own working hours and taking lots of vacations, particularly when just beginning the business. C. accepting accountability for the mistakes of the business. D. having limited financial resources to throw into the business.

C

Which of the following is an advantage of a partnership? A. Ease of starting and ending the business B. Unlimited liability C. Shared management and pooled skills D. Little time commitment

C

Which of the following statements about partnerships is most accurate? A. A partnership is a corporation with fewer than 100 owners. B. A major advantage of a partnership is that it offers all owners limited liability. C. A major drawback of a partnership is that it is difficult to terminate. D. Partnerships are taxed at the lowest corporate tax rate.

C

[15-01] The ______ function of an administrative agency may be accomplished by making reports to the president or to Congress. A. investigating B. adjudicating C. advisory D. rule-making E. prosecuting

C

[15-01] The ______ has significant impact on policy and is often as powerful as a commissioner or board member. A. secretary B. advisory council C. general counsel D. chairperson E. executive director

C

[15-01] When administrative agencies exercise their quasi-legislative power by issuing guidelines that have the force and effect of law, they are ______. A. adjudicating B. advising C. rule making D. investigating E. policy making

C

[15-01] Which of the following federal agencies regulates the availability and cost of money and credit? A. the Federal Communications Commission (FCC) B. the Federal Trade Commission (FTC) C. the Federal Reserve Board (FRB) D. the Equal Employment Opportunity Commission (EEOC) E. the Federal Energy Regulatory Commission (FERC)

C

Which of the following is true?

Can be bound on contracts made by an agent even if the principal's identity is not disclosed to the third party.

Articles of Partnership

Can include almost any terms that the parties wish, unless they are illegal or contrary, to public policy or statute.

Fact Pattern 5-1 Candy owns a nail and hair salon. She reaches an agreement with Todd, an independent contractor, allowing him to do nails in her salon three days per week. Todd has a sign on his desk informing his customers that he is an independent contractor of the shop. After working for a month, Todd asks Candy if she has been paying appropriate social security taxes for him. He also informs Candy that Phyllis, a customer, is preparing to sue both Todd and Candy based upon a nasty nail fungus she developed after having her ails done by Todd. Refer to Fact Pattern 5-1. Which of the following is true regarding legal responsibility to Phyllis assuming negligence on the part of Todd can be established?

Candy does not owe Phyllis any amounts.

Other federal consumer protections statutes enforced by CPSC

Children's Gasoline Burn Prevention Act Federal Hazardous Substances Act Child Safety Protection Act Labeling of Hazardous Art Materials Act Poison Prevention Packaging Act Refrigerator Safety Act

What law prohibits mergers that are anticompetitive

Clayton Act

The most basic legal characteristic of the employer-employee relationship is that the employer has the right to:

Control the conduct of the employee

In 1980, Congress passed the ________ , which amended the Copyright Act to include computer programs.

Computer Software Copyright Act

Article I of Constitution

Congressional powers

There are several remedies available to a copyright owner for copyright infringement. Select three.

Criminal penalties; damages; injunction

False or Misleading Claims Civil v Criminal

Criminal: False or misleadings claims result in fine decided by court or imprisonment up to 14 years Civil: Order person cease activity, publish notice, pay admin penalty with people liable to up to 750000 on first occurrence and corporations liable to 10000000. Subsequent individuals penalties increase to maximum 1000000 and for corporations 15 mil. Courts may order recitation, requiring person compensate consumer who bought product and an interim injunction to freeze assets -Competition Bureau may participate in class action settlement on behalf of consumers. - More specific guidelines for particular ads like green energy.

A type of partnership called a ___________ acts much like a corporation and is traded on stock exchanges, but it is taxed like a partnership with profits passing through to the owners and taxed as the owner's personal income. A. limited partnership B. combined general partnership C. cooperative partnership D. master limited partnership

D

One difference between partnerships and sole proprietorships is that partnerships: A. take less work to form. B. are managed by an elected board of directors. C. have the advantage of limited liability. D. have a greater chance of long-term survival due to the accountability of each partner to the other.

D

One way to eliminate some of the risk of your partners making costly mistakes that could jeopardize your personal assets is to set up a: A. Master Limited Partnership. B. sole proprietorship. C. limited amount of time each can actively spend in the business. D. limited liability partnership.

D

Selma owns a roofing business. She enjoys being her own boss, but her satisfaction comes at a price. Her days are filled with organizing the activities of her employees and soliciting new customers. She often misses activities with friends and family because of the obligations of running her own business. She also knows that she has unlimited personal liability for any of her firm's debts. Selma's business is organized as a(n): A. joint venture. B. C corporation. C. S corporation. D. sole proprietorship.

D

The __________ is the most common form of business ownership. A. partnership B. corporation C. joint venture D. sole proprietorship

D

To many businesspeople, one of the major attractions of a sole proprietorship is: A. the ability to obtain additional financial resources. B. the protection of limited liability. C. an unlimited lifespan. D. the chance to be their own boss.

D

When comparing general partnerships to sole proprietorships, an advantage of partnerships is that they: A. are less risky, because each partner is responsible for only a specified fraction of the firm's debts. B. are easier to terminate. C. cost less to organize. D. give the firm a stronger financial foundation.

D

Which of the following is an issue of administrative agencies that relates to personnel? A. The volume of rules adopted by agencies is beyond the ability of the business community to keep up with and comply with. B. There are so many agencies making regulations directed at the business community that the regulations often overlap and are in conflict. C. The administrative process is overwhelmed with paperwork and with meetings. D. The administrative process finds it difficult to discharge unsatisfactory employees. E. There is often a lack of enforcement procedures to follow up on actions taken to ensure compliance.

D

[15-01] A(n) ______ is designated as such at the time of nomination by the president and is the presiding officer at agency meetings. A. secretary B. advisory council C. general counsel D. chairperson E. executive director

D

[15-01] Administrative agencies are needed to provide specificity to A. refer a problem or area to experts for solution and management. B. protect the public, especially from the business community. C. replace competition with regulation. D. develop detailed rules and regulations to carry out a legislative policy. E. provide services that have risen out of necessity.

D

[15-01] When a firm is given monopoly power, it loses its freedom of contract, and a governmental body is given the power to determine the provisions of its contracts. The government agency is providing ______. A. specificity B. expertise C. protection D. regulation E. services

D

treble damages

Damages consisting of three times the amount of damages determined by a jury in certain cases as required by statute.

Which is NOT an example of government power

Dedication

What are the three types of patents?

Design, Plant and Utility

Which of the following terms refers to a slight deviation from the employer's business that is still within the scope of employment?

Detour

A _________________ accompanies a product without a warranty and denies the seller's liability. Disclaimer Lien Guarantee Warranty

Disclaimer

La Mejor Mexicana is right down the street from Tito's Taco Stand. Tito begins an advertising campaign that untruthfully states that tacos from La Mejor Mexicana are made with rat meat. Tito is guilty of _________________. Disparagement Bait and switch Failure to disclose Flawed and insignificant research advertisements

Disparagement

A property owner wants to use water from a river that runs through the property to irrigate a potato field. To do so, the owner is required by state law to submit an application to the Department of Water Resources describing in detail the beneficial use he plans for the water. If the department approves the owner's application, it will issue a permit allowing a limited amount of river water to be diverted onto the property. Based on these facts, it can be assumed that this property owner's state relies on which of the following rules of law?

Doctrine of prior appropriation

One main disadvantage of the corporate form of business is_____

Double taxation of distributed income

6. Under the doctrine of respondeat superior, employers and those contracting with independent contractors are liable for torts committed by employees and independent contractors.

False

7. The Electronic Signatures in Global and National Commerce Act (E-SIGN) provides that contracts executed by electronic agents are invalid.

False

[15-01] The mere existence of most government programs automatically creates a new agency or expands the functions of an existing one. These agencies are providing ______. A. specificity B. expertise C. protection D. regulation E. services

E

[15-01] Which of the following is true about an advisory council? A. It is more important than other agency members because of visibility and the power to appoint staff. B. It coordinates the activities of an agency with others involved in the regulatory process. C. It makes the decision to file suit or pursue other remedies. D. It supervises usual administrative functions such as accounting, budgeting, and personnel. E. It provides for interaction between regulators and those being regulated.

E

Article II of the Constitution

Executive Branch

Partnership by Estoppel

Exists and impose liability---but not partnership rights--- on the alleged partner or partners.

Community Property

Each spouse technically owns an undivided half interest in the property

Tenancy at Will

Either party can terminate tenancy without notice - couch guy

Which of the following are autonomous computer programs that can be dispatched by the user to execute certain tasks?

Electronic agents

Economic Development

Eminent Domain can be used for economic development that benefits EVERYONE, not just private developers

Some employment situations fall outside the rule of employment at will

Employees with their own individual contracts Protected classes of employees Unionized employees.

Employment at will

Employment-at-will means an employer or employee can end an employment relationship at any time for any reason.

Special Incentives

Encourages certain types of development using incentives - lower taxes, etc.

Marbury v. Madison (1803)

Established judicial review. Ruled that 1) Constitution is superior to federal and state statues and 2) when there is a conflict between the Constitution and a state or federal law, the Court has the authority to declare the challenged law as unconstitutional

An agency by ________ occurs when a person leads another to believe that someone else is his or her agent and is thereafter prevented from denying it.

Estoppel

An agent may bind the principal due to the agent's _____ authority.

Express, implied, or apparent

Once an agent is given ________ authority, he or she also has _______ authority to do whatever is reasonable to complete the task he or she has been instructed to undertake.

Express; implied

which of the following laws provides support to unemployed workers

FUTA

A telephone company that offers calls at "5 cents per minute" does not clearly inform the customer that the offer is good only for the first 60 days. This company is guilty of _________________. Flawed and insignificant research advertisements Disparagement Failure to disclose Bait and switch

Failure to disclose

Trade secrets has a duration of 20 years

False

True or false: Sellers of goods are required by law to offer an express warranty for goods.

False

True or false: The FDA does not allow any level of animal contaminants in food.

False

When Congress wants to regulate an issue, it most often passes very detailed regulations so that there are no questions about its intent.

False

When Congress wants to regulate an issue, it most often passes very detailed regulations so that there are no questions about its intent. T/F?

False

What are the five basic categories of valid trademarks?

Fanciful Marks, Arbitrary Marks, Suggestive Marks, Long used Secondary Meaning, & Trade Dress

An implied warranty of _________________ exists when a merchant who possesses certain judgment and skill in a particular area, promises a buyer that the goods will work for a specific purpose. Fitness for a particular purpose Title Merchantability Product dependability

Fitness for a particular purpose

A skin care company makes unsupported claims that a certain face wash will permanently get rid of acne. This company is guilty of _________________. Flawed and insignificant research advertisements Failure to disclose Disparagements Bait and switch

Flawed and insignificant research advertisements

Deceptive Telemarketing (Competition Act)

Forbidden to: - Make any representation that is false or misleading in a material respect - Conduct a contest, lottery, or other game in which delivery of prize is conditional on payment in advance, or where approximate value of prizes and other facts that affect chances of winning aren't fairly disclosed - Offer a free gift or product at minimal cost as inducement to buy second product (unless approximate value of gift or premium is disclosed) - Require payment in advance where price of product upon delivery is found to be grossly in excess of fair market value of product

Executive orders

Formal orders issued by the president to direct action by the federal bureaucracy.

Administrative agencies sometimes are referred to as the _______branch of government.

Fourth

Pricing Arrangements

Franchises provide the franchisor with an outlet for the firm's goods and services.

securities

Generally, corporate stocks and bonds May also be a note, debenture, stock warrant, or any document given as evidence of an ownership interest in a corporation or as a promise of repayment by a corporation.

Villages on the Lakes is owned by Fred, George and Harry as tenants in common. If George dies without a will, to whom shall his interest pass?

George's heirs

Canadian Broadcasting Standards Council

Has equivalent code of ethics and complaints process with promotion in broadcast media. - Developed specialized codes for sex stereotyping and violence

Select three situations when an agency can perform a warrantless search.

Highly regulated industries, emergency situations, certain types of hazardous operations

Which of the following is not a form that an express warranty may take? Hyperbole about the nature or quality of a product Representative samples and models of a product Descriptions of a product Oral and written representations of a product

Hyperbole about the nature or quality of a product

The Commerce Clause and Noncommercial Activity

I.e. United States v. Lopez, gun-free school zones on basis that gun possession in schools affects economic productivity by making it difficult for students to obtain an education

Sales of Goods Act Risk

If act applies, must be sale and transfer of seller to buyer Risk follows title: - Whoever has titles bears risk of loss in event of theft, loss, damage - If you don't bear risk, you don't have to take steps to protect it General Rule: - Intention of parties will govern transfer of title - Determine when they INTENDED title to pass to buyer, that's when it passes - If you can't determine intention, sale of goods act provides rules Summary: Helps determine when title passes

Which of the following is not true of the Magnuson-Moss Act? It was designed to make product warranties more easily understood by consumers. It established that an express warranty is present if the seller promises that the goods conform to an express promise. It gave the Federal Trade Commission power to enforce warranties. It was enacted in response to widespread deceptive warranty practices by merchants.

It established that an express warranty is present if the seller promises that the goods conform to an express promise.

Which of the following is true regarding express authority?

It may be given by the principal's actual words and also by an action that indicates the principal's consent

Which of the following is not true of the CPSC? It is an independent agency that does not operate under any other department of the federal government. It may issue recalls for dangerous products, but may not ban dangerous products that are in the marketplace. It is presided over by three commissioners who are appointed by the President. It operates a hotline and a Website where consumers may report dangerous products.

It may issue recalls for dangerous products, but may not ban dangerous products that are in the marketplace.

Which of the following is not true of the Food and Drug Administration? It allows a certain number of animal contaminants in food. It inspects manufacturing facilities to check for adulteration. It conducts pre-market safety assessments for new drugs. It tests all drugs for safety and efficacy.

It tests all drugs for safety and efficacy.

Jim was a mechanic. One day when he attempted to weld a car's gasoline tank, it exploded and he was hurt. He filed to collect workers' compensation. His employer resisted on grounds that Jim had been negligent and had also violated the express regulations of the company when he attempted to weld a gasoline tank. Which statement is correct?

Jim can recover even if he was negligent and violated the employer's rules.

Suzy owns 3,000 acres of row crop farmland in the delta and wants to leave the property to her son at her death and avoid the cost and delay of probate without creating a will, trust or beneficiary deed. What best form of tenancy should Suzy consider to accomplish her goal?

Joint tenancy

The four unities of possession, interest, time and title are associated with?

Joint tenancy

Article III of the Constitution

Judicial Branch

Which example in the following list is unrelated to the concept of intellectual property?

Land

The most important statutory protection for trademarks is the

Lanham Act

Laura intends to file a Title VII lawsuit against her employer. which of the following is true?

Laura is required to first submit her claim to the Equal Employment Opportunity

Periodic Tenancy

Lease does not specify how long it will last but payments are due at certain intervals

Which is NOT a legal life estate

Leasehold

Rational Basis Review

Least amount of judicial review. In order for court to uphold the action, government need only show 1) its action advanced a legitimate government objective (like public welfare, health, safety) and 2) the action was somehow related to government's objective

The following is the list from Section 102 of the Copyright Act of the types of the original works that are protected under copyright law. _____ works, including newspapers and magazine articles; ____ works and accompanying words, including advertising jingles, ____ works, including plays or musicals; pantomimes and _____ works, including ballet and other forms of dance; pictorial, _____, and sculptural works; motion pictures and other ____ works; _____ recordings; and ____ works, such as drawings and designs.

Literary musical dramatic choreographic graphic audiovisual sound architectural

Under the duty of ___________ an agent has a duty to act solely for the benefit of his or her principal in all matters directly connected with the agency undertaking.

Loyalty

Which of the following is an example of a hallmark of the fiduciary relationship?

Loyalty

legaslative branch

Makes laws

Mary, Nick and Oliver are joint tenants with rights of survivorship in a tract of land. Oliver conveys his interest to Violet....

Mary and Nick are still joint tenants

Which of the following is NOT a duty of an agent to a principal? Maximizing profits Due care Loyalty Obedience

Maximizing profits

Under modern criminal law, a corporation ______ be held liable for the criminal acts of its employees. The punishment for guilt of a crime by a corporation consists of __________. Corporations may be liable for the torts of their _________ if committed within the scope of the agency.

May Fines Torts Within

Business Organization

May require business use a particular organizational form and capital structure. May also set out standards of operation in such aspects, of the business as sales quotas, quality, and record keeping.

Business Premises

May specify whether the premises for the business must be lease or purchased outright.

A company's collective bargaining agreement has expired and negotiations are underway for a new one. After one exhausting session, union leaders have decided management will not bargain in good faith. The union declares it will be going out on strike the following midnight if an agreement is not reached. The union

Must give the employer at least 60 days' notice before going out on strike

The CPSC uses the _________________ to gather injury data from hospital emergency rooms around the nation. Child Safety Protection Act National Electronic Injury Surveillance System Children's Gasoline Burn Prevention Act Consumer Product Safety Improvement Act

National Electronic Injury Surveillance System

The most important federal law protecting the environment is the _________________. Natural Resources Conservation Service National Environment Policy Act Environmental Impact Statement Endangered Species Program

National Environment Policy Act

Select two categories of records that are exempt from public disclosure under the Freedom of Information Act.

National security documents Documents with confidential information

Tenancy by the Entirety

Neither spouse may separately transfer their interest of the property unless the other spouse consents - Only in NC

counter advertising

New advertising that is undertaken pursuant to a Federal Trade Commission order for the purpose of correcting earlier false claims that were made about a product.

Zoe, who works as a retail clerk, wishes to talk with her coworkers about organizing a union. Her employer forbids her from talking with other workers about union activity in the presence of customers and threatens to fire her if she joins the union. Does the employer have a legal right to make this threat to Zoe?

No. An employer may limit the time and place of conversation, but may not threaten to fire the employee

Leasehold Estate

Owner agrees to convey the right to possess the land for a certain period of time

Which of the following is not an example of a cosmetic product? Baby shampoo Pain reliever pills Skin moisturizer Mascara

Pain reliever pills

Management of a close corporation often resembles that of a _________ , but a corporation must meet the statutory requirements to remain a corporation. Often, shareholders in a close corporation ________ the transferability of shares. If a majority shareholder misappropriates company funds, the normal remedy for the other shareholders is to have their shares _______ to determine value and then ______ that value.

Partnership restrict appraised receive

Ownership in Real Property

Possessory- fee simple (absolute), life, leasehold estate Non Possessory - easement, profit, liscense

Article I, Section 8

Powers of Congress - such as regulating commerce, taxation and spending, bankruptcy, patents and copyrights, etc.

Structure of the Constitution

Preamble, 7 articles, 27 amendments

Winding Up

Process of collecting, liquidating, and distributing the partnership assets.

Justifications for Price Maintenance

Producer refuse to sell to retailers selling at unreasonably low prices, provided it can show retailers using product as: - Loss leaders (below cost price) - For bait and witch - Misleading Advertising - Sales where they fail to provide rinsable level of service

Employment at will exceptions

Promissory estoppel Implied contract Public policy tort Implied covenant

Promissory estoppel

Promissory estoppel bars an employer from taking back a promise that an employee reasonably relied on.

Fixed Term Tenancy

Property is leased for a specified period of time

Goal of Consumer Protection Law

Protect consumers: - in contracts for purchase of goods and services - From unfair selling and marketing practices - From physical harm/injury Many are regulated by providers like real estate, auto repair, payday loans, debt collection, requiring registration and licensing, mandatory education and minimum amount of experience, posting of performance bonds is forfeited in event on non compliance

Employee protections

Protected classes of employees, such as women and minorities, cannot be fired on the basis of race, gender, age, or disability.

Under federal copyright laws, a single-authored book is

Protected for the author's life plus 70 years

Buy-Sell agreement

Provides for one or ore partners to buy out the other or others, should the situation warrant.

Ratification occurs when the principal accepts responsibility for the agent's acts. For ratification to be valid, the agent must have acted on behalf of an principal, that principal must know all of the material , must the agent's act in its entirety, and must have the legal to ratify the transaction both at the time the agent engages in the act and at the time the principal ratifies it. The principal's ratification must occur before the third party from the transaction, and the principal must the same formalities when ratifying the act as would have been required to authorize it initially.

Ratification occurs when the principal accepts responsibility for the agent's unauthorized acts. For ratification to be valid, the agent must have acted on behalf of an identified principal, that principal must know all of the material facts , must affirm the agent's act in its entirety, and must have the legal authority to ratify the transaction both at the time the agent engages in the act and at the time the principal ratifies it. The principal's ratification must occur before the third party withdraws from the transaction, and the principal must observe the same formalities when ratifying the act as would have been required to authorize it initially.

Classifications of Land

Residential Commercial Industrial Conservation Districts

Predatory Pricing (Abuse of Dominant Position)

Reviewable matter when seller sets prices unreasonably low with intent of driving out competition. Can occur at different levels of distribution change - What amounts to it is seldom clear cut, with invention by competition Bureau following complaints made by competitors or concerned suppliers

Today most state corporate statutes are at least partially based on the ______

Revised Model Business Corporation Act

License

Revocable right of a person to come onto another persons land - fishing license

Select the three powers that agencies have.

Rule making, Enforcement, Adjudication

Carolyn is park owner of a restaurant. She is required by law to publish minutes of the annual board of directors meeting but the company is taxed like a partnership. The ownership Carolyn holds in the restaurant is a....

S-corp

Which of the following is not an example of an express warranty? Package labeling Providing a sample of the product Sales talk An express promise

Sales talk

Pat's Pen Co. manufacturers and sells an inexpensive ball-point pen. Salley's Stationery purchases the pens for $.25 each in quantities of 1,000. Salley's discovers that a national chain, a competitor of Salley's, buys the pen at $.20 each for quantities of 1,000. If Salley's Stationery sues Pat's Pen Co. for price discrimination

Salley's Stationery will win if it can prove price discrimination occurred and that it lessened competition

Television Bureau of Canada

Self regulating not for profit associations acting as resource centre for Canadian TV broadcasters and approves commercials before they broadcast

What is evidence of ownership in cooperative?

Shareholder's stock certificate

blue sky laws

State laws that regulate the offer and sale of securities.

State Protection for franchisees

State legislation varies but often is aimed at protecting franchisees from unfair practices and bad faith terminations by franchisors. Requires franchisors to provide presale disclosures to prospective franchisees. Also required that a disclosure document be registered or filed with a state official

what is the role of owners (stockholders) in the corporate hierarchy?

Stockholders do not have to be employees of the corporation. They are investors who have limited liability. Stockholders elect the board of directors of a company who select the management to control the company.

If you buy stock in a corporation and someone gets injured by one of the corporation's products, can you be sued? Why or why not?

Stockholders in a corporation have limited liability meaning as owners they are responsible for its losses only up to the amount they invested. The corporation could be sued and forced out-of-business but the stockholder would only lose what he/she invested.

John invents a new type of automobile-tracking system on January 1 and files a patent application for it on June 30. On March 10, Susan invents a very similar system and files a patent application on March 15. Under the America Invents Act, who holds the valid patent?

Susan because she filed a patent application first.

Landlord Larry notifies Tim he must move out immediately because Larry has rented the apartment out. This action is legal under what type of tenancy?

Tenancy at will

4 Types of Concurrent Ownerships

Tenancy in Common Joint Tenancy Tenancy by the Entirety Community Property

A parcel of property was purchased by two friends, Brian and Cheryl. The deed they received from the seller at closing conveyed the property "to Brian and Cheryl" without further explanation. Brian and Cheryl took title as which of the following?

Tenants in common

Maureen owns a business that makes kites. Maureen's agent Bob entered into an agreement with Alice to purchase some land for a new kite factory. Maureen's agency relationship with Bob was not memorialized by any writing. The day after Bob signs the papers finalizing the sale, Maureen learned of the purchase, was furious with Bob, and said that she wanted out of the deal. Assuming that Bob was legally considered the agent of Maureen in making the purchase, which of the following is Maureen's best argument?

That the agency agreement with Bob was not in writing and that under the equal dignities rule she should not be bound.

Minimum wages

The Fair Labor Standards Act requires certain employers, such as hospitals, stores, and restaurants, to pay a minimum hourly wage.

The agent has the duty to act __________ for the benefit of the principal and not in the interest of the agent or a third party.

The agent has the duty to act SOLELY for the benefit of the principal and not in the interest of the agent or a third party.

Which of the following is NOT one of the factors the law looks at in distinguishing between employees and independent contractors?

The amount of experience of the worker

antitrust law

The body of federal and state laws and statutes protecting trade and commerce from unlawful restraints, price discrimination, price fixing, and monopolies. The principal federal antitrust statues are the Sherman Act of 1890, the Clayton Act of 1914, and the Federal Trade Commission Act of 1914.

consumer law

The body of statutes, agency rules, and judicial decisions protecting consumers of goods and services from dangerous manufacturing techniques, mislabeling, unfair credit practices, deceptive advertising, and so on. Consumer laws provide remedies and protections that are not ordinarily available to merchants or to businesses.

environmental law

The body of statutory, regulatory, and common law relating to the protection of the environment.

Quality Control

The day to day operation of the franchise business normally is left up to the franchisee.

Unless state law is to the contrary, an agent may lawfully conceal ______ of the principal.

The existence and identity

In order to make a claim of deceptive advertising, a party must show all but which of the following elements? The false claim is likely to deceive a buyer. The false claim is likely to produce economic injury. The false claim is made about a product or service. The false claim does not affect the purchasing decision.

The false claim does not affect the purchasing decision.

Which of the following is true regarding situations in which an agent enters into a contract without authority?

The principal is not bound, but the agent may be personally liable.

insider trading

The purchase or sale of securities on the basis of "inside information" (information that has not been made available to the public) in violation of a duty owed to the company whose stock is being traded.

group boycott

The refusal to deal with a particular person or firm by a group of competitors; prohibited by the Sherman Act.

Tenancy in Common

The tenant can pass their interest to their heirs upon death

An owner purchased an interest in a house in Beachfront. The owner is entitled to the right of possession only between July 10 and August 4 of each year. Which type of ownership has been purchased?

Time-share

An implied warranty of _________________ is an implied promise that the product has no liens or infringements upon it. Product dependability Merchantability Fitness for a particular purpose Title

Title

Which of the following is not a goal of the NEPA? To enrich understanding of ecological systems and natural resources To conserve energy and endangered animals To eliminate damage to the environment and biosphere To encourage productive and enjoyable harmony between man and his environment

To conserve energy and endangered animals

Osha

To regulate health and safety standards for companies in the United States, the federal government created the Occupational Safety and Health Administration (OSHA).

Partnerships

Traditionally arises from an agreement, express or implied, between two or more person to carry on a business for profit. Governed both by common law and by statutory law.

Which of the following is not a major consumer reporting agency in the U.S.? Experian Equifax TransUnion Transperian

Transperian

10. The principal has the right to demand reimbursement from the agent for any damages paid to a third party because of an agent's negligence.

True

The "Inside Story" discusses how the Telephone Records and Privacy Protection Act of 2006 made it illegal for a person to use fraud to obtain individual customer billing records and other customer information from telephone companies.

True

The Regulatory Flexibility Act relieved small businesses of certain record-keeping requirements under agency rules and federal statutes.

True

The duration for a trademark is valid for 10 years and the owner can renew for an unlimited number of terms as long as the mark is still being used

True

The fact that leased workers are on the payroll of an employment agency does not preclude them from being considered employees of the company at which they are actually working on a joint employer theory.

True

which of the following case involved price-fixing

United States v. Apple, Inc.

Ron and several fellow workers of Vicy, Inc., a small manufacturing company, wished to organize a union. When Vicy learned of this activity, it issued a bulletin to all workers stating that a union would only hurt the company and that "we are a family that can solve any problems ourselves -- we do not need union activists from outside our company trying to tell us what to do!" Which statement is correct concerning the bulletin issued by Vicy?

Vicy has not committed an unfair labor practice. An employer may vigorously present anti-union views to its employees.

Concurrent Ownership

When multiple people share ownership rights simultaneously to a particular property (4 Types)

Apparent authority may be based on which of the following?

Words of the principal, acts of the principal, or knowledge that the principal has allowed its agent to engage in certain activities on its behalf over an extended period of time

While an alphabetical listing of phone customers cannot be copyrighted, the Yellow Pages and advertising sections of a phone book may be copyrightable because the:

Yellow Pages' information is selected and arranged in an original way.

Hot Products owns a patent for a fan motor that it uses in ceiling fans. Allied Electric uses a fan motor that is identical to Hot Products' in the air conditioners it manufactures. Allied Electric does not have Hot Products' permission to use the motor. Can Hot Products win a patent infringement case against Allied Electric?

Yes, because Allied Electric infringed on Hot Products' patent.

Rena incorporates her business, Rena's Rhinestones, in her home state of Maryland. She wants to expand and sell some of her baubles in Virginia. In Virginia, her company will be considered a(n): a. foreign corporation, and she will probably have to obtain a certificate of authority to do business there. b. alien corporation, because her business has been chartered in another state. c. open corporation, so she can do business in any state that allows open corporations to operate. d. public corporation, so she will probably not have to obtain a license to do business there.

a

A business has declared bankruptcy and a corporate officer has been sued for wrongdoing in handling corporate assets. It is determined that the officer is held liable for $1,000,000. Due to the bankruptcy, the corporation's assets have been frozen. The corporation's directors and officers (D&O) policy provides coverage with a $500K each loss limit and a $2M aggregate limit. As a result of this suit, the D&O policy will pay: a) $500,000 under Coverage A with a $1,,500,000 aggregate limit remaining. b) $500,000 under Coverage B with a $1,500,000 aggregate limit remaining. c) $500,000 under Coverage A and $500,000 under Coverage B with a $1,000,000 aggregate limit remaining d) Nothing due to the bankruptcy clause which excludes coverage in this instance.

a

A corporation automatically will be taxed under subchapter C unless it elects to become an S corporation. a. True b. False

a

Lanham Act

a 1946 law that spells out what kinds of marks (including brand names) can be protected and the exact method of protecting them

Acts such as sexual harassment, wrongful termination, and unlawful discrimination are referred to as: a) Wrong employment practices B) Torts c) Reasons to quit a job d) Reasons to fire an employee

a

Although a corporation's directors and officers must exercise care when making decisions about the running of the company, courts have held that they cannot be held liable for honest mistakes. This latitude allowed by courts to officers and directors is called the: a) Business judgment rule b) Nonjudgmental rule c) Due diligence rule d) Honest mistake rule

a

Bonds normally have a fixed payment and a maturity date when the principal is returned to the bondholder. a. True b. False

a

Fred is a nurse working the first shift at Save our Souls Hospital (SOS). He is the only man and the only unmarried nurse on that shift. He also has more seniority than all but one more nurse other nurse on his shift. SOS needs to hire more nurses for the first shift and brings on 3 young women straight out of nursing school - all of whom are married with young children. A couple of months late, Bob, the SOS President realizes that he made a mistake hiring 3 nurses for the first shift. Bob needs to trim the first shift by 1 person - either by laying someone off or transferring someone to the third shift. The new young women have made it clear to Bob that they can only work the first shift. Bob wants to keep as many people employed as possible, so he decides to transfer Fred to the third shift. Fred balks at this transfer and tells Bob that he is being treated unfairly because he is the only male nurse on that shift. He sues SOS for discrimination damages. What is the term given to the type of discrimination Fred is claiming? a) Disparate treatment b) Overt discrimination c) Disparate impact d) Intentional discrimination

a

The Employee Retirement Income Securities Act (ERISA): a) Was enacted in response to abuses & underfunding in many benefit plans. b) Was enacted to ensure that all workers have retirement programs. c) Addresses only retirement plans. d) Applies only to group health insurance.

a

The Employee Retirement Income Security Act (ERISA) is the federal law that governs retirement and other benefit plans. ERISA was enacted in response to: a) Abuses and underfunding in many benefit plans following several insolvencies. b) Banks investing funds in investments that resulted in numerous defaults in the market. c) Foreign countries beginning to participate in the retirement and benefit programs. d) Congress insisting on acting as the watchdog of the corporate benefit programs.

a

The Employee Retirement Income Security Act (ERISA) spells out the 4 duties of a benefit plan fiduciary. Which duty requires that the fiduciary act with a certain level of skill and diligence? a) Duty of prudence b) Duty of loyalty c) Duty of diversification d) Duty of adherence

a

The most common remedy for an ultra vires act is an injunction. a. True b. False

a

Which one of the following best describes Side A-only coverage added as a separate coverage for directors and officers? a) Does not include entity coverage b) Provides reimbursement coverage to the corporation when the corporation indemnifies the director c) Is written only on a pure excess basis d) Can be frozen as a corporate asset by a bankruptcy court.

a

Which one of the following best describes disparate treatment? a) Unfavorable or unfair treatment of someone in comparison to other similar individuals b) Indirect discrimination against a group c) A type of employee benefit loss exposure d) A specific observable action to discriminate against a person or class of persons

a

Which one of the following is a distinguishing characteristic of a derivative suit? a) Damages recovered, except for the expenses of bringing the suit, go directly to the corporation. b) It is brought by one or more individuals representing the interests of an entire group of people. c) Persons outside of the corporation may initiate such lawsuits. d) Such lawsuits are made in the name of individual customers or employees.

a

Which one of the following is a major responsibility of corporate directors? a) to perpetuate a competent board through regular elections b) to manage investments and disbursements of the corporation's assets c) to create the proper annual & interim reports for shareholders d) to establish the procedures & operational goals for each department

a

sole proprietorship

a business owned, and usually managed, by one person

Liens

a charge of liability on a product

Delegation doctrine

a constitutional rule that allows congress to give some authority to agencies

Alien Corporation

a corporation doing business in a state but organized in another country

alien corporation

a corporation doing business in a state but organized in another country

professional corporation

a corporation formed by members of certain professionals

benefit corporation

a corporation formed with concern for making money but also with concert for the public good

Professional Corporation

a corporation formed with members of certain professions

nonprofit corporation

a corporation formed without concern for making money

Nonprofit Corporation

a corporation formed without concern of making money

Xtreme Publications, Inc., disseminates obscene materials. Under numerous state and federal statutes, this is

a crime

Dividends

a distribution of profits or income to shareholders

Environmental Impact Statement (EIS)

a document required by NEPA that analyzes how potential actions will affect the environment An EIS requires the proponent of a project to 1. analyze the environment which is considered for impact 2. identify and explain the negative effects to the environment from the proposed action 3. consider less adverse alternatives 4. list what resources will be used 5. conduct a cost-benefit analysis on the project and alternatives in environmental terms.

which of the following would be considered a stationary source

a factory

Food and Drug Administration (FDA)

a government agency responsible for promoting public health by regulating the areas of food, drugs, and cosmetics Over-the-counter drugs tobacco diet supplements vaccines biopharmaceuticals blood transfusions medical devices radiation devices cosmetics veterinary products

Approved Drug

a medicine that has been proven safe and effective to relieve or remedy a medical condition The FDA does not test drugs itself, but rather relies on the manufacturer of the drug to submit evidence the drug is safe and effective.

Good Title

a merchant's promise that it has good and valid title of the product

Implied Warranty of Title

a merchant's promise that the product is not limited by any liens or infringements

When an agency finds a rule violation, one attractive option for resolution is .

a negotiated settlement

general partnership

a partnership in which all owners share in operating the business and in assuming liability for the business's debts

limited partnership

a partnership with one or more general partners and one more more limited partners

Infringements

a patent, trademark, or copyright claim on a product

which of the following statements concerning a reorganization plan is true

a reorganization plan can be confirmed by the court over objection of some creditors if the court determines that the plan is feasible and fair.

Credit Collection Firms

a third party credit collector

Select the three names that close corporations are often called. a. closely held corporations b. family corporations c. unprofitable corporations d. benefit corporations e. privately held corporations f. S corporations

a,b,e

The express powers of a corporation come from which four sources? a. U.S. and state constitutions b. state laws c. the Revised Model Business Corporations Act d. the Uniform Commercial Code e. the articles of incorporation f. the bylaws g. the Uniform Express Powers Act

a,b,e,f

28. What is the meaning of the term respondeat superior? a. Let the master answer. b. Let the servant respond. c. Let both the master and servant respond. d. The agreement must be in writing.

a. Let the master answer.

29. Which of the following is an example of a hallmark of the fiduciary relationship? a. Loyalty b. Subservience c. Politeness d. Generosity

a. Loyalty

An __________ occurs if a principal approves or accepts the benefits of the actions of an otherwise unauthorized agent. a. agency by ratification b. agency by estoppel c. agency by independent action d. agency by intervention

a. agency by ratification

Once an agent is given _____ authority, that agent also has _____ authority to do whatever is reasonable to complete the task as instructed. a. express; implied b. express; absolute c. express; limited d. apparent; contractual

a. express; implied

Under the duty of ______ an agent has a duty to act solely for the benefit of his or her principal in all matters directly connected with the agency undertaking. a. loyalty b. subservience c. trust d. obedience

a. loyalty

. An agent's authority to act for a principal: a. may be actual or apparent. b. must always be in writing. c. can be expressed only.

a. may be actual or apparent.

The agency relationship is a fiduciary relationship and is based upon trust, and each party owes the other the duty to act with the utmost good faith. a. True b. False

a.True

The _________ is the law that specifies the procedural requirements that all federal agencies must follow in their rulemaking, adjudication and other functions.

administrative procedures act

bait and switch advertising

advertising a product at a very attractive price (the bait) and then informing the customer,once he/she is in the store, that the advertised product is either not available or is in poor quality. the customer is then urged to purchase (switched to) a more expensive item.

winding up

after partnership has been liquidated, second stage of termination of partnership completing all business and paying all debts

Under the ADEA, an employer can win a disparate impact case if it can show that the discriminatory decision was based on a reasonable factor other than​

age

The Age Discrimination in Employment Act protects

age 40 and older

which of the following are remedies available to a successful plaintiff under Title VII?

all are correct

AT&T wants to obtain additional rights to operate within the 700 MHz spectrum in the United States. The Federal Communications Commission (FCC) has rules and regulations that govern wireless spectrum auctions. The FCC is:

an administrative agency.

Household Furnishings, Inc., distributes its merchandise on an interstate basis. Under the commerce clause, Congress has the power to regulate

any commercial activity in the United States

If a company has violated antitrust laws

any private person or company that has been harmed by the violator can file a lawsuit to recover damages `

Limited Warranty

any promise that falls short of the full warranty - for example, a promise to repair or replace any defect in a washing machine from the start of the third year it was purchased until the end of the sixth year.

. When a third party reasonably believes a person has authority to act on another's behalf, even if that person does not have such authority, the situation is known as .

apparent authority

Which one of the following is a fiduciary duty of directors and officers? a) Duty of information b) Duty of care c) Duty of adherence d) Duty of consent

b

A company carries a Directors and Officers (D&O) liability policy containing a typical definition of loss and a $1M annual aggregate limit. The company suffers a covered loss result in payment of $300,000 of indemnity, $200,000 of defense costs, and a criminal fine of $25,000. After this loss, the company's remaining annual aggregate limit would be: a) $475,000 b) $500,000 c) $675,000 d) $700,000

b

A corporation normally has a fifty-year existence. a. True b. False

b

A customer of a painting contractor contends the painter made an unwelcome sexual advance while working in the customer's home. This claim would be covered by the painting contractor's Employment Practices Liability policy if the: a) Definition of an employee includes employees working away from the Insured premises. b) Policy is endorsed to cover 3rd-party discrimination claims. c) Painter is an independent contractor. d) Advances were unintentional.

b

A suit has been filed by the United States of American against a publicly traded industrial corporation. The suit alleges that the corporation has violated the Clean Air Act by filing false statements regarding the level of emissions and air pollution generated by the company. The suit individually names the Chief Executive Officer (CEO) & a board of directors as co-dependents with the corporation. The type of suit that has been filed is...? a) Class action suit b) Non-derivative suit c) Derivative suit d) Antitrust suit

b

Elliot is suing Acme, Inc., for a breach of contract, but because Acme has very little in assets, he asks the court to pierce the corporate veil and hold the officers personally liable. In which of the following situations would the court likely approve Elliot's request? a. The officers make their decisions based on information presented to them, but they have been unaware that the information is incorrect. b. The corporation was undercapitalized from the beginning and never had sufficient assets to operate as a viable business. c. The corporation has struggled to make a profit from the beginning. d. The officers loaned money to the corporation in an attempt to delay any adverse actions.

b

Fiduciary liability loss exposures arise mainly when beneficiaries of a plan make a claim against the plan officials for breach of their fiduciary duties. Which one of the following is a specific duty of a plan fiduciary? a) To act in a way that is solely in the best interests of the organization providing the benefits. b) To ensure that the plan's investments are sufficiently diversified to minimize the risk of large losses. c) To carry out duties in such a way that no investment plans will lose money for the beneficiaries. d) To minimize actions that comply with the plan documents but may not be in compliance with the law.

b

If a corporation cannot point to a document that articulates its express power, the corporation does not have the power. a. True b. False

b

Many D&O liability policies may contain a 3rd insuring agreement called Coverage C. Coverage C makes the corporation an entity for claims made against it for wrongful acts. Which one of the following explains why bother Coverage B, which insures the corporation, and Coverage C which also insures the corporation, may both be needed? a) Coverage C would cover individual directors and officers while Coverage B covers for reimbursement to the corporation. b) Coverage B covers for indemnification to its directors and officers while Coverage C covers for the corporation's wrongful acts. c) If the Insurance carrier were to decline coverage under Coverage B, the Insured would still be able to make claim under Coverage C. d) If the limits under Coverage B were exhausted the Insured would be able to proceed under the Coverage C provision of the policy.

b

Regarding sexual harassment claims, isolated incidents are insufficient from a legal standpoint to establish the existence of which one of the following types of work environments? a) Unpleasant b) Hostile c) Diverse d) Congenial

b

The "employment at will" legal dcotrine has allowed employers to terminate employment relationships with or without cause at any time. An exception to "employment at will" is: a) The practice of constructive discharge. b) The theory of implied contract. c) Claims for a hostile work environment. d) Retaliation type claims.

b

Under the Employee Retirement Income Securities Act (ERISA), the duties of a plan fiduciary include which one of the following? a) Supervision b) Diversification c) Record-keeping d) Non-disclosure

b

What is the difference in the coverage provided by a directors and officers liability insurance policy (D&O) and the coverage provided under the Commercial General Liability Coverage Form (CGL) and the Business Auto Coverage Form (BACF)? a) The D&O liability insurance policy provides coverage against indirect losses, while the CGL & BACF cover only direct losses. b) The D&O liability insurance policy provides coverage for wrongful acts that do not qualify as bodily injury, property damage, personal injury, or advertising injury. c)The D&O liability insurance policy provides coverage against direct losses, while the GL & BACF cover only indirect losses. d) The D&O liability insurance policy only provides remedies in the form of "actions", while the CGL & BACF pay cash.

b

What is the purpose of Coverage A under a Directors and Officers (D&O) liability policy? a) To indemnify the corporation for its own wrongful acts, if such indemnification is not required or permitted by law. b) To indemnify the individual directors and officers for their wrongful acts, if such indemnification is neither required nor permitted by law. c) To reimburse the corporation for sums that it must pay on behalf of its directors and officers , if such reimbursements is not required or permitted by law. d) TO reimburse the corporation for hte premiums paid to the D&O insurer if such reimbursement is not required or permitted by law.

b

Which one of the following is a specific duty of a fiduciary supported by the Employee Retirement Income Security Act (ERISA)? a) Obtain Certified Public Accountant-level training b) Carry out duties with the diligence of a prudent person c) Be a beneficiary of plan d) Administer the investment plan assets

b

When the principal grants an agent an exclusive territory, we say that the principal has created a(n) ____________ . a) territorial agency b) exclusive agency c) gratuitous agency d) agency by operation of law

b) exclusive agency

The most basic legal characteristic of the employer-employee relationship is that the employer has the right to a. deduct taxes. b. control the conduct of the employee. c. provide health care. d. deduct taxes, control the conduct of the employee, and provide health care.

b. control the conduct of the employee.

Ohio enacts a transportation statute that impinges on interstate commerce. This statute will be

balanced in terms of Ohio's interest in regulating a certain matter against the burden placed on interstate commerce

Business Trust

business governed by trustees who operate trust for beneficiaries limited liability, taxed like corporation

Federal administrative agencies are created:

by enabling legislation.

The corporation's internal rules of management are called the

bylaws

The corporation's internal rules of management are called the .

bylaws

A corporation is a legal entity: a. created by local ordinance b. created by an agency regulation c. created by state statute d. that naturally occurs when two or more people do business

c

A 35-year-old female was employed at a company for 5 years. During her term of employment the company began having financial difficulty and determined that they needed to layoff 5 of its 125 employees in order to stay in business. The company laid off the female employee and 4 other female coworkers. All of the women had a history of receiving positive employee evaluations. The laid-off workers filed a claim against the company alleging discrimination. Which one the following best describes the basis of the employment practices claim filed against the company? a) Sexual harassment b) Age discrimination c) Wrongful termination d) Retaliation

c

A company has had significant declines in an employee benefit plan. Significant abuses and underfunding have left the benefit plan on the brink of being insolvent. When employees file a suit against the company, which one of the following policies would respond? a) Employment practice liability policy b) Directors & Officers insurance policy c) Fiduciary liability insurance policy d) Employee Retirement Income Security Act (ERISA)

c

Directors and officers are considered to have met their duty of care if they have met 2 standards. Which one of the following is one of these standards? a) Maintaining and enforcing the corporate charter & bylaws. b) Approve important financial matters & corporate reports c) Act in a manner believed to be in the corporation's best interests d) Be involved in establishing the goals & policies of the organization

c

Directors and officers of a corporation owe special duties to the stockholders of that corporation. Those duties include: the duty of care; the duty of loyalty; the duty of disclosure; and the duty of obedience. What is the term used to describe these duties? a) Legal b) Moral c) Fiduciary d) Ethical

c

Directors' and Officers' fiduciary duties include the duty of: a) Trustworthiness b) Reliability c) Obedience d) Credibility

c

Under common law and the Securities & Exchange Act of 1934, no director or officer can sue which one of the following types of information to buy or sell corporation stock? a) Outsider information b) Public information c) Insider information d) Quantitative information

c

What is the name given to directors and officers coverage that covers only the individual liability of the insured directors and officers? a) Directors-only coverage b) Officers-only coverage c) Side-A only coverage d) Individuals-only coverage

c

What is the term applied to directors of a company who are not otherwise affiliated with that company and who do not have a pre-existing relationship with the company? a) Outside directors b) Inside directors c) Independent directors d) Dependent directiors

c

Which one of the following explains the difference between the "broad form" & the "named perils" form definition for wrongful acts in the employment practices liability insurance policy? a) The named perils form provides indemnity and defense cost while the broad form provides "all-risks" coverage. b) The named perils form provides coverage on a claims made basis while the broad form provides coverage on an occurrence basis. c) The named perils form provides a listing of offenses while the broad form provides a general description. d) The named perils form provides for wrongful acts on an "all-risks" basis while the broad form provides coverage for a brief listing.

c

Which one of the following federal laws gives workers and their families who lose their health benefits the right to choose whether to continue group health benefits provided by their group health plan for a limited period of time under certain circumstances? a) Family Medical Leave Act (FMLA) b) Fair Labor Standards Act (FLSA) c) Consolidated Omnibus Budget Reconciliation Act (COBRA) d) Employee Retirement Income Security Act (ERISA)

c

. Select two other types of debt that a corporation may have in addition to debt securities. a. accounts uncollectible b. notes receivable c. notes payable d. accounts receivable e. accounts payable

c,e

Which of the following statements regarding a principal's duty to pay unemployment taxes is true? a. A principal must pay unemployment taxes for both an employee and an independent contractor. b. A principal must pay unemployment taxes for an independent contractor but not for an employee. c. A principal must pay unemployment taxes for an employee but not for an independent contractor. d. A principal is not required to pay unemployment taxes for either an employee or an independent contractor.

c. A principal must pay unemployment taxes for an employee but not for an independent contractor.

nless state law is to the contrary, an agent may lawfully conceal ______ of the principal. a. the existence b. the identity c. the existence and identity d. nothing regarding

c. the existence and identity

31. In an agent's negotiations on behalf of an undisclosed principal: a. no agreement is binding until the identity of the principal is provided. b. the agent cannot be held liable for the breach of a principal. c. the principal will be bound by any contract the agent has the authority to make. d. the principal is bound to any agreement, even if the agent acts without authority.

c. the principal will be bound by any contract the agent has the authority to make.

What must termination of a franchise have?

cause

Our government has a system of __ and balances that allow each branch to limit the actions of the other two branches. For example, the __ branch can enact a law, but the __ branch can veto that law.

checks, legislative, executive

the Toxic Substances and Control Act regulates

chemicals other than pesticides, food, drugs, and cosmetics

The type of corporation most at risk for piercing the corporate veil is the:

close corporation.

Most corporate enterprises in the United States can be considered:

close corporations.

Select the three names that close corporations are often called.

closely held corporations family corporations privately held corporations

Article 1, Section 8, of the U.S. Constitution impacts businesses greatly and is referred to as the __ clause.

commerce

Joint Stock Company

company members hold transferrable shares so that the goods of the company are held in the name of the partners mixture of corporation and partnership; shareholders/members own but have personal liability

which of the following questions could an interviewer safely ask a candidate in a job interview

could you carry a 100-pound weight, as required by this job?

A corporation is a legal entity:

created by state statute.

A common defense used to protect directors and officers against claims that allege a breach in the duty of care is the: a) Ultra vires rule b) Securities & Exchange Act of 1934 c) CLass-Action Fairness Act of 2005 d) Business judgment rule

d

A corporate officer serves on the board of directors at a local, not-for-profit charity organization at the request of his corporation. If the risk management goal of the corporation is to provide coverage for this officer while preserving the aggregate limit of the corporation's policy from any claims paid with respect to the officer's service to the not-for-profit, which is their best alternative? a) The corporation should assume the officer has adequate coverage under the policy for the non-profit organization and take no further action. b) The corporation should cover the officer by adding an endorsement to its existing directors and officers (D&O) policy. c) The corporation needs to take no other action as this officer is covered by its existing directors and officers (D&O) policy. d) The corporation should cover the officer with an outside directors liability policy.

d

A corporation owned by its shareholders is controlled by its: a) Management b) Board of Advisors c) Proxies d) Board of Directors

d

A plan fiduciary who fails to act according to plan documents has most clearly breached which one of the following fiduciary duties? a) Prudence b) Loyalty c) Diversification d) Adherence

d

A specific observable action to discriminate against a person or class of persons is: a) Overt impact b) Disparate impact c) Disparate treatment d) Overt discrimination

d

Directors (& sometimes officers) owe a duty of loyalty to the: a) Federal Securities and Exchange Commission b) Employees that support the corporation they serve c) Customers of the corporation they serve d) Stockholders who elect them

d

Jean is a director on the board of an apparel promotion company. Towards the company, Jean owes a duty of: a) Undivided time b) Profitability c) Divided loyalty d) Undivided loyalty

d

Jill has bad allergies and gets weekly shots to combat their effects. She wants to change jobs, but fears that her new employer's group health insurer will not cover her allergy expenses. However, her new employer tells her that the Federal law known as the Health Insurance Portability & Accountability Act (HIPAA) takes care of that for her. How is Hill helped by HIPAA in this instance> a) HIPAA makes sure that the health insurer can collect na appropriate premium for the exposure. b) HIPAA provides for a "set-aside" fund to cover Jill's allergy expenses c) HIPAA allows for coverage of Jill's allergy expenses after she has been employed for year. d) HIPAA limits the application of the exclusion of "pre-existing medical conditions."

d

Sarah owns half of Smith Realty, Inc., and her brother, Bill, owns the other half. Sarah routinely uses the company car, which is supposed to be only used for taking clients to view property, to run her personal errands. She also routinely uses company funds for personal uses, but always pays the money back in to the corporation. When Smith Realty failed to pay its lawyer for work completed on its behalf, the lawyer sued both Smith Realty as well as Sarah and Bill personally. In this situation the court likely will: a. dismiss the case because Smith Realty is a close corporation. b. not allow Sarah and John to be sued individually because Smith Realty is a close corporation. c. not pierce the corporate veil because there was no commingling of interests. d. pierce the corporate veil due to Sarah's commingling of interests.

d

The named Insured in a fiduciary liability policy is: a) The plan trustee b) The Insured plan c) The plan administrator d) The sponsor organization

d

Tom, Bill, and Adam are the 3 largest shareholders in ABC Corporation. Recently, the price of ABC's stock has dropped severely. Tom, Bill, and Adam decide to bring a suit in their own names against the directors. In that suit, Tom, Bill, and Adam allege that the directors failed to review the company's financial statements and that they also failed to properly monitor the company's affairs. The suit being brought by Tom, Bill & Adam is referred to as: a) Derivative suit b) Nuisance suit c) Unnecessary suit d) Non-derivative suit

d

What are the 2 ways that an employment practices liability (EPL) policy defines "wrongful acts?" a) "All-risks" & named perils b) Broad form & "all-risks" c) Named perils & named exclusions d) Broad form & named perils

d

What does ERISA stand for? a) Employee Retirement Income Stability Act b) Employer Retirement Income Security Act c) Employee Retirement & Insurance Security Act d) Employee Retirement Income Security Act

d

Which of the following is true regarding an agency relationship? a. The least common form of agency relationship is the employer-employee relationship. b. An agent may not be an independent contractor. c. An enforceable agency agreement may not be implied. d. Agency may be established by estoppel.

d. Agency may be established by estoppel.

Which of the following is true regarding an independent contractor's entitlement to fringe benefits offered by a principal? a. An independent contractor is generally eligible for the same fringe benefits provided to employees. b. An independent contractor is generally eligible for the same medical insurance provided to employees but not for retirement benefits. c. An independent contractor is generally eligible for the same retirement benefits provided to employees but not for medical benefits. d. An independent contractor is not generally eligible for the fringe benefits provided to employees.

d. An independent contractor is not generally eligible for the fringe benefits provided to employees.

n the past, Gale, acting as a purchasing agent for Four Seasons Furniture, has been permitted to enter into contracts up to $10,000. _____ authority allows Gale to continue entering into such transactions. a. Electronic agents' b. Vicarious liability c. Agency by estoppel d. Usual

d. Usual

An agency relationship can be created by a. an express contract. b. an implied contract. c. an express contract, but not an implied contract. d. both by an express contract and an implied contract.

d. both by an express contract and an implied contract.

hanning leads Dane to believe that Emerson is Channing's agent. Thereafter, Channing is prevented from denying it according to agency by: a. ratification. b. conduct. c. agreement. d. estoppel.

d. estoppel.

An agent may bind the principal due to the agent's ______ authority. a. express b. implied c. apparent d. express, implied, or apparent

d. express, implied, or apparent

A principal may be held liable for the torts of a(n) ______ only in extraordinary circumstances, usually involving highly dangerous acts or nondelegable duties. a. agent b. servant c. employee d. independent contractor

d. independent contractor

One of the first steps in the incorporation process is

deciding where to incorporate

One of the first steps in the incorporation process is ______

deciding where to incorporate

This case deals primarily with the right to ______

develop derivative works

In this case, Macy's use of the similar design ______ have an ______ on the _______, which is often considered the most important factor in the fair use test.

did effect market

Macy's use of the fabric design _______ fall within the protections of the fair use exception.

did not

The Chevron standard requires the court to ask two questions: first, did Congress ______ address the issue in dispute? If so, the statutory language ________. If the statute is ___________or ambiguous, is the agency's interpretation of it ? If so, the court should give deference to the agency's interpretation of it___________.

directly, prevails, silent, reasonable

four types of illegal activity under the Civil Rights Act of 1964

disparate treatment, disparate impact, hostile environment, and retaliation

Corporations ____ enjoy many of the same rights and privileges under state and federal law that people enjoy.

do

The Constitution sets out the authority and the limits of the branches of the government. The term checks and balances means that

each branch of government has some power to limit the actions of the other branches

The right of a government body to take ownership of real estate for public use is called...

eminent domain

Under OSHA

employers must keep records of all workplace injuries.

Federal Food, Drug, and Cosmetic Act

enacted in 1938, it gives the FDA authority to regulate the safety of food, drugs, and cosmetics

National Environmental Policy Act (NEPA)

enacted in 1969, it encourages productive harmony between people and the environment and creates a method of assessing environmental risks

Fair Credit Reporting Act

enacted in 1970, it protects consumers in the collection and reporting of their personal credit information Three major CRAs Experian TransUnion Equifax

Types of Agencies

executive and independent

If someone uses a small amount of a copyrighted work for a nonprofit, educational purpose, it may be a legal use under the __________ doctrine.

fair use

dissolution

first stage in termination of partnership

Adulterated Food

food that contains any poisonous substance that makes it harmful to health.

foreign vs domestic organizations

foreign means operating outside state it was formed

Administrative agencies sometimes are referred to as the ______ branch of government.

fourth

Chain Style Business Operation

franchisor helps franchisee establish a business using name and practices/methods (ex. Taco Bell)

Distributorship

franchisor licenses franchisee to sell franchisor's product in specific area (ex. Budweiser distributorships)

Manufacturing Agreement

franchisor provides franchisee with technical knowledge to manufacture franchisor's product (ex. Coca Cola sells its syrup to manufacturing companies to make its soda)

Private equity capital

funds invested by professional firms for an existing business venture

private equity capital

funds invested by professional firms for an existing business venture

the disposal of nonhazardous solid waste

generally regulated by state law, but the federal government sets guidelines that must be followed.

Carissa writes a novel but does not register a copyright for the novel. Carissa e-mails a copy of the novel to her friend Kevin. Carissa:

has a valid copyright on the novel even though she didn't register it.

Amanda decides to stay in the beach house in Florida for 4 days after her 1 week lease expires. This is known as...

holdover tenancy

What determines if a franchisor is liable for torts of its franchisees?

how much control it exerts

At the conclusion of a hearing, the ALJ issues a(n) _______ order. If no one objects, this becomes the __________ order. initial, final

initial, final

Maxine lost her job as an electrical engineer with a large company that had provided health insurance benefits for Maxine and her family. She now

is protected under COBRA, which allows her continued health insurance coverage for 18 months as long as she pays the cost.

Trade dress

is subject to the same protection as trademarks. A major consideration in trade dress infringement cases is whether consumers are likely to be confused by the allegedly infringing use

what organizations are limited liability partnerships most often used?

law firms and accounting firms

Under the Constitution, the legislative branch of the government

makes the laws

Federal Food, Drug, and Cosmetic Act of 1938

manufacturers must label cosmetics truthfully and correctly, and the act requires that products which have not been test for safety must be labeled accordingly.

The Environmental Protection Agency conducts meetings to discuss the possibility of creating additional regulations within the next five years. Under the Government in the Sunshine Act, the meetings:

may be closed to the public.

If an agency failed to follow proper rulemaking procedures when it issued the final rule, the rule ________ binding.

may not be

how many shareholders can be in an S corp?

no more than 100

Cooperative form of business organization

organization formed by individuals or other business organizations to market products- pool resources to gain an advantage in the market unincorporated= partnerships (joint liability) incorporated= limited liability like corporation

A condominium form of ownership is officially established when the...

owner records a declaration in the public record

What powers do the states have to regulate or prohibit private activities? a. Police powers b. Zoning powers c. Sovereign powers d. Oversight powers

police powers

Mary claims that a Nebraska state statute infringes on her "procedural due process" rights. This claim focuses on

procedures used in making decisions to take life, liberty, or property

FCRA

protects consumers against inaccurate credit reporting and requires that lenders and other creditors report correct, relevant, and up-to-date information. The act provides that consumer credit reporting agencies may issue credit reports to users only for specified purposes. Legitimate purposes include the extension of credit, the issuance of insurance policies, and in response to the consumer's request.

reasonable accommodation under the ADA

providing part time schedules to accommodate the disabled worker

During the comment period of the rulemaking process, the _______ is allowed to express opinions or views about a proposed rule. These comments may be in writing or ___________ if a hearing is held.

public, oral

When an agency formally creates a new rule, the first step is to:

publish a notice in the Federal Register

When assessing whether an agency action was arbitrary or capricious, courts generally look at several factors including whether the agency failed to provide a _____ explanation for its decision; changed its prior policy without _____ ; considered legally _____ factors; failed to consider a _____ fact; or made a decision to the____ evidence.

rational, justification, inappropriate, relevant, contrary.

if a firm thinks an agency's request for documents is unreasonable, it may refuse to comply with the request. In such situations, the agency may use a subpoena or ___________ to obtain the information. A subpoena ___________ is an order compelling a witness to appear at an agency hearing. A subpoena __________ compels an individual to bring documents to the agency.

search warrant, ad testificandum, duces tecum

Carbon Energy Corporation regularly expresses opinions on political issues. Under the First Amendment, corporate political speech is given

significant protection

limited liability company (LLC)

similar to s corporation but without the special eligibility requirements. LLCs were introduced in Wyoming in 1977 and were recognized by the IRS as a partnership for federal income tax purposes in 1988

in some states, an employer can discipline or fire employees for

smoking, posting unflattering comments on social media, and dating coworkers

A law that limits the liberty of all persons to do something may violate

substantive due process

S corporation

special type of corporation that is permitted to be taxed like a partnership all corporations start as C corporations but can elect to be S corporations under FEDERAl law

common stock

stock that gives the owner a residual position in the financial structure of the business along with the greatest risk of loss and the greatest potential for gain

chapters 7 bankruptcy is also known as

straight bankruptcy

If property is held by two or more owners as survivorship tenants, the interest of a deceased cotenant will be passed to the...

surviving owner or owners

A tenant wishes to occupy a rent house immediately and there is not enough time to negotiate or execute a lease. The landlord permits the tenant to move into the house with the understanding the tenant will be required to vacate the house if a lease cannot be executed. This is...

tenancy at will

Oklahoma enacts a law requiring all businesses in the state to donate 10 percent of their profits to Protestant churches that provide certain services to persons whose income is below the poverty level. PriceLess Stores files a suit to block the law's enforcement. The court would likely hold that this law violates

the establishment clause

What is required of shareholders in an S corp?

they must report their income on personal tax forms

On the Border Mexican restaurants all have the same terra-cotta and turquoise color scheme, with posters of bullfighters and maps of Mexico on the walls. The restaurants also have identical furniture and menus, the wait staff wear similar types of clothing, and the same music plays in the background. The restaurants have a unique ambience, known in legal terms as their:

trade dress

Silverado Foods, Inc., wishes to obtain trademark protection for a product it sells that it has named Salad Dressing, but will probably be unable to do so because the phrase is generic. A color scheme can never qualify for trademark protection.

true False

A legal arrangement where the title to real property is held to protect the interests of a beneficiary is a...

trust

partnership

two or more people legally agree to become co-workers of a business

cts that are beyond the express or implied powers of a corporation are called ______ acts

ultra vires

The express powers of a corporation come from which three sources?

us and state constitutions articles of incorporation bylaws

When a franchisee agrees to pay a sum of money to franchisor what else does that include?

what percentage of income from sales will go to franchisor

Age discrimination act

will not protect a police officer

Samuel writes a book and files for copyright protection in the United States. In order for Samuel to receive copyright protection in France and Germany, Samuel:

will receive international copyright protection pursuant to the Berne Convention.

What if the facts were different? If Macy's purchased the fabric from United Fabrics and then used it to create handbags, which it then sold, Macy's ________ have violated United Fabrics' copyright.

would not

Sullivan Consumer Products Co. asks its employees to apply four tests in determining whether their behavior violates Title VII with respect to sexual harassment. Which of the following is one of the four tests?

would you like your behavior reported in your local newspaper

In this case, United Fabrics satisfied its burden of proof by introducing evidence of the copyright registration. Accordingly, the burden to rebut the presumption of validity of the copyright registration shifted to __________.

Macy's

What is a grant by the government permitting the inventor exclusive use of an invention for a specified period?

A patent

Notary public:

A public official authorized to attest to the authenticity of signatures.

The law that specifies the procedural requirements that all federal agencies must follow in their rulemaking, adjudication, and other functions is the

Administrative Procedure Act

Corporation by estoppel

An entity that has not attempted to incorporate, but holds itself out to others as a corporation

Supremacy Clause

Article VI of the Constitution, which makes the Constitution, national laws, and treaties supreme over state laws when the national government is acting within its constitutional limits.

[15-01] Administrative agencies often provide needed continuity and consistency in the formulation, application, and enforcement of rules and regulations governing business. By doing so, these agencies are providing ______. A. specificity B. expertise C. protection D. regulation E. services

B

[15-02] Which of the following statements is true of delegation of quasi-legislative authority to administrative agencies? A. The delegation of authority should be general and unlimited to ensure smooth running of the administrative processes. B. The delegation of authority to an agency must provide that the agency's power to act is limited to areas that are certain. C. The delegation of authority should contain broad language to avoid confusion in the performance of an action. D. The delegation of authority involves grant of substantial discretion to the judiciary. E. The delegation of authority allows courts to interfere with the discretion given to the agency and can substitute their judgment for that of the agency.

B

Employment agreement

Most employees in the United States work according to the principle of employment-at-will.

Commerce Clause

Congress's broadest powers are derived from the Commerce Clause. The clause in the Constitution (Article I, Section 8, Clause 1) that gives Congress the power to regulate all business activities that cross state lines or affect more than one state or other nations.

Real Property

Consists of land and everything affixed to it - Land and Structures - Airspace and Subsurface Rights - Plants and Vegetation

Consumer vs Business Sales of Contract

Consumer sale: Sale of goods act applies always. - Buyers intends to sue good primarily for consumer purposes, household, domestic, personal purposes - Buying coffee maker for house Business Sale: - Sale of goods act applies ness parties agree to modify or exclude. Buying coffee for lunch room. Act applies unless its modified or excluded

Permissable Uses of Land

Dividing available land into districts according to present and potential uses

What is the most commonly used business organization today?

Limited Liability Company (LLC)

Tenancy at Sufferance

Mere possession of land without right

To receive a patent, an invention must be what?

Novel, non-obvious, useful, & patentable subject matter

Public policy tort

Public policy tort permits a fired employee to sue an employer if the firing harmed the public good in some way.

price discrimination

Setting prices in such a way that two competing buyers pay two different prices for an identical product or service.

What six categories cannot be valid trademarks?

Similar to an existing mark, Generic Trademarks (shoe, book), Descriptive Mark (low-fat, green), Names (Obama) unless associated with another word, Deceptive Marks, and Scandalous or immoral trademarks (Mary Jane).

Sole Proprietorship

Simplest form of business organization. The owner is the business.

What is PTO?

The Patent and Trademark Office

Inverse Condemnation

The gov't simply takes private property without paying compensation - forces the landowner to sue for compensation

predatory pricing

The pricing of a product below cost with the intent to drive competitors out of the market.

Joint Tenancy

The tenant must pass the interest to surviving joint tenants

Under the Uniform Computer Information Transactions Act (UCITA), what would be the results if an electronic agent agrees to a click-wrap agreement?

The use of the electronic agent would be liable for the agreement

Which of the following is true regarding respondeat superior?

Under that theory, a principal may be liable for not only the contracts but also the torts of its agents.

Most state laws, with respect to protection of information of a commercial value, are based on the:

Uniform Trade Secrets Act

Unions

Union members have specific procedures built into their contracts and cannot be hired or fired at will.

The court likely found for

United Fabrics

False or Misleading Claims (Federal Competition Act)

When a person for purpose of promoting, directly or indirectly, the supply or use of a product or for purpose of promoting ,directly or indirectly, any business interest, by an means whatever, makes a representation to public that is false or misleading in a "material" respect - "Material" must apply to statements that entice prospective purchases to place of business or influence customer decision to purchase item - Broad terms to capture those making false statements intentionally, but those who push limits of truth in impressions given to buyers - Falsity judged by objective test, misleading is measured by impression formed on ordinary member of group of persons statement is directed at. Important: Impression created by advertisement in entirety including illustrations and disclaimers

A small non-profit homeless shelter provides its services to a local community. Several homeless occupants allege that the shelter director administers preferential treatment in the distribution of food, toiletries, and cots based upon race. This claim against the shelter would be covered under a(n): a) Employment practices liability policy with added 3rd-party discrimination coverage. b) Directors & officers policy with both Coverage A & Coverage B. c) Directors & Officer liability policy with no employment practices exclusions. d) Employment practices liability policy with a broad form definition of wrongful acts.

a

Coverage B of the insuring agreement in the directors and officers (D&O) liability policy is also called: a) Indemnification coverage b) Direct coverage c) Individual coverage d) Entity coverage

a

With respect to defined-contribution retirement plans, the size of employee benefits are dependent upon the plan's earnings. This can lead to class action lawsuits covered under a typical: a) Fiduciary liability policy b) Directors & Officers liability policy c) Employment practices liability policy d) Employee retirement income security policy

a

Corporation

a legal entity formed by issuing stock to investors (shareholders)

corporation

a legal entity with authority to act and have liability apart from its owners

Disclaimer

a seller's statement denying the offer of a warranty on a product

Legislative rules

agency rules that affect substantive legal rights and carry the same weight as congressionally enacted statutes

Termination of an Easement

all parties must agree OR there is proof that the easement has been abandoned for a substantial amount of time

an employer would be expected to make reasonable accommodations for a disabled worker, such as

allowing a part-time schedule

An administrative rule is a statement of general or particular _______ and ________ effect designed to implement, __________ , or prescribe law and policy.

applicability, future, interpret

What is the unique term for the Named Insured in a fiduciary liability policy? a) Fiduciary organization b) Sponsoring organization c) Benefit organization d) Employee organization

b

What was the reason for the 1988 passage of the "Worker Adjustment & Retraining Notification Act?" a) To make mass layoffs of workers easier for employers b) To mitigate the effects of mass layoffs c) To outlaw mass layoffs of workers by employers d) To provide new training for current employees

b

XYZ, LLC has a 401-K plan for its 401-K plan for its employees. Employees may contribute up to 10% of their salary on a pre-tax basis to the plan and XYZ, LLC promises to match the first 4% of each employee's contribution. However, XYZ has been experiencing some severe money troubles for several years. As a result, the Chief Financial Officer ordered that the 401-K's. When they get their account statements, they see that the contributions have not been made and file a suit against XYZ, LLC. Explain whether or not the fiduciary liability policy that XYZ has will cover the defense and any potential judgement arising out of this lawsuit. a) No, the fiduciary liability policy will not cover XYZ, LLC for any expenses arising out of this suit - defense expenses or any potential judgment. The policy contains a specific exclusion of any intentional acts on the part of the Insured. b) No, the fiduciary liability policy will not cover XYZ, LLC for any expenses arising out of this suit - defense expenses or any potential judgment. The policy contains a specific exclusion for the Insured's failure to properly fund an employee benefit plan. c) Yes, the fiduciary liability policy will cover both the defense expenses and any potential judgment against XYZ, LLC that arise out of this suit. d) Yes, the fiduciary liability policy will cover the defense expenses, but not cover any potential judgment against XYZ, LLC that arise out of this suit.

b

there is no difference between a public corporation and a publicly held corporation. a. True b. False

b

When would the aided-in-accomplishing theory likely be asserted? a. By a defending employer in an attempt to show that although an employee was acting within the scope of employment, the employer should not be held responsible for the employee's actions because the employee was aided by a nonemployee b. By a plaintiff in an attempt to show that even if an employee was acting outside the scope of employment, the employer may be liable for the employee's action because the employee was aided by the agency relationship c. By a defending employer in an attempt to show that an employee was acting outside the scope of employment and that the employer should not, therefore, be held liable for the employee's actions d. By a plaintiff in an attempt to show that an employee was acting within the scope of employment and that the employer should, therefore, be held liable for the employee's actions

b. By a plaintiff in an attempt to show that even if an employee was acting outside the scope of employment, the employer may be liable for the employee's action because the employee was aided by the agency relationship

Which of the following terms refers to a slight deviation from the employer's business that is still within the scope of employment? a. Frolic b. Detour c. Errand d. Chore

b. Detour

A gratuitous agent may be held liable to the principal for breach of the agency contract. a. True b. False

b. False

Which of the following is NOT a duty the agent owes the principal? a. Performance b. Superior competence c. Notification d. Loyalty e. Obedience f. Accounting

b. Superior competence

Trey owns 250 shares of common stock in a toy-store company. This means that he owns a percentage of the company based on the proportion of shares he owns out of the total shares issued by the company. With this ownership he also acquires rights to: a. vote and receive a fixed sum on a fixed date. b. vote and receive dividends before any other creditors. c. vote. d. determine the amount of dividends that will be paid.

c

Mckinley, as an agent, entered into a contract with Kazumi on behalf of Adley, but without having obtained Adley's authority. Which of the following statements is true in this situation? a. Adley, the principal, is not bound nor is the agent Mckinley bound by the contract. b. Adley, the principal, is bound, and the agent Mckinley may be personally liable. c. Adley, the principal, is not bound, but the agent Mckinley may personally liable. d. Neither Adley, the principal, nor the agent Mckinley is bound if the contract is oral; but if the contract is written, both Adley and Mckinley are bound.

c. Adley, the principal, is not bound, but the agent Mckinley may personally liable.

Which of the following is NOT a duty the principal owes the agent? a. Compensation b. Reimbursement and indemnification c. Substantial ownership in the business d. Cooperation e. Safe working conditions

c. Substantial ownership in the business

Cheryl owns one of 20 town houses in the Luxor Lakes development in fee simple, along with a 5 percent ownership share in the parking facilities, recreation center, and grounds. What kind of property does Cheryl own?

condominium

If competitors act in concert but without an explicit agreement, they are engaged in

conscious parallelism

Sandra lives in the elegant Howell Tower. Sandra's possessory interest is evidenced by a proprietary lease. What does Sandra own?

cooperative unit

What cannot be classified as real property

cooperative unit ownership

An employee benefit plan fiduciary has a duty of prudence, meaning that: a) The fiduciary's actions must be solely in the best interests of the plan and all of its participants and beneficiaries. b) The fiduciary must ensure that the plan's investments are sufficiently diversified to minimize the risk of large losses. c) The fiduciary must act according to the plan documents and applicable law. d) The fiduciary must carry out the duties with the skill, prudence, and diligence of a prudent person familiar with such matters.

d

Most corporate enterprises in the United States can be considered: a. public corporations b. S corporations c. benefit corporations d. close corporations

d

Which one of the following is an important sattute for organizations seeking to identify & analyze fiduciary liability loss exposures? a) Fair Labor Standards Act b) Equal Employment Opportunity Commission Acts c) Americans with Disabilities Act d) Employee Retirement Income Security Act (ERISA)

d

The main difference between independent regulatory agencies and executive agencies is that:

executive agencies are subject to the authority of the president to a greater degree than independent regulatory agencies.

Congress enacts the Act to Restrict Commercial Speech (ARCS). The ARCS will be considered valid

if it directly advances a substantial government interest but goes no further than necessary

Under which circumstances is it legal to charge a lower price to a particular buyer

if the costs of serving that particular buyer are lower

A trustee can void any transfer that meets all of the following requirements EXCEPT

if the pre-petition payment was made in the ordinary course

domestic corportaion

in a given state, a corporation that is organized under the laws of that state

a refusal to deal

is a rule of reason violation of the Sherman Act and is illegal if it harms competition

Under the Americans with Disabilities Act, a person with a disabling illness

is considered disabled, even if the illness is under control

Gail publishes an article in Hear This! Magazine that harms Imogene's good reputation. The First Amendment protects Gail and other individuals who engage in speech that harms others' good reputations

none of the time

Today most ultra vires acts involve:

nonprofit corporations

The _____, or owners, of a corporation elect the _____ who then hire the _____ to run the daily operation

shareholders, directors, officers

Amanda signs a one week lease for a beach house in Florida on April 1- April 7. This type of lease is...

tenancy for years

Dian, a U.S. citizen, is the owner of Eagle, Inc. The Bill of Rights embodies a series of protections for Dian against various types of interference by

the government only

Judicial Review

the power of the judiciary to declare a legislative or executive act unconstitutional

A New Hampshire state law that directly conflicts with a federal law is invalid under

the supremacy clause

When there is a direct conflict between a federal and a state law, the state law is rendered invalid.

true

Easement in Gross

Non-adjacent land

The First Amendment protects Ira and other individuals who engage in speech that violates state criminal laws

None of time

To become an S corporation, a corporation must meet specific criteria, with restriction on the ______ of shareholders, as well as the types of _____ that can be issued.

Number Stock

Dissociation

Occurs when a partner ceases to be associated in the carrying on of the partnership business.

Subject to Error Prices

Provides protection only in context of catalogue sales, since not printed regularly and some p protection reasonable for sellers - Reviewable matter meaning due diligence defence applies and sellers should correct errors quickly and in manner consistent with original promotion.

Tests and Testimonials

- Accurately stated and current, person providing testimonial actually used or evaluated product - If advertiser uses actor to present hypothetical user, statements made measured by general revisions dealing with false or misleading claims - Tests carried out prior to promotion, if conducted by third party, permission to draw from tests or must already be in public domain

Sale of Goods Act

- Aren't many changes to act since consumer protection has expanded dramatically, plays well to voters, making it a priority to politicians - Implies terms into sales contracts (conditions and warranties) - Implied terms will be interpreted as part of contract since court implies them - Helps determine when title passes form seller to buyer, provides remedies for breaches

Quebec Company Common Selling Telemarketing Techniques

- Company was business's regular suppler looking to obtain renewal for services - Order was already pre authorized by someone else in company - Purpose of call was simply to verify address, when in fact it was to obtain order confirmation - Purchase was required to comply with new government legislation

Price Fixing

- Conspiring with competitors to fix the prices charged for goods or services - Criminal Offence under Competition Act - Every person commits an offence who, with competition of that person with respect to a product, conspires, agrees or arranges to fix, maintain, increase or control price for supply of product - 14 years imprisonment max, fine max of 25 mil.

Pyramid Schemes

- Genuine business activity not obvious - Unstable, inevitably, those joining receive little or no value if late to the game Illegal under Competition Act if: - Participants pay money for right to receive compensation for recruiting new participants - Participant required to buy specific quantity of products, other than at cost price, for purpose of advertising, before participant is allowed to join the plan or advance within the plan - Participants knowingly sold commercially unreasonable quantities of product or products (inventory loading) - Participants not allowed to return products on reasonable commercial terms

Online Sales

- Must comply with laws applying to traditional retailers in provisions of Sale of Goods Act, consumer protection legislation, Competition Act, Canada anti-spam legislation and common law principles applying to business relationship lie contract and tort - Legal issues include websites coming and going and physical location of vendor is unknown, online retailers collect and use private information and must be careful in complying with laws regarding collection use storage, disclosure of public or private, personal, and financial info, hard to determine-jurisdiction online retailer carries business in.

Price Conspiracies

- Price is most competitive variable in marketplace - Allows buyers to make informed decisions amongst producers and competitive products - Objective of Competition Act is to promote a level playing field with respect to pricing, ought to be able to negotiated at all levels of distribution - Criminal offence of fixing and bid rigging, price maintenance is reviewable activity

Refusal to Deal

- Producer refuses to sell to particular retail chain, because chain has history of promoting products that are competitive with producer products, even though chain willing and able to meet reducers conditions of sale - Reviewable if producer has adequate inventory of product and it refuses to sell to chain substantially lessens or prevents competition

Double Ticketing

- Two or more prices on product, must be sold at lower of those prices - To do otherwise is criminal offence - Extends to in store promotions and displays, prices listed in store computers, if consumers intentionally move goods (or change labels) its fraud

The Practical Significance

- administrative law is created by administrative agencies that regulate many areas of our government, community, and businesses - aa's pass regulations that are binding just like laws passed by congress

Agency Powers and Constitution

- legislative rules : acts as legally binding as laws passed by congress - executive controls : issue warrants/fines - judicial controls : exhaustion doctrine, party seeking court review must first exhaust all administrative remedies before suing - interpretive rules : not enforceable, previews of where the agency may be headed in terms of creating rules

Adjudication

- negotiated settlements - formal complaints - role of the administrative law judge (chinese wall procedure) - hearing procedures - agency orders - appeals (federal appellate court)

Rulemaking

- notice and comment rulemaking: involves three steps 1. notice of the proposed rulemaking 2. comment period 3. final rule - informal agency action/interpretive rules: exempt from apa does not establish legal rights

disadvantage of franchising

-large start-up costs -shared profit -management regulation -coattail effects -restrictions on selling -fraudulent franchisors

advantages of corporations

-limited liability -ability to raise more money for investment -size -perpetual life -ease of ownership change -ease of attracting talented employees -separation of of ownership from management

advantage of franchise

-management and marketing assistance -personal ownership -nationally recognized name -financial advice and assistance -lower failure rate

advantages of partnerships

-more financial resources -shared management and pooled skills and knowledge -longer survival -no special taxes

conglomerate merger

-unites firms in completely unrelated industries in order to diversify business operations and investments -a soft drink company and a snack food company

disadvantages of partnerships

-unlimited liability -division of profits -difficult to terminate -disagreement among partners

What are the 5 specialized forms of business organization?

1) Cooperative 2) Joint Venture 3) Joint Stock Company 4) Business Trust 5) Syndicate

3 General functions of the Constitution

1) It establishes a structure for the federal government: creates three coequal branches: legislative, executive and judicial 2) It delegates enumerated and limited powers to each coequal branch of federal government 3) It provides procedural protections to citizens, persons and business firms

What 3 things are in a franchise agreement?

1) States that franchisee is going to pay a sum of money to franchisor 2) Where the franchise will be located 3) Certain business standards that must be met and practices that are forbidden

What are the 2 disadvantages for Corporation?

1) double taxation as a C corporation if it doesn't qualify for S corporation 2) formalities required in establishing and maintaining corporate existence (corporate veil can be pierced)

What are the 4 advantages to limited liability company?

1) limited liability for members/managers 2) flexible tax treatment 3) flexible management structure with few required formalities 4) potential for perpetual duration

What are the 4 advantages to Corporation?

1) limited liability for shareholders 2) ease of raising capital by issuing (selling) stock 3) generally free transferability of ownership 4) can have perpetual duration

What 5 advantages does the FRANCHISOR have in franchise agreements?

1) lower risk in opening a franchise instead of a non-franchise location 2) increased income for every franchise started 3) motivated management 4) speed of growth 5) easier supervision

What are the 5 qualities of a corporation?

1) parties must file form with Secretary of State to create 2) owners are called shareholders and have liability limited to amount of investment in corporation 3) activities of the corporation are managed by officers and directors 4) profits taxed as income to corporation plus income to owners/shareholders (double taxation) 5) "S" corporation can avoid double taxation

What are the 6 qualities of a limited liability company?

1) parties must file form with Secretary of State to create and usually adopt an Operating Agreement to govern the affairs of the business 2) Business name must include "limited liability company or LLC" 3) the owners are called members (usually no limitation to the number of members or type of owners) 4) activities under LLC are managed by members or managers 5) liability of members for business liabilities is limited to the loss of capital contribution 6) *can choose to be taxed as a sole proprietorship, partnership, or corporation*

What are the 2 disadvantages to sole proprietorship?

1) personal liability for all business debts/obligation/losses/liabilities 2) funding limited to personal funds and loans

What are the 2 disadvantages of General Partnerships?

1) personal liability for all business debts/obligations/losses/liabilities, including those incurred by other partners on behalf of partnership 2) duration is generally more limited

The 3 standards of judicial review

1) rational basis review 2) intermediate-level scrutiny 3) strict scrutiny

Executive powers that affect business

1) the power to carry out laws made by Congress 2) the power to enter into treaties (subject to Senate approval) and carry out foreign policy 3) the power to appoint federal officers and judges (also subject to Senate approval)

Forms of Express Warranty

1. Oral and written representations 2. Descriptions of goods or services 3. Representative Samples and models 4. proof of history of the past quality of the goods

5 Types of Deeds

1. Warranty Deed 2. Special Warranty Deed 3. Quitclaim Deed 4. Grant Deed 5. Sheriff's Deed

qualify for s corporation

1. have no more than 100 shareholders (all members of a family count as a shareholder) 2. have shareholders that are individuals or estates, and who (as individuals) are citizens or permanent residents of the US 3. have only one class of stock 4. derive no more than 25% of income from passive sources (rents, royalties, interest)

FTC forbids this practice and will find bait and switch:

1. salespersons refuse to show a consumer a product which was advertised 2. management discourages salespersons from selling the advertised product 3. the firm does not actually have the advertised item in stock 4. the business has insufficient quantities available for consumer to purchase.

The __________ is usually the easiest form of business to start and end. A. sole proprietorship B. limited partnership C. corporation D. cooperative

A

Define Adverse Possession

A person who wrongfully possesses the real property will eventually aquire it - Obtaining title to land without delivery of a deed AND without payment to the true owner

Restrictive Covenants

A private restriction on the use of land - runs with the land - ex.- if the deed states you cant have mobile homes on the property

Joint Liability

A third party must sue all of the partners as a group, but each partner can be held liable for the full amount.

per se violation

A type of anticompetitive agreement—such as a horizontal price-fixing agreement—that is considered to be so injurious to the public that there is no need to determine whether it actually injures market competition. Rather, it is in itself (per se) a violation of the Sherman Act.

Power of attorney:

A written document, which is usually notarized, authorizing another to act as one's agent; can be special (permitting the agent to do specified acts only) or general (permitting the agent to transact all business for the principal).

A form of limited liability business organization created by Congress that requires at least 100 investors in real estate projects is best described as

Real Estate Investment Trust

One important difference between formal litigation and an administrative hearing before an administrative law judge ("ALJ") is that:

An ALJ can admit hearsay in the hearing

Consumer

An individual who pourchasse goods or spices primarily fo personal, domestic, or household purposes.

wetlands

Areas of land designated by government agencies (such as the Army Corps of Engineers or the Environmental Protection Agency) as protected areas that support wildlife and that therefore cannot be filled in or dredged by private contractors or parties.

Apparent authority

Authority arising from what the principal causes a third party to believe. When the principal, by either word or action, causes a third party to reasonably believe that the agent has authority to act, even though the agent has no express or implied authority

implied authority

Authority to do what is reasonably necessary to carry out express authority and accomplish the objectives of the agency

[15-03] The administrative process can give rise to too much discretionary power, often unstructured, and unchecked. This is a criticism of the administrative process relating to ______. A. personnel B. procedures C. substances D. management E. manpower

B

A ___________ is a form of business that is owned, and usually managed, by one person. A. closed corporation B. subchapter S corporation C. sole proprietorship D. limited partnership

C

In a partnership, a(n) __________ partner (owner) actively manages the company and has unlimited liability for claims against the firm. A. unlimited B. limited C. general D. associate

C

The Chevron decision is one of the decisions by the United States Supreme Court that was not very controversial and seemed to make sense to people.

False

The arbitrary and capricious test is very well defined.

False

Special Warranty Deed

Grantor is liable for defects of the title ONLY during his ownership

Marketable Title

Grantor is obligated to transfer a title that is free from encumrances and defects

Agency Concepts and Partnership Law

In a partnership, two or more persons agree to commit some or all of their funds or other assets, labor, and skills to a business with the understanding that profits and losses will be shared.

Implied Warranties

- Buyer cannot terminate contract, remedy is damages - No encumbrances or security interest on product - Delivered (only buyer) and paid (only seller) within responsable time.

Real Estate Sales Contracts includes:

- Closing Date and Escrow - Marketable Title - Implied Warranties - Disclosure of Hidden Defects

Deceptive Prize Notices

- Criminal Offence under Competition Act to tell person they won prize, or give them general impression they did, and ask for payment before receiving it.

Ontario Consumer Protection Act

- Every province has one, slightly different, mainly the same - Modifies freedom to contract - Allows people to design contracts way they choose, but puts limitation to protect consumers - Purpose of transaction is domestic, household, personal its consumer and gets all protections (doesn't apply for primarily business transactions)

Fee Simple

- Infinate duration and exclusive possession and use - only exception: nuisance

Limitations on the Rights of Property Owners

- Nuisance - Environmental laws - Property taxes - Zoning laws, etc - Eminent Domain - Economic Development

Advertising Standards Canada (ASC)

- Organization established by advertising community to promote public confidence in its products. Produces voluntary standards which advertisers choose to comply and supported by Canadian Association of Broadcasters with approval CRTC - Addresses ads in general with detailed code of guiltiness, providing mechanism for public and business to business complaints -Enforcement relies nonmoral suasion, but finds publicized with members reluctant to ignore ruling made against them by peers

Packaging and Labelling

- Packaging should protect product and be convent for shipping, storage and display, and to attract customers - Information on labels is relevant in deterring whether manufacture has breached required standard of care for product liability, including trademark law - Most is federal and applies throughout contrary with some legislation being industry specific like food and drugs at, textile labelling act, precious metals marking act, tobacco act

Federal Competition Act

- Prohibits making of misleading representations to consumers.

Duty of Loyalty

Requires a partner to account to the partnership for "any property, profit, or benefit" derived by the partner in the conduct of the partnership's business or from the use of its property.

Exceptions to Zoning Laws

- Variances - Special Use Permits - Special Incentives

What are the 3 advantages to sole proprietorship?

1) ease of creation (start up) 2) owner has total managerial control 3) owner retains profits

what are the 4 qualities of sole proprietorship?

1) owner has total control 2) owner has unlimited liability 3) profits taxed directly as income to sole proprietor 4) generally operates under a Fictitious name

4 Types of Leasehold Estates

1. Fixed Term Tenancy 2. Periodic Tenancy 3. Tenancy at Will 4. Tenancy at Sufferance

Under the Trademark Dilution Revision Act, to state a claim for trademark dilution, a plaintiff must prove that:

1. The plaintiff owns a famous mark that is distinctive. 2. The defendant has begun using a mark in commerce that allegedly is diluting the famous mark. 3. The similarity between the defendant's mark and the famous mark gives a rise to an association between the marks. 4. The association is likely to impair the distinctiveness of the famous mark or harm its reputation.

advantages of sole proprietorships

1. ease of starting and ending the business 2. being your own boss 3. pride of ownership 4. leaving a legacy 5. retention of company profit 6. no special taxes (taxed as personal income of the owner, and the owner pays the normal income tax on the money)

America's largest corporations

1. exxon mobil 2. wal-mart 3. chevron 4. conocphillips 5. general electric 6. general motors 7. ford 8. at&t 9. HP 10. valero energy

disadvantages of LLC

1. no stock 2. limited life span 3. fewer incentives 4. taxes 5. paperwork

Disadvantages of Sole Proprietorship

1.) The proprietor alone bears the burden of any losses or liabilities incurred by the business enterprise. Creditors can go after the owner's personal assets to satisfy any business debts. 2.) Lacking continuity on the death of the proprietor. 3.) In raising capital, the proprietor is limited to his or her personal funds and any personal loans that he or she can obtain.

What is the duration of a copyright?

70 years after the death of the author (95 years from publication or 120 years from creation)

Any debts or damages incurred by a firm organized as a sole proprietorship are: A. the responsibility of the owner. B. limited to the amount the owner has invested in the firm. C. paid for out of a reserve contingency fund that sole proprietors are required by law to set up. D. normally covered by liability insurance.

A

[15-01] Which of the following federal agencies protects the public from anticompetitive behavior and unfair and deceptive business practices? A. the Federal Trade Commission (FTC) B. the Equal Employment Opportunity Commission (EEOC) C. the Consumer Product Safety Commission (CPSC) D. the National Labor Relations Board (NLRB) E. the Federal Reserve Board (FRB)

A

[15-02] Which of the following statements is true of the judicial review of administrative agency's adjudications? A. Administrative agencies develop their own rules of procedure unless mandated otherwise by an act of the legislature. B. Courts and legislative bodies are better than administrative agencies to decide on the rules of procedure and methods of inquiry based on their familiarity with the industry. C. In reviewing the procedures of administrative agencies, courts have absolute authority to substitute their judgment or their own procedures for those of the agency. D. Procedures set by the administrative agencies are far more formal than judicial procedures. E. Administrative agencies are completely restricted by the strict rules of evidence used by courts.

A

What is the meaning of the term "respondeat superior?"

Let the master answer

Equal pay rule

The Equal Pay Act established the equal pay rule, which says that employers working in interstate commerce must pay women the same rate as men for doing the same type of job

Rachel has just finished the business plan for a franchise that she expects will have international appeal. She is concerned about protecting the trade name of the business. Which of the listed answers provides her an avenue for registering a trade name internationally?

The Madrid Protocol

divestiture

The act of selling one or more of a company's parts, such as a subsidiary or plant; often mandated by the courts in merger or monopolization cases.

Preemption

The concept that primary sources of law are applied consistent with a hierarchy and that a law higher in the hierarchy will overrule and make void a conflicting law lower in the hierarchy. Federal law preempts conflicting state law. State law preempts conflicting city and county law.

What patent protects the appearance, not the function of an item?

The design patent

CASE 5.3 O'Shea v. Welch (2003) involved a question of whether Welch, an employee, was acting within the scope of his employment when he struck O'Shea's car. How did the court find and why?

The found found that the jury should determine whether the employee was acting within the scope of his employment during the time period at issue.

The Franchise Contract

The franchise relationship is defined by a contract between the franchisor and the franchisee. The franchise contract specifies the term and conditions of the franchise and spells out the rights and duties of the franchisor and the franchisee.

Manufacturing Arrangement

The franchisor transmits to the franchisee the essential ingredients or formula to make a particular product.

What applies to both join tenancy and tenancy by the entirety?

The last survivor becomes a severalty owner

Retained Earnings

The portion of the corporation's profits or income that is not paid out to shareholders

Dissolution

The termination of a partnership

17. An undisclosed principal will be bound by any contract the agent enters into with actual authority.

True

Independent federal regulatory agencies are outside the federal executive departments.

True

Restrictive Distribution Practices

Two key principles to avoid legal difficulties: - Resist temptation to control distribution scheme to extent that competition for products is affected - Aim for full disclosure of terms and conditions at each stage Can't require or induce customer to deal only or mostly, inc certain products or require or induce customer to buy second product as condition of supply another one - Cannot refuse to sell to purchaser on same terms as those offered to other purchases (reviewable under competition act)

If one uses a business name that is the same as, or deceptively similar to, another's name, he may be liable for trade name infringement. a. True b. False

a

Workers who believe their employment rights have been violated can file discrimination charges with which one of the following gov't agencies? a) Equal Employment Opportunity Commission (EEOC) b) Fair Labor Standards Act (FLSA) c) Securities and Exchange Commission (SEC) d) Consolidated Omnibus Budget Reconciliation Act (COBRA)

a

Independant Regulatory Agencies

agencies that work under the direction of congress and whose officers serve for fixed terms

Comment Period

agency must respond by either modifying final rule or explaining why did not modify - final rule: published in the federal register, can alter the rule based on comments, but cannot radically change, otherwise new notice and comment period required

John is a member of New Moon, LLC that holds title to a commercial property, contacts you to market the property and asks you to prepare the contracts for him to sign to begin the marketing process. What documentation should you require before marketing the property?

articles of organization

ABC Company is a small, family-owned business that has never purchased employment practices liability (EPL) insurance. Susan is a temporary worker at ABC, having been placed there by Temporary Placements Company. Susan is a member of a fundamentalist religious group that requires that she wear some unusual clothing. The people at ABC have always tolerated Susan's clothing and have never expressed any problems or concerns about it. Recently, Gerald purchased ABC and at the same time purchased an unendorsed EPL policy that covers actions by employees against the firm. Gerald comes from a very conservative background and when he discovers that Susan is not an employee of the company he tells her that, because of her unusual beliefs and clothing, she is no longer welcome at ABC. Susan sues ABC and Gerald, claiming wrongful termination and religious discrimination. Will ABC's EPL policy provide coverage for this action? a)Yes, ABC's EPL policy will provide coverage for this action, because Susan is a "de-facto employee" b) No, ABC's EPL policy will not provide coverage for this action, because it does not include independent contractors in the definition of employee. c) Yes, ABC's EPL policy will provide coverage for this action, but only after the case has been decided in court. d) No, ABC's EPL policy will not provide coverage for this action, because it excludes religious discrimination

b

ABC Corporation and its directors have been sued by a group of shareholders, alleging that mis-management of the company led to a large drop in the per-share price of the stock. ABC has a directors and officers (D&O) liability policy. After a long, drawn-out period, ABC's directors and officers Insurer has reached an agreement with the shareholders to settle their claim for a certain amount of money. However, ABC neither likes nor approves of this settlement and refuses to consent to the settlement. Because of that refusal to consent to the settlement, the insurer says that ABC must fund its own defense from this point forward. What is the name given to the clause in the policy invoked by the Insurer in this case? a) The out-of-pocket clause b) The hammer clause c) The extra expense clause d) The defense clause

b

An employer who fires a worker because he/she exposed unethical or illegal practices leaves itself vulnerable to which one of the following types of employment practice claims? a) Harassment b) Retaliation c) Discrimination d) Fiduciary

b

Which one of the following captions describes the Coverage C insuring agreement of a directors and officers (D&O) policy? a) Direct coverage b) Entity coverage c) Corporate reimbursement coverage d) Indemnification coverage

b

Which one of the following is the advantage in securing a separate outside directors liability policy for corporate directors serving in an organization not affiliated with the insured corporation? a) The outside entity and the Insured corporation's consent are required to settle the claim. b) The deductible on the corporation's regular directors and officers policy would be waived. c) Claims paid by the policy will not reduce the aggregate limit of the Insured corporation's regular directors and officers policy. d) Coverage would apply even if the Insured organization had no direct knowledge of the director's participation.

c

The relationship of an independent contractor who is an agent of a principal and the principal is best described by which of the following statements? a. An independent contractor is always an agent of the principal. b. An independent contractor, by definition, is not an agent of the principal. c. An independent contractor may or may not be an agent generally depending on whether the independent contractor has authority to enter into contracts on behalf of the hiring party. d. An independent contractor is an agent only if the hiring party is a merchant.

c. An independent contractor may or may not be an agent generally depending on whether the independent contractor has authority to enter into contracts on behalf of the hiring party.

Which of the following is NOT a duty of an agent to a principal? a. Loyalty b. Due care c. Maximizing profits d. Obedience

c. Maximizing profits

47. Apparent authority may be based on which of the following? a. Only words of the principal or acts of the principal b. Only words of the principal or knowledge that the principal has allowed its agent to engage in certain activities on its behalf over an extended period of time c. Words of the principal, acts of the principal, or knowledge that the principal has allowed its agent to engage in certain activities on its behalf over an extended period of time d. Express contractual authority only

c. Words of the principal, acts of the principal, or knowledge that the principal has allowed its agent to engage in certain activities on its behalf over an extended period of time

The Employment Retirement & income Security Act (ERISA) governs: a) Employers exempt from the federal minimum wage law. b) Federal and state pension plans. c) Employers engaged in interstat commerce. d) Employee benefit & retirement plans.

d

Though most employer-employee relationships are "at will", an employer can change that by creating: a) An implied warranty b) An explicit warranty c) A mission statement d) An implied contract

d

Corporations enjoy many of the same rights and privileges under state and federal law that people enjoy.

do

. State police powers only authorize the creation and maintenance of police forces. a. True b. False

false

A chain of organic fast food restaurants uses the same distinctive colors, furniture, labels, logos, and employee uniforms. This unique ambiance is known as trade dress, which is NOT, however, as good as trademark protection.

false

Joan owned the fee simple title to a vacant lot adjacent to a hospital and was persuaded to make a gift of the lot. She wanted to have some control over its use, so her attorney prepared her deed to convey ownership of the lot to the hospital "so long as it is used for hospital purposes". After completion of the gift the hospital will own a...

fee simple determinable

A purchaser of real estate learns that his ownership rights could continue forever and that no other person claims to be the owner or has any ownership control over the property. This person owns a...

fee simple interest

employment at will

in the absence of a specific legal exception, an employee can be fired for any reason

Express Warranty

in the sale of goods, a merchant's guarantee upon which a buyer may reason

One of the key advantages of the corporate form of business is ________

limited liability of ownership

Under modern criminal law, a corporation ______ be held liable for the criminal acts of its employees. The punishment for guilt of a crime by a corporation consists of ______. Corporations _____ liable for the torts of their agents if committed ____ the scope of the agency.

may, fines, may be, within

Domestic Corporation

n a given state, a corporation that is organized under the laws of that state

to become an S corporation, a corporation must meet specific criteria, with restriction on the _____ of shareholders, as well as the types of _____ that can be issued.

number, stock

acquisition

one company's purchase of the property and obligations of another company

Limited Liability Partnership

partnership in which all partners assume liability for his or her own actions and for any partner's professional malpractice but then, only to the extent of the partnership's assets and/or capital contributions

Tenant Tim has a lease with Larry to pay $800 on the first day of the month with a provision to terminate the lease with 30 days notice. This lease is best known as...

periodic tenancy

Wisconsin, like other states, may regulate private activities to protect or promote the public order, health, safety, and general welfare under its

police powers

Reality of Agencies

president's authority to exert control over all agencies is significant

The articles of incorporation must include information such as the name, number of shares, and the name of its ______ , or person designated to receive legal documents on its behalf.

registered agent

The articles of incorporation must include information such as the name, number of shares, and the name of its _______ , or person designated to receive legal documents on its behalf.

registered agent

Joint Venture form of business organization

relationship between two or more persons/corporations created for specific business undertaking (combine to create new good/service, generally share profits and losses equally) like a partnership (joint liability)

Mike, an advocate of a certain religion, publishes an article in New Times magazine insisting that Congress base all federal law on his religion's principles. The First Amendment guarantees Mike's freedom of

religion, speech, and the press

James conveys ownership of his residence to his church but reserves for himself a life estate in the residence. The interest the church owns during James' lifetime is a ....

remainder

The Freedom of Information Act __________the government to disclose certain records to any person on request, even without a reason.

requires

common stock

stock that gives the owner a residual position n the financial structure of the business, along with the greatest risk of loss and the greatest potential for gain

Ed, Frank, and Gina were concurrent owners of a parcel of real estate. Frank died and his interest passed according to his will to become part of his estate. Frank was a...

tenant in common

Gabe, the president of Hot Sales Company, claims that certain actions by the federal government and by the state of Idaho infringe on rights guaranteed by the Bill of Rights. All of these rights limit

the federal government only

Failure to Disclose

the omitting of a material fact in an advertisement

merger

the result of two firms joining to form one company

Who operates the business and develops a plan of reorganization in Chapter 11 bankruptcies?

the trustee

A corporation automatically will be taxed under Subchapter C unless it elects to become an S corporation.

true

When a franchisor and franchisee agree on a location, what else does that include?

who will pay for buying, renting, or building the building

Comparative Advertising

- Allowed under competition Act as it fosters competition - When made falsely or misleading, performance claims are made that cannot substantial, constitutes violation of Act - Allows for civil action borough by individuals or companies harmed by actions of competitors in context of comparative advertisement - Stooping ad primary concern, complainant may seek injunction in addition to damages and commissioner may request court order restitution to those affected it

Consumer Protection Act

- Allows consumers to sue in contract regardless of privity instead of tort. EG: If you buy car from a dealership, can sue manufacture in contract law, and not just negligence, because your a consumer and get benefit of sales of goo acts too. Ignores rule of privity, even not a party - Makes Sale of Goods Act mandatory for consumer contracts. While there isn't a disinfection between consumers and businesses ins sales of goos act in three free ability to modify and exclude sales of good, consumer CPA is sale of goods act cannot be modified or excluded - Applies to services. Consumer gets implied term in every contract for services will be rendered in reasonable manner - Mandatory warning of product hazards - Prohibits false or misleading claims, advertisements aren't offer, they're invitation to treat. Misleading claims aren't made in offer, then it doesn't constitute breach of contract (common law) but statue says you can't do that - Prohibits unconcisocuanble contracts with right to credit ,requires disclosure of credit terms - Debate about whether provisions are good not not. Legitimate businesses care about it, but a lot don't, and not sure consumers know protection exists, nor would they be able to pursue a remedy

Sales of Goods Act

- Applies to every sale of goods contract: Broad application - Works in addition to underlying sales contract - Specific rules governing buyer and seller relationship - Not to services, intangibles, real property, gifts, leases, licences (only tangible personal property) - Only sales: property is transferred and paid for (money must change hands) - Buyers and sellers can modify or exclude implied terms, but not for consumer transactions

Deceptive Telemarketing (DNCL)

- CRTC Launched National Do Not Call List (DNCL). Telemarketers probated from calling consumers registered on this but some exempt like registered charities ,newspapers looking for subscriptions, political parties and candidates, companies collecting survey data. - Doesn't apply to calls made to businesses, or to calls made to consumers who have conducted business with caller during previous 1.5 year. - Telemarketers must be registered with DNCL, even if exempt and disclose reason they are calling, on behalf they're calling, and type f product or business promoting with fines up to 1500 per violation for individuals and 15k for corporations

Sale Above Advertised Price

- Civil provision of Act prohibits sale of product at price higher than advertised, unless price mistake which was immediately corrected - Not issue of contract law, because advertised price is considered invitation to rent, not offer to sell - Concerned about "drip pricing" in which only part of goods price is advertised.

Proving Abuse of Dominant Position

- Competition Tribunal must find company or group substantially controls market, have engaged in practice of anticompetitive acts, practice has effect of substantially lessening or preventing ocmpeititond in market - Applies civil burden or proof and has authority to make orders stopping behaviour, if ignored penalties imposed - Threat of civil action leads to voluntary agreement between parties and bureau, but tribunal may order offender take corrective action and penalties up to 10 million

Consumer Protection Law

- Consumers are in need of greater protection than non consumers, based on assumptions consumers at disadvantage compared to business - Have less bargaining power, not be as well informed, don't participate in transaction frequently - Goes further than Sale of Goods Act addressing contracts for provision of services, unfair trade practices, direct sales and online agreement, consumer transaction in specific industries like times acres and fitness clubs, credit, product safety standards, labelling and packaging

Legality of Telemarketing

- Deceptive telemarketing is criminal offence, corporations legally liable for illegal telemarketing activities of employees and agents unless it establishes exercised due diligence in trying to prevent commission of offence - Officers or directors in position to direct or influence policy as liable to penalties, summary conviction up to 200000 per count and imprisonment up to 1 year, indictable offences Indictment is up to 14 years and fines at discretion of court.

Examples of Administrative Agencies

- EEOC, EPA, OSHA - congress typically adopts general legislation-sarbanes-oxley - fill in the blanks-rule 10b5 - exist at both federal and state level

Proving Price Fixing

- Establish not only there was agreement or conspiracy, but that agreement lessened competition relating to market structure (factors such as number of competitors and barriers to entry) and behaviour of parties (implementation of agreement combined with market power) - Difficult to prove because it involves secret deals hidden in shadows - Competition Bureau encourages insiders come forward, and penalties are significant - Private competition class actions by purchasers who purchased products for fixed prices and even ifnreict purchasers who didn't buy directly from corporations able to recover damages - Immunity from prosecution offered to insider who comes forward doesn't shield him from class action suit by consumers or competitors.

Original Common Law of Consumer Protection

- Favoured sellers with caveat emptor buyer be ware, all risk on buyer - When one side bears all risk, not enthusiastic participants, getting burned and withdrawals from marketplace occurs more often - Legislation increases fairness, promotes trade and commerce - Developed rules to create protection for buyers - Done by courts implying terms into sales of goods, 1800's very complicated and inconsistent, needed to codify common law - 1893 english parliament enacted sale of goods, codified and repacked previous rules, every province has sales of good act, word for word indexical to english statute - Ontario's is identical to 1893 version

Competition Law

- Federal legislation (Unlike SOG or CP) - Primary goal to reduce anti competitive behaviour - Felt more competition is better for consumers who have benefits of companies competing, for economy its felt working hard to compete we get better products and value - Restricts or Prohibits anti competitive behaviour

Implied Conditions

- Fundamental, essential to contract, breach gives innocent the chance to terminate the contract - Seller has right to sell (EG Amazon doesn't have ownership, but has right to sell) - Goods must match description, pictures, sample provided - Merchantable quality with no defects like TV can't have dent

Requirements of Online Retailers

- Goal is to provide sufficient security and regulation with stifling commercial potential of e-commerce. Vendors disclose: - Name, address, contact info - Description of goods or services being sold - Itemized list and price of items or services sold - Description of additional charges and terms of payment - Delivery arrangements - Cancellation, return or exchange policy - Vendor provides rubaner with copy of contract with short period of time ensuring purchaser has chance to decline it. - Require vendor pay for return of goods where purchaser cancels contract in accordance with legislation - Permit purchaser cancel contract in event disclosure requirements aren't met, copy of contract not provided, goods not delivered - Vendor in event of cancellation provide refund, or credit card company reverse charges in event seller fails to provide refund

Unfair Practices

- Illegal business practices exploiting unequal bargaining position of consumers protected by provincial legislation assuming consumers in need of greater protection Arises when business intentionally: - Targets customers with physical infirmity, ignorance, illiteracy, inability to understand language or agreement, to other factors and who are unable to understand nature of agreement - Sells at price grossly exceeding price at which similar goods or services are readily available to similar consumers - Calculated and cynical marketing scheme subjecting consumers to undue pressure to enter into transaction - Persuades consumer to buy where there is no reasonable probability of payment in full by consumer - Imposes terms and conditions on proposed traction so adverse to consumer as to be inequitable May be rescinded by consumer, not possible then consumer recovers damages or amount which consumer's payments exceeds value that goods have to consumer

Product Design and Manufacture

- Laws protects inventions and product design - Obtaining patent in repost to formulation of product, or registered industrial design, natter business cannot manufacture or sell which infringes on rights without a licence from registered patent or industrial design owner - Canadian Standards Association develops voluntary guiltiness for use by producers and users, establish with assistance of experts and reps from industries adopted by regulators as mandatory standards representing measure of standards of care for tort liability Legislation imposes minimum standards for goods and services it considers public interest to reduce risk of harm including: - Motor Vehicle Safety act for manufacture and importation of vehicles and equipment - Broad categories such as food and drugs cannot be sold if unsafe or don't meet standards - Illegal under CPSa to manufacture, important advertise or sell consumer product posing danger to human health or safety as result of normal or foreseeable use of product. - Collective opinion of specialists in risk assessment with valuable resources for producers, not honours regulators.

Consumer Packaging and Labelling Act (CPLA)

- Minimum packaging and labelling requirements for prepackaged goods sold in Canada except drugs, cosmetics, medical devices which are food and drugs act) - Encourages fair competition between manufactures and sellers by ensuring consumers can compare price and quantity of products - Enforced by Health Canada and Canada Food Inspection Agency for food products and competition bureau for non food products - Prohibits making false or misleading representations, sets out specification for mandatory label info like name, net quantity In English and French, quantity in metric units - Label states common name of product and principal place of business of person by whom or for whom pre packaged product manufactured - Regulates sizing and shapes to prevents consumers from being mislead and labelling products made i Canada or product of Canada unless meeting requirements - Include sufficient warning of hazards, special instruction for handling, critical info about what to do if products causes harm, and child proof or resistant clearly labelled toward adults of angers to children.

Abuse of Dominant Position

- No law prohibiting business from being dominant in industry, law concerns dominant position achieved or maintained through activities stifling competition - Reviewable conduct of anticompetitive acts by dominant company or groups of companies preventing or lessening competition - Buying up products to prevent erosion of price levels, requiring suppliers sell only to certain customers, selling products below acquisition cost to discipline or eliminate competitors.

Competition Act

- Primary source of competition law is this federal piece of legislation - Administered and enforced by Commissioner of Competition, had of Competition Bureau, part of Innovation, sCience and Economic Development Canada - Publishes bulletins, guiltiness, annual report of activities and administering Consumer packaging labelling act, textile labelling act, precious metals marketing act - Criminal matters are more serious than civil reviewable matters) like materially false or misleading reps knowingly or recklessly, price fixing and deceptive telemarketing - Criminal matters alleged offences investigated by Bureau, evidence obtained referred to Commissioner to the Attorney General of Canada who may prosecute, or accused consents action avoiding prosecution -Reviewable matters are misleading advertising, discriminatory practices, abuse of dominant position. Civil process developed to address concerns about time required for and difficulty of proving criminal cases with primary purpose to stop anticompetitive activity, with bureau seeking order prohibiting the activity and those responsible ordered to publish info notice and pay admin penalty - Any violation of order may itself be criminal offence, but penalties not as severe as criminal, civil reviewable are easier to resolve since proof of criminal intent not required

Multi-level Marketing

- Product distribution structure creating multiple levels of distributorships - Commission paid upward through levels of sales trcuture - Big business, door to door usually - Is legal, but must be distinguished from pyramid selling which is criminal offence determined by genuine business activity being obvious

Consumer Product Safety Act (CPSA)

- Protects public by addressing or preventing dangers to human health or safety posed by consumer products. Requires: - prohibiting manufacture, importation, advertisement or sale of costumer products that constitute danger to human health or safety - prophets misleading claims on packages, labels or advertising relating to health or safety - Provide authority to order testing and evaluation of consumer products to verify compliance - Requires manufacturers, importers, sellers report dangerous incidents, product defects, inadequate labels, and product recalls. - Authorizes entrance to private's property, inspection and seizure of products to verify compliance - Enables government to institute and enforce corrective measures like recalls - Provides criminal penalties up to $5 million and admin up to 25k

Promotional Contests

- Regulated by competition act, criminal code and provincial legislation - Lead to civl or criminal liability - Operating lottery is criminal offence, contest operators will often require skill testing question, or ensure constants can enter with no purchase necessary in order to avoid contest being considered lottery under criminal code - Even if not lottery, competition act imposes requirements of disclosure, including number and approximate value of prices, geographical areas, odds of winning

Telemarketing

- Regulated primarily by Competition Act, and other federal and provincial laws governing making of unsolicited calls

Controlled Business Practices in Consumer Directors Act

- Require licenses or performance bonds noted, education, courses taken or registration - Singled out since politicians get complaints about these to they provide minimum requirements in Consumer Protection Act - Lawyers, doctors, financial providers much more controlled since each one has own statutes - Direct door to door sales: provinces differ a lot some require licences and deposits. Ontario just has cooling off period on ability to purchase - Times shares fitness clubs, used cars and repairs, multi level marketing ,debt collection. Regulation is tiny not requiring own statue, but do require regulation - Food and labelling protecting consumers by ensuring ambles disclose pertinent information, claims made aren't false or misleading but its arguable extent laws are effective (milk fat and powerful dairy lobby)

Competition Act on Prizes

- Restricts contests and prizes. No purchase necessary because they have to, can't require people to make purchase. Make is extremely inconvenient without pruahse, but must disclose rules one request when draws take place, how many winning tickets, odds, value , geographical distribution. - Competition tribunal was ineffective and patronizing. Tends to settle more than prosecute, same as tougher regulatory bodies. Trying to get criminal convictions against big companies is tough, better to spread thinner and go out over players

Competition Act

- Restricts mergers and acquisitions that would reduce competitions. Unlikely competition tribunal would allow satellite radio merger since there's only 2, very high threshold over 100 million - Prohibits anti competitive practices, with some reviewable and some illegal Illegal Practices: - Bid Rigging and price fixing, can't do them (quasi criminal) with consequences like jail and fines - Abuse of dominant position, predatory pricing are reviewable meaning they're not illegal automatically and if they would have effect of unduly lesson competition (allowed if they don't lessen it) - EG: Predatory Pricing: Tribunal looks at why your doing it. To put competitor out of business, that's anti competitive and illegal, but to liquidate last year inventory for this year stock, its fine Prohibits False/Misleading Claims - Same thing as consumer protection act, but consumer protection only benefits consumers. This is more broadly - Any false or misleading claims in business context prohibited - Consumer protection doesn't allow for civil claims. Rights between buyers and seller and complaints made to ministry, here you can company for something anti-competitive even it didn't directly affect you

Performance Claims

- Reviewable matter to make performance claim not based on adequate and proper testing - In addition to general prohibitions against false or misleading advertising - Tests conducted must be before promotional statement, and onus of proof rests with person making performance claim

False Sale or Bargain Price

- Reviewable offence for seller to mislead consumer about ordinary price of product. Can't advertise product is on sale when it isn't Claim price to be regular price if either: - Substantial volume of product has been sold at regular price within responsable period of time before or after making representation (VOLUME TEST). "Substantial is more than 50% of sales and responsable period of time is 12 months - Product has been offered for sale in good faith at regular price or higher for a substantial period of time before or immediately after making the representation (TIME TEST) Substantial period of time is more than 50% of six months before or after making representation

Price Discrimination (Abuse of Dominant Position)

- Reviewable practice whereby seller provides different pricing terms and conditions to competing customers for equivalent volume sales at an equivalent time - Producer offers discriminatory prices or because producer responds to customer pressure tactics, seeing it as only way to remain dominant - Differential Discounts permitted providing its shown customers were prepared to purchase under equivalent conditions were offered same terms. Any difference is direct reflection of cost differentials in terms off volume or delivery

Mergers, Acquisitions, Takeovers

- Reviewed by Competition Bureau - Mergers of all sizes in all sectors of economy subject to view by Commissioner to determine whether the will likely result in "substantial" lessening or prevention of competition - "substantial" is the result of material increase in prices not likely to be offset by increased efficiency in market - Size proposed exceeds prettification threshold, must notify commissioner of intentions, if concerns arise, parties ordered to provide information - Within specified time parties get determination will lessen or prevent competition, can decide if it proceeds, on specified conditions, or not at all

Tied Selling

- Seller will sell to purchaser only if the purchaser buys other, less desirable goods as well. - Reviewable provided action substantially lessens or prevents competition

Bid Rigging

- Specialized form of conspiracy by producers or suppliers to manipulate market through price - Suppliers conspire to fix bidding process in manner that suits their collective needs - No market impact need be proven, serious criminal offence attacking heart of competitive process -Agreement to submit bids on rotating basis, split market geographically.

Merchantable Quality v Suitable Quality TV Crack example

- TV has crack in it. Not merchantable quality because its not reasonable suitable for its intended purpose - Suppose dent on back. Breach of condition of merchantable quality, not breach of condition they be reasonable suitable for intended purpose

Reasonably Suitable for Intended Purpose (Implied Condition) Surfboard Example

- Your looking to buy board, don't know anything, person recommends the right one you buy it and it sinks. There IS A BREACH since you were using it for its ordinary intended purpose - You tell sales associate you want surf board, don't tell them you don't intend to use it to turn into coffee table. You buy on there recommendation, take it home, and breaks. NO BREACH OF CONDITION because its not in ordinary intended purpose and since you didn't tell them what your going to use it as - Go buy a board, and inform your going to use it as a coffee table. The person makes a recommendation. THERE IS A BREACH OF CONDITION because you noticed seller of intended purpose and they made the recommendation

Agency Creation and Powers

- congress passes enabling legislation that specifies the name, purposes, functions, and powers of the agency - an agency's enabling statute defines its legal authority. congress can give agency power and take it away - agency cannot regulate beyond the powers granted by the statute

The Administrative Procedures Act

- in the absence of clear congressional direction (no clear direction in enabling legislation) - all federal agencies must follow apa procedural requirements in notice and comment rulemaking and adjudication

The Chevron Case

- issue was whether courts should defer to an agency's interpretation of the enabling legislation which gives it authority to act 1) did congress directly address the issue in a statue 2) if the statute is silent, was the agency's interpretation of the law "reasonable"

Notice and Comment Rule Making

- notice of the proposed rule: agency publishes a notice of proposed rulemaking proceedings in the federal register - federal register is a daily publication of the executive branch that prints government orders, rules, and regulation - comment period: interested parties express their views on the proposed rule, lobbyists, advocacy groups, agency responds

False of Misleading Claims

-Every province prohibits making false, misleading, deceptive or exaggerative claims in a proposed sale. Involves: - Goods or services endorsed or sponsored, when they're not - Goods or serves have features, characteristics, or qualities that they don't have - Goods are new, when they're used - Goods available or can be delivered, or services can be performed the person making representation knows or ought to know that it is not true - Service or part is required, when its not - Price constitutes a social price, when it doesn't - Use exaggeration, innuendo, ambiguity as to material fact, or fail to state a material fact, if such use or failure tends to deceive Most provinces, consumer entering contract for product resulting of misrepresentation has right to rescind contract

Expansion of Sale of Goods Law

-Provincial consumer protection supplements the act by preventing parties from excluding or modifying implied conditions and warranty. - Provinces either enact legislation implying conditions and warranties into al sales of products, others prevent exclusion or modification of Act conditions and warranties - Statutes are similar, has broader scope than sale of goods law because it applies to all consumer transactions and have protected traction's like leadings, conditional sales and service contracts - Privity of contract cannot be used as defence against consumer, consumer may argue breach of implied conditions and warranties, even though there is no contract between them (under normal common law privity denies consumer remedy unless negligence is proven)

If you are a farmer who grows and sells only locally, can you correctly conclude that the commerce clause does NOT apply to your activities? a. No, because the commerce clause has been broadly interpreted. b. Yes, because your state legislature may say such. c. Yes, because you are engaged in intrastate commerce. d. No, because the commerce clause specifically states that it regulates all commerce.

. No, because the commerce clause has been broadly interpreted.

What 3 qualities are part of general partnership?

1) each partner has equal control of business 2) each partner has unlimited, personal liability for business debts/obligations/losses 3) profits taxed as income to partners and losses qualify for deductions to partners

What are the 4 advantages of General Partnerships?

1) ease of creation (start up) 2) partnership income is partner income (called flow through taxation) 3) business losses qualify for tax deduction and flow through to partners 4) few formalities

What are the 4 qualities of a Limited Partnership?

1) general partner in limited partnership has managerial/operational control over the business 2) limited partner's liability limited to extent of his/her capital contributions 3) limited partner has no managerial/operational control over business 4) parties must file with Secretary of State's Office to create *often used in estate planning for transition of family business

What are the 2 disadvantages for Limited Partnerships?

1) general partners have personal liability for all business debts/obligations/losses/liabilities including those incurred by other partners of behalf of partnership 2) difficult to remove general partners

What are 3 advantages to a franchise?

1) help from franchisor to start franchise 2) instant recognition due to franchisor's trademark or trade name 3) benefit from franchisor's worldwide marketing

What are the 3 advantages to Limited Partnership?

1) liability of limited partner(s) limited to investment 2) limited partners do not participate in management therefore this may be attractive for certain types of ventures 3) business losses qualify for tax deduction and flow through to partners

What are 2 advantages to limited liability partnerships?

1) liability of limited partners is limited to partnership assets/investment except for his or her own personal liability or malpractice 2) business losses qualify for tax deduction and flow through to partners

What are 3 disadvantages to a franchise?

1) must meet franchisor standards or risk losing franchise 2) has little creative control over business 3) has to pay significant amount of money in exchange for using franchise name and products

What are the 5 qualities of a limited liability partnership?

1) parties must file form with Secretary of State to create LLP 2) business name must include phrase "limited liability partnership" or LLP 3) some limitations on the type of partners that qualify 4) liability of limited partner(s) limited to partnership assets/investment except for his or her own personal liability/malpractice (if one partner is guilty of malpractice, another partner's assets can't be seized) 5) each partner pays taxes on his/her share of the business income

What are the 2 disadvantages to limited liability partnerships?

1) provides slightly less liability protection than other similar forms of organizations (such as corporation and LLC) 2) formality limitations such as prohibitions against certain persons or organizations holding partnership interests in an LLP

What are 3 disadvantages for the FRANCHISOR in franchise agreements?

1) reduced control over the product 2) can become liable for franchise if exerts too much control 3) risk of lower quality if doesn't exert enough control

What are the 6 major forms of business?

1) sole proprietorship 2) general partnership 3) limited partnership 4) limited liability partnership 5) limited liability company 6) corporation

What are 3 factors to the level of control?

1) who controls day to day operations? 2) how much express control is franchisor given in franchise agreement? 3) how large is the franchisor's stake in the venture?

Article __ , Section __ of the U.S. Constitution is generally believed to be the source of Congressional authority to create administrative law. Under the Necessary and Proper clause, the courts identified the _____________ doctrine to allow Congress to create these subordinate agencies and give them some legislative powers. The president has the power to veto enabling legislation and prevent the formation of an agency and also has the power to ________ federal officers, including agency leadership. Congress has the power to create and to ______ an agency. And the courts exercise control over agencies through the power of judicial _________.

1,8 , delegation, appoint, abolish, review

A Deed Requires:

1. Names of the Grantor and Grantee 2. Intent to Convey 3. Grantor's Signature 4. Delevery of the Deed

4 Requirements for the property to be held Adversely

1. Possession must be actual and exclusive 2. Possession must be open, visual, and notiorious 3. Continuous and Peacable 4. Possession must be hotile and adverse (you cant have the owners permission to live there)

A Claim of Deceptive Advertising

1. a false claim is made about an advertiser's product or service 2. the claim deceives, or is likely to deceive, a potential buyer 3. the deception will affect the purchasing decision 4. the advertising involves interstate commerce 5. the falsehood has produced, or is likely to produce, economic injury

largest private corporations in US

1. cargill 2. koch industries 3. chrsyler 4. GMAC financial services 5. PricewaterhouseCoopers 6. Mars 7. Bechtel 8. HCA 9. Ernst & Young 10. Publix Supermarkets

Michael Manin, an airline pilot, was twice convicted of disorderly conduct, a minor misdemeanor. To renew his flight certification with the National Transportation Safety Board (NTSB), Manin filed an application that asked him about his criminal history. He did not disclose his two convictions. When these came to light more than ten years later, Manin argued that he had not known that he was required to report convictions for minor misdemeanors. The NTSB's policy was to consider an applicant's understanding of what information a question sought before determining whether an answer was false. But without explanation, the agency departed from this policy, refused to consider Manin's argument, and revoked his certification. Was this action arbitrary and capricious? 1. The NTSB is an ______________ administrative agency. 2. As an administrative agency, the NTSB exercises powers associated with the three branches of government: the legislative branch through ________ ; the executive branch through ___________ ; and the judicial branch through ____________ . 3. When making rules, ___________ and the _____________ govern an agency's authority and procedures. 4. According to the law, a court can set aside an agency action if it is found to be _________ , __________ , and an abuse of ____________ . 5. In determining if an agency action is arbitrary and capricious, the court will look at five factors: first, if the agency failed to provide a ___________ explanation for its decision; second, if the agency changed its prior policy without _______________ ; third, if the agency considered legally ____________ factors; fourth, if the agency failed to consider a __________ factor; and fifth, if the agency rendered a decision _____________ the evidence. 6. in this case, the NTSB departed from its prior policy without explanation, which would be a violation of which factor? 7. In addition, the NTSB decided not to consider the understanding of the applicant, which had been its policy in the past. This would violate which factor? 8. Given these actions, the NTSB's actions _________ arbitrary and capricious.

1. independent regulatory 2. rulemaking; enforcement; adjudicatiton 3. Congress; Administrative Procedures Act 4. Arbitrary; capricious; discretion 5. Rational; justification; inappropriate; relevant; contrary to 6. Failing to provide a rational explanation 7. Changing its policy w/o justification 8. Were

disadvantages of corporations

1. initial cost (cost thousands of dollars and require expensive lawyers and accountants) 2. extensive paperwork 3. double taxation (corporation pays tax on its income before it can distribute any, as dividends, to stockholders. then the stockholders pay income tax on the dividends they receive). 4. two tax returns 5. size 6. difficulty of termination 7. possible conflict with stockholders and board of directors

advantages of LLC

1. limited liability 2. choice of taxation 3. flexible ownership rules 4. flexible distribution of profits and losses 5. operating flexibility

disadvantages of sole proprietorships

1. unlimited liability 2. limited financial resources 3. management difficulties 4. overwhelming time commitment 5. few fringe benefits 6. limited growth 7. limited life span

Why Partnerships Exist

1.) A sharing of profits or losses 2.) A joint ownership of the business 3.) An equal right to be involved in the management of the business.

Advantages of the Sole Proprietorship

1.) The proprietor owns the entire business and receives all of the profits. 2.) Starting a sole proprietorship is often easier and less costly than starting any other kind of business, as few legal formalities are required. 3.) No documents need to be filed with the government. 4.) The sole proprietor is free to make any decision he or she wishes concerning the business--- such as whom to hire, when to take a vacations, and what kind of business to pursue. 5.) They can sell or transfer all or part of the business to another party at any time and does not need approval from anyone else. 6.) Pays only personal income taxes.

Following the completion of an environmental impact statement, the NEPA allows a comment period for _________________ days. 10 30 20 40

30

[15-01] Administrative law judges are A. organizationally separate from the rest of the agency. B. responsible for the minutes of agency meetings and are legal custodians of its records. C. exempt from the protection of immunity. D. excluded from hearing cases of alleged law violations. E. intermediaries between regulators and those being regulated.

A

[15-01] As the member of an agency, a secretary A. signs orders and official correspondence. B. is the presiding officer at agency meetings. C. makes the decision to file suit or pursue other remedies. D. supervises usual administrative functions. E. provides for interaction between regulators and those being regulated.

A

[15-01] In a(n) ______ type of regulatory authority, an agency can make decisions like a court. A. quasi-judicial B. quasi-executive C. in personam D. quasi-regulatory E. quasi in rem

A

[15-01] The ______ function of an administrative agency involves both fact-finding and applying law to the facts. A. adjudicating B. advising C. rule-making D. investigating E. policy making

A

[15-01] The ______ power of administrative agencies is primarily to investigate, prosecute, advise, and supervise. A. executive B. judicial C. legislative D. arbitrary E. preliminary

A

[15-01] The protection administrative law judges receive from liability for damages based on their decisions is called ______. A. immunity B. specificity C. amnesty D. novation E. adjudication

A

[15-01] Which of the following federal agencies conducts union certification elections and holds hearings on unfair labor practice complaints? A. the National Labor Relations Board (NLRB) B. the Equal Employment Opportunity Commission (EEOC) C. the Occupational Safety and Health Administration (OSHA) D. the Federal Reserve Board (FRB) E. the American Federation of Labor and Congress of Industrial Organizations

A

[15-01] Which of the following is true of administrative agencies? A. The actual regulatory activity is performed by administrative agencies. B. Administrative agencies that issue rules having impact of laws are called quasi-judicial agencies. C. State and local governments do not have administrative agencies. D. Administrative agencies with quasi-executive authority make decisions like a court. E. Administrative agencies license and regulate intrastate transportation.

A

[15-01] Which of the following statements is true of a secretary in an administrative agency? A. A secretary is responsible for the minutes of agency meetings and is legal custodian of its records. B. A secretary is designated as such at the time of nomination by the president. C. A secretary is the presiding officer at agency meetings. D. A secretary is not responsible for agency functions such as signing orders and official correspondence. E. A secretary is the chief operating official of an agency and supervises usual administrative functions such as accounting.

A

[15-01] Which of the following statements is true of the executive director in an administrative agency? A. The executive director is the chief operating official of an agency and supervises usual administrative functions. B. The executive director is responsible for the minutes of agency meetings. C. The executive director is the legal custodian of the records of any meetings. D. The executive director is responsible for publication of all actions in the Federal Register. E. The executive director is the chief law officer and legal adviser.

A

[15-01] Which of the following statements is true of the functionality of agencies providing services? A. Social Security programs necessitate that there be a federal agency to determine eligibility and pay benefits. B. The mere existence of most government programs hardly creates any new agency or expands the functions of an existing one. C. Welfare programs are run easily without being administered by the government. D. Government agencies often stand as a substitution for competition. E. Agencies that function to provide services are created out of sheer manpower rather than necessity.

A

[15-01] Which of the following statements is true of the legislature in influencing decisions in an administrative agency? A. It has the power to limit appropriation of funds to the agency. B. It cannot abolish an administrative activity. C. It is beyond its scope to advise and amend procedural requirements for the agency's adjudications. D. It has very little control over the administrative process of an agency. E. It takes decisions independently, without any consultation with the executive branch.

A

____________ comprise about 20% of all businesses but account for about 81% of U.S. business receipts. A. Corporations B. Partnerships C. Sole proprietorships D. Limited liability companies

A

vertically integrated firm

A firm that carries out two or more functional phases—such as manufacture, distribution, retailing—of a product.

Benefit Corporation

A for-profit corporation that seeks to have a material positive impact on society and the environment.

Chain-style Business Operation

A franchise operates under a franchisor's trade name and is identified as a member of a select group of dealers that engage in the business.

Strict Scrutiny

A heightened standard of review used by the Supreme Court to determine the constitutional validity of a challenged practice, often in cases where a government action impairs a fundamental constitutional right or is based on a "suspect" classification (i.e. race). Three criteria to uphold 1) govt's objective is COMPELLING 2) means chosen by govt. to advance that objective are necessary compelling end and 3) NO LESS-RESTRICTIVE ALTERNATIVE exists

Distributorship

A manufacturer licenses a deal to sell its product. Covers and exclusive territory.

toxic tort

A personal injury caused by exposure to a toxic substance, such as asbestos or hazardous waste. Victims can sue for medical expenses, lost wages, and pain and suffering.

potentially responsible party (PRP)

A potentially liable party under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA). Any person who generated the hazardous waste, transported the waste, owned or operated the site at the time of disposal, or currently owns or operates the site may be responsible for some or all of the cleanup costs involved.

The "Inside Story" referenced the actions of Hewlett-Packard and its corporate spying activities. What is the investigative technique called "pretexting?"

A practice whereby a person pretends to be someone else, typically over the telephone, in order to obtain information.

Which of the following is true regarding a principal's duty to pay unemployment taxes?

A principal must pay unemployment taxes for an employee buy not for an independent contractor.

sec rule 10b 5

A rule of the Securities and Exchange Commission that makes it unlawful, in connection with the purchase or sale of any security, to make any untrue statement of a material fact or to omit a material fact if such omission causes the statement to be misleading.

Sales Talk

A salesperson's hyperbole about the nature and quality of a product. Also known as puffery

cooling off laws

A set of federal and state laws designed to protect purchasers and lessees of goods or property. For example, the Federal Trade Commission's cooling-off period is three business days for purchases of goods or services from door-to-door salespersons. Cooling-off periods vary for loans, mortgages, leases, etc.

regulation Z

A set of rules promulgated by the Federal Reserve Board to implement the provisions of the Truth-in-Lending Act (TILA).

market concentration

A situation that exists when a small number of firms share the market for a particular good or service.

mutual fund

A specific type of investment company that continually buys or sells to investors shares of ownership in a portfolio.

Environmental impact statement (EIS)

A statement required by the National Environmental Policy Act for any major federal action that will significantly affect the quality of the environment. The statement must analyze the action's impact on the environment and explore alternative actions that might be taken.

Which of the following is not a required element of an environmental impact statement? A consideration of less adverse alternatives Negative effects to the environment from the proposed action A cost-benefit analysis of the project A supportive petition of signatures proportional to the area's population

A supportive petition of signatures proportional to the area's population

monopoly

A term generally used to describe a market in which there is a single seller or a limited number of sellers.

rule of reason

A test by which a court balances the positive effects (such as economic efficiency) of an agreement against its potentially anticompetitive effects. In antitrust litigation, many practices are analyzed under the rule of reason.

Joint and Several Liability

A third party has the option of suing all of the partners together or one or more of the partners separately.

What is a formula, device, process, method or compilation of information that when used in business, gives the owner an advantage over competitors who do not know it?

A trade secret

Trademark Infringement

A trademark must be sufficiently distinct to enable consumers to identify the manufacturer of the goods easily and to distinguish between those goods and competing products. In this case, it is likely that consumers will confuse ex) the products MochaMerge and MokaMerge.

15 U.S.C. 2301 (6)(A)

A warranty is defined, in part, as "any written affirmation of fact or written promise made in connection with the sale of a consumer product by a supplier to a buy which relates to the nature of the material or workmanship and affirms or promises that such material or workmanship is defect free or will meet a specified level of performance over a specified period of time.

Interpretive Rules

Administrative agency rules that simply declare policies or explain the agency's positions and do not establish any legal rights or obligations.

what are the major advantages and disadvantages of incorporating a business?

Advantages of incorporating a business include: Limited liability, ability to raise more money for investment, size, perpetual life, ease of ownership change, ease of attracting talented employees, separation of ownership from management. Disadvantages of incorporating are: Initial cost, extensive paperwork, double taxation, two tax returns, size, difficulty to terminate, possible conflict with stockholders and board of directors.

Bait and Switch

Advertising a product for sale at a certain price and changing either the price or make up of the product for sale - Product advertised low price (bait), supply insufficient to meet demand and when consumers ask for product, they're informed that product not in stock of poor quality or inferior to product B, then persuaded to purchase higher priced or higher margin b (switch) - Reviewable under Competition Act

deceptive advertising

Advertising that misleads consumers, either by making unjustified claims concerning a product's performance or by omitting a material fact concerning the product's composition or performance.

Recording Statutes

After the deed is delivered, the buyer should record it with state records to put the public on notice - Establishes superior ownership

Executive Agencies

Agencies that exist within the cabinet departments and report to the president

executive agencies

Agencies that exist within the cabinet departments are report to the president

Independent Regulatory Agencies

Agencies that work under the direction of Congress and whose officers serve for fixed terms

An _____ occurs if a principal approves or accepts the benefits of the actions of an otherwise unauthorized agent.

Agency by ratification

interpretive rules

Agency rules that declare policies or explain agency positions but do not establish any legal rights or obligations

Confession of Judgment

An act by a debtor that permits a judgment to be entered against him or her by a creditor, for an agreed sum, without the institution of legal proceedings.

Which of the following is NOT true regarding an agency relationship? An agency agreement may be implied The most common form of agency relationship is the employer-employee relationship An Agent may not be in independent contractor Agency may be established by stoppel

An agency may not be in independent contractor

An agent's actions must be strictly for the benefit of the principal and must not result in any ___ profit for the agent.

An agent's actions must be strictly for the benefit of the principal and must not result in any SECRET profit for the agent.

tying arrangement

An agreement between a buyer and a seller in which the buyer of a specific product or service becomes obligated to purchase additional products or services from the seller.

resale price maintenance agreement

An agreement between a manufacturer and a retailer in which the manufacturer specifies the minimum retail price of its products. this is illegal per se under the Sherman Act.

price fixing agreement

An agreement between competitors in which the competitors agree to fix the prices of products or services at a certain level; prohibited by the Sherman Act.

exclusive dealing contract

An agreement under which a seller forbids a buyer to purchase products from the seller's competitors.

Franchise

An arrangement in which the owner of a trademark, a trade name, or a copyright licenses others to use the trademark, trade name, or copyright in the selling of goofs or services.

Implied contract

An implied contract exists when an employer has led an employee to believe he or she is not an at-will employee.

Implied covenant

An implied covenant is the principle that in any employment relationship the employer and the employee will deal with each other fairly and honestly.

Which of the following is true regarding an independent contractor's entitlement to fringe benefits offered by a principal?

An independent contractor is not generally eligible for the fringe benefits provided to employees

Which of the following is true regarding whether an independent contractor is an agent of a principal?

An independent contractor may or may not be an agent generally depending on whether the independent contractor has authority to enter into contracts on behalf of the hiring party.

concentrated industry

An industry in which a large percentage of market sales is controlled by either a single firm or a small number of firms.

validation notice

An initial notice to a debtor from a collection agency informing the debtor that he or she has thirty days to challenge the debt and request verification.

multiple product order

An order issued by the Federal Trade Commission to a firm that has engaged in deceptive advertising by which the firm is required to cease and desist from false advertising not only in regard to the product that was the subject of the action but also in regard to all the firm's other products.

attempted monopolization

Any actions by a firm to eliminate competition and gain monopoly power

horizontal restraint

Any agreement that in some way restrains competition between rival firms competing in the same market.

restraint of trade

Any contract or combination that tends to eliminate or reduce competition, effect a monopoly, artificially maintain prices, or otherwise hamper the course of trade and commerce as it would be carried on if left to the control of natural economic forces.

vertical restraint

Any restraint on trade created by agreements between firms at different levels in the manufacturing and distribution process.

free writing prospectus

Any type of written, electronic, or graphic offer of securities that describes the issuing corporation or its securities and includes a legend indicating that the investor may obtain the prospectus at the SEC's Web site.

Easement Appurtenant

Applies to adjacent pieces of land - neighbors

For Vs Less Protection for Consumer Protection and Goal of Government

Arguing For: - Have won, consumers get more protection. - Consumers are weaker, vulnerable than business, less sophisticated and less access to legal advice, less informed about law, taken advantage of - If we want consumers to be enthusiastic participants, we need to protect hem to some degree to encourage it. If they keep getting ripped off, no more purchases Arguing Against: - Some consumers don't need it - Less experienced- people in business don't get rights of sale of goods, but them ore experienced consumer gets all of it - Increases transaction costs (economic argument) with more hurdles requires making items more expensive, less competitive Ontarian businesses especially in age of globalization - Condescending and patronizing for government to deem people need protection and sometimes we don't want government tweaking terms once contract. GOAL: Balance consumer protection with no having negative impact on trade and commerce

Halle wants to start a business. She has two goals. First, given her limited personal wealth and eagerness to get started, she wants to get her business up and running with the least possible hassle and expense. Second, she wants to minimize her personal risk in the event that her company experiences difficulties. If Halle chooses a sole proprietorship, she would: A. achieve both goals since this form of ownership is both the easiest to form and the least risky. B. meet her first goal since sole proprietorships are easy and inexpensive to form. However, she would expose herself to personal risk because owners of sole proprietorships have unlimited liability. C. not achieve either goal since proprietorships are both costly to set up and subject to unlimited liability. D. achieve her second goal, since the owners of sole proprietorships are legally protected from losing more than the amount they invest in their company. However, she would find that the start-up costs would be higher than if she had incorporated her business.

B

In a limited liability partnership, each partner's risk of losing personal assets is: A. unlimited. B. limited to losses that result from his/her own acts and omissions and the acts and omissions of those who work under his/her supervision. C. determined entirely by the maximum loss provision established by the articles of co-partnership. D. nonexistent.

B

Maria has a lot of self-confidence and business knowledge. She recently opened a bakery as a sole proprietor. She is expecting a high level of profits and is looking forward to: A. the lower corporate tax rate paid by sole proprietorships. B. keeping all of the money she earns except for the taxes she is required to pay. C. keeping all of the money she earns since she does not have to pay taxes as a sole proprietor. D. easily raising additional large sums of money from the capital markets since she is a sole proprietor.

B

One of the major disadvantages of a sole proprietorship is the: A. possibility of disagreements between owners. B. unlimited liability the owner has for the debts of the firm. C. fact that any income earned by this type of business is taxed twice. D. high cost of starting or ending the company.

B

The limited liability provided to limited partners means that they are not responsible for the debts of the business beyond: A. the firm's total assets. B. the amount they have invested in the company. C. the percentage of profits they are entitled to earn. D. their total personal assets.

B

When entering into a new partnership, a good strategy is to: A. avoid putting the agreement in writing since this would limit the flexibility of the partnership. B. put the partnership agreement in writing. C. plan to incorporate as soon as possible. D. agree to put the first year's profits back into the partnership.

B

Which of the following statements is the most accurate? Sole proprietorships: A. are well suited for people who want to own a business and share in its profits without taking an active role in management. B. are taxed at the owner's personal tax rate. C. are the least risky form of business ownership. D. must receive a state charter before they can legally conduct business.

B

With respect to taxes, the sole proprietorship: A. pays taxes on the profits of the business at the same rate that corporations pay taxes. B. pays taxes on the profits of the business, at the owner's personal tax rate. C. pays taxes only if there are no expenses associated with the business. D. is permitted to determine its own tax rate and schedule of payments.

B

[15-01] Business often fails to regulate itself, and the lack of self-regulation is contrary to the public interest. To counterbalance, administrative agencies exist to A. refer the problem or area to experts for solution and management. B. protect the public, especially from the business community. C. replace competition with regulation. D. develop detailed rules and regulations to carry out the legislative policy. E. provide services that have arisen out of necessity.

B

[15-01] The Federal Reserve Board (FRB) found that Parson Inc., a newly established financial company, had violated banking laws. The company was involved in transactions that were prohibited by the United States government. Along with imposing a hefty fine, the FRB issued an order on Parson to stop the nature of such objectionable transactions and ordered the firm to refrain from indulging in such transactions in the future. This order is an example of a(n) ______. A. consent order B. cease and desist order C. preliminary order D. commission order E. assignment order

B

[15-01] The Securities and Exchange Commission (SEC) primarily functions as a(n) ______ body, which oversees the issue and sale of investment securities. A. rule-making B. supervising C. adjudicating D. investigating E. emergency

B

[15-01] The ______ is the chief law officer and legal adviser. A. secretary B. general counsel C. chairperson D. executive director E. chief judge

B

[15-01] The ______ power of administrative agencies is primarily to decide on controversies. A. executive B. judicial C. legislative D. arbitrary E. preliminary

B

[15-01] Which of the following is a unique agency device generally not available in the judicial system, as courts deal only with actual cases and controversies? A. limited cross examination B. advisory opinion C. formal ruling D. investigative power E. subpoena power

B

[15-01] Which of the following is an order that an agency imposes on a violator to stop an objectionable activity and refrain the violator from any further violations? A. consent order B. cease and desist order C. preliminary order D. commission order E. assignment order

B

[15-01] Which of the following statements is true of administrative law judges? A. They lack immunity for the damages arising from their decisions. B. They use prior decisions or precedent. C. They refrain from performing any fact-finding functions. D. They refrain from hearing cases of alleged law violations. E. They have the option of either following procedural rules of the agency or its policy directives.

B

[15-01] Which of the following statements is true of the executive branch of a government? A. It has no control over the administrative process of an agency. B. It normally appoints the top officials of an agency with the advice and consent of the legislative branch. C. It is denied veto power over the statues of the legislatures. D. It is excluded from making any budget recommendations to the legislative branch. E. It enacts and creates specific legislations adopted by administrative agencies.

B

[15-02] The doctrine of ______ is a court-created rule that limits when courts can review administrative decisions. A. estoppel B. exhaustion of remedies C. lapse D. primary jurisdiction E. precedent

B

[15-02] Which of the following statements is true of primary jurisdiction? A. It applies when a claim must go in the first instance to an administrative agency. B. It ensures uniformity and consistency in dealing with matters entrusted to an administrative body. C. It is inapplicable in cases whenever enforcement of a claim requires the resolution of issues that have been placed within the special competence of an administrative body. D. It is a court-created rule that limits when courts can review administrative decisions. E. It is revoked in cases where a claim is originally filed in the courts.

B

[15-02] Which of the following statements is true of the review of rule making? A. The rule-making function in the administrative process is essentially executive in character. B. Before a court can find a proposal void, an administrative agency must propose rules within the confines of its grant of power from the legislature. C. A court will inquire into its wisdom or effectiveness even after deciding that an act of the legislature or the action of an agency is authorized. D. Political action at polls is excluded from correcting an unwise or an ineffectual law. E. The scope of the legislature makes it impossible for it to correct an unwise regulation made by an agency in cases where the legislature was responsible for granting the agency such power.

B

A car dealership offers extremely low prices on cars for which they have a very limited number in stock. When Robert arrives at the dealership to buy a car at the low price, the dealer informs him that those cars are gone and instead shows him other more expensive cars he might be interested in. The dealership is guilty of _________________. Bait and switch Failure to disclose Flawed and insignificant research advertisements Disparagement

Bait and switch

Under the ______, when a U.S. citizen writes a book, every signatory to that convention recognizes the U.S. author's copyright. The ____ Agreement establishes standards for international protection of patents, trademarks, and copyrights. The _____ Protocol allows a U.S. company to register its trademark abroad by submitting a single application and designating in which other countries the trademark shall be registered. And in 2011, a number of nations signed the ______ Trade Agreement to combat piracy and global counterfeiting.

Berne Convention TRIPS Madrid Anti-Counterfeiting

Uniform Commercial Code (UCC)

Body of laws governing commercial transactions in the United States. Provides that an express warranty is present if the seller promises that the goods conform to an express promise.

Fact Pattern 5-2 Billy owns a used car lot. Samantha works for Billy selling used cars. Billy fully directs and controls her work, sets her hours, and pay her an hourly salary as well as a commission. Belinda comes to the lot to buy a used car. Samantha, however, tells Belinda that she needs to sell her mother's used vehicle and that if Belinda will meet her after hours, she will give Belinda an excellent deal. Belinda meets Samantha after work and ends up buying the car belonging to Samantha's mother. The next day, Samantha, acting within the scope of her employment, is moving a car. She, however, is in a hurry and in a grossly negligently manner backs it over the foot of Wesley, another customer. While waiting for the ambulance to come for Wesley, Belinda storms onto the lot complaining about the condition of the vehicle she purchased from Samantha's mother. Billy fires Samantha on the spot based on her obviously intoxicated condition and the fact that she arranged for the sale of her mother's vehicle. Samantha informs him that she has been an excellent employee and that he has no reason to be unhappy with her. Refer to Fact Pattern 5-2. Who is liable for Wesley's injured foot?

Both Billy and Samantha with Billy having the right to recover from Samantha any amounts paid.

When would the "aided-in-the-agency" theory likely be asserted?

By a plaintiff in an attempt to show that even if an employee was acting outside the scope of employment, the employer may be liable for the employee's action because the employee was aided by the agency relationship.

A master limited partnership (MLP) is: A. not traded on the stock exchanges. B. pays corporate income taxes. C. taxed like a partnership. D. the corporate form of choice for small groups of individuals.

C

A significant disadvantage of owning a sole proprietorship is the: A. possibility of limited liability. B. heavy tax liability that must be assumed. C. overwhelming time commitment often required of the owner. D. lack of incentives to motivate the owner.

C

According to the Uniform Partnership Act, the three key elements of any general partnership are: A. a board of directors, a written partnership agreement, and a well-defined product or service. B. two owners, an adequate financial base, and a written statement describing the manner in which profits and losses will be divided. C. common ownership, shared profits and losses, and right to participate in management. D. common stock, a board of directors, and a statement of limited liability.

C

Finley is a limited partner in Gettout & Associates. Heywood U. Gettout, one of the general partners in the company, must temporarily leave the company to attend to some personal matters. Heywood has asked Finley to perform his managerial duties while he is gone. As a limited partner, Finley: A. can fill in as a manager whenever necessary, as long as it is for only a limited time. B. can make managerial decisions as long as they do not involve the payment of money. C. cannot participate in the management of the partnership. D. can manage the firm as long as he gets approval from the company's other general partners.

C

In a sole proprietorship, the profits earned by the business are: A. taxed as income for the business, but exempt from the personal income tax paid by the owner. B. taxed at the lowest corporate rate. C. the property of the owner, except for taxes owed to the government. D. tax-free if the appropriate exemption is filed with the local government.

C

Joe Jackson operates a sole proprietorship, but he is in poor health and may be unable to continue running the business. If Joe becomes incapacitated, his business: A. automatically continues under new management as a sole proprietorship. B. automatically converts into a public corporation with stock sold to interested investors. C. ceases to exist unless sold or taken over by Joe's heirs. D. becomes the property of the most senior employee who wishes to continue operating the firm.

C

Kristen and her brothers and sisters decided to form a partnership that specializes in home design of all types. One of their goals is to maintain the loving relationship they currently enjoy, so they are following the Model Business Corporation Act recommendations as they write the partnership agreement. Which of the following is an accurate recommendation of the Act? A. The business should be actively operating for an extended period before the partners decide who is responsible for what business functions. B. Family businesses never take on outside partners, so no discussion of this need take place. C. There should be discussion and well-understood ways that the partners will handle disagreements. D. Due to the fact that they are all under 40 years old and expect to work until they are 65 there is no need to decide what will happen to the partnership if one decides to leave the business or retire, or dies.

C

Nick wants to start his own business. Nick should consider a sole proprietorship if he: A. expects rapid growth and wants to be able to raise a large sum of money. B. wants to make it easy to attract qualified employees. C. wants to be his own boss and can accept unlimited liability. D. wants to minimize the financial risk he must accept as the owner of a business.

C

Starting a new business as a sole proprietorship: A. requires retaining the services of an attorney. B. is simple, but the proprietorship fee is very expensive in some states. C. is usually simpler and less expensive than starting other forms of ownership. D. is very similar to starting a business as a corporation.

C

[15-01] Which of the following is true of the Environmental Protection Agency (EPA)? A. It protects the public against unreasonable risks of injury associated with consumer products. B. It ensures all workers a safe and healthy work environment. C. It administers all laws relating to water pollution, air pollution, solid wastes, pesticides, and toxic substances. D. It administers laws to prohibit distribution of adulterated, misbranded, or unsafe food and drugs. E. It regulates civil aviation to provide safe and efficient use of airspace.

C

[15-01] Which of the following members of an agency requires Senate approval while being appointed? A. secretary B. advisory council C. general counsel D. chairperson E. executive director

C

[15-01] Which of the following statements is true of factors influencing agency decisions? A. It is ideal that a rule or a regulation be adopted without having to follow the due process of law. B. Agencies are predominantly politically responsible for their decisions. C. At public hearings, interested parties are allowed to present evidence in support of, or in opposition to, a proposed rule or regulation. D. An ineffective means of influencing a quasi-legislative decision of an administrative agency is to participate in the adoption process as such participation is time-consuming and expensive. E. The advantage of the administrative agencies is that it is free from any control from any branch of the government.

C

[15-01] Which of the following statements is true of organization of agencies? A. Administrative agencies or boards usually consist of 35 or 40 members to ensure transparency in their functioning. B. Appointees at the federal level are permitted to engage in any other business or employment during their terms. C. Appointees may be removed by the president for neglect of duty and inefficiency. D. A simple majority of the members forming the body should belong to a different political party. E. A secretary is vested with a power to remove an appointee for malfeasance in office.

C

[15-01] Which of the following type of regulatory authority issues rules that have the impact of laws? A. in personam B. quasi-executive C. quasi-legislative D. quasi-regulatory E. quasi in rem

C

[15-02] Any party seeking the judicial review of any administrative agency's decision must be able to prove: A. enabling legislation. B. immunity. C. standing to sue. D. novation. E. primary jurisdiction.

C

Fact Pattern 5-1 Candy owns a nail and hair salon. She reaches an agreement with Todd, an independent contractor, allowing him to do nails in her salon three days per week. Todd has a sign on his desk informing his customers that he is an independent contractor of the shop. After working for a month, Todd asks Candy if she has been paying appropriate social security taxes for him. He also informs Candy that Phyllis, a customer, is preparing to sue both Todd and Candy based upon a nasty nail fungus she developed after having her ails done by Todd. Refer to Fact Pattern 5-1. Which of the following is true regarding the duty of Candy, if any, to pay social security taxes for Todd?

Candy is not responsible for any of Todd's social security taxes.

Under the laws of one state, any real property that either member of a married couple owns at the time of their marriage remains separate property. Further, any real property acquired during the marriage (except by gift or inheritance) belongs to both of them equally. What form of ownership is this?

Community property

System of checks and balances

Constitutional system in which each branch of government places limits on the power of other branches to ensure that the other branches do not exceed their authority under the Constitution

Tim, a tenant executed a 1 year lease agreement with landlord Larry. Prior to the expiration of the lease, Larry failed to repair the furnace and leaking roof, and when Tim threatened to report Larry to the city code enforcement division, Larry removed the front door of the apartment, causing Tim to vacate the premises. This is an example of...

Constructive eviction

Created in 1972, the _________________ was designed to protect the public from unreasonable injury from consumer products. National Electronic Injury Surveillance System Consumer Products Safety Commission Consumer Product Safety Act Consumer Product Safety Improvement Act

Consumer Product Safety Act

[15-01] Which of the following functions allows an agency to gather and compile information concerning the organization and business practices of any corporation or industry engaged in commerce to determine whether there has been a violation of any law? A. adjudicating B. advising C. rule making D. investigating E. policy making

D

[15-02] Which of the following doctrines applies when a claim is originally filed in the courts? A. estoppel B. the doctrine of exhaustion of remedies C. the doctrine of lapse D. primary jurisdiction E. the doctrine of precedent

D

[15-02] Which of the following statements is true of reviewability of an administrative agency's decision? A. Reviewability of an administrative agency's decision is mandatory as all such decisions are reviewable. B. The action of the agency is irrelevant in determining the reviewability of an administrative agency's decision. C. The Federal Administrative Procedure Act excludes judicial review of decisions where the statutes preclude judicial review. D. The Federal Administrative Procedure Act permits reviewability except in cases where agency action is committed to agency discretion by law. E. Reviewability of an administrative agency's decision is necessary as preclusion of judicial review by inference is very common.

D

[15-03] Which of the following is a criticism of the administrative process relating specifically to procedures? A. The administrative process is devoid of paperwork and meetings. B. There is too much reinforcement to follow up on actions to ensure compliance. C. The Peter Principle creates a huge problem in determining the flow of procedures across all levels in the agencies. D. The rules and regulations of the procedures are written in complex legal language, which laypeople cannot understand. E. The decision-making process of organizations is speedy thus creating suspicion among the efficacy of those decisions.

D

[15-03] Which of the following issues of administrative agencies relates to the substantive outcome of agencies' rule-making and adjudicating authority? A. It is very difficult to discharge unsatisfactory employees. B. The reward system usually does not make a significant distinction between excellent, mediocre, and poor performances. C. The administrative process is overwhelmed with paperwork and with meetings. D. Enforcement of some laws varies over time. E. There is often a lack of enforcement procedures to follow up on actions taken to ensure compliance.

D

[15-01] Which of the following statements is true of a consent order? A. It is extremely expensive in comparison to other types of orders. B. It is commonly known as a commission order. C. It excludes organizations and nonprofit organizations in its scope. D. It orders that a violator stop the objectionable activity and refrain from any further similar violations. E. It requires that the accused individual admit to the jurisdiction of an agency and waive all rights to seek a judicial review.

E

[15-02] Which of the following statements is true of the doctrine of exhaustion of remedies? A. It applies when a claim is originally filed in the courts. B. It comes into play whenever enforcement of a claim requires the resolution of issues that were placed within the special competence of an administrative body. C. It is an absolute principle, and courts usually deny parties the right to litigate prior to exhausting administrating remedies. D. It increases the premature interruption of the administrative process. E. It allows an agency to discover and correct its own errors, and thus it helps to dispense with any reason for judicial review.

E

The _________________ Act protects consumers in the collection and reporting of their personal financial credit information. Fair Credit and Charge Card Disclosure Fair Debt Collection Practices Fair Credit Reporting Equal Credit Opportunity

Fair Credit Reporting

The _________________ Act provides for disclosure of information in the issuance and regulation of consumer credit cards by banks and other credit companies. Fair Debt Collection Practices Fair Credit Reporting Fair Credit and Charge Card Disclosure Equal Credit Opportunity

Fair Credit and Charge Card Disclosure

The _________________ Act protects a consumer's right by making some collection practices unlawful, such as using false information, harassing the debtor, or making threats. Fair Credit Reporting Fair Debt Collection Practices Fair Credit and Charge Card Disclosure Equal Credit Opportunity

Fair Debt Collection Practices

14. An agent who refuses to follow legal instructions of a principal has breached the duty of care.

False

2. In all cases, an agency agreement must be written in order to be enforceable.

False

21. The person hiring an independent contractor bargains both for the results and the means of achieving the results.

False

An agency has to respond to every comment that is made.

False

An agent who refuses to follow legal instructions of a principal has breached the duty of care.

False

An independent contractor is also considered an employee of the person for whom work is being done.

False

The Electronic Signature in Global and National Commerce Act (E-SIGN) privdes that contracts executed by electronic agents are invalid.

False

The fair use doctrine prohibits a person limited use of copyrighted material without permission of the author for purposes such as criticism, comment, news reporting, scholarship, or research

False

The first sale doctrine states that once a copyrighted work is sold, it may only be resold with the permission of the original owner.

False

The major function of today's federal agencies is adjudication.

False

The person hiring an independent contractor bargains both for the results and the means of achieving the results.

False

The respondeat superior doctrine typically applies to the actions of independent contractors.

False

The term "customary authority" refers to authority that agents must have by law.

False

There is no difference between a public corporation and a publicly held corporation.

False

The _________________ is responsible for protecting and promoting public health by regulating and supervising labeling, food safety, drugs, tobacco, medical devices, and cosmetics. Department of Health and Human Services Food and Drug Administration Federal Food, Drug, and Cosmetic Act Environmental Protection Agency

Food and Drug Administration

Due Diligence

For reviewable matter, accused defence based on adopting erasable steps to avoid the violation of a legal duty to what a reasonable person would've done in similar circumstances - IF accused reasonably believed in mistaken set of facts rendering act innocent, accused took all steps to avoid event, no civil liability, since civil duty doesn't' require greater diligence thats what's reasonable in circumstances Competition Act allows for civil action brought by people or companies harmed by actions of competitors seeking injunction in addition to damages incurred

Grant Deed

Gives the property away- "I grant this property to you" - Carries an implied warranty that they have not transfered it to anyone else or encumbered it

Competition Law

Goals: - Promote a fair, competitive, and efficient marketplace - Strengthen businesses ability to adapt and compete in global markets - Give small and medium sized businesses ability to compete - Provide consumers with competitive prices, product choices, and information they need to make informed buying decisions Achieve balance between interests and producers an achieve balance between wholesalers and retailers, dominant market and minor market players, public and private interests

Warranty Deed

Grantor is liable for all defects of the title - Most extensive protection

Equal dignity rule:

In most states, a rule stating that express authority given to an agent must be in writing if the contract to be made on behalf of the principal is required to be in writing. Failure to comply can make a contract voidable at the option of the principal.

Intermediate-Level Scrutiny

In order for court to uphold the action, government need only show 1) its action advanced a legitimate government objective (like public welfare, health, safety) and 2) the action is SUBSTANTIALLY related to government's objective

The Commerce Clause and Civil Rights

In the 1964 Civil Rights Act, Congress used its commerce power to ban discrimination in places of public accommodation, such as restaurants and hotels. (Important cases: Heart of Atlanta Motel v. United States, and Katzenbach vs. McClung)

accredited investor

In the context of securities offerings, "sophisticated" investors, such as banks, insurance companies, investment companies, the issuer's executive officers and directors, and persons whose income or net worth exceeds certain limits.

Implied Powers

Include the authority to make warranties on goods in the sales business and the power to enter into contracts consistent with the firm's regular course of business. To make admissions and representations concerning partnership affairs

A principal may be held liable for the torts of a(n) _____ only in extraordinary circumstances, usually involving highly dangerous acts or nondelegable duties.

Independent contractor

Which of the following is not an illegal practice by a debt collector? Informing the debtor that it is a "debt collector" Infer to the debtor that it is associated with a governmental agency Calling the debtor's home before 8:00 am Contacting the debtor's family, friends, or employer

Informing the debtor that it is a "debt collector"

A copyright claim is an example of a(n) _________________ on a product. Implied warranty Infringement Lien Title

Infringement

judicial branch

Interprets the laws

Interstate vs. Intrastate commerce

Interstate commerce crosses state lines and is within the federal government's authority to regulate if it chooses. Intrastate commerce is conducted within a state's borders - state law applies, unless a preemptive federal law applies.

What is NOT a type of legal Life Estate?

Life Estate

A _________________ warranty is any promise short of the full warranty. Partial Full Satisfaction guaranteed Limited

Limited

One of the key advantages of the corporate form of business is ___________

Limited Liability of Owneraship

Why are so many new businesses choosing a limited liability company (LLC) form of ownership?

Limited liability companies have become a popular way to form a business since all fifty states now recognize LLCs. Some of the advantages of LLCs are: Limited liability, choice of taxation (can be taxed as a partnership or corporation), flexible ownership rules, flexible distribution of profit and losses, operating flexibility.

Even if United Fabrics was determined to have a valid copyright in the fabric design, Macy's may have been able to argue that ____________.

Macy's design was not substantially similar to United Fabrics' design.

Roger McDonald decides to open up a series of liquor stores in his home state. He calls his chain McDonald's and uses a large, blue, curvy M as his logo. McDonald's Corporation, the famous fast food restaurant chain, wants him to stop using the curvy M, as it resembles McDonald's Corporation's famous golden arches. Assuming that the association with a liquor store would likely harm McDonald's Corporation's reputation, McDonald's Corporation wants to stop Roger from using the blue M. Which statement is true?

McDonald's can stop him from using the blue M if the similarity between the marks creates an association between them.

An implied warranty of _________________ is an inherent promise that the product sold conforms to ordinary standards and that it is of the same average grade, quality, and value as similar products. Title Product dependability Merchantability Fitness for a particular purpose

Merchantability

Deeds

Method of passing the title to land - instrument used to transfer real property

Cheryl is the owner of Big Valley. During her lifetime, Cheryl conveys a life estate in Big Valley to Michelle. Under the terms of the grant, Michelle's life estate will terminate when Cheryl's uncle dies, and Cheryl will regain the property.

Michelle possesses a life estate pur autre vie, measured by the life of Cheryl's uncle.

Megan was employed by a large company. Her supervisor told her to falsify government reports. She refused and was fired. She sued for wrongful discharge. Her employer claimed that, since Megan was an at-will employee, she had no legal right to claim the company was liable for damages. Is the employer right?

No. Though at-will employees do not have extensive rights relative to job security, they may not be legally fired for refusing to perform an illegal act.

Benefit corporations differ from traditional corporations in three main ways. The main purpose is to benefit the _____ so directors must consider the impact of their decisions on society and the ________ . Shareholders have an additional right of private action, called a ________ , that allows them to sue the corporation for failure to pursue the purpose. Finally, benefit corporations must issue an annual_______ on its performance and include a third-party standard of assessment.

Public Environment Benefit Enforcement Proceeding Benefit Report

Purpose of the Adverse Possession Doctrine

Punishes owners who do not take action when they see adverse pssession and rewards possessors for putting land to productive use

When assessing whether an agency action was arbitrary or capricious, courts generally look at several factors including whether the agency failed to provide a __________ explanation for its decision; changed its prior policy without _________ ; considered legally __________ factors; failed to consider a _________ fact; or made a decision __________ to the evidence.

Rational, justification, inappropriate, relevant, contrary

Which law requires the government to reassess the impact on business and continue to look for less burdensome means of achieving a governmental goal?

Regulatory Flexibility Act

Remedies for Sale of Goods

Repudiation for Breach of Contract - Can terminate contract, if you haven't paid you don't have to, can return goods but have refund the seller - Can treat it as breach of warranty, if they choose to accept goods and pay for them, can sue for damages, even if its breach of condition - If they accept of use goods, render goods unable to be resorted to regional condition, forced to sue for damages only Damages are for breach of warranty only

The Franchise Rule

Requires franchisors to disclose certain material facts that a prospective franchisee needs in order to make an informed decision concerning the purchase of a franchise. Was designed to enable potential franchisees to weigh the risks ad benefits of an investment.

Which law establishes rules for treating both hazardous and nonhazardous forms of solid waste?

Resource Conservation and Recovery Act

Price Maintenance

Reviewable conduct in producer attempting to drive upward the final retail price at which goods are sold to public - Producer does by exerting pressure on retailer or by placing notice on goods itself - Producer worried about low advertised prices will damage product image, warns retailers to stop dropping prices or print on packaging recommended retail price and refugee to sell to retailers who sell below Two reviewable aspects (both anti competitive behaviour) - Attempt to influence the retail price upwards - Recriminations against noncompliant retailers Can suggest recommended real price, cannot insist on price as minimum selling price

Direct Marketing

Seller who initiates contact with prospective purchaser, rather than the other way around like door to door selling (selling in person directly at residence), promotional letters, telemarketing - Must reregistered and post performance bond which may be forfeited in event of non compliant with law - Some provinces have "cooling off periods", during which buyer can cancel contract for nay reason without obligation - Most provinces say sale contracts over specific minimum amount must be in writing ,requiring consumer receive copy of wartime contract for it to be enforceable

The _______ , or owners, of a corporation elect the _______ who then hire the ________ to run the daily operations.

Shareholders Directors Officers

Exclusive dealing contract, if they have an anticompetitive effect, are illegal under the

Sherman and Clayton act

Quitclaim Deed

Simply covers grantee whatever interest the grantor had - if the grantor had no interest, grantee recieves no interest

Katzenbach v. McClung (1964)

Small, local restaurant far from any interstate highway and having no appreciable business, still subject to the reach of federal statue because restaurant purchased some food and paper supplies from out-of-state vendors.

Contracts

Some employees, such as sports stars, celebrities, and business executives, negotiate their own individual employments contracts.

Uniform Partnership Act

The UPA defines a partnership as "an association of two or more persons to carry on as co-owners a business for profit". The intent to associate is a key element of a partnership, and one cannot join unless all other partners consent.

Which of the following is not an act enforced by the CPSC? The Labeling of Hazardous Art Materials Act The Refrigerator Safety Act The Child Safety Protection Act The Women's Health Protection Act

The Women's Health Protection Act

monopoly power

The ability of a monopoly to dictate what takes place in a given market.

vertical merger

The acquisition by a company at one stage of production of a company at a higher or lower stage of production (such as its supplier or retailer).

FACT (fair and accurate credit transaction act)

The act established a national fraud alert system. Consumers who suspect that they have been or may be victimized by identity theft can place an alert on their credit files. When a consumer establishes that identify theft has occurred, the credit reporting agency must stop reporting allegedly fraudulent account information.

Ratification

The act of accepting and giving legal force to an obligation that previously was not enforceable

In CASE 5.2 EBC I, Inc. v. Goldman, Sachs & Co.,(2005) the plaintiffs claimed that Goldman Sachs breached a fiduciary duty in acting as an underwriter and in providing advice to eToys, the plaintiff's predecessor, in regard to an initial public offering of stock. How did the court rule and why?

The court refused to order a dismissal of the plaintiff's claim and found that Goldman Sachs' failure to disclose a material conflict of interest established a claim for breach of fiduciary duty.

The degree of skill or care required of an agent is usually that expected of a(n) __________person under similar circumstances.

The degree of skill or care required of an agent is usually that expected of a(n) reasonable person under similar circumstances.

Franchise Termination

The duration of the franchise is a matter to be determined between the parties.

A union declares it will be engaging in a partial strike whereby its employees will alternate between working for a period of time and then walking off the job for an indefinite time. Thus, employees may work for a few days or only a few hours before walking off the job again. The employer claims the union does not have the legal right to engage in a partial strike. Which statement is correct?

The employer is correct. The union must either strike or work--it cannot alternate between working and striking

The equal dignity rule has several exceptions. For example, an executive officer of a corporation can conduct business transactions without written authority. Likewise, when an agent acts in the of a principal, the rule does not apply. Finally, when the agent's signature is merely a(n) , the agent does not need written authority to sign.

The equal dignity rule has several exceptions. For example, an executive officer of a corporation normally can conduct ordinary business transactions without written authority. Likewise, when an agent acts in the presence of a principal, the rule does not apply. Finally, when the agent's signature is merely a(n) formality , the agent does not need written authority to sign.

Bill of Rights

The first ten amendments to the Constitution (1791), recognized the rights "of the people", including freedom of speech, religion, assembly, protection against random searches and seizures, etc.

Payment for the franchise

The franchisee ordinarily pays an initial fee or lump-sum price for the franchise license. May also require the franchisee to pay a percentage of the franchisor's advertising costs and certain administrative expenses.

Eminent Domain

The government is the superior owner of all property (even if you own property in fee simple) - Condemnation Power of the Government (given by 5th Ammendment) ***Public Use Requirement - requires government to pay "just compensation"

Special Use Permits

The governments permits a certain activity, but only to certain people who meet certain requirements can do it

Bureaucracy

The large hierarchical, organizational structure that allows for specialization and is supposed to increase efficiency

monopolization

The possession of monopoly power in the relevant market and the willful acquisition or maintenance of that power, as distinguished from growth or development as a consequence of a superior product, business acumen, or historic accident.

market power

The power of a firm to control the market price of its product. A monopoly has the greatest degree of market power.

corporate governance

The relationship between a corporation and its shareholders-specifically, a system that details the distribution of rights and responsibilities of those within the corporation and spells out the rules and procedures for making corporate decisions.

Profit

The right to go onto someone else's land and take away part of the land - Christmas tree harvesters, Dunes gravel business

Easement

The right to make limited use of another persons land without taking anything away from it - road access - runs with the land

Zoning Laws

The rules and regulations that collectively manage the development and use of land - created to seperate nuisnaces from residents

Separation of powers

The system of checks and balances created by the Constitution whereby the three branches have unique powers that allow them to resolve conflicts among themselves, thus ensuring no one branch exceeds its constitutional authority

Life Estate

The tenant of a Life Estate has the same rights of a Fee Simpel owner except that he/she must maintain the value of the property - terminates at death - conveyance to individual (during life only)

Industry-Specific Standards

These laws protect the franchisee from unreasonable demands ad bad faith terminations of the franchise by the franchisor.

11. CASE 5.1, Jane Doe 1 v. Uber Technologies, Inc. (2016), involved the question of respondeat superior.

True

12. The fact that leased workers are on the payroll of an employment agency does not preclude them from being considered employees of the company at which they are actually working on a joint employer theory.

True

13. The term usual authority refers to the authority that an agent has been allowed to exercise in the past.

True

15. Principals may be held liable for the torts of independent contractors involving highly dangerous acts.

True

16. CASE 5.3 Candow v. Dust (2014), involved the question of whether an employee was on a frolic or a detour at the time of the accident.

True

18. The "Inside Story" provides a discussion of the Department of Labor's fiduciary rule that concerns advisers' recommendations to customers regarding retirement investments.

True

19. A manager should review the scope of authority granted to the company's workers and consider the company's potential liability for the actions of those workers.

True

1In agreeing to act on behalf of the principal, the agent becomes a fiduciary.

True

22. The most common form of agency relationship is employer-employee.

True

23. Courts have generally found click-wrap agreements to be enforceable.

True

3. Whether a person is an independent contractor or an employee depends on what he or she does, not how the relationship is characterized by the parties.

True

32. Agency is perhaps the most pervasive legal relationship in the business world.

True

4. In a master-servant agency, the employer has the right to control the conduct of the employee.

True

8. Jesse allows Terry to redecorate the interior of a retail space. Although Jesse has not specifically contracted with Terry to do the work, Jesse does not contradict Terry's order for new carpet and display fixtures. This situation is one of implied ratification.

True

A court may prohibit the infringer from committing further violations, order destruction of the infringing material and require the infringer to pay damages, profits earned and attorney's fees.

True

A manager should review the scope of authority granted to the company's workers and consider the company's potential liability for the actions of those workers.

True

A trademark is a distinctive mark or motto that a manufacturer stamps, prints, or otherwise affixes to its own goods.

True

A trademark is any combination of words and symbols that a business uses to identify its products or services and distinguish them from others.

True

Agency is perhaps the most pervasive legal relationship in the business world.

True

An inventor must apply for a patent within one year of selling the product commericially

True

An item is automatically copyrighted once it is in tangible form

True

An undisclosed principal will be bound by any contract the agent enters into with actual authority.

True

Anyone who creates a new type of plant can patent it, provided that the inventor is able to reproduce it asexually-through grafting, rather than by planting its seeds

True

CASE 5.3 O'Shea v. Welch (2003), involved the question of whether an employee was on a frolic or a detour at the time of the accident.

True

The holder of a copyright owns the particular tangible expression of an idea, but not the underlying idea or method of operation

True

The most common form of agency relationship is employer-employee.

True

The overall benefits of administrative regulations often exceed their costs.

True

The person who file an application first has priority

True

The principal has the right to demand reimbursement from the agent for any damages paid to a third party because of an agent's negligence.

True

The term "usual authority" refers to the authority that an agent has been allowed to exercise in the past.

True

True or false: The CPSC has created a public database where consumers may report dangerous products.

True

True or false: The FDA does not have as much authority to regulate cosmetic products as it does food and drugs.

True

True or false: Under common law, a landowner had to show specific harm to his property from nuisance.

True

Under the Chevron standard, courts should defer to an agency's interpretation of law and of fact.

True

Use is the only requirement for Trademarks and registration is not necessary, but does offer some benefits

True

When an agency publishes notice of proposed rulemaking, the notice must include the subject of the proposed rule, when and where the proceedings will be held, and the authority for passing the rule.

True

Whether a person is an independent contractor or an employee depends o what he or she does, not how the relationship is characterized by the parties.

True

Widely known facts and common sequences are not copyrightable.

True

Subsequent to the America Invents Act (2011), the first person to file a patent application receives patent protection.

True, since its difficult to prove who invented an item first, Congress changed the system in 2011 by passing the American Invents Act that the first person to file an application for a patent will receive patent protection. (period of patent protection begins of the date the patent app if filed rather than when its issued which may be years later. after expires it enters into public domain.

Location of the Franchise

Typically, the franchisor determines the territory to be served. Some contracts give the franchise exclusive rights, or "territorial rights", to a certain geographic area.

Acts that are beyond the express or implied powers of a corporation are called _____ acts.

Ultra vires

Collective bargaining

Union representatives negotiate contracts with representatives of management in a process called collective bargaining.

Fact Pattern 5-2 Billy owns a used car lot. Samantha works for Billy selling used cars. Billy fully directs and controls her work, sets her hours, and pay her an hourly salary as well as a commission. Belinda comes to the lot to buy a used car. Samantha, however, tells Belinda that she needs to sell her mother's used vehicle and that if Belinda will meet her after hours, she will give Belinda an excellent deal. Belinda meets Samantha after work and ends up buying the car belonging to Samantha's mother. The next day, Samantha, acting within the scope of her employment, is moving a car. She, however, is in a hurry and in a grossly negligently manner backs it over the foot of Wesley, another customer. While waiting for the ambulance to come for Wesley, Belinda storms onto the lot complaining about the condition of the vehicle she purchased from Samantha's mother. Billy fires Samantha on the spot based on her obviously intoxicated condition and the fact that she arranged for the sale of her mother's vehicle. Samantha informs him that she has been an excellent employee and that he has no reason to be unhappy with her. Refer to Fact Pattern 5-2. Did Samantha breach any fiduciary duties owed to Billy?

Yes, both the duty of loyalty and the duty of care

A company's benefit administrator, while acting on behalf of the company, invested 100% of the plan funds in speculative stock. The return on the investment was ten-fold. The duty violated by the plan fiduciary in this instance is: a) Diversification b) Prudence c) Loyalty d) Adherence

a

A female job seeker was denied employment at a local law firm as she did not fulfill a job requirement that all employees be at least 6 feet tall. An employment practices liability claim was filed against the law firm alleging discriminatory actions. The type of discrimination described in this instance is: a) Disparate impact b) Disparate treatment c) Overt discrimination d) Gender discrimination

a

A law that affects employment practices liability loss exposures is the Worker Adjustment & Retraining Notification Act, which: a) Requires employers to provide notice 60 days in advance of covered plant closings & mass layoffs b) Prohibits discrimination against disabled persons and requires an employer to make reasonable accommodations in the workplace for disabled employees. c) Establishes minimum wage & overtime rates and regulates the employment of children. d) Prohibits discrimination against individuals age 40 or older based solely on their age.

a

A lawsuit brought by one or more shareholders in the name of the corporation is a: a) Derivative lawsuit b) Class action lawsuit c) Fiduciary lawsuit d) Retaliation lawsuit

a

A shareholder may bring a derivative suit against a director or officer for having ownership in a competing business. This is a breach of their: a) Loyalty b) Obedience c) Disclosure d) Care

a

ABC has a directors and officers (D&O) policy with a limit of $10 million, with a $10,000 SIR coverage A. In order to boost cash-flow, the accounting department made what turned out to be risky investments. While those investments paid off initially, they soon went bad and ABC lost a lot of cash and ended up in a worse cash-flow position than previously. Due to this bad investment and change in the cash-flow pictures, the value of ABC's stock dropped so much that the New York Stock Exchange decided to de-list. AS a result of the de-listing, the stock could no longer be traded and stockholders had nothing more than sheets of paper to show for their investment. The stockholders sued the directors for $100 million. However, a settlement was reached with the stockholders, for the limit on the D&O policy, less defense costs and deductible. With defense costs of $200,000, how much did the stockholders collect under the D&O policy? a) $9,790,000 b) $9,800,000 c) $9,990,000 d) $10,000,000

a

An Insured has an unendorsed employment practices liability (EPL) policy with a $500,000 limit of liability and a $25,000 retention. A former employee alleges injuries sustained when another employee's acquaintance entered the premises and assaulted the employee, with injuries and damage totaling $100,000. Is this a covered claim, and if so, how much will the Insurer pay? a) No, coverage does not apply. b) Yes, coverage applies. Insurer pays $75,000. c) Yes, coverage applies. Insurer pays $80,000. d) Yes, coverage applies. Insurer pays $100,000.

a

An employer has a personnel policy that requires employees to be at least 6 feet tall before they can be considered for an office managerial position. This action would be cause for an employee to file a discrimination claim against the employers Employment Practices Liability policy based on: a) Disparate impact b) Overt discrimination c) Disparate treatment d) Overt harassment

a

An individual alleges a wrongful act by the director of a company. In order to classify the allegation as a claim under a directors & officers policy, which one of the following must occur? a) A written demand for monetary or non-monetary relief b) A verbal demand for monetary or non-monetary relief c) The threat of a filed lawsuit against the director d) The initiation of criminal proceedings

a

Bridgette wants to start a corporation. She is looking for a state in which to incorporate. If she incorporates in the state with laws that favor corporate management, where many corporations have incorporated, she will select: a. Delaware. b. Colorado. c. Florida. d. Michigan

a

Coverage A and Coverage B of most D&O liability policies insure different entities for the same type claims. Which one of the following is an entity insured under these policies for claims brought against the entity or individual? a) The corporation itself b) Customers of the corporation c) Stockholders of the corporation d) Employees of the corporation

a

Employment Practices Liability policies often provide coverage for 3rd-party discrimination claims filed by: a) Customers who have been sexually harassed. b) Employees who have been discriminated against. c) Employees who were wrongfully terminated. d) Customers dissatisfied with product reliability.

a

George owns 300 shares of preferred stock in a company. By owning preferred stock, George has: a. priority over holders of common stock as to dividends. b. the right to force the company to buy back the shares. c. a fixed maturity date for his shares. d. priority over holders of common stock as to dividends and the right to force the company to buy back the shares.

a

If an employer has both an employee benefits liability (EBL) coverage & fiduciary liability coverage, why is it important to check the wording in both policies' "Other Insurance" provisions? a) To be sure that the 2 policies will not create a conflict in the event of a claim covered by both policies. b) To be sure that the Insured employer is paying an adequate premium for the coverage. c) To be sure that both policies will pay the full amount of any covered claim. d) To be sure that both policies will pre-rate the payment of any covered claim.

a

Keenan wants to incorporate his business. He buys business cards and labels with the name "Keenan's Kwips" on them and begins selling gag gifts. Keenan follows the rules for incorporation in his state, including a statement that he is the sole shareholder, and he is granted a certificate of incorporation. Keenan's business is probably a: a. de jure corporation. b. corporation by estoppel. c. de facto corporation. d. public corporation.

a

Legislation has greatly expanded the basis for employment-related discrimination claims. These laws can create employment practice liability (EPL) loss exposures. Which one of the following is true regarding these exposures? a) EPL policies specifically exclude some violations created by law. b) Federal employment-related laws are broader than state laws. c) Corporate risk managers need only deal with the insurable exposures. d) Major types of employment-related claims are mutually exclusive.

a

Micah and Jonah want to start a corporation but want to be taxed as a partnership. They should form a(n): a. S corporation. b. benefit corporation. c. public corporation d. C corporation

a

Most directors and officers policies have a claims-made coverage trigger. Which one of the following does an extended reporting period add? a) 30 - 60 days automatic tail coverage b) 60-90 days automatic tail coverage c) 2-7 years of coverage after the automatic tail d) 6 years of coverage after the automatic tail

a

Some organizations such as school boards, municipalities, and non-profit organizations carry a special type of directors and officers (D&O) liability policy. What is the name given to this type of D&O coverage? a) Occupation-specific b) Director-specific c) Officer-specific d) Insured-specific

a

Tammi purchases stock in Vivaldi Corporation. Vivaldi Corporation later encounters legal issues and faces significant legal claims. As a shareholder, Tammi's liability is: a. limited to her investment in the stock. b. just like that of partners. c. unlimited.

a

The chief financial officer (CFO) of ABC Corporation was charged with administering the company's 401(k) plan for employees. Because the ABC stock value was growing at a double digit rate, the CFO invest the full 401(k) funds in ABC stock. 2 years later, the ABC stock dropped significantly due to new competition in the market. An employee group brought suit against the CFO for not properly diversifying the 401(k) investments and for not being prudent in carrying out his duties managing the 401(k). Which one of the following policies would provide coverage for the CFO for defense of this lawsuit? a) Fiduciary liability policy b) Directors and officers liability policy c) Employment practices liability policy d) Comprehensive general liability policy

a

The director of a corporation has been named in a suit brought by a stockholder of the corporation alleging a failure to correct inaccurate statements made within its prospectus. What is the classification of the suit made: a) Non-derivative suit b) Civil suit c) Derivative suit d) Class action

a

The director of a corporation has been named in a suit brought by a stockholder of the corporation alleging a failure to correct inaccurate statements within its prospectus. The stockholder filed suit in his own name. Which one of the following is the most likely classification of the suit? a) Non-derivative suit b) Civil suit c) Derivative suit d) Class action

a

The majority of cases of alleged wrongful employment practices arise from which one of the following? a) Wrongful termination b) Discrimination c) Sexual harassment d) Retaliation

a

To pierce the corporate veil is to expose the shareholders to personal liability. a. True b. False

a

What is the name given to a claim by an employee who says that he/she was fired because of the filing of a workers compensation claim? a) Retaliation claim b) Harassment claim c) Discrimination claim d) Insurance claim

a

Which one of the following is often covered under fiduciary liability policies? a) Claims arising under the Consolidated Omnibus Budget Reconciliation Act (COBRA) b)Claims for acts that occurred before the retroactive period c) Claims because of criminal and fraudulent acts d) Claims because of failure to properly fund a plan

a

Which one of the following statements is true regarding the use of deductibles and coinsurance in directors and officers (D&O) liability policies? a) Substantial deductibles often apply to Coverage B, with a small or no deductible applicable to Coverage A. b) Most D&O policies include a percentage deductible that disappears after a claim has reached a certain amount. c) Because there is no "valuation" in D&O Insurance, D&O policies do not contain a coinsurance provision. d) D&O policies do not have deductibles but generally impose a substantial coinsurance penalty for underinsurance.

a

TILA

a disclosure law. It is administered by the Federal Reserve Board and requires sellers and lenders to disclose credit terms or loan terms so that individuals can shop around for the best financing arrangements, also provides for contract rescission (cancellation) if a creditor fails to follow the exact procedures required by the act.

Consumer Products Safety Commission (CPSC)

a government agency that carries out the activities of the Consumer Product Safety Act is an independent agency that does not operate under any other department of the federal government. Presided over by three commissioners who are appointed by the President and who serve for staggered seven-years terms.

Environmental Protection Agency (EPA)

a governmental agency that regulates all aspects of environmental law, established is 1970. The EPA has broad authority to conduct research, enforce federal statutes and regulations, and set minimum standards for environmental pollution. Enforces the Clean Air Act and the Federal Water Pollution Control Act.

Credit Report

a person's report of his or her financial and credit information

Full Warranty

a seller's clearly written promise to repair the product, replace the product, or refund the price of a product

Implied Warranty

a seller's unwritten promise that is inherent in the nature of the sales transaction rather than given through express language

The Securities and Exchange Commission (SEC) charges the Able Baker Co. (ABC) with violating an administrative rule regarding the sale of securities. ABC did not realize that in its search for capital it became subject to securities regulations. ABC may attempt to settle the case rather than proceed to litigation because:

a settlement is less costly than litigation.

Electronic Injury Surveillance System

a system that gathers product injury data from hospital emergency rooms around the nation

Flawed and Insignificant Research Advertisements

a type of deceptive advertising unsupported by valid research or testing methods

Bait and Switch

a type of deceptive advertising which involves a seller offering one product with the intent to encourage the buyer to purchase another higher priced product

Which of the following is NOT usually considered an independent contractor? a. A delivery driver working for a delivery service b. A lawyer working for a client c. A plumber working for a homeowner d. An architect working for a developer

a. A delivery driver working for a delivery service

Which of the following are autonomous computer programs that can be dispatched by the user to execute certain tasks? a. Electronic agents b. Software identifiers c. Click programs d. Fortran identifiers

a. Electronic agents

When ruling on a case involving contracts, the law looks at a number of factors to distinguish between employees and independent contractors. Which of the following factors would NOT be included among those examined? a. How much experience does the worker have? b. Is the work usually performed by a specialist without supervision? c. Is the worker paid hourly or by the job? d. What degree of skill is required for the work?

a. How much experience does the worker have?

The "Inside Story" discussed the fiduciary rule announced by the Department of Labor in 2016. What is the requirement of this rule, and who is it meant to benefit? a. That advisers act in clients' best interests in making recommendations when advising them concerning retirement accounts. b. That advisers stop charging a set fee for making recommendations to clients concerning estate planning. c. That advisers retain fees and commissions regardless of clients' interests in order to keep the industry robust. d. That fiduciary investment advice can be provided by either registered or nonregistered investor advisers in order to create greater competition in keeping with capitalist principles.

a. That advisers act in clients' best interests in making recommendations when advising them concerning retirement accounts.

Mo owns a business that makes kites. Mo's agent Baez entered into an agreement with Val to purchase some land for a new kite factory. Mo's agency relationship with Baez was not memorialized by any writing. The day after Baez signs the papers finalizing the sale, Mo learned of the purchase, was furious with Baez, and wanted out of the deal. Assuming that Baez was legally considered the agent of Mo in making the purchase, which of the following is Mo's best argument? a. That the agency agreement with Baez was not in writing and that under the equal dignities rule Mo should not be bound. b. That agency agreements may not extend to the purchase of land. c. That under the exclusion principle, Baez was not authorized to purchase land unless expressly authorized by Mo. d. That Mo did not need land and therefore should not be bound because Baez was mistaken.

a. That the agency agreement with Baez was not in writing and that under the equal dignities rule Mo should not be bound.

Which of the following is true regarding respondeat superior? a. Under that theory, a principal may be liable for not only the contracts but also the torts of its agents. b. Under that theory, a principal may be liable for only the contracts of its agents, not the torts. c. Under that theory, a principal may be liable for only the torts of its agents, not the contracts. d. Under that theory, a principal may not be held liable for either the contracts or torts of its agent unless the principal expressly authorizes the agent's actions.

a. Under that theory, a principal may be liable for not only the contracts but also the torts of its agents.

An agent will have emergency powers: a. to protect the principal's property and rights when the agent is unable to communicate with the principal. b. when the agent is on the phone. c. when the principal is on the phone

a. to protect the principal's property and rights when the agent is unable to communicate with the principal.

Under the theory of _____, a company can be held liable for violations of ______ law by its employee, even if a manager told the employee not to violate the law. a. vicarious liability; civil b. aided-in-the-agency; civil c. vicarious liability; criminal d. disclosure of principal; civil

a. vicarious liability; civil

Legislative Rules

agency rules that affect substantive legal rights and carry the same weight as congressionally enacted statutes

Franchise form of business organization

agreement between franchisor (owner of trade name/trademark) and franchisee (per who sells goods/services under trade name/trademark)

The fair use doctrine _______ a person or company to use copyrighted material ______ permission of the copyright owner.

allows without

When a corporation is not operated as a separate entity, this is called the

alter ego theory

corporation by estoppel

an entity that has not attempted to incorporate, but holds itself out to others as a corporation

De Facto Corporation

an entity that has not substantially complied with all statutory requirements

de facto corporation

an entity that has not substantially complied with all statutory requirements. these are recognized in only a few states

De jure corporation

an entity that has substantially complied with all statutory requirements for incorporation

de jure corporation

an entity that has substantially complied with all statutory requirements for incorporation

Tom and Rose are married and co-own Green Acres Farm, with right of survivorship. Theirs is MOST LIKELY...

an estate by the entirety

Without permission, Sally copies photographs from Isaiah's book Mount Everest: Top of the World and uses them in a new book. Sally's book is about photography not mountains. Sally's use of the photos is:

an infringement of Isaiah's copyright

UCC 2-315 Implied Warranty: Fitness for Particular Purpose

an inherent promise that the buyer understand the buyer's intended purpose for the product and guarantees that the purchase will help accomplish that purpose

UCC 2-314 Implied Warranty of Merchantability

an inherent promise that the goods sold conform to ordinary standards and that they are of the same average grade, quality, and value as similar goods sold under similar circumstances.

Syndicate

an investment group that comes together for the specific purpose of financing a large project ex. pro sports teams type of joint venture operating by partnership law

Cease and Desist

an order that stops an advertiser from continuing a deceptive or confusing advertising campaign.

limited partner

an owner who invests money in the business but does not have any management responsibility or liability for losses beyond the investment

Stock may be described as:

an ownership interest in the corporation

An Alabama state statute prohibits business entities from using bill inserts to express controversial views. A court would likely hold this law to be

an unconstitutional restriction of speech

California enacts a statute to ban advertising in "bad taste." This statute would likely be held by a court to be

an unconstitutional restriction of speech

Congress enacts the Tight Money Act (TMA) to prohibit "major business entities" from making political contributions that individuals can make. A court would likely hold the TMA to be

an unconstitutional restriction of speech

Cordial Drinks, Inc., markets alcoholic beverages. A federal regulation bans the disclosure of the alcohol content of liquor on Cordial's labels and those of other marketers. A court would likely hold this regulation to be

an unconstitutional restriction of speech

Indiana enacts a statute that bans the distribution of anonymous political leaflets. A court would likely hold this to be

an unconstitutional restriction of speech

Limited Liability Company

an unincorporated business organization with limited liability of a corporation, yet can be taxed like a partnership

FDCPA

attempts to curb perceived abuses by collection agencies. The act applies only to specialized debt-collection agencies and attorneys who regularly attempt to collect debts on behalf of someone else, usually for a percentage of the amount owed. Creditors attempting to collect debts are not covered by the act unless, by misrepresenting themselves, they cause debtors to believe they are collection agencies. A debt collector who fails to comply with the act is liable for actual damages, plus additional damages not to exceed $1,000 and attorneys' fees.

Grand Lighting Co. has filed a petition for voluntary bankruptcy under Chapter 7 of the Code. Which of the following will prohibit creditors from collecting debts that Grand Lighting incurred before the petition was filed?

automatic stay

A female supervisor consistently reprimands male, but not female, employees for using the Internet for personal use. This is an example of: a) Overt discrimination b) Disparate treatment c) Disparate impact d) Adverse impact

b

A large manufacturing corporation administers a health care plan with a clause that allows terminated employees to maintain their group health benefits for 90 days under the Consolidated Omnibus Budget Reconciliation Act (COBRA). A former employee of the company has filed a claim alleging that they lost all health care benefits after being terminated. The company maintains current Directors & officers (D&O), Employment Practices Liability (EPL), and Fiduciary Liability policies. The claim would be covered: a) By the EPL policy b) Under the fiduciary liability policy c) By the D&O policy d) Under the workers compensation polciy

b

ABC Corporation was self-insured for its employee health insurance benefits. John was the personnel director and was charged with administering the plan. John found that the female portion of the workforce made use of the health insurance coverage much more than the male portion. In an effort to reduce the expense of the health insurance program, John began to eliminate jobs within the company that were held by females. As a result, a group of female employees brought suit against John and against ABC for discrimination and wrongful termination. Which one of the following policies held by ABC would respond and defend John? a) Directors and officers liability policy b) Employment practices liability policy c) Fiduciary liability policy d) Comprehensive general liability policy

b

Although a corporation may not want to settle any derivative suits out of court, why under common law might such settlements not benefit the corporation? a) the corporation would be considered to be the wrongdoer b) No determination of wrongdoing is made c) The results are not binding on all participants d) The results are sealed and, thus, hidden from the stockholders

b

An employer requires that its employees be at least 6 feet tall. Which one of the following types of potential Employment Practices Liability claims is likely to result from this requirement? a) Disparate treatment discrimination b) Disparate impact discrimination c) Sexual harassment d) Retaliation

b

An office-supplies distributor requires its drivers to be able to lift 100 pounds with proper form. 45 women who have denied employment during the current year file a class action lawsuit alleging that the lifting requirement is unfairly discriminatory against women. The distributor promptly reports the claim to its Employment Practices Liability (EPL) Insurer. In court, the distributor is found guilty of discrimination since the heaviest item actually distributed weighs only 20 pounds. The EPL carrier incurs $50,000 in defense costs and the court orders a $900,000 judgement against the distributor to be split among the 45 women. There is a $1 million limit of liability including defense costs; Retroactive Date is 01/01/1970; Retentions are $25,000. The EPL policy will pay: a) $50,000 for defense costs and nothing for the judgment. b) $50,000 for defense costs and $875,000 for the judgment. c) $50,000 for defense costs and $900,000 for the judgment. d) Nothing for the defense costs and $900,000 for the judgment.

b

Carlota is a Vice President of Operations at LMN Enterprises. She is an exempt employee, meaning she is not entitled to: a) Contingent income b) Overtime pay c) Compensatory time off d) Pension benefits

b

Corporate directors are considered to have met their duty of care if they: a) Discharge their responsibilities according to the same standards that an employee of the organization would use b) Act in good faith and in a manner they reasonably believe to be in the best interests of the corporation c) Conduct themselves in a manner that guarantee's the enterprise's profitability d) Make informed decisions based upon their special business skills

b

Marcus has filed na employment discrimination claim against his employer and lodged a complaint with the Equal Employment Opportunity Commission (EEOC). If the EEOC dismisses Marcus's discrimination complaint, it will: a) Bar his suit b) Not bar his suit c) Diminish the value of his suit d) Transfer the claim to another gov't agency

b

The Health Insurance Portability & accountability Act of 1996 (HIPAA) required that certain provisions in fiduciary liability policies be changed. One of those changes was to the definition of "wrongful act." How did many Insurers change the definition of "wrongful act" in their fiduciary liability policies in response to the passage of HIPAA? a) Many Insurers removed the definition of "wrongful act." b) Many Insurers added "breach of duties imposed by HIPAA" to the definition of "wrongful act." c) Many Insurers decided to wait for court action before changing their definition of "wrongful act." d) Many Insurers removed coverage for fines assessed under HIPAA.

b

The former director of a microchip manufacturing company has recently been hired by a computer manufacturing company. The microchip manufacturing company alleges that the director has breached a confidentiality agreement signed at his departure and revealed trade secrets regarding the microchip manufacturing company tot eh computer manufacturing company. The microchip manufacturing company further alleges that this has resulted in the computer manufacturing company being awarded a significant contract meant for the microchip company, Under a typic directors and officers (D&O) liability policy, the directors legal fees and other losses indemnified by the company would be paid under: a) Coverage A b) Coverage B c) Coverage C d) Coverage

b

The marketing department of a software company suggest raising the price of its most successful and popular software. The board of directors approves the decision. The price increase causes the company a large decrease in market share and the company stock prices go down. 12 men & 8 women employees of the marketing department are involved in the pricing strategy that ultimately lead to the product's decline. All of the women are terminated; however, none of the men lose their positions. Shareholders file a derivative suit against the directors claiming a breach of duty for approving the change in product pricing without requesting and reviewing adequate information to substantiate the change. Additionally, the women employees file suit for wrongful termination and sex discrimination. The software company's: a) Directors and officers liability policy will respond to the shareholder suit, and the fiduciary liability policy will respond to the suit by the terminated employees. b) Directors and officers liability policy will respond to the shareholder suit, and the employment practices liability policy will respond to the suit by the terminated employees. c) Fiduciary liability policy will respond to the shareholder suit, and the employment practices liability policy will respond to the suit by the terminated employees. d) Directors and officers policy will respond to the shareholder suit, and the employment practices liability policy will exclude coverage for the suit by the terminated employees due to its being an Equal Employment Opportunity Commission (EEOC) violation.

b

What is the term given to the duty to act for someone else's benefit? a) An imposed duty b) A fiduciary duty c) An insurable duty d) A non-exempt duty

b

When the value of a 401-K plan drops significantly, what is the name of the Federal law under which the effected employees may bring suit? a) Social Security Act b) ERISA c) Federal Pension Reform Act d) Federal Employer Liability Act

b

Which one of the following best describes the types of plans the Employee Retirement Income Security Act applies to? a) Employee benefit plans that relate to retirement funding. b) All types & sizes of employee benefit plans. c) Employee benefit plans for employers with 5 or more employees. d) All plans declared as employee benefit plans & registered by the employer.

b

Which one of the following must be endorsed to a fiduciary liability policy to be considered an "insured plan?" a) Customized retirement plan b) Multi-employer plan c) A group health insurance plan d) Profit-sharing plan

b

Which one of the following statements is accurate concerning a standard, unendorsed directors and officers (D&O) policy? a) A policy provides 15-25 day automatic tail coverage, with an occurrence coverage trigger. b) A policy provides 30-60 day automatic tail coverage, with a claims made coverage trigger. c) A policy provides 120-day automatic tail coverage, with a claims-made coverage trigger. d) A policy does not provide automatic tail coverage, with an occurrence coverage trigger.

b

Which one of the following statements is true regarding Coverage B of a directors and officers (D&O) liability policy? a) Coverage B insures the individual directors and officers, indemnifying them for covered claims when neither required nor permitted by law. b) Coverage insures the corporation for amounts that it is lawfully required to pay to settle claims against the directors and officers. c) Coverage B coverage is restricted to losses for which the corporation does not or cannot provide indemnification to the director or officer. d) Coverage B makes the corporation itself as an insured for claims made against it because of wrongful acts covered by the policy.

b

Wrongful termination claims can sometimes allege implied employment contracts arising from which one of the following types of documents? a) Mission statement b) Employee handbook c) Code of conduct d) Vision statement

b

In CASE 5.2, Northeast General Corp. v. Wellington Advertising, Inc. (1993), the plaintiff sued to receive a finder's fee for acting as an agent to Wellington. Wellington claimed Northeast failed to disclose adverse information and thereby failed in its fiduciary duty. How did the court rule and why? a. The appellate court refused to dismiss the plaintiff's claim and found that its failure to disclose a material conflict of interest established a claim for breach of fiduciary duty. b. The appellate court ruled that Wellington must pay the finder's fee because the agreement did not contain cognizable fiduciary terms. c. The court dismissed the case because the defendants' financial losses from their market mishap with Sternau do not provide sufficient reason to advocate a new fiduciary-like doctrine into finders' agreements. d. The trial court judge set aside the jury's verdict based on public policy imperatives, which imposed a fiduciary-like duty on finders to disclose adverse information to clients; the appellate court upheld this ruling.

b. The appellate court ruled that Wellington must pay the finder's fee because the agreement did not contain cognizable fiduciary terms.

A corporation's directors are: a) Elected by the corporation's officers b) Appointed by the corporation's officers c) Elected by the corporation's shareholders d) Appointed by the corporation's management

c

A fiduciary liability claim has been filed by the employees of a company. The employees allege that poor funding administration of the company-managed health insurance plan has resulted in an exponential increase in the plans cost. Which one of the following acts would govern any abuses in managing the plans funding? a) Family & Medical Leave Act (FMLA) b) Health Insurance Portability & Accountability Act of 1996 (HIPAA) c) Employee Retirement Income Security Act (ERISA) d) Consolidated Omnibus Budget Reconciliation Act (COBRA

c

A typical securities class action complaint contains an allegation such as: a) Directors and officers have failed to fulfill legal duties owed to employees under the Employee Retirement Income Security Act of 1974 (ERISA) b) Directors and officers have violated state environmental statutes c) Insiders have profitably sold their personal holdings in the company's shares while the share price was artificially inflated d) Directors and officers have used the corporate jet for personal use

c

ABC Corporation encourages its directors and officers to serve as outside directors for local not-for-profit organizations and consequently ABC wishes to provide the D&O coverage for them for this service. Why might ABC obtain a separate policy called an outside directors liability policy rather than include the exposure on its corporate policy? a) Coverage for separate entities is not available under the basic corporate D&O policy. b) As a not-for-profit, the rate will be much less than adding the coverage to the corporate policy. c) Claims paid will not reduce the aggregate limit of liability under the regular corporate policy. d) Claims are not as likely to be made against a not-for-profit company as under the corporate policy.

c

Acme Co. just completed the incorporation process and received its articles of incorporation from the state. At the first organizational meeting of the new company, the officers' most important task is to: a. determine the details of the stock sale. b. amend the articles of incorporation. c. adopt bylaws. d. create a hiring policy.

c

An employer's fiduciary liability policy has a one-year term beginning on June 1. On July 15, a claim is filed as a result of a lawsuit by an employee alleging a breach of the employer's obligation in benefits administration. The suit alleges the employer negligently failed to collect required contributions from the employee in February of the same year, resulting in the employee's health insurance being canceled and several medical expenses being denied. The provisions of the fiduciary liability policy will respond by: a) Denying coverage because the loss occurred prior to the policy inception. b) Providing coverage because the claim was made after the policy inception date. c) Denying coverage due to the exclusion related to collection of employee contributions. d) Providing coverage due to the claim being reported after the policy inception and meeting the definition of a wrongful act.

c

An occupation-specific directors and officers policy such as an Educators' Professional Liability policy may be preferrable to a non-specific independent directors liability policy because: a) The policy can not be rescinded even in the event of nonpayment of premiums. b) Coverage is excess over the corporation's directors and officers liability policy. c) Coverages often include Employment Practices liability and Professional liability. d) The policy provides Side A-only coverage for a reduced premium.

c

Employers face a number of potential loss exposures due to federal legislation and state laws. Of the various types of Employment Practices Liability (EPL) claims, which one of the following is a major type of EPL claim? a) An overtime pay claim b) A retirement claim c) A retaliation claim d) An exempt employment claim

c

Fiduciary liability loss exposures from benefit plans arise mainly out of the possibility that: a) Employees will allege that they did not receive salary and other compensation commensurate with their contributions to the organization. b) Shareholders will allege that the organization's directors & officers were negligent in allocation resources to benefit plans. c) Beneficiaries of an employee benefit plan may make a claim against the plan officials for breach of their fiduciary duties. d) Vendors that provide benefits will file liens against the corporation's assets for unpaid balances due.

c

In most ways, fiduciary policies closely resemble D&O and employment practices liability (EPL) policies. Which one of the following is true about fiduciary liability policies? a) The policy provides liability coverage for all participants or beneficiaries of the plan. b) Covered legal defense expenses are provided in addition to the policy limits. c) To be covered claims must be first reported during the policy period. d) The definition of a wrongful act includes acts of any plan participant or beneficiary.

c

Joe owns a small stock brokerage, XYZ Company. He also serves as a director & pension fund fiduciary at XYZ Company. Most of the pension fund at XYZ Company is invested in the company's own stock. When XYZ starts having financial troubles, the price of the stock goes down. Various brokers at Joe's firm want to move much of the XYZ pension fund to a safer investment. However, Joe fails to approve the transfer, because he fears the effect such a move would have on XYZ. As a result, the value of the pension fund drops. Which one of the following fiduciary duties is Joe breaching by focusing solely on the possible financial impact that a change would have on XYZ Company? a) Duty of prudence b) Duty of diversification c) Duty of loyalty d) Duty of adherence

c

On March 1, 2009, a townhouse association purchased a Directors & Officers Liability Policy for the March 1, 2009 to March 1, 2010 policy period. The policy contains a March 1, 2009 retroactive date. On April 23, 2009 the association was named in a lawsuit alleging improper removal of a board member in which the lawsuit took place on February 1, 2009. Which one of the following best describes the scope of coverage provided by the claims-made provision of the policy? a) The would be coverage under the policy since the claim was reported within the policy period. b) There would be coverage under the policy since the association had no knowledge of the claim prior to the effective date of the policy c) There would be no coverage under the policy since the wrongful act occurred prior to the retroactive date of the policy. d) There would be no coverage under the policy since the policy contained a full prior acts exclusion.

c

Several lawyers in Plainsville decide to start a law firm together. They use their names as the name of the firm. The law firm of Adams, Bell, and Clyde has the letters "P.C." at the end of its name. The letters stand for: a. Publicly held Corporation. b. Public Company. c. Professional Corporation. d. Public Corporation

c

Some Employment Practices Liability (EPL) insurers offer additional coverage and services to its Insureds. Additional coverages commonly offered by an EPL Insurer include which one of the following coverages? a) Errors & omissions coverages b) Workers compensation coverage c) 3rd-party discrimination coverage d) Occupational Safety & Health Act violations coverage

c

Some fiduciary liability policy exclusions differ from those in other professional liability policies. Which one of the following is an exclusion under a typical, unendorsed fiduciary liability policy? a) Obligations for certain penalties imposed by ERISA b) Obligations to cover claims arising under COBRA c) Obligations to pay for losses resulting from a failure to collect required employee contributions d) Obligations to pay claims made for acts that occur after the retroactive period

c

The administrators of a retirement plan decide the plan will exclude all women from coverage. The women formerly covered by the plan file suit with allegations that the decision to negate their coverage was imprudent. The administrators of the plan should seek protection from lawsuit under which one of the following policies? a) Directors and officers liability b) Employment practices liability c) Fiduciary liability d) Commercial general liability

c

The purpose of the severability of interests provision of a directors and officers liability policy is to: a) Provide automatic coverage for directors and officers of new entities resulting from mergers. b) Continue coverage for directors and officers after they have retired from their positions c) Remove a coverage exclusion for innocent directors and officers who did not have knowledge of wrongful acts d) Exclude coverage for claims made against directors and officers covered under prior policies

c

The type of corporation most at risk for piercing the corporate veil is the: a. publicly traded corporation. b. public corporation. c. close corporation.

c

To prove that a hostile work environment exists, an employee generally must show several facts. Which one of the following is one of those facts? a) The employer did not know about the harassment. b) Remedial action taken by the employer was ineffective. c) The harassment affected a term or condition of employment. d) The employee is not a member of a protected class.

c

Tough TVs, a corporation, makes a profit in its first year of existence. The managers of the corporation decide to reinvest the profits. The reinvested profits are called: a. shareholder profits. b. public earnings. c. retained earnings. d. dividends.

c

Billie owns a used car lot. Scout works for Billie selling used cars. Billie fully directs and controls Scout's work, sets Scout's hours, and pays Scout an hourly salary as well as a commission. Brady comes to the lot to buy a used car. Scout, however, tells Brady that Scout needs to sell a friend's used vehicle and that if Brady will meet Scout after hours, Scout will give Brady an excellent deal. Brady meets Scout after work and ends up buying the car belonging to Scout's friend. The next day, Scout, acting within the scope of employment, is moving a car. Scout, however, is in a hurry and in a grossly negligently manner backs it over the foot of Wylie, another customer. As they wait for the ambulance to come for Wylie, Brady storms onto the lot complaining about the condition of the vehicle purchased from Scout's friend. Billie fires Scout on the spot based on Scout's obviously intoxicated condition and the fact that Scout arranged for the sale of a friend's vehicle. Scout claims to be an excellent employee and that Billie has no reason to be unhappy with Scout as an employee. a. Only Billie b. Only Scout c. Both Billie and Scout with Billie having the right to recover from Scout any amounts paid d. Both Billie and Scout with Scout having the right to recover from Billie any amounts paid

c. Both Billie and Scout with Billie having the right to recover from Scout any amounts paid

Under the Uniform Computer Information Transactions Act (UCITA), what would be the result if an electronic agent agrees to a click-wrap agreement? a. The user of the electronic agent would not be liable for the agreement. b. The user of the electronic agent would be liable for the agreement only if the evidence established that the user had an opportunity to look over the agreement and cancel it within a reasonable length of time. c. The user of the electronic agent would be liable for the agreement. d. The user of the electronic agent would be liable for the agreement only if the user was a merchant in respect to goods or services of the type purchased by the agreement.

c. The user of the electronic agent would be liable for the agreement.

Billie owns a used car lot. Scout works for Billie selling used cars. Billie fully directs and controls Scout's work, sets Scout's hours, and pays Scout an hourly salary as well as a commission. Brady comes to the lot to buy a used car. Scout, however, tells Brady that Scout needs to sell a friend's used vehicle and that if Brady will meet Scout after hours, Scout will give Brady an excellent deal. Brady meets Scout after work and ends up buying the car belonging to Scout's friend. The next day, Scout, acting within the scope of employment, is moving a car. Scout, however, is in a hurry and in a grossly negligently manner backs it over the foot of Wylie, another customer. As they wait for the ambulance to come for Wylie, Brady storms onto the lot complaining about the condition of the vehicle purchased from Scout's friend. Billie fires Scout on the spot based on Scout's obviously intoxicated condition and the fact that Scout arranged for the sale of a friend's vehicle. Scout claims to be an excellent employee and that Billie has no reason to be unhappy with Scout as an employee. Refer to Fact Pattern 5-2. Did Scout breach any fiduciary duties owed to Billie? a. Yes, only the duty of loyalty. b. Yes, only the duty of care. c. Yes, both the duty of loyalty and the duty of care. d. No.

c. Yes, both the duty of loyalty and the duty of care.

33. Express authority may be given by: a. the principal's actual words but not by action. b. written contract only. c. the principal's actual words and also by an action that indicates the principal's consent. d. action but only after a contract of agency has been signed.

c. the principal's actual words and also by an action that indicates the principal's consent.

An owner has purchased a fee simple interest in a lakefront cottage along with 6% of the parking lot, laundry room, and boathouse. What kind of ownership has been bought?

condominium unit

What do most franchisors think is more important? Consistency from store to store or avoidance of liability?

consistency from store to store liability is the cost of doing business

A Minnesota state statute restricts certain kinds of advertising to protect consumers from being misled. A court would likely hold this statute to be

constitutional under the First Amendment

A Metro City ordinance allows only a few street vendors to operate in certain areas, for the purpose of reducing traffic. A court would likely hold this ordinance to be

constitutional under the equal protection clause

United Fabrics International, Inc., bought a fabric design from an Italian designer and registered a copyright to it with the U.S. Copyright Office. When Macy's, Inc., began manufacturing and selling garments with a similar, but not exact, design, United Fabrics filed a copyright infringement suit against Macy's. The dispute in this case is over the _______

copyright of a particular fabric design

A regional barbecue restaurant decided to expand nationally. Although market research indicated that the expansion would not be profitable, the restaurant chain's management decided to move forward with the plans. The company's retirement assets were heavily invested in corporate stock. After the expansion, the stock price fell more than 50%. Which one of the following management liability policies would respond to the employees' suit against the company for the reduction in their retirement assets? a) Employee benefits liability policy b) Employment practices liability policy d) Directors & officers liability policy d) Fiduciary liability policy

d

Ariana is an officer of New Stage, a theater production company. Without telling any other officers or the board of directors, she decides that New Stage should try to sell gardening tools over the Internet. She makes contracts with suppliers and a Web-based remote-order-fulfillment company. The only action that may not be taken is: a. the shareholders can file a lawsuit on behalf of the corporation. b. the state attorney general may seek an injunction against the transactions or seek a dissolution order from a court. c. the corporation can file a lawsuit against her. d. she can file a lawsuit against the corporation for damages.

d

Bill and John are employees of XYZ Corp. and also serve on XYZ's board of directors. They have been asked to serve as directors for New Charity Organization. XYZ wants to protect Bill and John from any possible financial loss from their service for New Charity Organization. What is the name of the type of policy that XYZ can purchase to protect Bill and John while they serve on the board at New Charity Organization? a) An other company directors liability policy b) An inside directors liability policy c) An excess directors liability policy d) An outside directors liability policy

d

Employee practices liability (EPL) policies typically agree to pay loss resulting from claims made during the policy period for a wrongful act. Which one of the following is a correct statement regarding claim awards that include back pay? a) EPL policies all address the issue of coverage for both front pay as well as for back pay. b) EPL policies exclude claims for back pay relating to discrimination claims. c) EPL policies provide coverage for front pay awards but exclude claims for back pay. d) Some EPL policies cover claims for back pay for certain types of claims.

d

Employment practices liability loss exposures are effected by a statute which establishes minimum wage & overtime rates, and regulates the employment of children. The statute applies to employers with at least 2 employees engaged in interstate commerce and a business volume of over $500,000 per year. Which one of the following statutes is described? a) Civil Rights Act of 1991 b) Employee Retirement Income Security Act c) Consolidated Omnibus Budget Reconciliation Act d) Fair Labor Standards act

d

How did many insurers change the definition of "sponsored plan" in their fiduciary liability policies in response to the passage of the Health Insurance Portability & Accountability Act (HIPAA) of 1996? a) Many Insurers removed the definition of "sponsored plan." b) Many Insurers narrowed the definition of "sponsored plan" to specifically exclude those plans subject to HIPAA. c) Many Insurers decided to wait for court action before changing the definition of "sponsored plan." d) Many Insurers broadened the definition of "sponsored plan" to include those plans subject to HIPAA.

d

How is the word "loss" used differently in a directors and officers (D&O) liability policy versus in a Commercial General Liability (CGL) policy? a) In a CGL policy, the total "loss" payable includes payments of defense expense; in a D&O policy, defense expenses are outside the total amount payable b) In a D&O policy, defense expenses are not payable. c) In a CGL policy, defense expenses are not payable. d) In a D&O policy, the total "loss" payable includes payment of defense expense; in a CGL policy, defense expenses are outside the total amount payable.

d

Human Resource Manager Jim has received medical records of employee Drew in connection with a pending health insurance claim. Distracted by an unrelated conversation, Jim left Drew's medical records near the office photocopier, where 5 co-workers were able to view the materials. Jim & his company may have some legal exposure pertaining to which one of the following federal laws that calls for protection of employee medical information and subjects employers & fiduciaries to penalties for non-compliance? a) RICO b) FICA c) ERISA d) HIPAA

d

Independent directors on the board are those that are not otherwise affiliated with the corporation they are serving. They may insist on having their own D&O coverage. A reason for this request would be...? a) That it would not be as likely that issues of coverage for the total board would be construed against them. b) So that it would be less likely that they would be sued for issues of other board members c) Due to the fact that it is less expensive than covering the total board of directors d) So that their insurance limits will not be diluted by claims against other directors.

d

Marguerite starts a corporation. Her articles of incorporation specifically state that the corporation will work in the beauty products industry. Marguerite would like to take out a loan on the company's behalf. She: a. cannot, because borrowing is not an express power in the articles. b. cannot, because corporations cannot borrow money. c. can, because it is illegal to forbid the borrowing of money. d. can because of the implied powers of the corporation

d

Mitch has been as underwriter at Regional Insurance Company for several years. He has always been attracted to one of the file clerks named Debbie. One year on his birthday, Mitch approached Debbie in the file room and asked for a "birthday kiss." Debbie said "no" and laughed it off. Unfortunately, Mitch persisted and became more and more aggressive in his pursuit of the "birthday kiss." Debbie complained to her supervisor, Louise, about the incident with Mitch. Debbie also contended that Mitch has said several things to her over the years and that Louise knew about it but didn't do anything, saying that "Mitch is harmless and wouldn't hurt a fly." Debbie then claims sexual harassment and quits her job. She then sues Regional Insurance Company stating that she could no longer work there under the current "working conditions." What is the term for the "working conditions" to which Debbie was referring? a) Unwelcome advances b) Interference with job responsibilities c) Inability to earn a living d) Hostile work environment

d

Patrick works in the benefits department at a company whose responsibilities involve selecting investments that support the employee benefit plan. One of the investment options happens to be at a firm where Patrick's friend works. He knows the friend could use the money that would come from the substantial investment the benefit plan would create. Despite the fact there are more sound investments, Patrick decides to invest heavily in the friend's company. The investments perform adequately. Is this a violation of Patrick's fiduciary duties? a) No, his duties would have been violated, had the investment performed poorly. b) No, the investment provided adequate performance and no harm was done. c) Yes, the plan had the potential to perform better than it did. d) Yes, he has a duty to act solely in the interest of the plan and participants.

d

QRS, LLC has been a small town's largest employer for a long time. When the owner of QRS, LLC died, the company was forced to lay off 25% of its workforce, because the proper life insurance was not in force for the owner. These mass lay-offs resulted in bad publicity in the town paper and much negativity directed at the company in various town meetings. The Employment Practice Liability (EPL) policy in force for QRS, LLC provided money to cover QRS's costs to retain a PR firm. Such costs are called: a) Bail out costs b) Unnecessary costs c) Forced costs d) Reputation management costs

d

The Health Insurance Portability & Accountability Act (HIPAA) sets standards for health insurance, prohibits discrimination in enrollment, and improves disclosure about group health plans. Which one of the following is a response that fiduciary insurers have provided in response to the HIPAA law? a) They have provided coverage for up to $100,000 for any criminal fines imposed due to HIPAA. b) They provide endorsements for fidelity bond coverage for the fiduciary liability policy. c) They extend coverage for loss due to failure to collect required employee contributions. d) They have provided an endorsement to cover civil fines that HIPAA can impose.

d

Today most ultra vires acts involve _________ a. close corporations b. publicly traded corporations c. benefit corporations d. nonprofit corporations

d

Wilson, Bart, and Susan Fields decide to set up a corporation together called Fields, Inc. They follow the correct procedures for establishing their corporation, but once it is established they do not hold regular corporation meetings. Since they are all related, they just conduct their communications and business related to Fields, Inc. at their family gatherings and over casual phone conversations. When Fields, Inc., is sued for failing to pay some outstanding debts, the court likely will: a. dismiss the case because Fields, Inc., is a close corporation. b. dismiss the case because Fields, Inc., is an open corporation. c. not pierce the corporate veil. d. pierce the corporate veil due to the failure to hold required corporation meetings.

d

Carlin owns a nail and hair salon. Carlin reaches an agreement with Teddy, an independent contractor, which allows Teddy to do nails in Carlin's salon three days per week. On Teddy's desk is a sign informing customers that Teddy is an independent contractor of the shop. After working for a month, Teddy asks whether Carlin has been paying appropriate social security taxes for Teddy and informs Carlin that Piper, a customer, is preparing to sue both Teddy and Carlin based upon a nasty nail fungus that developed after Teddy did Piper's nails. a. Both Carlin and Teddy are responsible to Piper with Carlin being primarily responsible, meaning that if Teddy pays then those payments can be recovered from Carlin. b. Both Carlin and Teddy are responsible to Piper with Teddy being primarily responsible, meaning that if Carlin pays then those payments can be recovered from Teddy. c. Carlin owes 50 percent of any payments due Piper, and Teddy owes 50 percent; but neither Carlin nor Teddy can recover against the other. d. Carlin does not owe Piper any amount.

d. Carlin does not owe Piper any amount.

Carlin owns a nail and hair salon. Carlin reaches an agreement with Teddy, an independent contractor, which allows Teddy to do nails in Carlin's salon three days per week. On Teddy's desk is a sign informing customers that Teddy is an independent contractor of the shop. After working for a month, Teddy asks whether Carlin has been paying appropriate social security taxes for Teddy and informs Carlin that Piper, a customer, is preparing to sue both Teddy and Carlin based upon a nasty nail fungus that developed after Teddy did Piper's nails. Refer to Fact Pattern 5-1. Which of the following is true regarding the duty of Carlin, if any, to pay social security taxes for Teddy? a. Carlin must pay all of Teddy's social security taxes. b. Carlin is responsible for 50 percent of Teddy's social security taxes, and Teddy is responsible for 50 percent. c. Carlin is responsible for all of Teddy's social security taxes only if Teddy works at least 30 hours per week; otherwise, Teddy is responsible for all of the taxes. d. Carlin is not responsible for any of Teddy's social security taxes.

d. Carlin is not responsible for any of Teddy's social security taxes.

Macy's design was similar to, but not exactly like, United Fabrics' design. Copyright infringement ______ require an exact reproduction of the original.

does not

If a state passes a regulation that impacts interstate commerce, it may violate the __ commerce clause. To decide if the regulation is unconstitutional, the courts typically balance the __ of the state against the __ on interstate commerce.

dormant, interests, burdens

One main disadvantage of the corporate form of business is ________

double taxation of distributed income

Consumer Product Safety Act

enacted in 1972, was designed to: 1. protect the public from unreasonable injury from consumer products 2. assist consumers in weighing the advantages and disadvantages of some products 3. develop minimum safety standards 4. conduct research and investigation on consumer products

Equal Credit Opportunity Act

enacted in 1974, it prohibits creditors from discriminating in the offering of credit services

Magnuson-Moss Warranty Act

enacted in 1975, it makes product warranties more easy for consumers to understand and gives the Federal Trade Commission power to enforce warranties.

Fair Debt Collection Practices Act

enacted in 1977, it protects a creditor's right to pursue payment but proved new protections for consumers

Fair Credit and Charge Card Disclosure Act

enacted in 1988, it provides for disclosure of information in the issuance and regulation of consumer credit cards

Consumer Product Safety Improvement Act

enacted in 2008, it required testing and certification of some products and created a public database for consumers to make complaints

Match the branch of government with the function it performs in our government. executive branch

enforces the law

Employees of Truan went on strike because of unfair labor practices. After the strike, the striking workers are

entitled to get their jobs back

what administrative agency regulated pesticides, insecticides, fungicides, and rodenticides

environmental protection agency

As a general rule, employers have a legal obligation to disclose information about former employees to potential employers

false

As of 2016, companies are not allowed to use crowdfunding to offer and sell securities.

false

Both per se and rule of reason violations of the Sherman Act are automatically illegal

false

If a corporation cannot point to a document that articulates its express power, the corporation does not have the power.

false

State laws that allow the use of medical marijuana protect users in those states from federal prosecution.

false

Under modern antitrust law analysis, a company with a market share between 70 and 90 percent has a monopoly

false

Disparagement

false statements about a competitor's product or service

The U.S. Constitution created a __ form of government.

federal

Property deeded to a town, provided, however, its us is "for recreational purposes only" conveys a...

fee simple on condition subsequent

venture capital

financing provided by professional outside investors to new business ventures

venture capital

financing provided by professional, outside investors to new business ventures

United Fabrics would lose the ability to control the fabric once sold to Macy's under the ________.

first sale doctrine

crowdfunding

funds that come from a cooperative network usually through the internet

crowdfunding

funds that come from a cooperative network, usually through the internet

The Equal Employment Opportunity Commission (EEOC) issues a statement describing how it will apply a section of the Americans with Disability Act. After exhausting the administrative remedies, Jill files a lawsuit in federal court alleging that the EEOC incorrectly interpreted the statute. The court likely will:

give deference to the EEOC's interpretation so long as it is reasonable

A homeowner may be allowed certain protection from judgments of creditors as a result of his estate's...

homestead rights

Assume that three automobile manufacturers all merged into on car company. Such a merger would be a

horizontal merger

Protection of trade secrets extends to both _______ and their ______. Because of this, there is no ______ requirement. But secret information must be known by someone so companies usually attempt to protect the secrets through _______ agreements.

ideas, expression registration confidentiality

Tom files a suit against the state of Utah, claiming that a Utah state law violates the commerce clause. The court will agree if the statute

imposes a substantial burden on interstate commerce

Foreign Corporation

in a given state, a corporation that does business in that state without being incorporated in that state

foreign corporation

in a given state, a corporation that does business in the state without being incorporated in that state

When a business association holds itself out to others as being a corporation when it has made no attempt to , the firm normally will be from denying corporate status. When this occurs, courts will treat the entity as a corporation, but only for the purposes of resolving dispute.

incorporate estopped a single

Which of the following would NOT be regulated at the state level? a. Interstate commerce laws b. Zoning restrictions c. Fire and building codes d. Antidiscrimination laws

interstate commerce laws

Agency Enforcement and Adjudication

investigation includes power to: - conduct inspections and tests - issue subpoenas - search during site inspections - search warrants

Collective Mark

is a mark used by members of a cooperative, association, or other organization to certify the region, materials, mode of manufacture, quality, or accuracy of the specific goods or services.

Certification Mark

is a mark used by one or more persons, other than the owners, to certify the region, materials, mode of manufacture, quality, or accuracy of the owner's goods or services. e.g. "good Housekeeping Seal of Approval" or "UL Tested"

Service Mark

is a mark used in the sale or the advertising of services, such as to distinguish the services of one person from the services of others.

Patent infringement

is if a firm makes, uses, or sells another's patented design, product, or process without the patent owner's permission, that firm commits the *tort* of patent infringement.

In 2014, Mugaba wrote her memoirs, My Life in the Congo. Mugaba did not register a copyright. Under federal copyright law, Mugaba's book:

is protected for her life plus seventy years

The Environmental Protection Agency (EPA) passes a proposed rule change to the Clean Air Act related to the discharge of emissions by factories. The EPA's action would be considered arbitrary and capricious for all of the following reasons except:

it failed to provide the required time for public comment.

EEOC considers obesity to be a disability if..

it has an underlying physiological cause and/ or if the individual is morbidly obese

Which of the following is the most accurate statement about the Robinson-Patman Act

it has rarely been enforced in recent years

Courts historically have granted deference to an administrative agency's . This seems appropriate when applied to an agency's analysis of questions. In the Chevron case, the United States Supreme Court stated that this deference is also appropriate when an agency interprets its own and authority.

judgement, factual, regulations

Which example in the following list is unrelated to the concept of intellectual property.

land

A tenant who rents an apartment from the owner of the property holds a....

leasehold interest

Direct Mail Sales Corporation regularly advertises its products. Under the First Amendment, these ads and other commercial speech are given

less protection than noncommercial speech

What is a disadvantage to limited liability company?

may be limits to ability to raise capital through this structure (when compared to corporation) as some investors may not desire membership status

In vertical price-fixing, the manufacturer sets the

minimum prices that retailers may charge

Creation of an Easement

must be in writing - expressed in a will, contract, or deed - Implication (subdivison) - Necessity (land locked) - Prescription (understood agreement)

Cason thinks of a new concept for a palm-sized computer notebook. He also thinks of a new, faster process for producing the notebooks. Federal copyright law protects:

neither Carson's concept nor his process.

In addition to making decisions that are not arbitrary and capricious, agencies must give fair ____ to those affected by its regulations.

notice

In addition to making decisions that are not arbitrary and capricious, agencies must give fair __________ to those affected by its regulations.

notice

Many rules must be adopted using the notice-and-comment rulemaking procedure, which includes giving ______ the proposed rulemaking, allowing for a period of time for ______ from the public, and the issuance of the ______ rule.

notice of, comments, final

According to the United States Supreme Court, a court must give Chevron deference to an agency interpretation if it has gone through the:

notice-and-comment rulemaking process.

To be patentable, an invention, discovery, process, or design must be:

novel, useful, and not obvious

how owners affect management

owners/stockholders (elect board of directors) --> board of directors (hire officers) --> officers (set corporate objectives and select managers) --> managers (supervise employees) --> employees

A court will disregard the corporate form and the corporate in five circumstances: first, if a party is into dealing with the corporation rather than the individual; second, if the corporation is set up to always be or is capitalized; third, if the corporation is formed to an existing legal obligation; fourth, if the corporation fails to follow the statutory corporate ; and fifth, if the personal and corporate interests are so that the corporation has no separate identity.

pierce veil tricked insolvent thinly evade formalities commingled

Express authority

power given by one party to another in clear and definite terms to act on that person's behalf

When Congress intends to exclusively control a subject where the U.S. Constitution allows for both states and the federal government to act, courts will use the doctrine of __ to invalidate any state regulations.

preemption

Independent Agencies

president's influence less pronounced (federal reserve) - officers serve for fixed terms - cannot be removed without the just cause

ECOA (equal credit opportunity act)

prohibits the denial of credit solely on the basis of race, religion, national origin, color, gender, marital status, or age. The act also prohibits credit discrimination on the basis of whether an individual receives certain forms of income, such as public-assistance benefits.

The fair use exception has four components: first, the ______ of the use, second, the _______ of the copyrighted work; third, the ______ of the work used; and fourth, the ______ of the use on the potential _______.

purpose nature amount effect market

To determine if an agency is abusing its discretion in pursuing information, a court may consider the _________ of the investigation, the _____________ of the information being sought, the _________ of the demand for documents, and the __________ of the demand on the party.

purpose, relevance, specificty, burden

Copyright owners generally are protected against unauthorized ________ of the work, development of __________ works, ________ of the work, and public ________ of the work.

reproduction derivative distribution display

Generally, copyright owners have exclusive rights to make ________, develop ________ works, _______ the work, or ______ display the work.

reproductions derivative distribute publicly

The Government in the Sunshine Act ________all agency meetings to be_________ to the public unless they meet certain criteria. If a person is going to be________ , if _______agency action would be frustrated, or if the meeting involves litigation or rulemaking, then the meeting may be____________ .

requires, open, accused if a crime, future, future, closed

Dormant Commerce Clause

restriction on states' authority to pass laws that substantially affect interstate commerce, i.e. no right to discriminate against out-of-state citizens

Today most state corporate statutes are at least partially based on the ____

revised model business corporation act

Corporations normally are financed by . One type of security consists of borrowing funds and is called a . The other main type of security consists of ownership in the corporation and is called a , or equity security.

securities bond stock

Exclusive Dealing

seller requires that these dealers not handle competitors' products - Lessen competition substantially (must) and is reviewable - Different from permissible practice of exclusive distributorship, where seller distributes certain products to only one retailer (allowed)

Amy Mendoza is a local radio personality who goes by the name "Amy in the A.M." on the air. She also uses that label in print ads to help radio listeners distinguish her show from the other morning radio shows in her town. Amy would be most likely to register her name as a:

service mark

Pierre has a radio show in the evening that he calls "Pierre in the PM" and he uses that label in print ads. Pierre most likely can register "Pierre in the PM" as a

service mark

According to the Administrative Procedures Act (APA), courts should _____ agency actions that are found to be_____ , ____ , or an abuse of _______ .

set aside, arbitrary, capricious, discretion

According to the Administrative Procedures Act (APA), courts should __________ agency actions that are found to be _________ , ________ , or an abuse of __________.

set aside, arbitrary, capricious, discretion

A corporation is a legal entity, a person in the eyes of the law. Property owned by the corporation is owned in...

severalty

What refers to ownership by one person?

severalty

Preferred stock

stock that gives the owner priority as to payment of dividends and distribution of assets on dissolution

preferred stock

stock that gives the owner priority as to payment of dividends and distribution of assets on dissolution

Executive Agencies

subject to the authority of the president (health and human services) - can appoint officers/directors - can fire officers/directors

Colorado enacts a statute that limits the liberty of all persons, including corporations, to broadcast "annoying" radio commercials. This may violate

substantive due process

Federal system

system in which a national government in Washington, D.C., coexists with state governments in each state. A key concept underlying the federal system is that the Constitution grants limited powers to the federal government: the powers of the federal government must be specifically granted by the U.S. Constitution.

Arbitrary and Capricious Test

the APA gives courts power to hold agencies' actions "arbitrary and capricious" if they are not in compliance with constitutional due process - fail to provide a rational explanation for a decision - change in prior policy w/o explanation - failure to consider a relevant factor

When there is a direct conflict between a decision by a federal Environmental Protection Agency (EPA) administrator on a matter that comes within the EPA's jurisdiction and a Hawaii state law

the EPA's decision takes precedence

The requirement that no person be deprived of "life, liberty, or property without due process of law" is found in

the Fifth Amendment and the Fourteenth Amendment

A union declares its workers are going on strike. The employer states the collective bargaining agreement is still in force for another eight months and that it contains a no-strike clause. The union claims the CBA's no-strike provision is not binding since new union leadership is in place. Which of the following statements is correct?

the Union cannot strike because the no strike clause

Owen claims that a Pennsylvania state statute infringes on his "substantive due process" rights. This claim focuses on

the content of the statute

If there is a direct conflict between a federal law and an Alaska state law

the federal law takes precedence

A&O is the software designer of the most popular video game in the country. A&O decides to develop the game into a series and have its best designer, Laz, head the team of programmers working on the next game. Laz quits and goes to work for GameWare, taking some files for the new game with him. Under trade secret laws, A&O has protection for:

the information in the files and Laz's ideas for the game design

Buster invents a new camp grill that he names Buster's Burger Blaster. He writes specific instructions about how to use it in a manual that comes with every grill. Buster can obtain a trademark for:

the name only

Under the Constitution

the national government and the states share sovereign power

Which of the following is TRUE in cases based on claims of disparate treatment?

the plaintiff must prove that the defendant intentionally discriminated

Under what circumstances might the court reject a debtor's Chapter 13 plan?

the plan anticipates paying the unsecured creditors less than what they would get under Chapter 7

retained earnings

the portion of the corporations profits or income that is not paid out to shareholders

An agent's implied authority can be inferred by

the position the agent occupies

Enumerated powers

the powers granted to the three branches of the federal government

The Food and Drug Administration (FDA) is an example of an executive agency. If Fred Smith is an officer in the FDA and he fails to perform his duties properly, the power to remove him lies with:

the president of the United States.

Corrective Advertising

the process of correcting a false, misleading, or incomplete claim with affirmative advertising

limited liability

the responsibility of a business's owners for losses only up to the amount they invest; limited partners and shareholders have limited liability

unlimited liability

the responsibility of business owners for all of the debts of the business

Fred, the president of Good Retail Corporation, claims that certain actions by the federal government and the state of Hawaii infringe on rights guaranteed by the Bill of Rights. Most of these rights limit

the state government and the federal government

Doctrine of Private Nuisance

the unlawful use of property in a manner that unreasonably interferes with the use or enjoyment of another person's property

BKS Incorporated has a research and development (R&D) facility in the Arizona desert. Only authorized persons are allowed in the facility, and all employees and guests must sign a non-disclosure agreement. BKS likely considers the ideas of the people in their R&D division to be:

trade secrets

Alpha Corp. creates a syrup that is flavored with coffee and chocolate and sells it under the name MochaMerge. Beta Co. begins to sell a similar product under the name MokaMerge. This is most likely a matter of:

trademark infringement

Bonds normally have a fixed payment and a maturity date when the principal is returned to the bondholder.

true

Cincy, Inc. is building a $20 million addition onto its distribution facility. To build the facility, Cincy must fill in two acres of wetlands. Under the Clean Water Act, Cincy must obtain a permit before filling in the wetlands.

true

Per se violations are subject to both criminal and civil penalties

true

Private equity firms use their private equity capital to invest in existing corporations.

true

Reciprocal dealing is a type of vertical cooperative strategy

true

To pierce the corporate veil is to expose the shareholders to personal liability.

true

TriColor, Inc. purchased a piece of land from HBC, Inc. Hazardous waste was subsequently discovered on the land. Even though TriColor did nothing illegal, it may be liable under CERCLA for the cleanup costs.

true

Unless a trade name is used as a trademark or service mark, it cannot be registered with the federal government.

true

the disposal of nonhazardous solid waste has generally been left to the states

true

A major motion picture distributor offers to provide a television station with three very popular, desirable films. However, as part of the agreement, the distributor requires that the television station also purchase four films that are not very desirable. This type of arrangement is called a

tying arrangement

A Rhode Island state statute imposes a prison term, without a trial, on all street vendors who operate in certain areas. A court would likely hold this statute to be

unconstitutional under the due process clause.

General Partnership

unincorporated business owned and operated by two or more persons

Sole Proprietorship

unincorporated business owned by one person (simplest)

Limited Partnership

unincorporated business with at least one general partner and one limited partner

The police obtain a search warrant and search Dave's apartment. After yelling obscenities at the officers, Dave confesses to a crime and implicates his friends. The Constitution protects against

unreasonable searches only

Substantive presidential proclamation

usually involve the conduct of foreign affairs and other sworn executive duties, such as matters of international trade, the execution of set export controls, the establishment of tariffs, or the enforcement of federal immigration laws.

Example 6

yes because they failed to provide a rational explanation for its decision and changed its prior policy without justification