Quiz 2 Multiple Choice Study set

Lease signing question. Guy signs "on behalf of the corporation"

He is not personally liable because he disclosed his agency when he wrote that it was on behalf of the corp. Ratification authority would not necessarily apply here, but he is liable if he fails to disclose his agency

Expected Value calculation

(Gain from winning - cost of litigation)*probability of winning + (Gain from losing (0) - cost of litigation)*probability of losing

The Uniform Dispute Resolution Procedure for the resolution of disputes over domain names relies on, or comes closest to, which form of dispute resolution: a. Arbitration b. Mediation c. Litigation d. Negotiation e. Rock-paper-scissors

A - Arbitration. Final ruling stands, third party mediates dispute

Company A adopted and began using the name Purrfect Opener for a pill bottle opener. The best form of intellectual property protection for the product's name is a. Trademark law. b. Copyright law. c. Trade secret law. d. A design patent. e. A utility patent.

A - Trademark - can be used for names

Assume that you have filed the appropriate paperwork to create an S corporation. You are the sole owner and only shareholder. In these circumstances, as the owner, as a general rule, you will face: a. Limited liability and pass-through taxation b. Limited liability and double taxation c. Unlimited personal liability and pass-through taxation d. Unlimited personal liability and double taxation e. None of the above

A - it is a corporation, so you have limited liability. Pass through because S corp

In a limited partnership, a general partner has (pick one) (a) limited or (b) unlimited personal liability for the debts and liabilities of the partnership.

B - General partners have unlimited personal liability. Only limited partners have limited liability

Which of the following is not a discovery tool that may be used in litigation: a. Interrogatory b. Habeas corpus petition c. Interrogatories d. Request for Admission e. None of the above (In other words, all of these are discovery tools.)

B - Habeas corpus petition is for being a prisoner of the state

Assume that you and a friend become licensed professional engineers and began operating an engineering consulting service together. In the absence of any formal agreement regarding the nature of the enterprise, the business entity that your actions have most likely created is: a. Sole proprietorship b. Partnership c. C-corporation d. LLC e. S corporation

B - Need founding documentation to make any of C-D, and there is teamwork so it's not sole prop.

A company sells sunglasses and advertises the glasses as specially designed and safe for use in sports and other activities. A consumer buys the sunglasses and wears them while playing baseball. A ball strikes the glasses. The glasses shatter. The consumer is injured. Which of the following legal causes of action or theories of recovery would not be available to the consumer for her injury: a. Negligence by the company in the design and manufacture of the sunglasses. b. Product defamation. c. Express warranty. d. Implied warranty of fitness for particular purpose. e. Strict product's liability.

B - product defamation - this would be if the user went and lied about the product to someone else.

Jane Doe is an officer and director of DCB inc. DCB wants someone to do freelance computer programming. Ms. Doe is responsible for hiring. Ms. Doe's son is a qualified and gifted programmer who works at competitive rates. If she hires her son, she a. Violates her duty of care b. Violates her duty of loyalty c. Violates her duty of obedience d. Will not violate duty of loyalty if she discloses to boss that Jon is her son before hiring e. Will not violate duty of loyalty if she discloses to boss that Jon is her son before hiring

B - violates duty of loyalty. She must recuse herself from the hiring decision

In determining whether an Uber driver is an employee of Uber, which of the following facts is not relevant and will not be considered: a. Whether Uber has control or the right to control the Uber driver's work for Uber, including the details of the work. b. Whether Uber pays its drivers a salary, an hourly wage, or by the job. c. Whether the Uber driver provides his own car or uses one Uber provides. d. Whether the Uber driver has a valid driver license. e. Whether the work will be performed at Uber's offices or another location.

D - Drivers license - doesn't matter whether or not they have a license, only matters if they check off things on the list

To form a C corporation, you must: a. Enter into an agreement with the other founders of the C corporation b. Create and file articles (or a certificate) of incorporation and by-laws and any other documents required by the state in which you incorporate c. Create and file articles of organization and an operating agreement and any other documents required by the state in which you incorporate d. Pick a board of directors e. b and d

E - Both B and D are correct. You need to file the articles of incorporation and establish a BOD. The BOD can be one person.

Assume that you are the CEO and sole shareholder of a C corporation, Biz, Inc. Biz, Inc. has been found liable in a tort dispute and owes $10 million to the injured plaintiff. Biz, Inc. has only $5 million in assets, so the plaintiff is seeking to hold you personally liable for the judgment. Which of the following, if true, would make it more likely that a court would pierce the corporate veil and hold you personally liable for the judgment. a. You make all decisions for the corporation b. You are also Chairman of Biz, Inc.'s board of directors c. You have commingled Biz, Inc.'s accounts with your personal accounts d. Biz, Inc. has not held a board of director or shareholder's meeting in five years e. c and d

E - C and D - cannot commingle and must maintain board meetings

If Uber drivers are determined to be employees of Uber, and an Uber driver assaults his Uber passenger, then Uber: a. is not legally liable for any damages the passenger may have suffered. b. is legally liable only if Uber itself was negligent in hiring, training, retaining, or promoting the driver. c. is legally liable for the passenger's injuries under the doctrine of respondeat superior. d. is legally liable if Uber itself was negligent in hiring, training, retaining, or promoting the driver. e. C and D.

E - C and D are both correct. It is not B because Uber can be held liable for respondeat superior.

Which of the following does not need to be included in an agreement between the founders of an entrepreneurial enterprise: a. Buy-sell provision describing how one can buy out the other b. Ownership shares c. Whether ownership shares are subject to vesting d. The time commitment expected from each e. Exit strategy

E - exit strategy is not necessary in founders agreement

Company A developed a cat-shaped device used to assist consumers with opening pill bottles and storing their medications. The head and tail of the device are shaped to assist the consumer with opening pill bottles. The best form of intellectual property protection for these features of the device is a. Trademark law. b. Copyright law. c. Trade secret law. d. A design patent. e. A utility patent.

E - utility patent - Copyright doesn't include functional items, and design patents can only be addressed for ornamental (nonfunctional) objects

If you pay a lawyer a retainer of ten thousand dollars for legal work, and the legal work becomes unnecessary, you are entitled to a return of the retainer. a. True b. False

True - Should not keep unworked-for funds

A white male supervisor, Sam Jones, at Camco, Inc. berates, harasses, and yells at all of his employees. After enduring six months of the abuse, a white female employee, Jane Smith, quits. Based upon these facts, Ms. Smith: a. Has experienced sexual harassment. b. Has experienced racial harassment. c. Has been discriminated against on the basis of her religion. d. Has had her right to reasonable accommodation under the American with Disabilities Act violated. e. None of the above.

e - none of the above. Because he harasses everyone, he is not doing it based upon sex, race, religion etc.

Duck meat question - duty of care or loyalty or both?

he violates only his duty of loyalty through his self dealing. Duty of care is ok because he's providing the company with quality meat at competitive price.