BUSI 2301 Business Law Exam One Ch 1 - 15
The Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) seeks to:
ensure the cleanup of waste from previous business activities.
A __ contract must be in a special form or be created in a certain way.
formal
The promise or obligation of each party to a contract must be supported by consideration in order for the contract to be valid. T/F
True
A firm offer can be best defined as:
an offer that cannot be revoked for a reasonable time if no time is stated.
Kenneth was sentenced to six years in prison for forgery. In this case Kenneth has committed a(n)
Felony
Which of the following is true of the Children's Online Privacy Protection Act (COPPA)?
It imposes certain requirements on operators of websites directed to children under the age of 13.
Which of the following best describes the term "consideration"?
It indicates what the promisor demands and receives as the price for a promise.
To recover for a tort based on negligence, the plaintiff must show:
the breach of the tortfeasor's duty to the injured party.
An offer that does not specify a particular manner of acceptance may be accepted in any manner reasonable under the circumstances. T/F
True
If, after an offer has been made, the performance of the contract becomes illegal, the offer is terminated. T/F
True
In a small claims court, there is no jury and a judge tries the case. T/F
True
A person licensed to represent others in court is called a(n):
Attorney
List four sources of law.
Constitutions (bill of rights) Statues (codes) Judicial Decisions (precedents) Administrative Agency Orders (can make laws and codes)
Which of the following is true of a contract between two minors?
Each minor has the right to avoid the contract.
All agreements are contracts. T/F
False
The law states that a unilateral contract can be formed when performance is started. T/F
False
Under CERCLA, so long as the current owner did not participate in the activity which resulted in contamination of the property, the owner is exempt from liability. T/F
False
Which of the following is true of government regulation business?
Government regulations are used to eliminate abuse in business.
Explain the function of the courts.
To interpret and apply the law
A minor, upon reaching the age of majority, must ratify none or all parts of a contract. T/F
True
Administrative agencies primarily set policy through the issuance of rules and regulations. T/F
True
Advertisements and catalogs are examples of general invitations. T/F
True
If the intended acceptance varies or qualifies an offer, the counteroffer rejects the original offer under the common law. T/F
True
If the supposed consideration consists merely of a promise to do what one is already legally obligated to do, consideration is invalid. T/F
True
Payments made to governmental officials to obtain new business are treated as bribes by the Foreign Corrupt Practices Act. T/F
True
The Racketeer Influenced and Corrupt Organizations Act includes civil sanctions as well as criminal ones. T/F
True
Which one refrains or promises to refrain from doing something, this conduct is known as ___.
forbearance
Which of the following statements is most likely to be true of administrative agencies?
Administrative agencies have the power to implement laws.
An office supply store promises to sell a customer all of the paper ordered by the customer for $4.50 a package in exchange for the customer's promise to pay that price for any copy paper ordered. This constitutes a valid and enforceable contract. T/F
False
If an adult purchases personal property from a minor, the minor has only a voidable title to the property. T/F
False
Ratification to a contract can be made any time before reaching majority. T/F
False
Which of the following is true of a binding contract?
It is created when an offeree accepts an offer that has been properly communicated.
Which of the following statements is true of common law?
Cases in common law are decided on the basis of precedents.
Which of the following best describes the difference between civil law and criminal law?
Civil law deals with the enforcement or protection of private rights, whereas criminal law deals with offenses against society.
A jury found the plaintiff's damages amounted to $100,000 but that the plaintiff was also 45% liable for the event causing the damages. Under the doctrine of comparative negligence, what damages will the plaintiff collect?
$55,000
An offeree's inquiry about the terms of an offer that differ from the offeror's terms will have what effect?
The inquiry will not reject the offer, and if the offeror says no, the original offer may still be accepted if it has not been revoked.
Which of the following conditions is a prerequisite for any agreement to be legally enforceable?
The parties entering into the agreement must have the mental capacity to contract.
As a general rule, the adequacy of the consideration is irrelevant because the law allows bargains. T/F
True
Consideration is not necessary to support an obligation of record. T/F
True
Generally, a part payment of a past-due debt is not consideration to support the creditor's promise to cancel the balance of the debt. T/F
True
In the legal system of the United States, it is possible for identically worded law to have different consequences in different states. T/F
True
The use of rogue programs to produce abnormal computer behavior is an example of computer trespass. T/F
True
While many states have repealed their former laws restricting the capacity of a convict to contract, some states still have restrictions. T/F
True
The Robinson-Patman Act prohibits sales at unreasonably low prices in order to eliminate competition. T/F
True
The U.S. Supreme Court is the highest tribunal in the land, and its decisions are binding on all other courts. T/F
True
The Water Pollution and Control Act is responsible for preventing the illegal discharge of pollutants into interstate and navigable waters. T/F
True
The legal term for one party benefiting unfairly at the expense of another is unjust enrichment. T/F
True
The location where a case is to be tried is known as a venue. T/F
True
The failure of a party to perform the obligations assumed under a contract is known as a(n):
breach of contract
Ryan, a college student, intends to sell his car. He contacts his friend Luiz and inquires whether he is interested in buying the car. Luiz finds the quoted price reasonable and buys the car from Ryan. In this scenario, Ryan is the ___.
offeror
If an offeror receives something of value in return for a promise to hold the offer open, it is said to be a(n) ___, and this type of offer cannot be revoked.
option
Activities that are illegal regardless of their effect are known as __
per se violations.
The term disaffirmation refers to:
the election to avoid a contract or set it aside.
Disgorgement of profits refers to:
the repayment of any profits received as a result of corrupt payments.
What precaution can a business person take when contracting with a minor?
A business person can require an adult to join the contract as a cosigner.
A promise to steal a valuable piece of art is valid consideration to support a contract. T/F
False
A summons is a way for parties to obtain unprivileged information from another party prior to trial. T/F
False
A trademark must be registered before the holder is afforded any rights or protections for the mark. T/F
False
Felonies refer to crimes that are usually punishable by just a fine. T/F
False
If a decision of an administrative agency conflicts with at statue enacted by a higher legislative body, the agency decision will prevail. T/F
False
It is simpler to file a suit in a court of record than in an inferior court. T/F
False
Probate courts handle divorce and child custody cases. T/F
False
Regulatory agencies are also called social regulatory agencies. T/F
False
If a merchant displays a coat at a particular price, he has a binding requirement to sell at that price. T/F
False
The Uniform Commercial Code states that when a contract for the sale of good is modified by agreement of the parties, consideration is necessary to make it enforceable. T/F
False
The law considers everyone under the age of twenty-one to be a minor. T/F
False
The legal system of the United States is based primarily on the French legal system. T/F
False
The most common type of relief that courts of equity provide is monetary damages. T/F
False
There is no difference between a void contract and an unenforceable contract. T/F
False
To recover damages for an intentional tort, the plaintiff is required to prove that there was a breach of duty by the tortfeasor to the plaintiff. T/F
False
A ___ is a court decision that determines the decision in a subsequent, similar case.
Precedent
What is the chief function of the courts?
They interpret and apply the law from whatever source to a given situation.
A contract for the sale of goods is governed by the Uniform Commercial Code. T/F
True
As a general rule, a minor is liable for torts as fully as an adult is. T/F
True
Government regulates business by means of antitrust laws that seek to promote competition among businesses. T/F
True
___ laws are those that state how parties are to go forward with filing civil actions and how these actions are to be tried.
Procedural
Most business people prefer making oral contracts regarding matters of great importance. T/F
False
Performing or promising to perform what one is already obligated to do is valid consideration. T/F
False
The law is uniform throughout the United States in binding minors on contracts induced by misrepresenting their age. T/F
False
To establish the offense of criminal copyright infringement, a prosecutor needs to prove that the infringement was done for non-financial gain. T/F
False
The doctrine of strict liability can make the manufacturer of a dangerously defective product liable, even if there's no proof of negligence. T/F
True
The offering of money, entertainment, or anything of value as a corrupt payment constitutes a bribe. T/F
True
The system of equity evolved to provide judicial relief in cases where no adequate remedy at law existed. T/F
True
Blake has subscribed to a local charitable association where he needs to make a monthly payment of $100. However, a few months later, Blake stops paying this amount. Which of the following exceptions to the requirement of consideration will enforce that Blake pays the amount?
Voluntary subscriptions
An offeree's response that rejects an offer by varying its terms is known as a(n) ___.
counteroffer
Only financial items can constitute consideration. T/F
False
Which of the following is true of the United States Supreme Court?
It has appellate jurisdiction in cases based on the U.S. Constitution.
Consideration distinguishes mere agreements from legally enforceable obligations. T/F
True
An agency's power to determine whether the activity of a regulated entity is acceptable or not is an example of:
a power over business practices.
When a minor returns property in a damaged condition, in most jurisdictions an adult (party to the original agreement) may:
not recover compensation.
When a contract is required to be sealed, a substitute for an actual seal may be used. T/F
True
When charitable enterprises are financed by voluntary subscriptions of many people, the promise of each person is generally not held to be enforceable. T/F
False
Which of the following statements best describes a difference between rules and laws?
Laws are rules that are enacted by the government.
The "mailbox rule" does not apply in situations where the offeror does not receive the acceptance. T/F
False
In a democratic society, laws generally reflect the ethical view of the majority. T/F
True
When an offeree is not aware of the insanity of the offeror and communicates assent to an offer, it is considered accepted. T/F
False
An offer made in jest that does not appear to be seriously intended to an offeree is considered a valid offer. T/F
False
Which of the following is true of The Water Pollution and Control Act?
It sets limits on discharges, including pollutants into sewer systems.
Private citizens are entitled to sue on the basis of the Water Pollution and Control Act. T/F
True
Silence constitutes acceptance to an offer if it is reasonable in consideration of previous dealings that the offeree to notify the offeror of non-acceptance. T/F
True
A toy merchant's display of a doll house in a store window for $100 constitutes:
an invitation to the public to make an offer for the doll house.
A person who is under the influence of drugs...
cannot use that as an excuse to void a contract.
Appellate courts include courts of appeals and supreme courts. T/F
True
What is the difference between an agreement and a contract?
An agreement results whenever two people's minds meet on a subject, but a contract only exists when the parties intend to be legally obligated by the terms of the agreement.
What is a wobbler?
An offense that can be either a felony or a misdemeanor.
Which of the following is most likely to be a tort based on negligence?
Automobile accidents
The ___ consists of ten amendments to the U.S. constitution specifically designed to protect the civil rights and liberties of citizen and the states.
Bill of Rights
Describe the procedure for filing a suit in a small claims court.
Filing and trying a suit in an inferior court starts with obtaining a form for the complaint from the court and filling it out by the plaintiff without help from a lawyer. The defendant is then served with the complaint. When the case is tried, the procedure is much more informal than in a court of record. A judge tries the case because there is no jury present. Neither party has to be represented by an attorney, and in some courts may not be so represented. Thus, the judge asks the parties to state their positions. Witnesses and evidence may be presented, but the questioning is more informal. The judge is likely to ask questions in order to assist in ascertaining the facts. The judge then renders the verdict and judgement of the court. Normally, either party may appeal the judgement to a court of record, in which case the matter is retried there.
Which of the following is true of the Uniform Commercial Code (UCC)?
Individual states may make changes to the portions of the UCC that they have adopted.
Which of the following is true of state trial courts?
They handle cases that are first instituted in them.
Which of the following is true of trial courts?
They handle cases that are first instituted in them.
Which of the following is true of special federal courts?
They have jurisdiction limited by Congress.
An executory contract is defined as:
a contract in which the terms have not been fully carried out by all parties.
Mark owes $2000 each to his business partners, Ryan, Bryan, and Clark. Since Mark is facing financial difficulties, his business partners agree to accept a total amount of $4800 from Mark as a cancellation of the unpaid balance due to them. This type of an agreement is known as a ______.
composition of creditors
A __ contract would be an enforceable agreement but, because of circumstances or the capacity of a party, one or both of the parties may set it aside.
voidable
Contracts made by people who have become so intoxicated that they cannot understand the meaning of their acts are:
voidable
If a person has not been declared incompetent by a court but lacks legal capacity, such person's contracts are:
voidable
Which of the following is not a true contract and has been imposed by law in order to prevent one party benefiting unfairly at another's expense?
A quasicontract
A temporary order that is issued by a court with equity powers forbidding activities that would be detrimental to others is known as:
A restraining order.
Define law.
A rule of civil conduct, commanding what is right and prohibiting what is wrong.
__ is the assent to an offer that results in a contract.
Acceptance
A written request to a court to settle a dispute is called a(n):
Complaint or petition
The tort of injurious falsehood occurs when:
a person makes false statements of fact that degrade the quality of another's goods or services.
Regulatory agencies can use their licensing power to:
allow a business to enter the filed being regulated.
The Office of Foreign Assets Control (OFAC) is responsible for:
enforcing economic sanctions against individuals and entities deemed a threat to national security.
Judy promises to pay Ashley $50 to babysit her children. After Ashley babysits the children, Judy pays Ashley the $50; thus each party has completed performance of each part of the contract. This is an example of a(n):
executed contract
If a minor contracts for necessaries, the minor's liability is quasi-contractual in nature. This means that:
the minor is not required to pay the contract price but will be required to pay a reasonable amount to avoid unjust enrichment.
ANZ Inc., a cement manufacturer, releases hazardous chemicals into the atmosphere and also into nearby streams. The pollutants released into the atmosphere exceed acceptable levels and the company is facing a suit from the residents of nearby towns. Under which of the following acts can the company be sued?
Clean Air Act
Distinguish among crimes, torts, and ethics.
Crimes - offenses against society as a whole Torts - wrongful act or infringement of a right leading to a civil legal liability Ethics - moral principles that help us determine the morality of conduct and motives
On investigation, it was found that Ken, the bookkeeper at CL Corp., had stolen money from the company's account and recorded financial transactions inaccurately to cover up for this activities. For which of the following business crimes can Ken be prosecuted?
Embezzlement
Explain why we have laws.
Establish a framework in which society can operate as smoothly as possible to avoid disputes.
A person who has not been formally declared incompetent but has periods of lucidity is prohibited from contracting in order to protect those who might seek to contract with such person. T/F
False
A state administrative agency affects businesses throughout the country. T/F
False
An agreement between two parties to perform an illegal act is a quasicontract? T/F
False
An antitrust violation occurs when a business firm seeks to have cooperation within its firm to diminish competition. T/F
False
Contracts made by people who were intoxicated to such an extent that they would not have entered into it if they were sober, makes the contract voidable. T/F
False
For a promise to constitute consideration, the promise must impose an obligation on the person making it. T/F
False
Generally, it is the activity itself, not is effect, which is the most important element in deciding whether the Sherman Act has been violated. T/F
False
Which of the following is true of a valid offer?
It is seriously intended.
Which of the following best defines the tort of interference with a contract?
It occurs when a business relationship has been formed, and in some way a third party intentionally causes one party to end the relationship.
Which of the following is true of quasi-contracts?
It prevents the unjust enrichment of a party.
Which of the following best describes the term "recognizance"?
It refers to the obligations that people enter into before a court to do an act required by law.
Which of the following is true of the doctrine of promissory estoppel?
It requires the promisor to reasonable expect the promise to induce action by the promisee.
Maya, an elderly lady, wanted to sell her house. She offered the house to Lily, a friend. However, before the house deeds were transferred, Maya passed away. Which of the following scenarios is legally acceptable in such a case?
Lily must consider the offer automatically revoked and void.
Which of the following constitutes valid consideration?
Past performance
Sam and Martha sign a contract in which Sam agrees to pay a certain price and buy Martha's house. Later, Sam's brother states that Sam often has intervals of delusions and hence the contract is invalid because it has been made by an incompetent person. Sam has not been declared by the court as insane. In such a scenario, according to law, which of the following will entitle Martha to the price agreed upon in the contract?
Sam was in a sane frame of mind and understood the contract when he signed it.
Kenneth, ages sixteen, sells his car to Robin, aged 49. Later, Robin sells the car to Sarah, an innocent third party, before Kenneth can disaffirm the contract. In this case, which of the following will hold true?
Sarah can obtain good title to the property.
A probate court is an example of a(n):
Special court
Which source of law responds more to the changing demands of the people?
Statutes
An enforceable contract is made by an adult with a minor. Which of the following is most likely to hold true in this case?
The contract is enforceable against the adult but not against the minor.
Which of the following is true of appeals made to higher courts?
The decision of the appellate court is binding on lower courts.
In a situation where an injured party in an accident is partly to blame for the accident, which of the following is most likely to be true under a contributory negligence system?
The injured party cannot recover any damages because it is partially negligent in the case.
Which of the following is true of a jury trial procedure?
The jury is selected before an opening statement is made by the attorney.
The Racketeer Influenced and Corrupt Organizations Act provides for the recovery of three times the damages suffered by an injured party as a result of its violation. T/F
True
Which of the following statements is true of federal district courts?
They hear all criminal cases that involve a violation of federal law.
When parties to a contract mutually agree to cancel an old contract and replace it with a new one, which of the following is true?
To be enforceable, there must be added features in the new contract benefiting both parties.
A chief officer is known as a judge in a state court of record as well as in a federal court. T/F
True
An employee who picks up inventory tools from his office with the intent to deprive the owners of the property is an example of larceny. T/F
True
An offer expresses the willingness of the offeror to enter into a contractual agreement. T/F
True
Each state is part of the federal court system and has a state court system. T/F
True
For an act to be established as a tort of injurious falsehood, the false statements of fact must be communicated by the defendant to a third person. T/F
True
Many federal laws regulating business do so based on the Commerce Clause of the U.S. Constitution. T/F
True
One may have rights and obligations imposed by law when no real contract exists. T/F
True
Statutes are easier to amend than constitutions. T/F
True
The purpose of antitrust laws is to:
promote competition among businesses.