Business Law - Final Exam prep (modules 5-8)

true

A deceptive ad for a product involving wrongful charges to consumers may result in an award of damages of a defendant's unjust gains and consumers' losses.

False

Agency relationships cannot exist outside an employment, so agency law has a narrower reach than employment law.

false

Agency relationships come about by voluntary consent and agreement of the parties—consideration is required, and the agreement must be in writing.

true

An eligible employee may take unpaid leave under the Family and Medical Leave Act for family or medical reasons, or in certain situations for military service.

true

An employer can avoid liability under Title VII by showing that the employer's standards for hiring and promoting have a substantial, demonstrable relationship to realistic qualifications for the job at issue.

true

As in a partnership, a limited liability company may pay no taxes—profits can be passed through to the members, who pay personal taxes on the profits.

true

Because the speed of check-processing time is increasing, to avoid overdrafts, an account-holder needs to verify that funds are available to cover a check when it is written.

true

Business as we know it could not exist without secured transactions because otherwise sellers and lenders would be less likely to sell and lend on credit.

false

Crowdfunding can be exempt from the registration requirements of the Securities Act of 1933 if shares are offered directly to investors.

true

Establishing the relevant product market is a key issue in monopolization cases because the way a market is defined can determine whether a firm has monopoly power.

false

Federal securities laws take priority over state securities laws.

False

If a bank pays a stale check in good faith but without consulting the customer, the bank has no right to charge the customer's account for the amount.

true

If an agent has represented himself or herself as possessing special skills, the agent is expected to use them.

true

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

false

In states that require a minimum wage that is higher than the specified federal minimum wage, employees are entitled only to the lower federal amount.

true

Labels on fresh and frozen fruits and vegetables must indicate where the food originated so that consumers can know if the food was imported.

true

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

false

Once a bankruptcy petition is properly filed, creditors can commence or continue most legal actions against the debtor to recover claims.

true

The Sarbanes-Oxley Act of 2002 attempts to increase corporate accountability by imposing strict disclosure requirements and harsh penalties for securities laws.

true

The destruction of an original check after the creation of a substitute check prevents the check from being paid twice.

true

The power to control the market price of a product is market power.

false

The principal is bound by the agent's unauthorized act, unless the principal negates it.

true

Under the principles of agency law, any sale of goods by a salesperson in a store to a customer can be binding on the owner of the store.

true

When an agent, acting within the scope of his or her authority, contracts with a third party, a disclosed principal is liable to the third party.

True

A check may fall under Uniform Commercial Code Article 3 as a negotiable instrument and be subject to UCC Article 4 in the course of collection.

false

Federal law on menu labeling supplements but does not supersede previous state and local law on the same subject.

true

The definition of security in the Securities Act of 1933 includes interests that involve the right to buy a security on a national security exchange.

true

A bank may contractually shift to its customer the risk of forged checks created electronically or otherwise by the use of non-manual signatures.

true

A business that cannot provide scientific evidence to support its marketing claims may be held liable for deceptive advertising.

false

A court cannot dismiss a debtor's petition under Chapter 13 even if the circumstances indicate bad faith.

false

A debt-collection agency can always contact a debtor at his or her place of employment.

true

A false statement or unjustified claim about a competitor's products can result in liability for deceptive advertising.

false

A foreign corporation that has not obtained a certificate of authority to do business in a state can nevertheless maintain an action in the state's courts.

false

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

false

An express employment contract cannot protect an employee from discharge without good cause.

true

Any agreement among competitors to artificially fix prices or restrict output is a per se violation of Section 1 of the Sherman Act.

true

Any person can be an agent, regardless of whether he or she has the capacity to contract.

false

Any person—including individuals, but not partnerships or corporations—may be a debtor under Chapter 7.

true

Anyone who has access to or receives inside information of a nonpublic nature and trades on it for personal gain can be liable under SEC Rule 10b-5.

false

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

false

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

true

In a sole proprietorship, the proprietor bears the burden of any liabilities incurred by the business enterprise.

false

In an agency relationship, one party called the principal agrees to represent or act for another called the agent.

true

Individual state laws should be relied on to determine corporate law because, despite the existence and use of model corporation acts, there is considerable variation among the states.

true

Insider trading is prohibited because trading on the basis of inside information can give the trader an unfair advantage over the investing public.

true

Most of the states and the federal government have enacted statutes to protect employees who report wrongdoing from employer retaliation.

true

Most private, small-business, noninvestment company offers of securities are exempt from the registration requirements.

true

Providing investors with more information helps them make buying and selling decisions about securities.

false

Securities must be registered under the Securities Act of 1933 for the Securities Exchange Act of 1934 to apply.

true

Shareholders' assumption of personal liability, as guarantors, for the obligations of a corporation can enable the firm to obtain credit.

false

The Immigration Reform and Control Act makes it legal to hire, recruit, or refer for a fee someone not authorized to work in this country.

false

The duties that an agent owes a principal must be set forth in the agency agreement because they do not arise by operation of law.

true

The primary document needed to incorporate a business is the articles of incorporation because the articles serve as a primary source of authority for the firm's organization and functions.

false

The quality and safety of food may be important to consumers, but food labels that provide standard nutrition facts are a seller's option, not a requirement.

false

To avoid sanctions under Section 10(b) of the Securities Exchange Act of 1934 and SEC Rule 10b-5, scienter must exist.

false

To deem an agreement a per se violation of antitrust law, a court must determine whether the agreement actually constitutes a restraint on trade.

true

To make informed decisions and supervise corporate officers and employees, the directors need an unrestricted right to inspect corporate books and records.

false

To qualify for a Chapter 7 bankruptcy, a debtor must complete a means test to determine whether the debtor has been living within his or her means.

true

An employer cannot discharge a worker who, in good faith, refuses to work in a high-risk area if bodily harm or death might result.

true

If the legitimate benefits outweigh the anticompetitive effects of a resale price maintenance agreement, the agreement may be held lawful.

true

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

true

In a Chapter 13 proceeding, the debtor retains possession of his or her assets.

false

Requiring users of a social media site to agree to certain terms and conditions to use the site is most likely an antitrust violation.

false

The Lanham Act protects against the deceptive use of trademarks but does not cover false advertising claims.

false

With a joint checking account, the bank can hold any joint-account owner liable for payment of an overdraft even if that owner did not sign the check or benefit from its proceeds.