Exam 3

Hillside Vineyards is a family limited liability partnership. All of the partners must be

natural persons or persons acting as fiduciaries for natural persons

Conrad and Delilah are employees of EcoCrop Feed & Seed Corporation. Under the Equal Pay Act of 1963, EcoCrop can legitimately pay different wages on the basis of

seniority

Creative Concepts Co. and Retail Investment Inc., form a joint venture to purchase and sell high-end real estate to foreign buyers. Creative Concepts contributes $400,000 in capital, and Retail Investment contributes $600,000 in capital. The first year resulted in $2,000,000 in profits. Unless otherwise agreed, joint venturers:

share profits and losses equally.

Byron runs a business cleaning gutters. Lance, who is in a wheelchair, applies for a job working for Byron as a cleaner. Byron does not hire Lance and is very frank about the reason: Lance's disability. If Lance sues Byron,

Byron will win, if he can show that being able to climb a ladder is a requirement of the position.

When the timber industry in Montana experiences an economic slump, Superior Logging Co. is forced to lay off a number of its employees, including Larry Kurzyniec. Larry, who had been logging for over eighteen years, suffers from heart disease, high blood pressure, and diabetes. His wife is worried that the family's health-insurance coverage, which is through Superior Logging, will be canceled. Larry learns that he has a right to extend his insurance benefits, however, if he pays the premiums under:

COBRA.

Gerald files a petition in bankruptcy. An automatic stay will apply to actions by creditors seeking to collect Gerald's debts comprised of

Car payments

Michael creates a new company and wants to attract quality employees, so he establishes a retirement plan. The law regulating this activity is:

ERISA.

T/F - A surety can be required to pay an obligation only after the principal debtor defaults and usually only after the creditor has made an attempt to collect from the debtor.

False

T/F - Advertising that contains an endorsement by a celebrity will not be deemed deceptive.

False

T/F - Agency relationships do not permeate the business world.

False

T/F - An involuntary bankruptcy occurs when the debtor forces his or her creditors into bankruptcy proceedings.

False

T/F - Employers are required to establish retirement plans for their employees.

False

T/F - Generally, under employment-at-will doctrine, an employer may fire an employee even if doing so would violate a federal or state statute.

False

T/F - In a limited partnership, a limited partner has full responsibility for the partnership and for all its debts.

False

T/F - One of the key advantages of the corporate form is the unlimited liability of its owners.

False

T/F - Only a few types of property—a debtor's wages or bank account, for example—can be garnished.

False

T/F - Puffery constitutes deceptive advertising.

False

T/F - The partnership is a pass-through entity and a taxpaying entity.

False

T/F - There are no important consequences if the procedures for incorporation are not followed precisely.

False

T/F - To recover workers' compensation, an employee must prove that an injury did not occur on the job or in the course of employment.

False

Redcap Dairies sells to consumers yogurt that it knows to be contaminated by a harmful mold. Redcap Dairies would be held responsible under the:

Federal Food, Drug, and Cosmetic Act.

James was a thirty-eight-year-old man in good health. One of his hands shook slightly for no apparent reason. The doctors could not find a medical cause for it. James's employer worried about the potential for early-onset Parkinson's disease or another neurological disorder, so he fired James. Under the ADA:

James can bring a claim as being "regarded" as having a disability.

Kyla replaces Lomax in his job at Motor Vehicle Manufacturing Corporation (MVMC). Lomax believes that he has been discriminated against on the basis of his age. For the Age Discrimination in Employment Act of 1967 to apply

Lomax must be forty years of age or older

Byron works at Stitch-Rite Clothing Factory. The company is required to maintain safe working conditions under the:

Occupational Safety and Health Act.

Lizzie works for Gary in his dance supply shop and is authorized to sell inventory but not to order new merchandise. Rena, a sales representative for a new line of dancewear, comes into the store and Lizzie places an order with her. When Gary learns the details of Lizzie's purchase, he wants to ratify the contract. The one condition that is NOT necessary for ratification is:

Rena must withdraw from the transaction before Gary ratifies it.

Melanie and Beau both work in comparable jobs at Technology Impact, Inc. Melanie is paid 15 percent less than Beau. Which of the following is not a legitimate defense to this pay inequality?

The company pays Melanie less, because she has a husband who is a highly successful businessperson.

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?

The corporation was undercapitalized from the beginning and never had sufficient assets to operate as a viable business.

Jason's consumer debt is beyond what he can now afford to pay; he is having difficulty making the minimum payments. The credit card companies are calling daily asking him when he is going to pay. Which of the following goals of bankruptcy is applicable to Jason's situation?

To protect the debtor by giving him a fresh start without creditors' claims.

Like Social Security, Medicare is funded by contributions from the employer and the employee.

True

T/F - A franchisee is generally legally independent of the franchisor.

True

T/F - A limited liability company can be held liable for any loss or injury caused by the wrongful acts or omissions of its members.

True

T/F - A limited liability company can be taxed as a partnership.

True

T/F - A principal or employer normally is not liable for an agent's crime even if the crime was committed within the scope of authority or employment.

True

T/F - A sanction known as counteradvertising requires a company to advertise anew to inform the public about earlier misinformation.

True

T/F - An agent has the implied authority to do what is reasonably necessary to accomplish the objectives of the agency.

True

T/F - An employer can voluntarily pay overtime to ineligible employees.

True

T/F - Certain employees are exempt from federal overtime provisions.

True

T/F - Certain employers must provide advance notice of a layoff to the affected workers.

True

T/F - Contracts in which creditors discharge debtors' debts for amounts less than what is owed are referred to as composition agreements.

True

T/F - Employers have a general duty to keep workplaces safe.

True

T/F - If a corporation has S corporation status, it can avoid the imposition of income taxes at the corporate level.

True

T/F - If a homeowner defaults, or fails to make the mortgage payments, the lender has the right to foreclose on the mortgaged property.

True

T/F - In choosing a form of business organization for a new enterprise, important factors include the ability to raise capital.

True

T/F - Liens generally take priority over other claims against the same property.

True

T/F - Limited liability companies are entities apart from their owners.

True

T/F - Members of limited liability companies are shielded from personal liability in many situations.

True

T/F - Most employers with fifty or more employees are required to offer health-insurance benefits.

True

T/F - Shareholders have the power to vote to elect or remove members of the board of directors.

True

T/F - The FTC is charged by Congress with the broadly stated goal of preventing unfair and deceptive trade practices.

True

T/F - The agent has the right to be compensated, to be reimbursed and indemnified, and to have a safe working environment.

True

T/F - The articles of incorporation serve as a primary source of authority for the corporation's future organization and business functions.

True

T/F - The intent to associate is a key element of a partnership.

True

T/F - Under the doctrine of respondeat superior, a principal may be liable for any harm that his or her agent causes to a third party.

True

Boni, the owner of Café Rico, knows about, but does not take any action to prevent, the sexual harassment of employees. Boni and the café may be liable for such harassment by

a customer or a co-worker

Dollars & Sense, Inc., is incorporated in the state of New Jersey and is doing business in the state of New York. In New York, Dollars & Sense is properly referred to as

a foreign corporation

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 foreign corporation, and she will probably have to obtain a certificate of authority to do business there.

Bee Hive Honey, LLC's members include Chad, Dolores, and others. For purposes of suing and being sued, Bee Hive Honey is

a legal entity apart from the owners

Tuller wants to start a commercial trucking business and also wants to form his own limited liability company (LLC). Tuller, as the only member of the LLC, will make all relevant decisions, contribute all of the investment, and be responsible for all of the risks and rewards. Tuller's proposed LLC will be accepted by:

a majority of states.

Bartell contracts with LaRonda to remodel and retile a bathroom. LaRonda finishes the job and gives Bartell a bill for $14,000 for labor and materials. Bartell refuses to pay. In this case, LaRonda may seek:

a mechanic's lien.

Mouth & Gums, Inc. (CSI), engages in deceptive advertising when it markets its product Oral Rinse as able to kill germs over long periods of time. In an action against Mouth & Gums, the firm is ordered to stop its false advertising of Oral Rinse and other products. This is

a multiple product order

Hady's Health Services advertises numerous "miracle cures" such as a hair growth cure for baldness. The FTC has received numerous complaints about several of these cures. The FTC most likely will require Hady's to stop false advertising for all of its products by issuing:

a multiple product order.

Gina buys a piece of pottery from Woodward for her principal, Kelvin. If Woodward knows that Gina is buying the pottery on behalf of someone other than herself but does not know the identity of that person, Kelvin is:

a partially disclosed principal.

Pualani and Quentin do business as partners in Rio Vista Builders, a residential construction firm. For federal income tax purposes, Rio Vista would be treated as

a pass-through entity

Jewelry & Coin Company hires Kelly Ann to buy gems and precious metals from various sources on its behalf. In this relationship, Jewelry & Coin is

a principal

The shares of Home Mortgage Corporation are publicly traded in securities markets. Home Mortgage Corporation is

a publicly held corporation

Norman is a franchisee of MegaFurnishings, a furniture store. Norman breaches the franchise agreement. The contract states that the franchisee (Norman) must be given notice of termination, but does not specify a time for termination in the agreement. In this case, MegaFurnishings must give:

a reasonable time, with notice, to wind up the business.

Under federal law, the calorie content of the food on a menu must be posted by Organic Mix, LLC, if Organic Mix is

a restaurant chain with twenty or more locations

Erin and Dooley, a married couple, borrow $120,000 from Capital & Credit Bank to buy a home. When Erin and Dooley divorce, they are unable to make payments on the mortgage. The market value of the home has declined to less than the balance of the loan. Capital & Credit agrees to a sale of the property for this amount. This is

a short sale

Dara gives her agent, Marla, money to purchase a new commercial oven. Marla takes the money and deposits it into her personal checking account. Marla then accidentally spends some of Dara's money. Marla has violated her duty of:

accounting.

Bayou Development Corporation hires Coastal Brokerage Associates to sell the condominiums in a building at Bayou Development's resort. The agency will terminate

after the condos have been sold

Micah and Jonah want to start a corporation but want to be taxed as a partnership. They should form:

an S corporation.

Ridgeline Bank provides Shirley with a mortgage to buy a home. The rate of interest is fixed for three years and then adjusts annually. This is

an adjustable-rate mortage

Dina and Michelle buy a house together and sign a document to borrow some of the money for the house. The contract provides that they will pay a single rate of interest for the first five years of the loan, and then the rate will vary depending on a specific index rate. This type of contract is:

an adjustable-rate mortgage.

Ingmar asks Jessie to contract with Jessie's high school classmates to babysit Ingmar's new baby. Jessie orally agrees to do so. This is

an agency by agreement

Lucille is married to Marcus. Lucille buys food for their children's lunches and charges the cost to Marcus's account. This is

an agency by operation of law

California Produce Company hires Drew to work on California Produce's shipping dock, checking outgoing loads and dispatching the company's drivers. With respect to California Produce, Drew is most likely

an agent

Sybil agrees with Tyrone and other professional athletes to sign contracts with promoters and others on the athletes' behalf. Sybil is

an agent

Rick agrees to customize Melissa's wedding ring. The cost is $10,000. After the job is complete, Melissa refuses to pay. As long as Rick retains possession of the ring, he may seek to recover the cost of the labor with:

an artisan's lien.

Noah and Orin do business as Personnel Providers, an employment agency. In most states, for purposes of suing and being sued, Personnel Providers, which is a partnership, would be treated as

an entity

Febo is an employee of Guitar & Drum Company. Guitar & Drum's employee manual states that workers, such as Febo, will be dismissed only for good cause. With respect to the employment-at-will doctrine, this is

an exception based on contract theory

Napoleon owns Napoleon's Construction and agrees to renovate Mrs. Cernan's bathroom. She will provide him with the plans, and then he will do the work in the manner that he determines is most cost effective and appropriate. Napoleon is likely to be classified as:

an independent contractor.

Whitney works at home making unique children's clothes. Liam buys Whitney's clothes to sell in his store. With respect to Whitney's legal relationship to Liam, she is probably:

an independent contractor.

Michael opens an upscale men's clothing store. He borrows money to rent space and buys inventory on credit. Unfortunately, business is weak. He promises his creditors that he will be able to pay them after the next season. Business does not improve, and two years later, his creditors seek to force him into Chapter 7 bankruptcy through:

an involuntary bankruptcy.

Dean is not Paul's agent, but Paul tells Charlie that Dean has always been a good friend and can "handle any of my business affairs." If Dean were to later enter into a contract with Charlie on Paul's behalf, Dean would be acting under an:

apparent authority.

Tyler and Stanton are members of an LLC. They have no operating agreement. Tyler and Stanton have a dispute. They look to the LLC statute for an answer, but the statute does not cover this situation. In this case, courts often:

apply state partnership law.

Roland files a petition in bankruptcy. After all his assets have been sold and the proceeds distributed among his creditors, Roland's remaining debts

are discharged

Jason, Julian, and Rebecca are members of a longstanding and successful LLC. The three members want to dissolve their LLC and distribute their assets, but they know the LLC has debts as well. Once all the LLC's assets have been sold, the proceeds:

are distributed to pay off creditors first and member capital contributions next. Any remaining amounts are then distributed to members in equal shares or according to the operating agreement.

To start his business, Neil borrows money from every source available to him, including all his credit cards and a line of credit at his bank. The business fails, and Neil files a voluntary Chapter 7 petition in good faith to discharge his debts. He returns to work as an attorney, where he makes over twice the median family income in his state. Neil's debts will most likely:

be paid, at least in part, after his case is converted to a Chapter 13 repayment plan.

Jason instructs his agent Miguel to obtain a piece of artwork from Martina by threatening to beat her if she refuses to sell the artwork. Miguel follows Jason's instruction and beats Martina when she refuses to sell the item. In this situation:

both Jason and Miguel are liable for Martina's injuries.

Charlie tells Jamal that Marisol has agreed to allow him to sell her racing bicycle. Marisol is present at the time, hears the conversation and says nothing. Jamal agrees with Charlie to buy Marisol's bike. Marisol then refuses to sell the bicycle. Marisol claims that she is not bound by the agreement formed by Charlie and Jamal, because Charlie is not her agent. Marisol likely is:

bound by the contract under a theory of agency by estoppel.

As a director and officer of Max Transport, Inc., Max would most likely be considered to have breached his duty of loyalty if he:

buys stock in Arnold's Transport, Inc., a competing trucking firm.

Kris represents Josh in the sale of his house as his real estate agent. Kris is entitled to:

compensation.

Farrah and Grant are shareholders of Hong Kong Restaurants, Inc. As shareholders, they must approve

conducting a merger

Jared works on the assembly line at a manufacturing plant. At the beginning of the year, Jared bought a house and moved out of his apartment. To furnish his house, he bought lots of new furniture. He also purchased many maintenance supplies and decorations. By the end of the year, Jared realized that he was going to have to declare bankruptcy. Jared is an example of a:

consumer-debtor.

Catherine works for BluCorp, which has an employee handbook stating that employees will be terminated for good cause. Catherine's manager fires her one morning and when asked the reason, states that he does not need a reason since they live in a state that has employment at will. If Catherine wins her lawsuit against BluCorp, it is because of the:

contract exception to employment at will.

Paradise Footwear buys a franchise from Quadrangle Athletic Shoes Inc. This relationship, like all other franchise relationships, is governed by

contract law

A group of fifty homeschooling parents in New Jersey get together and form a nonprofit membership organization for the purpose of buying teaching materials and supplies at a discount and selling the materials and supplies to members. The parents have probably formed a:

cooperative

Garry drives a truck as an employee for Heavy Hauling, Inc. Garry would most likely be considered acting outside the scope of his employment if he

crashed into a car at the airport while off duty.

Keenan wants to incorporate his business. 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 for "Keenan's Kwips Co." He buys business cards and labels with the name "Keenan's Kwips Co." on them and begins selling gag gifts. Keenan's business is probably a:

de jure corporation.

Ace Products manufactures and markets a product called Grow Tall. Ace claims in its advertising that Grow Tall will make its users grow a minimum of six inches taller than their current height. The Federal Trade Commission (FTC) will likely find that the ad is:

deceptive, and the FTC may issue a cease-and-desist order.

Neville, a member of a protected class, applies for a job with Origami Paper Products Corporation, but fails the company's employment test and is not hired. Neville believes that the test has an unintentionally discriminatory effect. If so, this is

disparate-impact discrimination

Min applies for a job as a receptionist at an accounting firm. If she is denied a job because she is of Asian origin, she may be a victim of:

disparate-treatment discrimination.

Silvano owns Textbooks Plus, a sole proprietorship that sells textbooks and other school supplies. When Silvano dies, Textbooks Plus will automatically

dissolve

Madeline very much wants to be a franchisee of BurgerBarn, a popular chain style business operation. BurgerBarn shows Madeline the franchise contract, which includes the requirement that all franchisees are required to obtain materials and supplies exclusively from BurgerBarn. Madeline objects to this provision. This contract term is:

enforceable, because franchisors are permitted to require franchisees to obtain materials and supplies only from them.

Jasmine's General Store advertises cans of X-brand tomatoes for $.33 per can, although she does not have any in stock. When customers arrive to buy the tomatoes, Jasmine tells them that her stock of tomatoes has been sold and that she cannot get more at the lower price. She tells customers she has Y-brand tomatoes in stock for $.55 per can and that the Y-brand tomatoes are far superior to the X-brand. Jasmine is:

engaging in bait-and-switch advertising.

Nancy joins with other creditors to force Odette, a debtor, into bankruptcy. One of the goals of bankruptcy law with respect to creditors is to

ensure equitable treatment of creditors who are competing for a debtor's assets

Ashley is an eighteen-year-old clerk in a store that sells bird seed. She earns minimum wage. Her boss, Trina, often expects her to stay and work as many as three hours longer than her scheduled shift. Trina never pays Ashley for these hours. Ashley is:

entitled not only to be paid for the additional time, but also to be paid overtime if she works more than forty hours in a week.

Trucking Dispatch Company and Ucello put their agency agreement into a written document that describes the rights and duties of both parties. Ucello, as the agent, has

express authority

Through careless manufacturing practices, Metalworks Company makes and distributes unsafe products that are sold to Nabi and other consumers. This may be subject to sanctions under

federal and state law

The directors and officers of Sports Color, Inc., vote to refuse to declare a dividend. The shareholders can:

file an action to require the directors to declare a dividend.

Luke and Maya form Northwest Air Express, a general partnership. The essential elements of this partnership do not include

goodwill

Orville and Perry are negotiating a franchise agreement. Perry, the potential franchisee, asks Orville for information about the franchise. In this case, Orville:

is required to disclose certain material facts that a prospective franchisee needs to make an informed decision concerning the purchase of a franchise.

Western Fitness advertised a new Omnibike specially designed to help users lose weight faster. It cited the example of Julie, who lost weight faster on the Omnibike than with other exercise products. What Western Fitness did not disclose is that in their study of thirty users of the Omnibike, Julie was the only one who lost weight faster than with other exercise products. Western Fitness's claims are:

half-truths, which would likely constitute deceptive advertising.

American Insurance Co. reviewed its customers for creditworthiness. American Insurance found that a number of its customers had lower credit scores than expected. Without disclosing the reason, American Insurance increased the rates of insurance on new customers who had credit scores below a certain threshold. American Insurance:

has committed a willful violation of the Fair Credit Reporting Act.

Yakov hires Melina to be his Vice President for Marketing. The job description is pretty broad but does not include the ability to hire or terminate lower level employees in the Marketing division. If Melina has this power, it is based on her:

implied authority.

Veronica's corn cakes are packaged with labels that say "Veronica's delicious popped corn cakes. 20 popped corn cakes. Net weight: 5.3oz. Manufactured in Plano, Texas." Regarding the Fair Packaging and Labeling Act, the label is missing:

information about the packager or distributor.

Ramona discovers that a credit reporting agency shows her having not paid a loan that she paid off last year. She writes to the credit reporting agency and requests an investigation. The agency must:

investigate and delete any errors in Ramona's report.

Merlin is a drug addict who has completed a supervised drug-rehabilitation program. Nabil used drugs casually in the past. Both work for Omni Insurance & Investments Inc. Considered to have a disability under the Americans with Disabilities Act of 1990

is Merlin only

Floors R Us, a franchisor, cancels its franchise agreement with Bernardo, the franchisee, without any notice. Floor's action:

is likely a wrongful termination

Erin works for a dry-cleaning company that has a contract with the U.S. government. To save on cleaning fluid, her boss orders her to wash some dry clean-only clothes in a washing machine. When the courier hired to pick up the cleaned garments arrives, Erin tells him about her boss's actions. Erin tells no one else about what is going on and is later fired. Erin:

is not protected by the Federal whistleblower statute, because she failed to inform the proper party of the contract violation.

Adam owns a private company and has significant concerns about employees shopping and accessing pornography while at work, so he buys some filtering software that blocks shopping and pornography websites. Adam:

is within his rights to do this.

Investment Sales Corporation wants to monitor its employees' electronic communications. Investment Sales's best course of action to avoid liability under laws related to employee monitoring is to notify

its employees

Sam goes out shopping and, using his wife Juanita's credit card, buys $221 worth of groceries. Under agency law, Juanita will probably be deemed: a. not liab

liable for the purchase, based on the creation of an agency by operation of law.

Data & Data Accountants, a private employer, handles bookkeeping for small employers. In most circumstances, with exceptions, federal law clearly prohibits Data & Data from subjecting its employees to

lie-detector tests

Jacob and Kristen are parties to a franchise agreement. Jacob is the franchisor and Kristen is the franchisee. Although Kristen's franchise is highly profitable and conforms to the franchise contract, Jacob terminates Kristen's franchise and gives it to his nephew Louis. In most cases, Jacob's action is:

likely a wrongful termination.

Charlotte and Regina are opening a new business venture to sell gourmet cupcakes. One of the important characteristics in choosing to form a limited liability company instead of a different business entity is:

limited liability for members.

Tammi purchases stock in Vivaldi Corporation. Vivaldi Corporation later encounters legal issues and faces significant legal claims. As a shareholder, Tammi's liability is:

limited to her investment in the stock.

Eloise is a director for Frozen Yogurt Company. Eloise is also a director for Gelato Desserts, Inc. When the board of Frozen Yogurt considers entering into a contract with Gelato Desserts, Eloise must

make a full disclosure of any conflict of interest

Quentin operates an ice cream franchise. CoolCream Co., the franchisor, supplies the ingredients and formula so that Quentin can create the ice cream in his store and sell it fresh to customers. This relationship is known as a:

manufacturing or processing-plant arrangement.

Eastminster Presbyterian Church has an opening for a new head pastor. Mohammed, who is a Muslim, applies for the job. The church declines to hire him and continues to look for other applicants. If Mohammed files a claim of illegal discrimination against the church, the church:

may assert a bona fide occupational qualification (BFOQ) defense.

Rosie hired Donald to perform repairs on some farm equipment she owned. Donald allowed Rosie to have the equipment before she paid for the repairs. When it became obvious that Rosie was not going to pay him, Donald successfully sued her for breach of contract. Rosie did not pay the judgment, and the tractor was destroyed in a fire. Rosie has no other valuable property that can be seized to satisfy the judgment, but she does have a job. Donald:

may seek an order of garnishment.

Julio lives in an area with a high percentage of Hispanic workers. Many of these workers are legal immigrants who have relatively little college training. If, when Julio applies for his job, he is given an examination designed for a college graduate, and if he and most Hispanic applicants fail to pass the test, the employer:

might be engaged in disparate-impact discrimination.

Donald is buying a house and obtains a loan from the lender. The document that Donald signs giving the lender an interest in Donald's house as security for a debt is called a:

mortgage.

Rhonda is not hired for her dream position and believes that she is the victim of gender discrimination. She is angry and wants to file a lawsuit immediately in the closest courthouse she can find. Rhonda:

must first file a complaint with the EEOC.

Rico's Grill, Inc., is solely owned by Rico Vito. Rico's Grill borrows $10,000 from a local bank to finance the purchase of a new range. The payments are to be made monthly over a two-year period. The bank:

need not make any special disclosures.

Kip opens an account at a Lotsa Goodies Store, and buys a digital music player and other items, but makes no payments on the account. To collect the debt, Mako, the manager, contacts Kip's parents. This violates

no federal law

Carl is negotiating a franchise contract with Frank's Deli, a franchisor and a competitor of McDonald's. Frank's Deli is willing to give Carl "territorial rights" to Orange County, where Frank will open his franchise. Frank's Deli, however, will not specifically state that the franchise given to Carl is exclusive. The territorial rights clause will most likely:

not help Carl keep out other franchises, because the territorial rights are not exclusive.

Jasmine receives an unsolicited credit card in the mail and tosses it on her desk. Without Jasmine's permission, her roommate Ilene uses the card to buy a new tablet for $500. Jasmine is

not liable for any amount

Lumber Mill Inc. is a private employer with more than twenty employees. Its employment practices do not indicate a past pattern of discrimination. It is located in Metro City, which has recently seen an increase in the number of its citizens who are members of protected classes. Under the Civil Rights Act of 1964, Lumber Mill is

not required to implement an affirmative action policy

Melissa works as a computer data-entry operator at VeraSign. Melissa informs VeraSign that she was just diagnosed with carpal tunnel syndrome, which causes pain in her wrists, rendering her unable to use a keyboard. Melissa requests as an accommodation that VeraSign hire a data-entry employee to enter the information on her behalf. VeraSign refuses to do so. VeraSign has:

not violated the ADA, because the requested accommodation is an undue hardship on the employer.

Marvin and Maria start selling handmade jewelry to distributors nationwide and intend to form an LLC. Marvin and Maria enter into four contracts with distributors while the LLC is in the process of being formed but before the LLC is formally in existence. Once Marvin and Maria form the LLC,:

once the LLC is formed and adopts the contracts, it can then enforce the contract terms.

Carl tells Jenny that he will give her a raise if she agrees to have a romantic relationship with him. In legal terms, this is known as:

quid pro quo harassment.

Kari is the sole proprietor of Living Earth Garden Shop. As a sole proprietor, on the business's profits, Kari pays

only personal income taxes

Nikki and Orlando are limited partners in Port City Exports, a limited partnership. To avoid personal liability for partnership obligations, they must not

participate in the firm's management

Sarah has to move from the East Coast to the West Coast for her job. Elmo agrees to act as Sarah's agent to sell her New York condo. As her agent, Elmo owes Sarah all of the following duties except:

payment.

Abby and Zeke begin a joint venture together selling fruitcakes door to door. Each invests $500. The joint venture generates large debts, and there is not sufficient income from the joint venture to pay them. Abby and Zeke as joint venturers are:

personally liable.

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 used only 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:

pierce the corporate veil due to Sarah's commingling of interests.

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:

pierce the corporate veil due to the failure to hold required corporation meetings.

QuikPay Inc. extends credit to consumers. QuikPay is subject to the Equal Credit Opportunity Act, which prohibits credit discrimination based on

race

George owns 300 shares of preferred stock in a company. By owning preferred stock, George has:

priority over holders of common stock as to dividends.

Suzy signs a written agreement with Phillip, giving Phillip the right to cast Suzy's votes for a certain group of people nominated for the Syllibar Corporation board of directors. This agreement between Suzy and Phillip is known as a:

proxy.

Melon Lawn Co. advertises its new XJ200 lawn mower. Salespersons describing the XJ200 on behalf of Melon Lawn describe it as a "fabulous new mower" that will "take landscaping by storm." Melon Lawn's salespersons are engaging in:

puffery.

Ruta is a supervisor for Subs & Suds, a restaurant. Tim is a Subs employee. The owner announces that some employees will be discharged. Ruta tells Tim that for sexual favors she will give him an excellent performance review and recommend a raise. This is

quid pro quo harassment

Marsha is a sole proprietor of a small quilting shop. She has considered changing her business structure, but she cannot find an alternative structure that would give her the main advantage she enjoys as a sole owner. The major advantage is that she:

receives all the profits

The Consumer Product Safety Commission (CPSC) determines that a Bee Jeep, a toy Jeep in which children ride, is unsafe. The CPSC has the power to:

remove the Jeeps from the market.

Sweet Treats, Inc., wants to market a new snack food. On the product's label, standard nutrition facts are

required

Hauser takes temporary family leave from his job at Gelato Confectionary Corporation to care for a new baby. On Hauser's return from the leave, Gelato must

restore Hauser to his original position

Livia takes temporary family leave from her job at Meatpackers Corporation to care for a new baby. On Livia's return from the leave, Meatpackers must

restore Livia to her original position

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:

retained earnings.

Elsa participates in an investigation into possible violations of the Civil Rights Act of 1964 at Fabrication Foundry, Inc., where she works. As a result, Elsa's employer demotes her. Elsa can file a

retaliation claim

Insurance Sales Corporation gives preferential treatment in hiring and promotion to the members of all protected classes. This treatment results in discrimination against members of the majority. This is

reverse discrimination

Yen grants his cousin, Art, a franchise in Yen's sandwich shop. Yen writes the agreement so that he controls every detail of Art's shop such that it is exactly the same as Yen's original shop. Yen even consults with Art about hiring employees and safety practices. One of Art's employees fails to clean up a spill, and a customer is injured. The customer sues Yen. In this case, Yen:

risks liability under the doctrine of respondeat superior.

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 of the below that may not be taken is:

she can file a lawsuit against the corporation for damages.

Helene, a disabled person, applies for a job at Industrial Engineering Applications Inc. for which she is well qualified, but for which she is rejected. Industrial Engineering continues to seek applicants and eventually fills the position with a person who is not disabled. Helene is most likely to succeed in a suit against Industrial Engineering for discrimination under the Americans with Disabilities Act of 1990 if she can show that

she was not hired solely because of her disability

Robert attempts to avoid paying Andrew a commission on the sale of his house to a buyer procured by Andrew. He does so by waiting until after the listing agreement has expired. Andrew finds out about this after Robert sells his house. Andrew can:

sue Robert for breach of contract.

Wally is blind and would like to work for Dairy Times writing articles on the dairy industry. Wally uses voice-recognition software that allows him to dictate articles to his computer. His computer is specially designed for visually impaired individuals. Dairy Times interviews Wally but offers the job to a sighted person instead. Dairy Times may have violated:

the ADA.

Mary is a lender who offers credit throughout the United States. John applies for credit to start a restaurant business. Mary denies John credit, because she believes that older persons like John are not reliable for paying back debt. Mary has violated:

the Equal Credit Opportunity Act.

The agency with the chief responsibility to prevent unsafe food and drugs from being sold is

the FDA

Debt & Loan Collection Agency calls Ethel several times a day, and sometimes in the middle of the night, about an overdue bill that a Furniture4U store turned over to Debt & Loan for collection. This is a violation of

the Fair Debt Collection Practices Act

Josh works for a federal governmental agency that requires drug testing as a condition of employment. He wants to challenge the constitutionality of the testing in court. For his case, Josh will attempt to rely on:

the Fourth Amendment.

Matt and Chad form an LLC, and Matt later decides to withdraw as a member. They do not have a provision in their operating agreement regarding withdrawal of a member, but they do live in a state that has adopted the ULLCA, which means that:

the LLC must purchase Matt's interest at fair value within 120 days.

Tory borrows $10,000 from USA National Bank to remodel a room in her home. This transaction is subject to

the Truth-in-Lending Act

Cowland, Inc., manufactures a low-cost generic cheese alternative. It adds a filler to the meat that it does not list on its label. Cowland's actions violate federal requirements relating to the labeling of food products. These requirements are enforced by:

the U.S. Food and Drug Administration and the U.S. Department of Agriculture.

Home Enterprises employs Itzak to buy property for a possible residential development. Itzak secretly buys some of the property and sells it to Home Enterprises at a profit. Itzak has breached

the duty of loyalty

Lewis is a director of Mines & Refineries, Inc. Using information that is not available to the public, Lewis makes a profit trading in Mines & Refineries stock. Lewis is most likely liable for breach of

the duty of loyalty

Bernard is an expert on exotic flowers. Custom Floral Arrangements, Inc., hires Bernard to order exotic flowers for its arrangements. Bernard does not examine the quality of the flowers he orders on behalf of Custom Floral. Bernard has breached

the duty of performance

Norm worked as a sales person for his firm. When he turned fifty, the office had a party for him. His boss made a lot of jokes about Norm getting too old to keep up with the younger staff. Those comments continued past the party for several months. Norm was fired six months later. When he filed a complaint for age discrimination, the boss defended his actions by saying Norm was fired for not meeting sales quotas. Norm had missed his quota for only one month, and he provided evidence that younger employees who had missed up to three months of the quotas were not terminated. Norm is attempting to show that:

the employer's defense was a pretext.

Carter University has an admissions policy that requires a certain number of points to be automatically awarded to minority applicants. This type of policy may violate which clause of the U.S. Constitution?

the equal protection clause.

Mack is negotiating a franchise agreement with BigCo. The parties are discussing payment terms. Generally, payment in a franchise agreement is as follows:

the franchisor receives a stated percentage of the annual (or monthly) sales or volume of business done by the franchisee.

Mary, Thomas, and Franklin form an LLC for the purpose of running a restaurant. Each invests $10,000 into the LLC, and the restaurant gets off to a good start. Two months after the LLC is formed, Joanne patronizes the restaurant and suffers from severe food poisoning. If Joanne sues the LLC,

the members could be liable for $10,000 each, the amount of their investment.

Product Management, LLC has forty members. Two of the members died the previous year. Under the Uniform Limited Liability Company Act (ULLCA), on the death of the two members:

the other members may continue to carry on the LLC's business, unless the operating agreement provides otherwise.

Selena signs a power of attorney appointing Kim, for the sole purpose of signing paperwork on her behalf that relates to the sale of her house. The power of attorney will automatically terminate based on:

the purpose being achieved.

The seven members of Fast Commerce, LLC, want to start their company as quickly as possible. The members, in their haste, do not bother to draft an operating agreement. If a dispute arises between two of the members:

the state LLC statute will apply to the dispute.

Arnie is a member of Bowling & Billiards, LLC, a limited liability company. Arnie can participate in the firm's management

to any extent

Buckley is a general partner in Cut-Rate Shipping, LLLP, a limited liability limited partnership, which cannot pay its debts. Buckley is personally liable for the debts

to no extent

Choice is the largest employer in the Pacific Northwest. It is covered by numerous federal employment laws. As such, it is required by the Family and Medical Leave Act of 1993 to provide employees with up to

twelve weeks of unpaid family or medical leave during any twelve-month period.

When Kimberly begins working for Pharmco Industries, the company tells her that at a future date, after so many years of employment with the company, she can receive retirement pay. Her rights on that date to receive pay upon retirement would be considered:

vested.

Kay runs a business with a target customer population of twenty- to forty-five-year-olds. Because she wants her employees to be "in tune" with the younger crowd, she requires all of her front staff to quit or retire from her company at the age of fifty. This:

violates the Age Discrimination in Employment Act.

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:

vote.

Kurt is 52 years old and, until recently, worked for a company covered by the Age Discrimination in Employment Act (ADEA) of 1967. He wants to bring a claim of age discrimination against his employer, because he was replaced by a younger, lower-paid worker. To make out a prima facie case of age discrimination, Kurt does not have to establish that he:

was replaced by someone younger than 40 years old.

Rheingold Supply has a seniority system by which employees who have worked the longest are first in line for promotions and last to be laid off. As a result, most of the senior managers at Rheingold Supply are men. If Jane files a claim of illegal discrimination, Rheingold Supply:

will have a legitimate defense, because Rheingold Supply has a seniority system in place.

Jason is a small-business owner. He has a dry cleaning business. One year, Jason has to replace nearly all of his equipment, and the rent on his building increases. Jason borrows money to cover his expenses. Business is slow, however, and Jason eventually realizes he must declare bankruptcy. Neither Jason nor his creditor wants the expense and hassle of going to court. They can settle their creditor-debtor relations outside of court through a:

workout.

Eric brings a valuable watch to Sherry's clock shop for repairs. One of Sherry's assistants mistakenly allows Eric to take the watch without paying for the repairs. Sherry sues Eric to recover payment for the repairs, and she asks the court to direct the sheriff to seize and take custody of the watch before the trial. Sherry is seeking a:

writ of attachment.

A court awards a judgment to Loan Collection Agency, who is the creditor, against Margret, who is the debtor. After the judgment, the creditor requests a court order to seize Margret's property to ensure that the judgment will be collectible. This is

writ of execution