Law Exam

1. The _______ is the standard an individual must meet in order to file for Chapter 7 bankruptcy. a. means test b. threshold level of debt c. length of time of debt d. attempts to repay under Chapter 13

means test

1. Han wants to start a personal training business. He should choose a sole proprietorship entity if he seeks a. limited liability. b. perpetual existence for the new company. c. the ability to raise capital by selling equity in the business. d. the ability to avoid management conflict.

the ability to avoid management conflict.

1. An employee must file charges of illegal discrimination with the EEOC generally within ________ days of the adverse job action. a. 90 b. 120 c. 180 d. 365

180

1. Once the union organizers obtain authorization cards from at least ________ of the members of a bargaining unit, an election will be scheduled by the National Labor Relations Board. a. 20 percent b. 25 percent c. 30 percent d. 35 percent

30 percent

1. The Family and Medical Leave Act applies to employers with a minimum of a. 10 full-time employees. b. 15 full-time employees. c. 25 full-time employees. d. 50 full-time employees.

50 full-time employees.

1. The Labor Management Relations Act gives the president of the United States the right to suspend a strike for up to ________ in times of national emergency. a. 80 days b. 90 days c. 120 days d. 180 days

80 days

1. The bankruptcy trustee is a representative of a. the debtor. b. the creditors. c. the court. d. the state.

the court.

1. Several people have decided to go into business as an LLC. To cover all contingencies, they want to specify what constitutes an act of dissociation and outline the procedures upon dissolution. This information would be included in a. the certificate of organization. b. the operating agreement. c. the Uniform Limited Liability Company Act. d. common law—the members may not negotiate these rights.

the operating agreement.

1. Voting rights of LLC principals are governed by a. the laws of the state in which the LLC is filed. b. the Uniform Limited Liability Company Act. c. IRS regulations. d. the operating agreement.

the operating agreement.

1. A disadvantage of the sole proprietorship is a. the difficulty of formation. b. the inflexibility of management and control. c. the unlimited liability of the principal. d. the double taxation that occurs.

the unlimited liability of the principal.

1. Which of the following is used to separate and keep apart commercial, residential, and industrial properties? a. eminent domain b. variances c. easements d. zoning

zoning

1. Which of the following is also called the Taft-Hartley Act? a. National Labor Relations Act b. Labor Management Relations Act c. Labor-Management Reporting and Disclosure Act d. Fair Labor Practices Act

Labor Management Relations Act

1. Morton lends money as a business loan to Luisa, who is capitalizing her start-up sole proprietorship named Luisa's Things. If Morton must sue for repayment, he would sue A. Luisa. B. Luisa's Things. C. Luisa and Luisa's Things. D. no one, since the loan makes him a partner.

Luisa

1. Which of the following is not a component in the definition of a security? a. An investment. b. An expectation of profit. c. Tangible collateral to secure the instrument. Efforts of a third party to create expected profit

Tangible collateral to secure the instrument.

1. Mark and Riley live in Orlando and decide to open a souvenir shop. They incorporate their shop, Sunshine Gifts, Inc., in the state of Florida. In Florida, Sunshine Gifts would best be characterized as a. a domestic corporation. b. a foreign corporation. c. an alien corporation. d. a native corporation.

a domestic corporation.

1. A creditor with an interest in real property is called a. a surety. b. an unsecured creditor. c. a mortgagee. d. a mortgagor.

a mortgagee.

1. Travon has agreed to lease a home from Helena on a month-to-month basis. The lease is a. a life estate. b. an easement. c. a tenancy for years. d. a periodic tenancy.

a periodic tenancy.

1. LLPs are formed with the filing of ________ with the proper public official. a. a statement of qualification b. a certificate of formation c. LLP record of business creation d. articles of organization

a statement of qualification

1. Angel is Hispanic and has applied for a job at Buckets Inc. Buckets Inc. has a workforce that is 45 percent Hispanic, 35 percent black, and 20 percent white. This closely approximates the workforce available to Buckets. Angel is turned down for the job and is told that Buckets has too many Hispanics, so he couldn't be hired. He is a victim of a. mixed motives discrimination. b. disparate treatment. c. affirmative action. d. disparate impact.

disparate treatment.

1. The authority of the government to take away private property for the public good or for public use is called a. police powers. b. condemnation. c. eminent domain. d. easement.

eminent domain.

1. A limited partnership requires a. at least two general partners. b. at least two limited partners. c. a written limited partnership agreement. at least one general and one limited partner

at least one general and one limited partner.

1. Chester is renting an apartment, and he has a problem. All night he hears the scurrying of rodents, and each morning he finds cereal boxes and other cardboard food containers gnawed. He has also noticed droppings all over the apartment, including in the children's nursery. He has complained to the landlord, who simply replies, "Hey, this is center city—everybody has a rat problem." The landlord is breaching Chester's right to a. possession. b. quiet enjoyment. c. continuous control. d. habitability.

habitability.

1. Morris is a nonexempt employee with a salary of $400 a week based on a 40-hour week. If he works 50 hours in a particular week, his paycheck should be for a. $450. b. $500. c. $550. d. $600.

$550.

1. Which of the following is not a characteristic of an LLC? a. May elect to be taxed as a corporation. b. Usually capitalized via debt. c. Its members are not personally liable for any business debt or liability. d. Only its managing members owe a fiduciary duty to other members.

Only its managing members owe a fiduciary duty to other members.

1. Which of the following would likely not be considered a major life activity supporting a disability claim? a. Being able to sit for long periods. b. Thinking and reasoning. c. Proficiency in typing. d. Speaking.

Proficiency in typing.

1. Kante is an underwriter who acted as a third party conducting a sale of securities between Fox Co. and an investor. After the sale, it is discovered that the disclosures made by Fox Co. were fraudulent. The investor has sued both Fox Co. and Kante. What is Kante's best defense to avoid liability? a. Proving that she actually did not profit from the transaction. b. Proving that the fraud was so sophisticated that even if she had investigated the preregistration and registration documentation, she probably wouldn't have discovered the fraud anyway. c. Proving that the issuing company had a long history of truthful disclosures and had never been suspected or investigated for fraud, so she was able to rely on their representations. d. Proving that she exercised due diligence in examining the preregistration and registration documentation and did not discover the fraud.

Proving that she exercised due diligence in examining the preregistration and registration documentation and did not discover the fraud.

1. Which of the following is a valid bailment? a. Babysitting your sister's child for the weekend. b. House sitting your friend's house for the weekend. c. Caring for your neighbor's cat by leaving food outside while your neighbor is on vacation. d. Putting your neighbor's car in your garage to shield it from a hail storm.

Putting your neighbor's car in your garage to shield it from a hail storm.

1. Which of the following is a true statement? A. Ratification applies to previously unauthorized acts. B. Actual authority must be expressly created and cannot be based on custom or past dealings. C. Apparent authority is based on what the principal communicates to the agent and not to the third party. D. Actual authority must always be expressed in writing.

Ratification applies to previously unauthorized acts.

1. The reorganization plan is unique to what type of bankruptcy filing? a. Chapter 7 b. Chapter 11 c. Chapter 12 d. Chapter 13

Chapter 11

1. In 2006, Martin purchased a home in a residential development, and in 2010 he sold it in fee simple to Rocco. A week after Rocco moved in, the local cable company came to his door to inform him that it would start digging up his yard to install underground cable for the neighborhood. When Rocco objected, he was told that the company had a right to do it and he should check with his lawyer. A call to the lawyer confirmed the right of the cable company to enter his land and dig. Which of the following would have given the cable company this right? a. An easement by grant. b. An easement by prescription. c. An easement by necessity. d. An easement by implication.

An easement by grant.

1. John and Amelia work for Dover Farm and Home Company. John and Amelia are caught one day stealing a tractor. The next day, John was given a verbal warning and Amelia was terminated. a. Amelia has a claim for discrimination based on gender discrimination. b. If the company has a written policy providing for termination for theft, Amelia does not have a claim for discrimination based on gender discrimination. c. Amelia does not have a claim for discrimination based on gender discrimination if John has less seniority. d. Amelia does not have a claim for gender discrimination if she is paid more than John.

Amelia has a claim for discrimination based on gender discrimination.

Angelina hires Brad to drive a truck to a depot 200 miles away. She specifies the route that he is to take and tells him to be sure to arrive by 5 p.m. On the way, Brad finds himself feeling light-headed due to hunger. He checks the time and finds that he has plenty of time to make the 5 p.m. deadline, so he decides to stop at a diner that he is familiar with. The diner is three-quarters of a mile off the route that Angelina had specified. Brad does not call Angelina to ask for permission. On the way to the diner, Brad has a collision with Billy Bob. Billy Bob sues Angelina. a. Angelina is not liable because Brad was on a detour, freeing her from liability. b. Angelina is not liable because Brad was on a frolic, freeing her from liability. c. Angelina is liable because Brad was on a detour, so she is liable. d. Angelina is liable because Brad was on a frolic, so she is liable.

Angelina is liable because Brad was on a detour, so she is liable.

1. _____ liquidates the debtor's property to repay creditors and discharge the debts. a. Chapter 7 b. Chapter 11 c. Chapter 12 d. Chapter 13

Chapter 7

1. Boris, Carina, and Theo have decided to go into business as a limited partnership importing and selling exotic spices. Boris and Carina will manage the business, and Theo will have no role in the day-to-day operations. Boris and Carina have each invested $500,000, and Theo has contributed the building and land that the business will be operated from. Alina, a customer, contracts a rare disease from a contaminated spice sold by the company and sues. Alina is awarded a judgment for $5 million. After she exhausts the assets of the partnership, having the property and building sold, and seizing all other property, $3 million remains unpaid. a. Boris, Carina, and Theo each owe $1 million, and Alina must sue each for his or her part. b. Boris, Carina, and Theo each owe $3 million jointly and severally, so Alina may sue one, two, or all three for the $3 million balance. c. Boris and Carina each owe $1.5 million, and A

Boris and Carina each owe $3 million jointly and severally, so Alina may sue one or both of them; Theo has no additional liability.

1. Burt has gone to a commercial bank to negotiate a loan for the LLC in which he is a member. He tells the bank that he is authorized to act on behalf of and to bind the company. What is the best way for the bank to verify whether Burt does in fact have the authority he claims? a. Get him to sign a written statement. b. Call another member of the LLC for confirmation. c. Check the articles of organization. d. Nothing need be done because all LLC members have the right to bind the company, as do general partners.

Check the articles of organization.

1. What effect does the process of accord and satisfaction have on creditors? a. It prevents a creditor from suing while the business is revising its business model b. Contract terms with creditors are renegotiated, releasing the debtor from liability by settling the debt. c. It prevents creditors from filing for involuntary bankruptcy. d. It discharges debt.

Contract terms with creditors are renegotiated, releasing the debtor from liability by settling the debt.

The Happy Days Day Care is hiring a child care worker. On the employment application, Happy Days specifically asks if the applicant has ever been arrested. Tina applies for a job at Happy Days and answers no to that question. She also answers no to the question that asks if there is any reason that she would not be qualified to work with children. Soon after Tina is hired, she severely shakes a baby to stop it from crying, causing the baby injuries. It is discovered at trial that Tina has been fired from numerous day cares for baby shaking and various other offenses. If the baby's parents sue Happy Days: a. Happy Days is not liable because it made a good faith effort to screen applicants and because it specifically asked about past indiscretions. b. Happy Days is liable because Tina was dealing not with the public but only with children. c. Happy Days is liable for negligent hiring. d. Happy Days is liable for

Happy Days is liable for negligent hiring.

1. Which of the following inclusions in an employment advertisement would likely not be considered discriminatory? a. Young persons wanted. b. Seeking recent college graduates. c. High school graduation required. d. Stewardesses needed.

High school graduation required.

1. Martina and Dryson have applied for teaching positions in your school's accounting department. Martina is a recent graduate with her PhD in accounting and one published paper. She has no teaching experience except for classes taught as a teaching assistant during her PhD program. Dryson also has a PhD in accounting and has been teaching for five years at a major university. He has eight published papers. Both are hired as tenure track assistant professors and assigned two 101 courses and one 102 course. When Martina later discovers that Dryson's salary is $10,000 higher than hers, she is furious and files suit under the Equal Pay Act. Will she be successful? a. Yes, she is being paid less to do the exact same job that her male counterpart is doing, so she does have a valid cause of action. b. Yes, Dryson's additional experience cannot be considered under the Equal Pay Act. c. No, Martina does not have a valid c

No, Martina does not have a valid cause of action because Dryson is being paid a different salary based on factors other than sex.

1. Unsafe workplace conditions are monitored and regulated under a. ERISA. b. COBRA. c. HIPAA. d. OSHA.

OSHA.

1. Which of the following is not an option available to a general partnership seeking capitalization? a. Borrowing money from one or more of the partners. b. Selling the right to a percentage of the profits to an investor. c. Selling ownership rights through the public markets. d. Borrowing money from a commercial lender.

Selling ownership rights through the public markets.

1. Which of the following is a debt that is nondischargeable unless the debtor can prove undue hardship? a. Claims for federal, state, and local taxes within two years of the petition filing. b. Student loan debts. c. Debts incurred for luxury items within 90 days of the petition. d. Alimony, maintenance, and child support.

Student loan debts.

1. In Ziva Jewelry v. Car Wash Headquarters, when a jewelry salesman left his car at a carwash, it was stolen with over $850,000 of jewelry hidden inside. When the jeweler sued the carwash, what was the result? a. The carwash was liable for the stolen jewelry because a bailment was formed. b. The carwash was liable because it took responsibility for the jewelry when it accepted the vehicle for service. c. The carwash was not liable for the stolen jewelry because there was no bailment formed. d. The carwash was not liable because it could not have expected it was taking responsibility for over $850,000 worth of jewelry when it accepted the salesman's vehicle.

The carwash was not liable because it could not have expected it was taking responsibility for over $850,000 worth of jewelry when it accepted the salesman's vehicle.

1. Which of the following is not true regarding venture capital firms? a. They are generally long-term investors. b. They generally concentrate on one specific industry. c. They usually insist on substantial control of the corporation being funded through membership on its board or through appointments to certain officer positions. d. They are generally a source of expertise in operations and expansion of the corporation being funded.

They are generally long-term investors.

1. Sanchez borrowed money from Fifth National Bank to buy a car. She defaulted on the loan. Fifth National hired Rex's Recovery Service to repossess the car for a set fee. Rex's was simply told to locate and seize the car. Rex's would be classified as A. an agent/employee. B. a principal. C. a gratuitous agent. D. an independent contractor.

an independent contractor.

1. A petition for bankruptcy that is filed by creditors against a debtor is known as a. a recovery action. b. an involuntary bankruptcy. c. a voluntary bankruptcy. d. an order for relief.

an involuntary bankruptcy.

Young has just fired Kathy, who was her agent. Young places an ad in the classified section of the local newspapers that states, "Kathy no longer works for or represents Young in any way." Young placed this ad to eliminate any possible liability resulting from a. actual authority. b. apparent authority. c. ratification. d. respondeat superior.

apparent authority.

1. Which of the following is an equity instrument? a. Debenture b. Bond c. common stock d. promissory note

common stock

1. Which of the following is a tactic used by employers when anticipating a strike by a group of employees? a. wildcat strikes b. lockouts c. secondary boycotts d. grievances

lockouts

1. A corporation formed to maintain a charitable operation is called a a. nonprofit corporation. b. Subchapter S corporation. c. public corporation. closely held corporation.

nonprofit corporation.

1. Which of the following options does not attempt to repay and discharge debt? a. out of existence b. workout c. Chapter 7 bankruptcy d. Chapter 11 bankruptcy

out of existence

1. Robert is a wealthy businessman who wishes to purchase a particular property. Realizing that the price might become inflated if his name is made known, he asks Faye to negotiate the purchase of the property on his behalf. Faye is the general manager of Robert's east coast operations. Faye reports directly to Robert and is supervised in all respects. Faye is told to tell Philip, the property owner, that she represents someone, but she is told not to specify who she works for. The agency would be described as: A. partially disclosed. B. disclosed. C. undisclosed. D. indemnified.

partially disclosed.

1. With regard to taxation, LLPs are treated as a. pass-through entities. b. corporations. c. nonprofit organizations. d. hybrid entities.

pass-through entities.

1. The ability to distribute earnings without incurring double-level taxation is an advantage of a a. pass-through entity. b. corporate tax structure. c. member-managed LLC. d. manager-managed LLC.

pass-through entity.

1. Security transactions involving the original issuance and reissuance of securities by a business to raise capital are called the a. primary market. b. secondary market. c. preferred market. d. common market.

primary market.

1. Thirteen sorority sisters decide to start a dog-walking business. They incorporate under the name Pro Canine Walkers, Inc., and advertise their services throughout the city in newspapers and on flyers they post. All stock is owned by the 13 principals, and none is offered to anyone outside the 13. This corporation would be classified as a a. privately held corporation. b. privately held public corporation. c. privately held professional corporation. d. privately held public professional corporation.

privately held corporation.

1. The type of corporation that generally has the highest number of shareholders is the a. public corporation. b. professional corporation. c. publicly held corporation. d. nonprofit corporation

publicly held corporation.

1. Which of the following is a form of vicarious liability? a. respondeat superior b. disgorgement c. repudiation d. ratification

respondeat superior

1. The purchase and sale of issued securities between investors is called the a. primary market. b. secondary market. c. preferred market. d. common market.

secondary market.

1. The ____________ are the owners of a corporation. a. promoters b. officers c. board of directors d. shareholders

shareholders

1. Jonathan has graduated and wants to start a business. Which business entity gives him the most complete and exclusive control over the business and any business decisions? a. sole proprietorship b. limited liability company c. corporation d. general partnership

sole proprietorship

1. The Sarbanes-Oxley Act imposed stricter regulations on how corporations do business through regulations in each of the following areas except a. tax compliance. b. financial reporting. c. corporate governance. d. auditing.

tax compliance.

1. The Equal Employment Opportunity Commission was created by a. the Civil Rights Act of 1964. b. the Americans with Disabilities Act. c. the Lilly Ledbetter Fair Pay Act. d. Executive Order 11246 creating affirmative action.

the Civil Rights Act of 1964.

1. Agency law generally exists on the state statutory level and is based on a. common law. b. the Restatement (Third) of Agency. c. tort law. d. the federal regulation of agency.

the Restatement (Third) of Agency.

1. The only legal remedy for _______ is to bring a lawsuit against a borrower to try to recover the money loaned. a. secured creditors b. unsecured creditors c. a mortgagor d. a government agency

unsecured creditors