ACCT 568 - Exam 1
What are the require elements of every contract?
1. Mutual assent (offer and acceptance) 2. Real assent (capacity) 3. Consideration 4. Legality
Specific identified authority reserved only for the federal government is called: a) Enumerated powers b) Executive privilege c) Separate powers d) Congressional powers
a) Enumerated powers
Glenn's Sport Center Corp. operates 47 retail sporting goods outlets, mostly in the western United States. Glenn's has rigid employee guidelines to ensure the safety of its customers as well as its employees. Glenn's also rewards store managers whose safety records are particularly high. Notwithstanding these efforts, Stone, a Glenn's customer, was injured when she tripped over several small boxes left in an aisle by Fanning, a Glenn's employee. In a suit by Stone for compensation for her injuries ... a) Glenn's could be held liable even if the corporation itself was not negligent. b) Stone will prevail against Glenn's, but not against Fanning c) Stone will not prevail against Glenn's if it is proven that Fanning had ignored her supervisor's order to clean up those boxes immediately. d) Stone will not prevail against Fanning or Glenn's if there was no insurance coverage.
a) Glenn's could be held liable even if the corporation itself was not negligent
Aya was hired by ABC Covenience Market to refinish and seal the store's concrete floors. Aya provided her own tools and supplies, and was paid upon completion of the job. She completed her work overnight and without supervision. Which of the following statements describing Aya's role with respect to ABC Convenience Market is true? a) If Roz, a customer of ABC, slips and injures herself due to negligent application of the sealant, she would only be able to recover from Aya, unless ABC was negligent in hiring Aya b) Whether Aya is considered an employee or independent contractor, she is considered ABC's agent because she was paid by ABC to do a job to its specifications c) Aya would typically be considered an employee of ABC in this case, because she was granted access to the store without supervision d) Aya would be considered an independent contractor in this case. However, as construction work is considered an inherently dangerous task, ABC can be held liable for Aya's torts related to the project.
a) If Roz, a customer of ABC, slips and injures herself due to negligent application of the sealant, she would only be able to recover from Aya, unless ABC was negligent in hiring Aya.
Nick, a college student, sells a radio to Steve, a fellow student who lives on the same floorin the dorm. Steve gives him a check, which bounces. Nick is more amused than anything, so he leaves a message on Steve's door that says "please see me about $25 worth of rubber drawn on a local bank." The message is large enough for everyone on the floor to see. Steve is very embarrassed by this, and accuses Nick of defamation. Has Nick defamed Steve? a) No, because the statement was not false b) No, because he did not mean to harm Steve's reputation c) No, because the message was not widely disseminated d) No, because the message did not cause any damage to Steve
a) No, because the statement was not false
Which of the following is NOT an example of checks and balances between the three branches of the federal government? a) President replacing a cabinet secretary b) Congressional veto-override power c) Supreme Court power to declare a law unconstitutional d) Senate power to approve (or disapprove) judicial appointments
a) President replacing a cabinet secretary
Milton Friedman would have been most likely to agree to which of the following statements? a) The CEO and the board should have a single-minded focus on delivering maximum value to shareholders of the business b) All is fair in love, war, and business c) The purpose of the corporation is to find a path to sustainable corporate profits by paying careful attention to key stakeholders d) the business of business is business
a) The CEO and the board should have a single-minded focus on delivering maximum value to shareholders of the business
Clark has ordered a prescription to be delivered from Bruce's pharmacy. Clark's house is just a block off the usual route that Rick, Bruce's assistant, drives home. Bruce asks Rick to deliver the prescription on his way home after work. While Rick is on his way to Clark's house, he hits and injures Peter, a driver who was parking his car. Is Bruce liable for Peter's injuries? a) Yes, because Rick was acting at Bruce's request to make the delivery b) No, because Rick is on his way home after work c) Yes, because an employee is an agent of his employer until he gets home d) No, unless Rick is using a car supplied by Bruce
a) Yes, because Rick was acting at Bruce's request to make the delivery
Bae is late for work. He is driving down the street at 45 mph, even though the posted speed limit is 30. It is very early in the morning, so there is no traffic. An early-morning jogger runs into the street in front of Bae's car. Although Bae slams on the brakes, he hits and injures the jogger. Was Bae negligent? a) Yes, because he was driving over the posted speed limit b) Yes, because pedestrians (including joggers) automatically have the right of way c) No, because the jogger should have seen him coming d) No, because although Bae was speeding, he probably was not going too fast to be able to control his car.
a) Yes, because he was driving over the posted speed limit
Q offered, in writing, to purchase a warehouse and adjacent parking lot from R for $750,000 with R to hold $500,000 in financing. R counter-offered to sell the property to Q for $850,000 cash. Q responded to the counteroffer agreeing to the new price and terms, but inserting a provision that gave Q 45 days to secure financing. R demanded, and Q thereafter agreed, that Q would bay R $1,500 within 15 days for R to keep the offer open. Under the circumstances, a) an enforceable option has been created b) Q will not be bound to complete the transaction even if he finds an agreeable lender. c) R may sell the property to another buyer, without liability to Q, if he signs contract prior to receiving $1,500 from Q. d) because the terms of the agreement are unreasonably vague, no contract has been formed.
a) an enforceable option has been created.
What occurs when an offeror tells an offeree that the offeror no longer intends to enter into a contract? a) revocation of the offer b) acceptance of the offer c) rejection of the offer d) counteroffer request
a) revocation of the offer
Which of the following kinds of law are most often found in state law rather than federal law? a) torts and contracts b) international law c) maritime law d) bankruptcy
a) torts and contracts
A contract entered to by the offeree under duress of physical violence is a) void b) voidable c) unenforceable by either party d) enforceable by the threatened party
a) void
Parker was a sales agent for Green Tree Health Equipment with an assigned sales territory of the southeast United States. Parker failed to meet his sales quota for three consecutive quarters, and as a result, was terminated by Green Tree's management which took no further action other than informing Parker that his employment was immediately terminated. Six days later, Parker entered into a contracton behalf of Green Tree with a Provo Fitenss Center, a customer outside Parker's previous sales territory. Parker received a $1,500 cash advance relating to the sale, which was the ordinary custom in the fitness equipment business. Which is correct? a) Parker had implied authority to enter into the contract with Provo Fitness Center b) Parker had apparent authority to enter into the contract with Provo Fitness Center c) Provo Fitness Center CANNOT enforce the contract with Green Tree but could recover the $1,500 down payment d) Parker had no authority to enter into the contract with Provo Fitness Center
b) Parker had apparent authority to enter into the contract with Provo Fitness Center
Faith Development, Inc., devised a plan whereby it would, over time, acquire an entire city block in downtown Sheltonburg. Faith employed approximately fifteen different individuals and companies to acquire the 21 parcels which comprised the city bloc, giving explicit instructions that neither Faith's identity nor its existence should be disclosed to anyone. Which of the following statements is correct? a) Unless and until Faith's identity is disclosed, Faith Development will have no liability to anyone. b) The individuals and companies acting for Faith Development have actual authority to act for Faith c) Faith will have no right to enforce the contracts without the consent of the sellers d) If one of the individuals acting for Faith negligently causes harm while acting on Faith's behalf, there will be no liability on the part of Faith Development.
b) The individuals and companies acting for Faith Development have actual authority to act for faith.
Steve offered to give Christie five piano lessons for $20 per lesson. Christie responded that she would agree to that arrangement if Steve would include an additional three guitar lessons at no additional cost. Christie's response is: a) an acceptance b) a counteroffer c) an option contract d) a revocation
b) a counteroffer
which of the following statements regarding agency law is correct? a) an agent will generally be held liable under contracts entered into with a third party when the agent has acted on behalf of a disclosed principal b) a principal has a duty to indemnify its agents c) an agent has a fiduciary duty to her principal only if the agency contract is in writing d) when an individual hires an attorney, the client is the agent and the attorney the principal
b) a principal has a duty to indemnify its agents
The Supreme Court used what clause as its main basis for its decision in Gibbons v. Ogden? a) supremacy clause b) commerce clause c) free speech clause d) due process clause
b) commerce clause
Which form of jurisdiction is based on each party from a different state and applies to federal courts in certain circumstances? a) subject matter b) diversity c) federal d) personal
b) diversity
In the Pitre v. Louisiana Tech University case you needed to look up and read, Pitre was injured as the result of what activity? a) skateboarding b) sledding in snow c) elevator surfing d) rock climbing
b) sledding in snow
Under conscious capitalism, a) virtue ethics is ignored b) Shareholders, whether they be traders or long-term investors, are always the first and last consideration for the CEO and the board c) Maximizing profits comes from a focus on higher purposes and harmonizing the interests of various stakeholders d) Kantian duties take precedence over cost-benefit analyses
c) Maximizing profits comes from a focus on higher purposes and harmonizing the interests of various stakeholders
Omar tells Clara that he will pay $500 if she sinks five free-throws in a row. Without saying anything, Clara picks up a basketball, steps to the free-throw line, and easily sinks five free-throws. Omar then says, "Too bad! You never said you accepted my challenge!" Has Omar breached a contract with Clara? a) No, because she never said she accepted the offer b) No, because there was nothing in writing c) Yes, because she accepted the offer by making the free-throws d) No, because Clara has not lost anything that she had before.
c) Yes, because she accepted the offer by making the free-throws
What is a misrepresentation of a fact made with the intention of inducing reliance? a) a material misrepresentation b) puffery c) a fraudulent misrepresentation d) a mutual mistake
c) a fraudulent misrepresentation
Unless an offer states otherwise or the person making the offer revokes it, an offer remains open: a) even after the person making the offer dies b) until the person making the offer makes another offer to someone else c) a reasonable period of time d) forever
c) a reasonable period of time
Catarina falsely accuses Jeff of stealing from their employer. The statement is only defamatory if: a) the statement is widely circulated in the local media and on Twitter b) Nick suffers severe emotional distress as a result c) a third party hears it d) the statement is the actual and proximate cause of his distress
c) a third party hears it.
Which of the following statements relating to the law governing an agent and principal is INCORRECT a) an agent has a duty to put the interest of her principal ahead of her own self-interest b) a principal has a duty to compensate his agents c) all of an agent's authority to bind the principal is terminated when the agent is fired d) a principal's duty to reimburse an agent for expenses may be modified by contract
c) all of an agent's authority to bind the principal is terminated when the agent is fired
With respect to the general common law rules governing agents and principals, which of the following is an INCORRECT statement of the law? a) the firing of an agent terminates all the agent's actual express authority to act for the principal. b) an agent's title or position with the principal creates a degree of binding authority. c) an agency relationship does not exist unless there is a written agreement between the agent and the principal d) illegality of the purpose of the agency immediately terminates all the agent's authority to act for the principal
c) an agency relationship does not exist unless there is a written agreement between the agent and the principal.
The rock band Hell Hath No Fury, which did business as HHNF, LLC, contracted with Stevens Security, Inc., to provide security for the performers while on stage in concert. Mays, an employee of Stevens Security, punched a fan in order to keep him from climbing onto the stage during the concert. Mays was later convicted of criminal assault on account of the incident. In a civil suit for injuries resulting from the assault, HHNF, LLC, would: a) NOT be liable since Mays was not its employee b) NOT be liable since HHNF is an LLC, which limits its liability c) be liable since Mays' conduct was reasonably foreseeable d) be liable since HHNF, LLC is liable for all misconduct of its agents
c) be liable since Mays' conduct was reasonably foreseeable.
For a person to make a valid offer, the terms of the offer must be stated or reasonably ascertainable. Which of the following statements is incorrect regarding when the terms of an offer can be inferred? a) price of the item(s) offered may be inferred if the items are not unique, and a ready market exists from which price can be determined b) time for performance can be inferred and is usually determined as what is reasonable under the circumstances c) quantity can often be inferred d) under some circumstances, the subject matter of an offer can be inferred
c) quantity can often be inferred
An advertisement is an enforceable offer if: a) a person expresses a willingness to accept it b) the advertiser uses puffery c) the advertisement is clear and definite, makes an explicit offer, and leaves nothing open for negotiation d) the advertisement seeks a reciprocal promise
c) the advertisement is clear and definite, makes an explicit offer, and leaves nothing open for negotiation
A written agency agreement is required anytime: a) an agent has been employed for more than one year b) the purpose of the agency involves real estate c) the agent will be buying and selling land on behalf of the principal d) a written agency agreement is always required
c) the agent will be buying and selling land on behalf of the principal
Unless an offer states otherwise, which of the following does NOT terminate an offeree's power to accept an offer? a) rejecting the offer b) making a counteroffer c) the passage of a short time period d) revocation of the offer
c) the passage of a short time period
Which amendment to the US Constitution has the Supreme Court used as the basis to apply some of the other Amendments to the states? a) 1st amendment b) 2nd amendment c) 6th amendment d) 14th amendment
d) 14th amendment
If a party to a case did not like its result from a U.S. District Court in Texas, to which court would the party submit its next appeal? a) US Supreme Court b) 11th Circuit US Court of Appeals c) Texas Supreme Court d) 5th Circuit US Court of Appeals
d) 5th Circuit US Court of Appeals
Li, an overworked executive, will be traveling to a remote island retreat in order to relax and "unplug" for a two-week period. This retreat is designated to only allow guests contact to and from the outside world in event of emergency; all cell phones and personal electronics are banned. However, Li is in the midst of finalizing the negotiation of the private sale of a valuable piece of artwork. Li doesn't want to risk losing the sale, but, due to his work schedule, cannot delay his trip. He wants to grant his sister, Shu, power of attorney to allow her to negotiate and finalize the sale in his absence. Which of the following statements is false? a) Li may draft the power of attorney document in order to limit this authority to the particular transaction in question b) Shu does not need to be an attorney herself to act with Li's authority in the sale, but is required to have capacity to act as an agent c) Only Li is required to sign the power of attorney document to make it valid and binding d) In the unfortunate event of Li's death, Shu will have the authority to finalize the sale for the benefit of Li's estate
d) In the unfortunate event of Li's death, Shu will have the authority to finalize the sale for the benefit of Li's estate
Of the sources of law listed below, which would have supremacy over the others if a conflict was found between them? a) Texas Constitution b) Federal regulation c) Oklahoma law d) US Constitution
d) US Constitution
An agency relationship may be created by: a) contract b) operation of law c) an oral agreement d) all of the above
d) all of the above
Johnny buys a motorcycle manufactured by the Wrightville Cycle Company. The motorcycle has a built-in rack for carrying luggage installed directly in front of the saddle. While riding one day, Johnny stops suddenly to avoid a dog in the road. He is thrown forward violently into the rack and is severely injured. If Johnny were to sue Wrightville for his injuries, what legal theories could he use? a) negligence b) design defect and manufacturing defect c) breach of warranty and manufacturing defect d) breach of warranty and design defect
d) breach of warranty and design defect
The source of law that is foundational in the US legal system is: a) administrative law b) common law c) statutory law d) constitutional law
d) constitutional law
Which one of the following intentional torts does NOT also qualify as a potential criminal charge? a) assault b) battery c) trespass d) defamation
d) defamation
What role does the executive branch play in the legislative process? a) create laws b) interpret laws c) provide expertise to Congress in passing laws d) enforce laws
d) enforce laws
K&N Corporation, a distributor of automotive products, placed the following advertisement on its web-site: "INTERESTED IN AN EXCITING CAREER? QUALIFIED CPA WILL EARN $200K PLUS! GUARANTEED!!" Roth, a CPA with 10 years experience in the fuel oil industry e-mailed her application to K&N. As a result, K&N: a) has not made an offer to Roth, but has made an offer to the first qualified applicant for the position b)has made an offer to Roth if the position is still available when Roth applies c) has made an offer to Johnson if Roth is fully qualified d) has not made an offer to Roth
d) has not made an offer to Roth
Generally, minor cannot enter into contracts. However, there are exceptions. Which of the following is not an exception to this general rule? a) necessity b) misrepresentation of age c) nonvoidable contracts d) minor looked of age
d) minor looked of age
Q offered to provide L with computer programming services, which would allow L to fully automate his billing processes. The agreement was reduced to writing and signed by both parties. Thereafter, Q requested the agreement to be modified to extend the time for completion and to increase the payment to Q. If the modifications were made in an addendum signed by both parties, which is correct with respect to the modifications? a) only the agreement to increase the price is enforceable b) only the agreement to extend the time is enforceable c) both the price and time modifications are enforceable d) neither the price nor the time modifications are enforceable
d) neither the price nor time modifications are enforceable
Which form of jurisdiction is based on the party having sufficient contact with the jurisdiction? a) subject matter b) diversity c) federal d) personal
d) personal
The term used to refer to the Unites States common law, precedent approach to court cases is: a) in loco parentis b) e pluribus unum c) checks and balances d) stare decisis
d) stare decisis