BUS202 Exam 2

Which of the following would beprotected by a patent? A. A new chemical substance which"dissolves" fog caused by inversion B. A textbook C. The theory of relativity D. A computer program

A. A new chemical substance which"dissolves" fog caused by inversion

Cashing a check that says "payment in full" will stop the person from collecting more, even if the amount owed is disputed .1. True. If there is a dispute, don't cash the check! 2. False. A debt is a debt. "Payment in full" generally does not work to satisfy the entire debt.

.1. True. If there is a dispute, don't cash the check!

Tom sold ad space for Boise Magazine for three years.Two days after he's laid off, he sells a 5" ad toChronic Taco, an existing customer, who does not know he was fired. 1. Tom had authority to sell the ad. Why? 2. Tom did not have authority to sell the ad. Why? 3. I need to reviewChapter 8!!

1. Tom had authority to sell the ad. Why?

Bob, a partner of XYZ Partnership, injures David while doing partnership business. XYZ is liable to David because of Bob's tort. 1. True 2. False

1. True

Sam, another partner in XYZ partnership, is personally liable to David because of Bob's tort. 1. True (why?) 2. False (why?)

1. True (Why?)

Contract duties may be: 1. Assigned 2. Delegated 3. Either assigned or delegated

2. Delegated

ABC Partnership has no agreement on how profits and losses will be divided. Adam invested 50% of the partnership start-up $$. Bob & Charlie each invested25% .1. Adam will receive50% of the profits;Bob and Charlie will each receive 25%. 2. Each partner will receive 33% of the profits.

2. Each partner will receive 33% of the profits.

An agent always has the right to withdraw her consent and terminate the agency relationship. 1. True 2. False

2. False

Shareholders always have limited liability. 1. True 2. False

2. False

In an international dispute, the forum non conveniens principle attempts to determine which nation: 1. Can resolve the dispute without violence 2. Is most convenient or appropriate 3. Can resolve the dispute in the fairest manner

2. Is most convenient or appropriate

The Statute of Frauds means that: 1. Contracts entered into because of fraud are voidable 2. Some contracts have to be in writing or they are not enforceable 3. Each of the above

2. Some contracts have to be in writing or they are not enforceable

A contract for a new surf board would be governed by: 1. The common law 2. The UniformCommercial Code(UCC) 3. This guy:

2. The UniformCommercial Code(UCC)

I promise to pay you $2000 if you promise to have my bathroom remodeled by the 1st day of school. 1. This would be a unilateral contract 2. This would be a bilateral contract 3. This contract is not supported by consideration because$2000 isn't enough.

2. This would be a bilateral contract

A principal will be liable for: 1. Torts of an independent contractor 2. Torts of an employee 3. Torts of either an independent contract or an employee

2. Torts of an employee

Which of the following is the trade agreement between the U.S., Canada, andMexico? 1. GATT 2.NAFTA 3. WTO 4. WHO

2.NAFTA

While driving a truck for AAA Co.(within the scope of employment) Vic causes an accident and injures Wendy. Wendy can recover from: 1. AAA only 2. Vic only 3. AAA and/or Vic 4. Her insurance company only

3. AAA and/or Vic

Which statement is accurate? 1. A contract is required to create an agency relationship. 2. Agents and principal so we each other fiduciary duties. 3. All employees are agents, but not all agents are employees. 4. Principals always have the right to terminate an agency relationship.

3. All employees are agents, but not all agents are employees.

Which of the following is not a factor to determine fair use? 1. Purpose and character of the use 2. Nature of the copy righted material 3. Whether the use serves the public good 4. Economic impact of the use on the copy right holder

3. Whether the use serves the public good

Venezuela seizes the assets of World Oil, Inc., a U.S. firm. World Oil's recovery from Venezuela in a U.S. court may be prevented by the: A. Act of State Doctrine. B. World Trade Organization. C. Central American Free Trade Agreement. D. principle of comity.

A. Act of State Doctrine.

Kristin and Lindsey are partners in Mobile Devise, an online marketing firm. Lindsey dissociates from Mobile. Kristin signs a contract with Organic Olives, a food seller, apparently on Mobile's behalf. Organic Olives does not know of Lindsey's dissociation. The contract is binding on​: A. Kristin, Lindsey, and Mobile. B. Kristin only. C. Mobile only. D. Organic Olives only.

A. Kristin, Lindsey, and Mobile.

Promoters will be personally liable for contracts entered into on behalf of the corporation. A. True, unless or until the corporation adopts the contracts B. False, the promoter was an agent and so cannot be liable for the contract

A. True, unless or until the corporation adopts the contracts

As an employer's defense to liability for an agent's torts, a frolic is: A. the agent's substantial deviation from the service of the employer. B. the agent's inconsequential deviation from the service of the employer. C. available only if the employer is not a corporation. D. available only if the employer is not a partnership. E. a termination of the agency relationship.

A. the agent's substantial deviation from the service of the employer.

Mike is an architect who works for General Construction Co. The most important factor in determining whether Mike is General's employee or an independent contractor is: A. the degree of control that General exercises over Mike. B. the distinction between General's business and Mike's occupation. C. the length of the working relationship between General and Mike. D. the method of payment. E. whether General is liable for Mike's torts.

A. the degree of control that General exercises over Mike.

Resurgent Corporation designs a new mobile device that the firm names "SyFye." The company can obtain patent protection for: A. the device. B. the idea for the device. C. the name "SyFye." D. none of the choices.

A. the device.

Ernie is a director of Five-Star Properties, Inc. Ernie is a property appraiser. Five-Star makes several purchases in which it pays too much. Ernie approves all the transactions without evaluating them. He is most likely liable for breach of​: A. the duty of care. B. none of the choices. C. the duty of loyalty. D. the business judgment rule.

A. the duty of care.

Which of the following expresses the duties that the officers and directors owe to the corporation and its shareholders? A. Duties of of care, obedience, and to spend. B. Duties of loyalty and care. C. Duties of loyalty and making a profit. D. Duties of loyalty and making decisions. E. Duties to avoid damages and of loyalty.

B. Duties of loyalty and care.

Acceptance of an offer: A. Is determined when acceptance is received B. Is determined when acceptance is sent C. Must always be in writing D. Both A and C

B. Is determined when acceptance is sent

United Trucking Co. employs Vic as a driver. While driving a United truck within the scope of employment, Vic causes an accident in which Wendy is injured. Wendy can recover from: A. United only. B. United or Vic. C. Vic only. D. Wendy's insurance company only. E. None of the above.

B. United or Vic.

Ron offers to pay Sara to pick up and deliver certain business documents within thirty minutes. Sara can accept the offer only by completing the task within the deadline. If she does, Ron and Sara will have​: A. a bilateral contract. B. a unilateral contract. C. a void contract. D. an executive contract.

B. a unilateral contract.

Lyle and Miranda agree that Lyle will fix the refrigeration unit in Miranda's Buns n' Burgers in exchange for her payment of a debt that Lyle owes to New Credit Corporation. New Credit is​: A. a delegatee. B. an intended beneficiary. C. an incidental beneficiary. D. an obligor.

B. an intended beneficiary.

Jason and Kelly enter into a contract for Jason to renovate Kelly's house by a certain date. Jason never performs. After the applicable limitations period has passed, Kelly decides to bring a suit against Jason for breach. This suit: A. must be filed within ten to twenty years, depending on state law. B. can no longer be brought. C. can be filed within four years after Kelly decides to sue. D. must be filed between four and five years after Kelly decides to sue.

B. can no longer be brought.

Joe, a famous football player, was asked to autograph a pad of paper held by Betty. Unknown to Joe, Betty had carefully concealed a contract for the sale of Joe s home to Betty in the pad that Joe signed. If Betty seeks to enforce the contract, Joe s best defense to have the contract declared void would be: A. fraud in the inducement B. fraud in the execution C. statute of frauds D. mistake E. duress

B. fraud in the execution

Mike is a shareholder of NatGas, Inc. NatGas uses cumulative voting to elect directors. This means that the number of Mike's votes is determined by the number of A. years that he has been a shareholder. B. members of the board to be elected multiplied by the total number of voting shares that he holds. C. shareholders present at the shareholders' meeting. D. shareholders' meetings that he has attended.

B. members of the board to be elected multiplied by the total number of voting shares that he holds.

Under the corporate opportunity rule: A. officers and directors may personally benefit from an opportunity in which the corporation would have been interested. B. officers and directors may not personally benefit from an opportunity in which the corporation would have been interested. C. shareholders may not personally benefit from an opportunity in which the corporation would have been interested. D. directors are bound to accept any reasonable offer by an outside investor for all or substantially all of the outstanding stock of the corporation. E. directors are not required to accept a reasonable offer by an outside investor for all or substantially all of the outstanding stock of the corporation, if it would impair their ability to receive compensation under a golden parachute.

B. officers and directors may not personally benefit from an opportunity in which the corporation would have been interested.

Avery wants to go into business as Boom! to make and market fireworks. When deciding which form of business organization would be most appropriate, Avery would normally take into account all of the following except​ A. the liability of the owners. B. the forms of competitors' business organizations. C. tax considerations. D. the need for capital.

B. the forms of competitors' business organizations.

Adam is a partner in the ABC partnership. He owes a fiduciary duty to: A. The ABC partnership only since it is the principal B. Bob and Charlie C. Both the ABC partnership andBob and Charlie.

C. Both the ABC partnership andBob and Charlie.

Federal trademark protection: A. Lasts for 14 years B. Can be renewed for a limited number of times only C. Can be abandoned for non-use - so if used, it lasts indefinitely D. All of the above

C. Can be abandoned for non-use - so if used, it lasts indefinitely

Karen decided to sell her stair stepper because she was not using it as much as she thought she would. Her friend Lydia bought it from Karen for $100. The first day that Lydia used the stair stepper it fell apart, injuring Lydia's ankle. A. Lydia can sue Karen for breach of the implied warranty of merchantability because the stair stepper is not fit for the ordinary purpose intended. B. Karen can sue the manufacturer for breach of the implied warranty of merchantability because she was the original buyer. C. Lydia cannot sue Karen because Karen is not a merchant. D. Lydia cannot sue Karen because they are not in privity of contract. E. None of the above are true.

C. Lydia cannot sue Karen because Karen is not a merchant.

Cumulative voting means: A. One vote per share B. One vote per shareholder C. One vote per share x the number of board members to be elected

C. One vote per share x the number of board members to be elected

Paul is driving a truck delivering goods for his partnership when he negligently backs into a customer's new Mercedes. The customer sues the partnership and recovers $5000 in damages. What liability do the other partners have for Paul's actions? A. No liability. B. Liability based upon their initial capital contributions. C. Personal liability. D. Liability based upon what their written agreement provides. E. I don't know what liability means!?

C. Personal liability.

Richard writes a letter to Sarah authorizing her to sell his car and sends a copy of the letter to Timothy, a prospective buyer. The next day, Richard sends a letter to Sarah revoking her authority, but he fails to notify Timothy. A. Sarah has actual authority to sell the car to Timothy. B. Sarah has implied authority to sell the car to Timothy. C. Sarah has apparent authority to sell the car to Timothy. D. Sarah is empowered under the doctrine of respondeat superior to negotiate the contract. E. Sarah may sell the car to Timothy if she first ratifies the contract.

C. Sarah has apparent authority to sell the car to Timothy.

The Act of State doctrine holds that: A. foreign countries are not subject to the jurisdiction of the courts of the United States. B. foreign countries are subject to the jurisdiction of the courts of the United States. C. U.S. courts will not question the validity of an action taken by a foreign government within its own territory. D. U.S. courts will question the validity of an action taken by a foreign government within its own territory. E. U.S. courts will not question the validity of an action taken by a foreign government within its own territory, unless the act is inconsistent with United States law.

C. U.S. courts will not question the validity of an action taken by a foreign government within its own territory.

Eve hires Frank to do some remodeling work in her office. They agree that she will pay him in a lump sum when the job is complete, and that Frank may come and go as he pleases. Gary, a customer, enter Eve's office. Frank negligently drops a tool on Gary's foot, injuring him. Eve is likely: A. liable to Gary because he was injured on Eve's property. B. liable to Gary unless Frank acted intentionally. C. not liable to Gary because Frank is an independent contractor. D. not liable to Gary because Frank is Eve's employee. E. going to lose her business!

C. not liable to Gary because Frank is an independent contractor.

Mary hires Jay to act as her agent in the purchase of Kappa, Co. Mary tells Jay to reveal only that he is buying the firm on behalf of a third party, without telling Kappa's seller who that third party is. Mary is a(n): A. undisclosed principal B. disclosed principal C. partially disclosed principal D. disloyal principal E. unethical principal

C. partially disclosed principal

Ann offers to buy a laser printer, with a case of paper and an extra cartridge, from Best Office Products, for $200. Curt, Best's representative, says, "OK, but no paper and no extra cartridge." Curt has: A. accepted the offer. B. made a counteroffer without rejecting the offer. C. rejected the offer and made a counteroffer. D. rejected the offer without making a counteroffer.

C. rejected the offer and made a counteroffer.

Tropic Foods Corporation, a U.S. firm, owns property in Ecuador. When the Ecuadoran government seizes the property, Tropic Foods asks a U.S. court to order the property's return. The court rules that Ecuador is exempt from the court's jurisdiction. This is an example of: A. a travesty of justice. B. the act of state doctrine. C. the doctrine of sovereign immunity. D. the principle of comity.

C. the doctrine of sovereign immunity.

Tile & Grout (T&G) contracts to resurface the insides of the pools at Water Park. T&G knows that without the resurfacing, Water Park will have to delay its seasonal opening. T&G does not perform as promised. As consequential damages, Water Park can recover: A. the cost of new pools. B. the difference between T&G's price and the eventual cost of resurfacing. C. the loss of profit from the delayed opening. D. nothing.

C. the loss of profit from the delayed opening.

iMeeMine Inc. develops a new mobile phone that the company names "Call Mee." iMeeMine can obtain trademark protection for: A. the phone. B. the "newness" of the device. C. the name "Call Mee." D. none of the choices.

C. the name "Call Mee."

Like the bylaws of other corporations, the bylaws of Rocks, Paper & Scissors, Inc.,​ A. establish the operating name of the corporation. B. establish the value and classes of corporate stock. C. were adopted at its first organizational meeting. D. were submitted for approval to the public official in charge.

C. were adopted at its first organizational meeting.

Who may be liable to Marlene for her injuries? A. Only David - it's his tort, and it also breached the PS K, so PS is not liable B. Tri-State Express PS C. Mike, another partner D. 2 and 3 E. What's a tort?

D. 2 and 3

Which of the following is true? A. A statute of repose sets an outer limit on how many years after a product was manufactured that the maker could be held liable for a defect. The limit is based on the time that begins to run on the date the product was manufactured. B. A statute of limitations sets a limit on the injured party's ability to file a lawsuit against a seller or manufacturer of a defective product. The limit is based on the time that begins to run on the date of the injury. C. Statutes of repose require sellers of electronic goods to provide consumer with a one-year limited warranty. D. A and B are correct. E. B and C are correct.

D. A and B are correct.

Under the doctrine of respondeat superior, an employer will be held liable for the torts committed by her agent when: A. the agent is an employee. B. the agent is particularly wanton or reckless in the commission of the tort. C. the tort was committed within the scope of employment. D. A and C. E. none of the above.

D. A and C.

Sara owns a coffee shop. She hires Howard to manage the shop. Which of the following best describes their relationship? A. Sara, the employer, is the general agent; Howard, the employee, is the principal. B. Sara, the employer, is the general agent; Howard, the employee, is an independent contractor. C. Sara is the general partner; Howard is a limited partner. D. Sara, the employer, is the principal; Howard, the employee, is a general agent. E. Sara, the employer, is the principal; Howard, the employee, is neither a general agent or an independent contractor because he's a manager. Managers are exempt from agency law.

D. Sara, the employer, is the principal; Howard, the employee, is a general agent.

To determine what law applies to a contract that contains both a good and a service, one must apply: A. The mirror image rule B. The Statute of Frauds C. The 4/5 rule D. The predominant purpose test

D. The predominant purpose test

State University (SU) provides housing on campus and in some adjacent off-campus neighborhoods. To lease a university house or apartment, a person must be student at SU. This requirement is​: A. a discharge by performance. B. a material alteration. C. an accord and satisfaction. D. a condition.

D. a condition.

Custom Auto, LLC, is a limited liability company. Its members include Dennis and Emma. Like other LLCs with more than one member, unless indicated otherwise, the firm will automatically be taxed as​ A. a person. B. a corporation. C. a sole proprietorship. D. a partnership.

D. a partnership.

Roy, a director of Service & Sales Corporation, does not attend a board meeting for three years. During that time, Terry, the firm's president, makes improper loans that cost the company $10 million. Roy is most likely liable for breach of​: A. the business judgment rule. B. the duty of care. C. the duty of loyalty. D. none of the choices.

D. none of the choices.

Joe owns a used car lot. When Alan buys a car from Joe, Joe tells him he's bought "the best little car in the world." Joe's statement is: A. an express warranty. B. a misrepresentation. C. a pyramid scheme. D. puffery. E. an implied warranty.

D. puffery.

Charlie, Dora, and Ethel are the first directors on the board of Face Time Corporation, a social media host. Subsequent directors are elected by a majority vote of Face Time's​: A. users.​ B. employees. C. officers. D. shareholders.

D. shareholders.

Carlo is a director of Desserts Italiano, Inc. Carlo opposes a tender offer that is in the company's best interest because its acceptance would cost his position as a director. Carlo is most likely liable for a breach of​ A. none of the choices. B. the business judgment rule. C. the duty of care. D. the duty of loyalty.

D. the duty of loyalty.

Gene, an accountant, convinces his client Hazel to sign a contract to invest her savings in 2Gether, a nonexistent social-networking Web site. There is clear and convincing evidence that Hazel did not act out of her free will. This is​: A. duress. B. fraud. C. mistake. D. undue influence.

D. undue influence.

Mona is induced by her guardian Newt to sign a contract to invest her student loan funds in OptiBank through Newt's investment firm. Unknown to Mona, Newt realizes a commission from the investment. Most likely, Mona may rescind the contract on the basis of​: A. duress. B. fraud. C. mistake. D. undue influence.

D. undue influence.

A contract in which acceptance is expected in the form of the performance of some act by the offeree is a(n): A. collateral contract. B. bilateral contract. C. conditional contract. D. unilateral contract. E. adhesion contract.

D. unilateral contract.

In which of the following situations does the first promise serve as valid consideration for the second promise? A. A police officer's promise to catch a thief for a victim's promise to pay a reward. B. A builder's promise to complete a contract for a purchaser's promise to extend the time for completion. C. A debtor's promise to pay $500 for a creditor's promise to forgive the balance of a $600 liquidated (undisputed) debt. D. A father's promise to pay his son $500 because his son stopped smoking cigarettes. E. A debtor's promise to pay $500 for a creditor's promise to forgive the balance of a $600 unliquidated (disputed) debt.

E. A debtor's promise to pay $500 for a creditor's promise to forgive the balance of a $600 unliquidated (disputed) debt.

Ann, a representative of Best Concrete Products, Inc., assures City Construction Company (CCC) that Best's cement will not crack within a certain range of temperatures. CCC uses Best's product. When cracks develop within the stated temperature range, CC files a suit against Best. The court would be most likely to rule in favor of: A. Best, because Ann's statement was an expression of opinion. B. Best, because CCC chose Best's product voluntarily. C. Best, because Ann's statement was just puffery. D. CCC, because Best's product is not fit for CCC's particular purpose. E. CCC, because Ann's statement was an express warranty.

E. CCC, because Ann's statement was an express warranty.

Which law prohibits U.S. companies from paying a sum of money to a foreign government or official for the purpose of influencing decisions or obtaining business? A. Foreign Sovereign Immunities Act. B. Department of Justice. C. Export Administration Act of 1979. D. World Trade Organization Act. E. Foreign Corrupt Practices Act.

E. Foreign Corrupt Practices Act.

Which of the following is true about an express warranty? A. It can be created by a promise or affirmation of fact about the goods, a description of the goods, or use of a sample or model in connection with the sale of the goods. B. It must become part of the basis of the bargain. C. State law must provide the precise wording of the warranty, and the seller must use such wording to state the warranty. D. All of the above are true. E. Only a and b are true.

E. Only a and b are true.

What are the Three necessary contract elements•

OFFER• ACCEPTANCE• CONSIDERATION