CRR
Uzo's husband Kazeem is a huge fan of Wayne Newton. As a surprise, Uzo hired Newton to perform at Kazeem's 50th birthday party, to be held July 1. About a month before the party, Newton's agent called Uzo and said that because of a change in Newton's tour schedule, Newton would not be able to perform as promised. Uzo is very upset, because Kazeem would not want anyone else but Newton to perform at his party. Uzo wants you to tell her what her legal options are. First, she wants to know if she can ask a court for specific performance, especially because Newton's services are unique. She also wants to know what other types of judicial relief she could seek. Second, she wants to know when she should file an action against Newton. Does she have to wait until July 1 to see if Newton breaches the contract?
(a) No, she cannot get specific performance so that court would make Wayne Newton perform, as specific performance is not available for personal services contracts. She could certainly seek compensatory damages against Newton, and perhaps incidental damages if she has to incur costs in order to find replacement performance. Punitive damages would not be awarded. (b) She does not need to wait until July 1, but can treat Newton's anticipatory repudiation as a breach immediately. She can sue him for breach now, and can seek replacement performance right away.
A limited liability company must register with each state in which it plans to do business. A. true B. false
A
Al, a biochemist, worked for Zanta, the sole producer of the medicine Zzing. Zanta provided Al with training on producing Zzing. Al's employment contract contained a non-compete clause stating upon termination of his employment, Al could not work for or be associated with any competitor of Zanta in any country in any capacity. Recently Al quit his job and began working for a competitor in another state. Zanta sued Al for breach. Who should win? A. Al, because the non-compete agreement is overbroad B. Al, because the non-compete does not protect a legitimate business interest C. Zanta, because it has a legitimate interest in protecting its trade secrets and the investment it made in training Al D. Zanta, because as the sole producers of Zzing, it has a legitimate interest in preventing Al competing with Zzing anywhere in the world
A
Cato was injured while using a gas-powered chain saw manufactured by Thresh Corp. Cato sued Thresh, arguing that tubing used to convey the gas into the motor was faulty, because the material used in the tubing was not impregnable, thus causing fumes from the gas to leak and explode. What type of product-liability claim is Cato bringing? A. a manufacturing defect case B. a design defect claim C. an inadequate warning claim
A
Cecelia's employer just promoted Caesar to a more senior position instead of Cecelia, despite the fact that Cecelia has seniority and is better qualified. If Cecelia wants to file a sex-discrimination complaint against her employer, what should she do? A. file a complaint with the EEOC within 180 days under Title VII of the Civil Rights Act of 1964 B. file a lawsuit based on the Equal Pay Act C. File a lawsuit based on Section 1981 of the Civil Rights Act of 1866 D. all of the above
A
Clay offered Kelly $5,000 to sing on his next album and gave her until May 9 to accept. Kelly sent Clay a letter on May 1 rejecting his offer. She soon changed her mind, however, and sent another letter on May 6 accepting the offer. Her first letter arrived on May 8. The second arrived on May 10. Do they have a contract? A. no, because the rejection letter arrived first B. yes, because the acceptance letter was sent before the deadline C. no, because there was no consideration for his promise to keep the offer open until May 9 D. yes, because Clay did not revoke the offer before she accepted
A
Dewey, Cheatem and Howe want to form a general partnership. What would be the best choice for their firm's name? A. Dewey, Cheatem and Howe B. Dewey, Cheatem and Howe, Corp. C. Dewey, Cheatem and Howe, Ltd. D. Dewey, Cheatem and Howe Co. E. either A or C F. any of the above
A
Effective CSR strategies typically seek to satisfy a business' obligation to cure problems that the business has caused for social or environmental assets. With which of the following ethical approaches is this element of CSR strategy consistent? A. deontology B. utilitarianism C. virtue ethics D. relativism
A
Glimmer entered into a contract with Clove under which Clove would lay a new sidewalk in front of Glimmer's office. Glimmer directed Clove as to where the sidewalk should go and how it should look. Clove used her own tools and methods to do the work. During construction, a passerby was injured when he fell into a hole Clove negligently left uncovered. Can the passerby sue Glimmer? A. no, Clove was an independent contractor B. no, because the accident occurred outside the scope of Clove' employment C. yes, because Glimmer controlled the details of Clove' performance D. yes, because Glimmer ratified Clove' actions
A
Linus contracted with Lucy to shovel snow off of her sidewalk. Sally, who lived next door, was excited about the contract, because it meant she would be able to ride her skateboard past Lucy's house. Linus breached the contract. Sally was very disappointed and wants to sue Linus. Can she sue Linus successfully? A. no, because she is an incidental beneficiary to the contract B. yes, because she would have received a benefit under the contract C. yes, because she is a donee beneficiary
A
Lydia, Kitty and Mary are partners. Lydia borrowed $300,000 from Denny to secure a loan for the partnership. Under joint and several liability Denny can collect: A. $300,000 from Kitty B. $300,000 from Kitty, $300,000 from Lydia and $300,000 from Mary C. he can only sue Lydia for the debt and not Kitty or Mary D. none of the above
A
Mary ordered 30 specially scented candles from Abe's Ole Candle Shoppe for a price of $30. Just before shipping the order, Abe called Mary to tell her that because of a price increase in the ingredients used for the scent, he needed to charge her $35 for the order. Mary, who particularly wanted these candles, agreed to the higher price, but after receiving the candles refused to pay more than $30. Is her agreement to the increased price legally enforceable? A. yes, because she agreed in good faith to the price increase B. yes, because courts do not examine the adequacy of consideration C. no, because Abe had a pre-existing duty to deliver the candles to Mary D. no, because the increased cost of ingredients did not present an unforeseen difficulty to Abe
A
Matthew posted on a community social media site that his lawnmower was for sale; "if interested, email me back and name your price." Marilla emailed him to say she would take it for $10. Matthew replied, "no, it's not worth a lot more than that." Marilla thinks she has a contract with Matthew because she did exactly what he asked her to do. Is she right? A. no, the ad was a solicitation for offers B. yes, the ad had definite terms and was limited in the number of people who could respond C. yes, the ad was an offer for a unilateral contract that Marilla accepted by responding and naming her price D. no, Marilla was only engaging in preliminary negotiations
A
Minnie told George that she would pay him $50 if he promised to shovel the snow off of her driveway. George agreed that he would. Which of the following is true? A. if George shovels the snow, Minnie is legally obligated to pay him $50 B. if George does not shovel the snow, Minnie cannot sue him for breach C. if George shovels the snow, he can sue Minnie for quasi contract D. if George does not shovel the snow, Minnie can sue him for promissory estoppel
A
Peeta loved water guns, particularly large blaster-types. In order to reduce time spent refilling his gun, Peeta developed a backpack-style container that could hold several gallons of water, and attached tubing to facilitate quick re-loading. His friend Jackson admired Peeta's backpack and designed one for himself. Can Peeta sue Jackson for patent infringement? A. no, Peeta must file an application with the US PTO to be protected from infringement B. no, because Peeta's design was obvious to Jackson, who was able to duplicate it easily C. yes, because patents are protected under the common law even without registering D. no, because allowing Jackson to steal Peeta's design encourages competition
A
Peter sued Paul for breach of contract. If Peter asks the court to require Paul to compensate Peter for his losses caused by the breach, Peter is seeking: A. damages B. equitable relief C. specific performance D. an injunction
A
Peter wanted to sell a ring to Paul, so he assured that the stone in the ring was a ruby, although he really didn't know what type of stone it was. Paul has the ring appraised and discovered the stone was only glass, but decided to buy the ring anyway, thinking the price was still fair. Paul later decided that he had paid too much and tried to rescind on the basis of fraud. Who wins? A. Peter, because Paul did not rely upon his misrepresentation B. Peter, because Paul made a mistake of value C. Paul, because Peter spoke with reckless disregard for the truth D. Paul, because he does not have to prove damages to rescind
A
Pigpen buys a piano from Schroeder for $1,000 to give to Marcie. Schroeder is to deliver the piano to Marcie on May 4. Pigpen then leaves the country. Because Schroeder's delivery van has engine trouble, he calls Marcie to say that he won't be able to deliver on the 4th. Marcie asks you for advice. What do you tell her? A. that she can treat Schroeder's statement as a breach immediately B. to wait until Pigpen returns because she cannot enforce the contract C. to wait until the 4th to see if Schroeder performs after all
A
Progressive business models incorporate achieving social goals into their business objectives. A. true B. false
A
State courts can decide issues of federal law
A
The duty of good faith is a legal obligation to act in an ethical manner. A. true B. false
A
Under the Securities Act of 1933, defendants other than the issuer can defend themselves by showing that they relied in good faith upon an expert for the accuracy of the information reported and thus did not intend to deceive anyone. A. true B. false
A
Under the Securities Act of 1933, what assumptions are made about the plaintiff in court? A. if there is a material misrepresentation of fact in the prospectus, the plaintiff relied in that misrepresentation in purchasing the security B. if there a material misrepresentation of fact in the prospectus, it caused the plaintiff harm C. the defendant knew of the plaintiff's reliance on the misrepresentation of material fact in the prospectus D. none of the above as the plaintiff bears the burden of proof E. both A and C
A
Under the mirror image rule, an acceptance cannot impose any new terms or conditions that were not contained in the offer. A. true B. false
A
What defenses are available to a claim of strict liability? A. assumption of risk B. contributory negligence C. immateriality D. none of the above
A
What is another argument Josie could use to win the case? A. the contract is unenforceable under the Statute of Frauds B. the contract is unenforceable under the Statute of Limitations C. the contract is unenforceable due to unconscionability D. the contract is void due to a lack of consideration
A
A corporate board of directors serves as the agent of the executives to monitor the actions of the shareholders. A. true B. false
B
Annie wants to challenge the legality of her employer's policy stating that employees who had taken more than 3 weeks leave in a year were not eligible for promotion. Annie believes the policy discriminates against women, who are likely to take more than 3 weeks maternity leave. What type of claim should Annie file under Title VII of the Civil Rights Act of 1964? A. a disparate treatment claim B. a disparate impact claim
B
Because federal securities laws preempt (trump) state blue sky laws, to the extent a state blue sky law contains more detailed disclosure requirements than the federal law, an issuer need only comply with the federal law. A. true B. false
B
Darius lost his leg in an accident, but is fairly mobile with a prosthetic limb. He has difficulty with stairs, however, and thus has requested that he be given an office on the first floor of his company's building (which does not have an elevator). The office manager thinks Darius is using his disability to obtain a larger office than he would otherwise be entitled to, and refused Darius' request. Can Darius sue under the American with Disabilities Act? A. yes, but only if there is not a BFOQ for denying him the office B. yes, because Darius' request was for a reasonable accommodation to make his work environment suitable to his physical needs C. no, because Darius does not qualify as disabled as the prosthetic limb allows him the same mobility as an able-bodied person D. no, because giving Darius a ground-floor office would cause undue hardship
B
Domestic corporations are created within the US and foreign corporations are created in countries outside of the US A. true B. false
B
During the __________ period, issuers can solicit offers to purchase a security, but cannot actually sell any securities (excluding well-known issuers) A. prefiling B. waiting C. post-effective
B
Ethan is a resident of New Hampshire. In Boston, Ethan enters into a contract with Paul, a resident of Massachusetts. If Ethan breaches the contract, Paul can file suit in a Massachusetts state court, because Massachusetts A. can exercise diversity jurisdiction over Ethan B. can exercise in personam jurisdiction over Ethan C. can exercise in rem jurisdiction over Ethan D. cannot exercise jurisdiction over Ethan
B
Fair Corporation's CEO has been slyly using the company's profits for her own gain, so much so that the company now finds itself in some financial trouble. Which of the following allows the court to allow Fair's creditors to pursue the CEO's personal assets? A. fraudulent misrepresentation B. alter ego theory C. unlimited personal liability D. it is a publicly held company
B
Fitzwilliam is the CEO of Rosing, Inc. and serves as a director on the board of Park Corp. Rosing and Park are not affiliated. What type of director is Fitzwilliam? A. inside director B. independent director C. lead director D. none of the above
B
Fred and Ethel are residents of Pennsylvania and wish to file for a divorce. In what court should they file? A. a federal district court in Pennsylvania B. Pennsylvania state trial court C. all of the above D. none of the above
B
Gale, in a heated argument with Madge, angrily declared, "Madge, you're just schizophrenic! I swear, you're certifiably insane!" Assuming these statements are untrue, if no one else besides Madge heard Gale make the statements, is Gale guilty of slander? A. yes B. no
B
Gilbert hired Bob for $300 to fix his store roof, which was leaking. Bob did the work but used inferior materials, so by the third time it rained, the roof started leaking again although not as much as it did before. Gilbert refused to pay Bob the $300. Bob sued Gilbert for breach of contract. Who wins? A. Bob, because he substantially performed B. Gilbert, because Bob materially breached the contract C. Bob, under quasi contracr D. Gilbert, because fixing the roof was a condition subsequent to payment
B
If a business owner has significant amount of income from sources other than the business, and expects the business to generate a loss, then which of the following business forms should the owner choose? A. corporation B. LLC C. none of the above
B
In Osprey LLC v Kelly-Moore Paint Co., the Oklahoma Supreme Court held that when an offer for a contract authorizes acceptance of the contract by either hand-delivery or certified mail, sending an acceptance by fac is also permissible. A new case, Bratt v Stoar, has just been filed in Oklahoma trail court, in which the plaintiff attempted to accept an offer by fax when the offer stated acceptance "may be by hand delivery or certified mail." Under stare decisis, the trial court in Bratt v. Stoar A. probably will find the plaintiff did not accept the offer properly B. probably will find the plaintiff did accept the offer properly C. will decide Bratt v Stoar as a case of first impression D. will decide Bratt v Stoar independently because Osprey LLC v Kelly-Moore Paint Co. involves different parties from Bratt v Stoar
B
Muriel offered to sell her car to Walter for $1,000. Walter asked her if she would consider reducing the price. Muriel asked what sort of discount did he have in mind. Walter suggested $950, but then he could consider paying cash. Muriel said no, she felt strongly that the car was worth $1,000. Before Walter replied, Muriel got an offer from someone else for $1,200. Then Walter called her, saying "ok I accept." Muriel wants to know if she has a contract with Walter or can she sell the car to the other person? A. she can sell to the other person because Walter rejected her offer by counteroffering for $950 B. she must sell the car to Walter
B
Octavia hired Portia to manage her company's office. If Portia purchases copy paper on Octavia's corporate account, she does so based on A. actual authority B. implied authority C. apparent authority D. Octavia's ratification
B
Penn hired Butler to clean his house monthly. Penn then assigned the contract to his brother Austin, who lives in a much bigger house than Penn. Does Butler now have to clean Austin's house? A. no, the assignment would materially change the scope of the assignee's rights under the contract B. no, the assignment would materially change the scope of the obligor's duties under the contract C. both A and B D. neither A nor B
B
Prissy offered to sell Jane her ring for $5,000. Jane replied, "I accept but I would like you to put our agreement in writing." Prissy then gets a better offer from Leslie and sells the ring to her. If Jane sues Prissy for breach of contract, who wins? A. Prissy, because Jane made a counteroffer under the mirror image rule B. Jane, because she accepted Prissy's offer
B
Same facts as in Blarney case. Suppose the court decides that Blarney public policy would allow euthanasia and acquits the nurse of any wrongdoing. The Blarney Supreme Court affirms the decision. This causes a public outcry, so the Blarney legislature enacts a statute outlawing euthanasia. Shortly thereafter, a doctor is accused of committing euthanasia and is brought before the same trial court. What will happen? A. the trial court must apply the Supreme Court ruling holding euthanasia is legal B. the trail court must apply the new statute holding euthanasia is illegal C. the trial court must follow its own precedent which held that euthanasia is legal D. the trial court should consider its own precedent, the Supreme Court's holding, the new statute, as well as decisions from other jurisdictions and decide what it believes the best policy would be E. none of the above
B
The definition of trademark infringement is the unauthorized use of a famous mark that reduces the mark's distinctiveness. A. true B. false
B
The legislature is the only body of government capable of making law. A. true B. false
B
To act legally is to act ethically A. true B. false
B
Trade secrets must be registered with the US Patent and Trademark Office (PTO) in order to qualify for protection. A. true B. false
B
Under Title VII of the Civil Rights Act of 1964, discrimination based on race, color, religion, sex or national origin is permitted if necessary to satisfy a bona fide occupational qualification. A. true B. false
B
What law applies to an offer to sell stock? A. UCC B. common law
B
When Benjamin was 16, he signed an installment contract to buy a new computer from Egypt Corp. The contract stated that failure to pay an installment would permit Egypt Corp. to seek the full amount due in one lump sum payment. Benjamin made 2 payments, but then an accident involving nitric acid and a large pizza destroyed the computer, so Benjamin stopped making payments. Can Egypt Corp. obtain the lump sum payment for the remainder of the purchase price? A. yes, if Benjamin lives in a majority rule state B. no, because Benjamin's failure to continue making payments constituted an implied disaffirmation of the contract
B
Will D. Cat is the CEO of Ignite Mascots Inc., the largest customer of Attitude Corp. Will D. Cat sits on the Board of Directors for Attitude Corp, alongside its CEO Jay Left. In respect to Attitude Corp., Wild D. Cat would be best described as: A. an insider director B. an outside director C. an independent director D. a lead director
B
"Do unto others as you would have done unto you," also know as the Golden Rule, best reflects which ethical approach? A. profit maximization B. utilitarianism C. deontology D. virtue ethics
C
A court in the state of Blarney must decide a case in which a nurse is accused of killing a terminally ill patient at the patient's request, an act called euthanasia. Because the Blarney legislature has not addressed the legality of euthanasia, the only available source of law on this issue is previous judicial opinions. What type of law will the court use to decide the case? A. uniform law B. statutory law C. common law D. civil law E. law and order
C
Charlotte, Collins and Maria form a partnership. Eventually Maria wants to dissociate from the partnership. What effect does Maria's dissociation have on the partnership? A. none, the partnership continues with just Charlotte and Collins as partners B. the partnership legally dissolves upon Maria's dissociation C. either A or B, depending on how Charlotte and Collins vote to proceed
C
Cinna was a game designer. He recently named a new game that he invented after his hometown, "Capitol Heights." Cinna spent a lot of time advertising and marketing his new game, which became a financial success. If Cinna were to sue another game designer for infringement, would his trademark of "Capitol Heights" be protected? A. yes, because even though generic, the name "Capitol Heights" has acquired a secondary meaning associated with Cinna's game B. no, the name is not famous (not a household name) C. yes, because even though "Capitol Heights" has an accepted meaning (identifying Cinna's hometown), it now has acquired a secondary meaning associated with Cinna's game D. no, the name is not fanciful
C
Ed tells Sullivan "After you build a set of custom bookcases for my library, I will pay you $2,000." Sullivan says "I accept your offer." He then comes to Ed's house to look at the library, but later calls Ed and says he is not interested in the job. Can Ed successfully sue Sullivan for breach of contract? A. yes, because Sullivan verbally accepted Ed's offer, forming a contract B. yes, because Sullivan partially performed, thus forming a contract C. no, because Sullivan did not complete performance and therefore did not accept the offer D. no, because Ed did not revoke his offer before Sullivan began performing
C
Finnick is Mags's employee. While making a delivery to a customer, Finnick stops at a gas station where he hits a pedestrian. Can the pedestrian sue Mags for Finnick's negligence? A. no, Finnick was on a frolic and detour B. no, mags is not responsible for Finnick's actions respondeat superior C. yes, the accident occurred within the scope of Finnick's employment D. yes, but only if Finnick intentionally hit the pedestrian
C
If a court invalidates a contract because of unconscionability, with what fundamental legal principle does it conflict? A. Fahrvergnugen B. fairness and equity C. freedom of contract D. contracts embody an economically efficient allocation of risk
C
In Ex parte Kia Motors, the defendants, a car manufacturer and a dealership, asked the court to have the case moved from Alabama, where the plaintiffs bought the car, to Florida, where the car was in the accident that gave rise to the lawsuit. What were the defendants trying to change? A. the case's jurisdiction B. the case's standing C. the case's venue D. the case's mens rea
C
In SEC v Edwards, the Supreme Court found that the sale and lease-back contracts that ETS used to sell payphones to customers, then lease back and manage the phones for 5 years, at which point the phones were repurchased for the same initial purchase price, were "securities" because A. the contracts at issue were "investment contracts," as defined in the US security statutes B. the contracts invested the customers' money in a common enterprise with the profits to come from ETS' efforts, not the customers' efforts C. both A and B D. none of the above
C
Jane, the CEO of Longbourne Enterprises, has a compensation package that guarantees her an award of 5,000 shares of stock upon the firm's increasing its sales by 10% during her tenure. This type of compensation is called an award of: A. restricted stock B. cash incentives C. performance stock D. stock option
C
Liam and Nisona are engaged. Liam, who owns several houses, wants to ensure that his children from a prior marriage will inherit his family's historic home. He asks Nisona to sign a pre-nuptial agreement which states that upon their divorce, Nisona will receive full title to Liam's homes in New York and Los Angeles, in exchange for giving up all claims to be the rest of his property, including the historic home. To be effective, this agreement must be in writing because: A. it involves a promise in consideration of marriage B. it involves interests in real estate C. both A and B D. none of the above
C
Lucas does business as a plumber through a sole proprietorship named Lucas Plumbing. He negligently caused some water damage to a client's house. Can the client sue Lucas personally? A. no, the client can only sue Lucas Plumbing and not pursue Lucas' personal assets B. no, unless Lucas can meet the requirements for vicarious liability C. yes, the client can sue Lucas himself and pursue his personal assets D. yes, the client can sue Lucas but only if the client can pierce the corporate veil through the alter-ego theory
C
Lucy hired Linus to shovel snow from her driveway. He got most of it clear, but couldn't remove one small patch of ice. He came back the next day with a chemical that melted the remaining ice, so that the driveway is now completely clear. How does this affect Lucy's duties under the contract? A. because Linus's breach was material, Lucy is excused from paying him B. because Linus failed to comply with a condition subsequent, Lucy is excused from paying him C. because Linus substantially performed, Lucy has to pay him, although she can still sue him for whatever damages his breach caused her D. Linus' subsequent actions do not affect Lucy's duties under the contract
C
Preemptive rights give shareholders the right to: A. vote on executive compensation packages B. overrule executive recommendations on proxy packages C. purchase new stock before it is offered to the general public D. inspect the corporation's books upon demand
C
Rachel entered into a verbal contract to buy Josie's house for $400,000. They agreed that Rachel would give Josie a cashier's check for the full amount, then Josie would turn over the deed. They did not discuss when either the check or deed was to be delivered. While Rachel began arranging for the cashier's check, Josie sold the house to Moody. Rachel sued Josie for breach. What is Josie's best argument to win the case? A. Rachel had not yet taken actions to detrimentally rely on Josie's promise B. because Josie had not yet received the check, she was not unjustly enriched C. no contract existed due to lack of definite terms
C
Radar put an ad in the paper stating "I will pay $15 to the person who returns my pet bunny Fuzzball to me." Klinger saw the ad just before he threw some logs onto a bonfire in his backyard and accidentally threw in the log in which Fuzzball was hiding. Upon realizing what happened, Klinger scooped up some ashes and brought them to Radar. Is Radar legally obligated to pay Klinger the reward? A. no, because ads are not considered to be offers B. yes, because Klinger brought Radar the ashes, thereby accepting the offer C. no, because Fuzzball was killed in the fire D. yes, because the ad contained all the necessary terms to form a contract
C
Same facts as the Gale case. Suppose Madge did in fact suffer from schizophrenia, and that Rue overheard Gale. For which of the following torts would Gale be liable, if any? A. slander B. libel C. public disclosure of private facts D. injurious falsehood
C
Simon offered to pay Paula $100,000 if she remained chaste until her marriage. Paula compiled completely and abstained until she was married. Paula then demanded $100,000 from Simon, but he refused to pay on the grounds they did not have a legally enforceable contract. Is Simon correct? A. yes, because Simon got no legal benefit in exchange for his promise B. yes, as Simon incurred no legal detriment in exchange for his promise C. no, because Paula incurred legal detriment because of Simon's promise D. no, because Paula substantially relied upon Simon's promise
C
Thor, a believer in Norse mythology, tries to behave in a way that he believes will make him worthy of eternal life in Valhalla, the home of honorable Norse warriors and heroes. Thor's ethical approach is most consistent with: A. deontology B. utilitarianism C. virtue ethics D. relativism
C
While driving, Haymitch carelessly ran onto the sidewalk and knocked over a trashcan. The trashcan rolled into the road into the path of an oncoming car driven by Gale. Gale swerved to avoid the trashcan and collided with Effie's car, causing her significant injuries. If Effie were to sue Haymitch for negligence, the element Effie would have the most difficulty proving would be: A. duty of due care B. breach of the duty of due care C. proximate cause D. injury
C
Anne posted an ad on a community social media site offering to sell her used bunk beds for $50. Charlie emailed Anne to say he'd like to buy the bunk beds. Anne emailed back to say that she had already sold them to someone else who had responded first. Charlie wants to know if he can sue Anne for breach of contract? A. yes, because Charlie's email accepted her offer B. yes, because the contract was formed at the moment Charlie's email was sent C. no, because Anne revoked her offer D. no, because Anne rejected Charlie's offer
D
Effective CSR strategies incorporate which of the following: A. market regulation, as manifested through consumer demands and civic activism B. legal regulations C. voluntary actions beyond market or legal requirements D. all of the above
D
Eleanor Coal signed a contract with Franklin Energy in which Franklin agreed to buy 100,000 tons of coal delivered in 10 equal shipments as long as Franklin approved of the quality of the coal. Franklin was free to reject any shipment it wished by simply stating it did not approve of the coal. Is the contract enforceable? A. yes, because the contract is for a sale of goods B. yes, because the mirror image rule does not apply C. no, because the pre-existing duty rule applies D. no, because the contract is illusory
D
Jay Co. wants to hold an IPO. Five days after filing its registration statement with the SEC, it sold a few shares to some preferred investors. Ten days later, the SEC discovered fraudulent information on the registration statement, and the ensuing investigation forces several of Jay's accountants to be fired. Jay's IPO is for a disappointingly low price. Is Jay liable for any losses suffered by the preferred investors? A. yes, Jay is liable because they are presumed to have made a misrepresentation of material fact B. no, Jay is not liable, only the accountants that prepared the statements are liable C. no, Jay is not liable because the investors bore the risk that the stock would be overvalued D. yes, Jay is liable both to the investors for fraud and to the US government for selling without being registered
D
Johanna just adopted a baby girl. Under the Family and Medical Leave Act, Johanna's boss must A. give Johanna 12 weeks unpaid leave B. give Johanna 12 weeks paid leave C. make Johanna's job available to her when she returns from leave D. A and C E. B and C
D
Katniss Motors opened next door to Prim's house. Within days, Prim found it difficult to work in her garden outside or leave her windows open due to the constant barrage of noise emanating from Katniss' garage. Which of the following claims should Prim file against Katniss? A. trespass to real property B. intentional interference with familial relations C. conversion D. nuisance
D
Laurie, the CFO of Sally Co., purchased 200 shares of Sally Co. stock for $5.25 a share. Five months later, after Sally Co. announced a recall of one of its products, Laurie sold her 200 shares of stock for $3.00 a share. Does she have a legal problem? A. yes, she bought and sold her company's shares within a six-month period B. no, Laurie is not considered an insider C. yes, she made a profit off the sale of her stock D. no, she did not make a profit from buying and selling her stock
D
Mary, a Florida resident, was injured one day in Miami, Florida when a large crate fell off a passing truck and hit her. She wants to sue the trucking company for $3 million in damages. The company's headquarters are in Georgia, although it does business in Florida. In what court can Mary file her suit? A. Florida state court B. Georgia state court C. Federal district court in either Florida or Georgia D. any of the above
D
Pedro wanted to sell his ring, which he reasonably thought contained a real gemstone. Paula, the buyer, also reasonably believed the stone was real and that the price was fair for a real gemstone. After the sale, Paula discovered the stone was actually only glass, and sued for rescission. Who wins? A. Pedro, as Paula made a unilateral mistake of fact B. Pedro, because Paula made a mistake of value C. Paula, because a court won't question the adequacy of consideration D. Paula, because of a bilateral mistake of fact regarding the stone's validity
D
Ruby offered Diana 500 shares of stock in her closely held corporation for $1,000. IN order to comply with conflict of interest rules related to her job, Diana told Ruby she would like to buy the stock but had to sell her shares in a competitor first. Ruby promised Diana she would hold the offer open until the following Friday. Diana sold her shares in the competitor at a loss, but before she could call Ruby to accept, Ruby emailed Diana a revocation notice. Can Diana successfully sue Ruby for breach of contract? A. no, because Ruby's offer was for a unilateral contract which Diana could only accept by fully performing by paying for the shares B. no, because Ruby's offer was revocable and she properly revoked before the contract was formed C. no, but she could sue for damages based on quasi contract D. no, but she could sue for damages based on promissory estoppel
D
Ryan and Colton have owned the limited partnership, Summer Stone, for five years selling summer-themed apparel. Ryan has always handled the daily operations of the business while Colton only provides financial support. Ryan realizes that the clothing business isn't for him and decided to leave the company. What will happen to Summer Stone if Ryan leaves? A. Colton becomes the general partner and must find a limited partner B. the business will revert to a general partnership C. Summer Stone becomes a sole proprietorship with Colton as the owner D. dissolution
D
Snow hired Alma to act as her agent in selling her paintings. The agreement was for the 2011 calendar year. Under which circumstances would the agency relationship be terminated? A. the agreement will automatically terminate on January 1, 2012 B. a fire destroys all of Snow's paintings on November 4, 2011 C. Snow fires Alma on September 18, 2011 D. all of the above
D
Toyota, a Japanese company, conducts business in the US through its many dealerships and offices across the country. From the standpoint of a US citizen living near a Toyota dealership in Ardmore, PA, Toyota is considered to be a(n): A. neighboring corporation B. domestic corporation C. foreign corporation D. alien corporation
D
Virginia entered into a written contract with Uconn Inc. to construct a new gymnasium. A dispute arose, and Virginia sued Uconn for breach of contract. Under which of the following circumstances would the court allow Uconn to admit parol evidence? A. to show Virginia fraudulently induced Uconn to enter the contract B. to show Virginia and Uconn had agreed that the contract would not be enforceable unless their respective attorneys approved it, and Uconn's hadn't C. to show that Virginia and Uconn had agreed to a written modification of the contract D. all of the above
D
Carter decided to purchase stock in a new start-up company called DanceBalls, Inc. Carter carefully reviewed the prospectus before making the purchase. Although all of the information in the prospectus was accurate, DanceBalls failed to generate the profits Carter had expected. Under which of the following securities statutes can Carter bring an action against DanceBalls? A. the Securities Exchange Act of 1933 B. the Securities Exchange Act of 1934 C. Sarbanes-Oxley Act of 2002 D. the Private Securities Litigation Reform Act of 1995 E. none of the above
E
In applying the Fair Use Doctrine to copyright infringement, courts examine: A. the purpose of the unauthorized use B. the nature of the copyrighted work (eg creative v nonfiction) C. amount and importance of the portion copied in relation to the entire work D. the effect of the unauthorized use upon the value of the work E. all of the above F. B and D only
E
What is an example of a perquisite? A. country club membership B. life insurance C. stock options D. all of the above E. A and B only F. none of the above
E
Which of the following must comply with the requirements of the Securities Exchange Act of 1933? A. underwriters B. sellers C. controlling person D. issuers E. all of the above F. A, C and D only
E
Which of the following ethical values are derived from legal principles? A. avoid conflicts of interest B. maintain confidentiality C. treat others in good faith D. exercise due care E. show respect for other's rights and liberty F. all of the above
F
Jesse and Erica want to start a business manufacturing face masks. They expect difficulty with competition because there are so many competitors in the market for masks currently due to Covid. As a result, they don't anticipate making a profit until their second year of operation. Which form of business organization should they choose? A. partnership B. corporation C. S corporation D. limited partnership E. LLC F. any of the above G. A, C, D, or E
G
Which of the following is regulated by the Fair Labor Standards Act? A. the federal minimum wage B. payment of wages for overtime C. child labor standards D. notifying employees of impending plant closings E. notifying employees of impending layoffs F. A and B only G. A, B and C only H. D and E only
G
Profit maximization, as described in the text and in the Wall Street Journal article discussed in class, suggests that businesses will act socially responsible as long as doing so is profitable, but that businesses will not seek to promote social goals that are not aligned with the business's ultimate objective of making a profit. Using the facts of the infant formula boycott and Nestlé's response (to the boycott specifically and more generally its strategy for Creating Shared Value), evaluate this statement.
The boycott arose because Nestlé was selling a legal product, infant formula, but marketed the product in such an unethical way that its sales resulted in an increase in infant mortality in undeveloped nations. Nestlé's marketing techniques included giving free products to women in the hospital after childbirth (which reduced the women's ability to breastfeed after leaving the hospital), giving incentives to doctors for promoting its products, and having inadequate labeling so that the formula was prepared with contaminated water or diluted. The boycott ended after Nestlé agreed to comply with new legal standards for international marketing of baby formula. Nestlé's actions reflected a profit maximization approach when it changed its behavior to be more socially acceptable (ethical) once the boycott began affecting its profits. Initially Nestlé did little more than comply with the new marketing standards, and its response to the boycott was largely defensive. Over time, however, and in response to the renewal of the boycott, Nestlé took a more proactive approach, and developed its Creating Shared Value (CSV) program. Its CSV program seeks to accomplish social goals that are consistent with the company's profit objectives. For example, Nestlé works to improve drinking water resources in undeveloped areas where its suppliers are located. By doing so, Nestlé accomplishes (1) the social goal of improving health in poorer nations, (2) improves brand recognition and its own reputation as a good global citizen, and (3) provides a target market with a necessary component (clean water) for many of Nestlé's products (e.g., infant formula). Thus Nestlé's CSV program exemplifies the profit maximization approach to corporate ethical behavior.
Product liability laws are an attempt to balance two conflicting public policies. For example, in Merrill v Navegar, a California statute prevented a widow of a shooting victim from suing the manufacturer of the weapon used in the shooting. The statute prohibited product liability claims against firearm manufacturers based on the risk-utility test, and only permitted claims arguing firearms were improperly designed if the plaintiff could show a safer alternative existed. Explain (1) what the risk-utility test is; (2) what the two conflicting public policies inherent in product liability cases are; and (3) how the California statute in Merrill strikes a balance between those policies.
The risk-utility test holds that a product is negligently designed if the risk of harm from using the product outweighs the utility of the product. (2) Product liability law strives to balance two conflicting goals. The first goal recognizes the need to protect consumers from dangerous and defective products by placing the risk of loss caused by those products on their manufacturers. Doing so encourages product safety and innovation, and places the costs of harm from the product on the manufacturer, who is best situated to reduce those costs. The manufacturer can also spread the costs among all of its customers, which is preferable to one single injured consumer bearing the entire cost. On the other hand, product liability law also strives to protect manufacturers from being overwhelmed by liability costs, which can be so severe as to drive the manufacturer out of business. (3) The California law at issue in Merrill balances these two conflicting goals by protecting firearm manufacturers generally from liability under the risk-utility test, because most likely firearms would always be determined to present a greater risk than harm then utility in product liability lawsuits, thus presenting liability costs so significant as to make the manufacture of firearms cost-inefficient. However, the firearm manufacturers are not insulated from all design-defect cases under the statute, because a consumer could still successfully win if he/she could show that a safer design than the one used by the manufacturer existed. In other words, consumers can still be compensated for their injuries if firearm manufacturers do not constantly strive to use the safest designs for their products possible, thus meeting product liability law's first goal of protecting consumers and encouraging product safety and innovation.
Sarbanes-Oxley sought to make reforms in the following five areas: the SEC, accounting reforms, corporate governance, financial statements and controls, and securities fraud. For each of these areas, give an example of a new rule or change created by Sarbanes-Oxley.
the Sarbanes Oxley Act enacted reforms in the areas of the SEC (increased the budget and therefore the agency's ability to enforce securities laws); corporate governance (audit committees must have independent directors, one of whom is a financial expert); accounting reforms (auditors must be separate from consultants, can only perform auditing services); financial statements (CEO and CFO must certify statements, also certify internal controls); and securities fraud (increased criminal penalties, created crime of conspiracy to commit securities fraud).
