LAW exam 2

Affordable Care Act

Among other things, ifted restrictions on preventative services and preexisting conditions, and imposed cost controls with regard to prescription drugs and health insurance.

Any breach of contract effectively excuses both parties from performing. T/F

F

When an employee receives tips on the job, federal law requires the employer to pay the employee the difference between the amount of the tips and the federal minimum wage. T/F

T

Heber, Irma, and Jon apply to work for Kitchen Chicken Inc. in Louisiana. These individuals' eligibility to work must be verified by a. federal authorities. b. Kitchen Chicken. c. state officials. d. the applicants.

b. Kitchen Chicken.

A key provision of the Employee Retirement Income Security Act (ERISA) concerns vesting. Vesting gives an employee who stops working a legal right to receive a. all of the choices. b. disability, death, and hospitalization insurance. c. pension benefits. d. unemployment compensation.

c. pension benefits.

Components Inc., a maker of vehicle parts, refuses to sell to DIY Repair Inc., a national vehicle service firm. The maker convinces Engine Parts Company, a competitor, to do the same. This is a. a trade association. b. a tying arrangement. c. a market division. d. a group boycott.

d. a group boycott.

Retail Store Inc. is located in Seattle, Washington, where the city and the state have minimum wage laws. Retail pays its starting employees the legal minimum rate, which, among the governing laws, is a. the state minimum wage. b. the city minimum wage. c. the federal minimum wage. d. the highest minimum wage.

d. the highest minimum wage.

Resource Conservation and Recovery Act

Authorizes regulations for monitoring, transporting, storage, treatment, and disposal of hazardous substances.

Consumer Product Safety Act

Created a commission with broad regulatory authority over the safety of consumer products; also provides authority to pursue recalls and to ban products under certain circumstances.

Comprehensive Environmental Response, Compensation, and Liability Act

Designed to ensure the clean-up of hazardous waste sites and to assign liability for the costs of the cleanup.

Federal Food, Drug and Cosmetic Act

Establishes food standards, specifies safe levels of potentially hazardous food additives, and provides classifications of foods and food advertising.

Eugene, an accountant, convinces his client Faye to enter into a contract to invest her savings in Gather, a non-existent social media site. There is clear and convincing evidence that Faye did not act out of her free will. This is

Eugene, an accountant, convinces his client Faye to enter into a contract to invest her savings in Gather, a non-existent social media site. There is clear and convincing evidence that Faye did not act out of her free will. This is Selected Answer:c. undue influence.Answers:

A covenant not to compete that is imposed as part of a sale of an ongoing business will be enforced even if the restraints are unreasonable. T/F

F

Contracts entered into by mentally incompetent persons are not valid under any circumstances.T.\F

F

If a party is already bound by contract to perform a certain duty, that duty can serve as consideration for a second contract. T/F

F

On a contract—"F.O.B. New York"—for a sale of almonds by a broker in California, the risk of loss passes to the buyer when conforming goods are placed in the possession of the carrier. T/F

F

Only a mistake of value or quality makes a contract voidable. T/F

F

Only contracts that have been fully executed can be rescinded by agreement. T/F

F

The Clayton Act of 1914 was the first piece of legislation that broadly prohibited anticompetitive agreements and unilateral conduct that monopolize or attempt to monopolize relevant markets. T/F

F

The Sherman Antitrust Act which prescribes the rule of free competition among those engaged in commerce also established the Federal Trade Commission and outlaws unfair methods of competition and unfair acts or practices that affect commerce. T/F

F

The doctrine of respondeat superior imposes liability for an agent's tort on a principal without regard to the personal fault of the agent. T/F

F

When a contract mistakenly specifies a crane instead of a forklift, a court could reform the contract to reflect the parties' original intent as to the equipment. T/F

F

Those who knowingly violate the Clean Air Act may be subject to civil penalties but not criminal penalties. T/F

False

Toxic Substances Control Act

Regulates chemicals and chemical compounds that are known to be toxic, such as asbestos and polychlorinated biphenyls (PCB's).

Food Safety Modernization Act

Regulates the way foods are grown, harvested and processed; also provides authority to directly recall any food products that it suspects are tainted, rather than relying on the producers to recall items.

Federal Insecticide, Fungicide, and Rodenticide Act

Requires anyone planning to use chemicals first determine their effect on human health and environment.

Energy Policy and Conservation Act

Requires automakers to attach to every new car an information label that includes the Environmental Protection Agency's fuel economy estimate for the vehicle.

Nutrition Labeling and Education Act

Requires nutrition labeling of most foods regulated; requires that all nutrient content claims (i.e., 'high fiber', 'low fat', etc.) and health claims be consistent with regulations.

Fair Packaging and Labeling Act

Requires products identify certain details about the product.

FTC Mail or Telephone Order Merchandise Rule

Requires sellers who solicit buyers to order merchandise through the mail, via the Internet, or by phone to have a reasonable basis to expect that the sellers can ship within the advertised time frame, or, if no time frame is specified, within 30 days.

Telemarketing and Consumer Fraud and Abuse Act

Requires solicitors to identify themselves and not misrepresent facts.

Telemarketing Sales Rule

Requires telemarketers to make specific disclosures of material information; prohibits misrepresentations; sets limits on the times telemarketers may call consumers; prohibits calls to a consumer who has asked not to be called again; and sets payment restrictions for the sale of certain goods and services.

Telephone Consumer Protection Act

Restricts telephone solicitations (i.e., telemarketing) and the use of automated telephone equipment; also limits the use of automatic dialing systems, artificial or prerecorded voice messages, SMS text messages, and fax machines.

Acceptance is timely if it is effective before the offer is terminated.T/F

T

Generally, if an acceptance to a sales contract between merchants includes terms additional to those in the offer, the terms automatically become part of the deal. T/F

T

Identification is the express designation of the goods provided for in a contract, and the parties to the deal can agree in their contract when this will take place. T/F

T

If a court determines that a contract involving both goods and services is primarily a goods contract, any dispute over the deal will be decided under the UCC.T/F

T

If a person buys cattle at a livestock auction, unless the parties agree otherwise, title will pass to the buyer when the cattle are physically delivered. T/F

T

Regulation Z was issued by the Federal Reserve Board of Governors to implement the disclosure requirements of the Truth-in-Lending Act.

T

The Federal Food, Drug, and Cosmetic Act protects consumers against contaminated and misbranded food and drugs. T/F

T

The contracts entered into by a minor are voidable at the option of that minor. T/F

T

The greater the employer's control over the work, the more likely it is that the worker is an employee. T/F

T

A novation requires the contracting parties to make restitution of whatever they received under the contract. T/F

TRUE

Len contracts to work for Media Corporation during May for $4,500. On April 30, Media cancels the contract. Len declines a similar job with New Ads Inc., which would have paid $3,500. Len files a suit against Media. As compensatory damages, Len can recover a. $1,000. b. $3,500. c. $4,500. d. $0.

a. $1,000.

Seacoast Transport Company pays Trucks & Trailers Inc. a stated price for the use of seven tractor-trailer rigs for a year. Under the UCC, this is a. a lease. b. a sublease. c. a sale. d. a contract for services.

a. a lease.

Holes Inc. begins digging a foundation at a construction site for Investment Company under a contract for a certain price. After six months, Holes demands a higher price because of extraordinary difficulties that were totally unforeseen at the time the contract was formed. An agreement to pay the higher price is a. enforceable due to unforeseen difficulties. b. enforceable as the consideration is past. c. unenforceable due to the preexisting duty rule. d. unenforceable as an illusory promise.

a. enforceable due to unforeseen difficulties.

A majority of the workers at Packing & Shipping Inc. sign authorization cards. Union organizers present the cards to the firm and ask for formal recognition of the union. The employer a. may voluntarily recognize the union, but is not required to do so. b. cannot recognize the union without an election. c. is required to honor the request on a showing of majority support. d. must petition the National Labor Relations Board to hold an election.

a. may voluntarily recognize the union, but is not required to do so.

During a strike, unionized employees who picket their workplace a. none of the choices. b. can form a barrier and deny nonunion workers access to the workplace. c. are guaranteed the right to return to work after the strike. d. do not lose their right to be paid.

a. none of the choices.

To drive its competitors out of a certain geographic segment of its market, Drones Inc. sets the prices of its products below cost for the buyers in that area. This is a. price discrimination. b. smart marketing. c. price-fixing. d. predatory pricing.

a. price discrimination.

Reese contracts to sell a Spicy Pizza restaurant to Titian. As part of the deal, Reese agrees not to open a competing business within a hundred-mile radius for ten years. Reese later sues Titian, alleging that the agreement is illegal. To enforce the covenant not to compete, the court will most likely a. reform the contract to make the distance and time limits reasonable. b. order specific performance. c. award damages for Reese's complete compliance with the terms. d. rescind the contract and require restitution.

a. reform the contract to make the distance and time limits reasonable.

Coffee Beans Inc. offers to buy Brewing Company's roasting services for a certain price. Brewing responds that the price is too low and thereby rejects the offer. The offer is a. terminated. b. valid for a reasonable time. c. valid until Coffee Beans revokes the offer. d. valid for the period of time prescribed by a state statute.

a. terminated.

Lu's application to Metro Bank for a credit card is denied. Lu can obtain information on his credit history in a credit agency's files under a. the Fair Credit Reporting Act. b. no federal law. c. the Fair Debt Collection Practices Act. d. the Equal Credit Opportunity Act.

a. the Fair Credit Reporting Act.

Jo owns a condominium that she leases to Kia. Jo gives her daughter Liu $450 on her sixteenth birthday. Jo sells her car to her neighbor Maia for $1,500. Article 2 of the UCC covers a. the sale to Maia. b. the gift to Liu. c. all of the choices. d. the lease with Kia.

a. the sale to Maia.

Ewa is induced by her guardian Filo to sign a contract to invest funds in Gold Inc. through Filo's investment firm. Unknown to Ewa, Filo realizes a commission from the investment. Most likely, Ewa can rescind the contract on the basis of a. undue influence. b. fraud. c. duress. d. mistake.

a. undue influence.

A contract to do something that is prohibited by statute is a. unenforceable. b. enforceable if the parties are ignorant of the prohibition. c. enforceable if the parties are aware of the prohibition. d. enforceable if the contract does not negatively affect society.

a. unenforceable.

Bey indicates that he is acting as an agent on behalf of an unidentified client—Cuisine LLC—when he enters into a contract with Diners Bistro. Cuisine is a. a disclosed principal. b. a partially disclosed principal. c. an undisclosed principal. d. an apparent agent.

b. a partially disclosed principal.

Outdoor Outfitters Store contracts to buy fifty tents from Pitched Camp, Inc. Unless the contract states otherwise, this document is assumed to be a. a warehouse receipt. b. a shipment contract. c. a bill of lading. d. a destination contract.

b. a shipment contract.

Under the Equal Pay Act, an employer can legitimately pay different wages to male and female employees on the basis of a. any factor other than gender. b. all of the choices. c. a seniority or merit system. d. the primary duties of the jobs.

b. all of the choices.

Motor Parts Sales Inc. hires Nolly to work on its shipping dock, accepting deliveries, and dispatching trucks, and dealing with customers and drivers. With respect to Motor Parts, Nolly is most likely a. none of the choices. b. an agent. c. a principal. d. an agent and a principal.

b. an agent.

Steel Mill Inc. agrees to deliver a certain quantity of steel to T-Bar Framing Corporation. The agreement states that delivery is to be within "9" days, although the parties intend "90" days. The seller cannot convince the buyer to amend the contract. The most appropriate remedy is most likely a. specific performance. b. reformation. c. a quasi contract. d. rescission.

b. reformation.

The state of Nevada enacts a usury statute. With respect to different types of transactions, including ordinary loans, the purpose of the statute is to a. regulate certain forms of gambling. b. set a maximum rate of interest. c. prohibit certain contracts based on their subject matter. d. specify clauses that must be included in certain contracts.

b. set a maximum rate of interest.

Ceramic Workers Union represents the workers of Delta Tile LLC. The union fails to hold elections for union officers. This most likely violates a. the Labor Management Reporting and Disclosure Act. b. the Labor-Management Relations Act. c. the Fair Labor Standards Act. d. no federal law.

b. the Labor-Management Relations Act.

Teri borrows $10,000 from USA Bank to remodel a room in her home. This transaction is subject to a. the Consumer Product Safety Act. b. the Truth-in-Lending Act. c. the Consumer Leasing Act. d. no federal law.

b. the Truth-in-Lending Act.

Renew Inc. contracts to resurface the pools at Swim Park by June 1. Renew knows that if performance is not timely, Swim Park will have to delay its seasonal opening. Renew finishes the job June 15. In a suit for breach, Swim Park can recover a. nothing—the work is done. b. the loss of profit from the delayed opening. c. the difference between the contract and market prices for the work. d. the cost of new pools.

b. the loss of profit from the delayed opening.

Dona offers to sell her used sofa, chair, coffee table, end table, and lamp to Etta for $700. Etta responds that she will pay that price if Dona's TV set is included. Neither party is a merchant. Their contract is formed according to a. whatever is reasonable. b. the terms of the original offer. c. none of the terms. d. the new terms of the acceptance.

b. the terms of the original offer.

When applying the rule of reason to an activity that allegedly violates the antitrust laws, a court will not consider A. the potential effect of the agreement on competition. b. whether the agreement is a per se violation. c. the parties' market ability to implement the agreement. d. the purpose of the agreement.

b. whether the agreement is a per se violation.

The Affordable Care Act requires most employers with fifty or more full-time employees to offer health-insurance benefits. Under the act's 50/30 rule, qualified employers who fail to provide insurance a. must reduce their full-time workforce to no more than thirty workers. b. will be fined for each employee after the first thirty. c. may be required to pay 30 percent of employees' healthcare costs. d. are subject to a reduction of eligible tax credits from 35 to 30 percent.

b. will be fined for each employee after the first thirty.

Macy offers to sell his fitness watch for $50 to Nona. Nona promises to pay Macy the price. Later, they exchange the watch for the funds. A contract was created when a. Nona paid for the watch. b. Macy delivered the watch. c. Nona promised to pay for the watch. d. Macy offered to sell the watch.

c. Nona promised to pay for the watch.

Analytics LLC processes misinterpreted data furnished by Botch Services to propose a marketing plan for Clientele Inc. Analytics and Clientele are both ignorant of the mistaken data. Their contract can be rescinded on the basis of a mistake of quality. b. none of the choices. c. a bilateral mistake. d. a unilateral mistake.

c. a bilateral mistake.

Cady files an employment discrimination suit against Durable Goods Corporation under the Civil Rights Act. If Cady shows that Durable Goods acted with malice or reckless indifference, she may recover a. punitive, but not compensatory, damages. b. an unlimited amount of compensatory and punitive damages. c. a limited amount of compensatory and punitive damages. d. compensatory, but not punitive damages.

c. a limited amount of compensatory and punitive damages.

Dig Inc. is the major wholesale distributor of heavy equipment in six states. Dig's closest competitor is Excavator Company. The two firms agree that Dig will operate in four of the states and Excavator in the other two. This is a trade association. b. a price-fixing agreement. c. a market division. d. a group boycott.

c. a market division.

Mining Corporation purchases the business assets of Open Pit Inc., including its equipment and supplies, for an agreed-to price, payable in installments. Under the UCC, this transaction is a. a contract for services. b. a sublease. c. a sale. d. a lease.

c. a sale.

The Uniformed Services Employment and Reemployment Rights Act applies to a. all private employers. b. U.S. employers operating in foreign countries. c. all of the choices. d. all public employers.

c. all of the choices.

Hearth & Home Furniture store advertises bedroom suites at a "Special Low Price of $599." When Ilene tries to buy one of the suites, Jill, the salesperson, tells her that they are all sold and no more are obtainable. Jill adds that Hearth & Home has other bedroom suites available for as low as $2,599. This is a. counteradvertising. b. puffery. c. bait-and-switch advertising. d. a cease-and-desist order.

c. bait-and-switch advertising.

Gino applies for a job with Hobby Company. The employer does not hire him because of his ethnicity, or national origin. This is a. not discrimination. b. disparate-impact discrimination. c. disparate-treatment discrimination. d. a constructive discharge.

c. disparate-treatment discrimination.

Title VII of the Civil Rights Act applies to employers and labor unions with at least a. ten employees or members. b. five employees or members. c. fifteen employees or members. d. one employee or member.

c. fifteen employees or members.

Under the Immigration Act, specialty temporary work visas are not available for a. a company's managers or executives, or investors or entrepreneurs. b. persons with "extraordinary ability" in the sciences, arts, or business. c. foreign workers whose hiring will adversely affect domestic workers. d. workers performing agricultural work of a "seasonal nature."

c. foreign workers whose hiring will adversely affect domestic workers.

Fess convinces Gwyn to enter into a contract for the purchase of a Falafel Waffle Food Cart by knowingly misrepresenting a number of material features about the facility and the business. Most likely, Gwyn can rescind the contract on the basis of a. none of the choices. b. duress. c. fraudulent misrepresentation. d. undue influence.

c. fraudulent misrepresentation.

Marketing Solutions Inc. promises to employ Niki as a software engineer. In reliance on the promise, Niki quits her job with Online Ad Agency, but Marketing Solutions does not hire her. Most likely, Marketing Solutions is a. liable to Niki under the concept of rescission. b. liable to Niki under the preexisting duty rule. c. liable to Niki under the doctrine of promissory estoppel. d. not liable to Niki.

c. liable to Niki under the doctrine of promissory estoppel.

Olive is a supervisor for Pasta Garden, a restaurant. Qui is a Pasta Garden employee. The owner announces that some employees will be discharged. Olive tells Qui that for sexual favors, she will give him an excellent performance review and recommend a raise. This is a. employer retaliation. b. hostile-environment harassment. c. quid pro quo harassment. d. none of the choices.

c. quid pro quo harassment.

Cass agrees to sell her Daily Donut shop to Ernie. In the agreement, there is a covenant not to compete that prohibits Cass from operating a donut shop within a certain distance. If the restriction is unreasonable, a court will most likely a. prohibit both parties from operating donut shops. b. order Ernie to stop doing business. c. reform the covenant. d. award Cass damages.

c. reform the covenant.

Luke takes temporary family leave from his job at Metal Works Corporation to arrange for child care and deal with financial and legal matters when Nancy, his spouse, a U.S. Marine on active duty, is deployed overseas. On Luke's return from the leave, Metal Works must a. do nothing. b. promote him to the status of a key employee. c. restore him to his same position or a comparable position. d. reimburse him for his expenses while on leave.

c. restore him to his same position or a comparable position.

The credit department of Mega-Mart often calls Nora at work about an overdue bill over the objection of Nora's employer. This is a violation of a. the Fair and Accurate Credit Transactions Act. b. the Truth-in-Lending Act. c. the Fair Debt Collection Practices Act. d. no federal law

c. the Fair Debt Collection Practices Act.

Devlin is thirteen years old. Under the Fair Labor Standards Act, he cannot a. deliver newspapers. b. work in any job. c. work in a hazardous occupation. d. work for her parents.

c. work in a hazardous occupation.

Food Court Inc. leases space to Gourmet Café. Gourmet abandons the premises when the amount of the rent due on the lease is $5,000. Food finds a new tenant, Hasty Bowls, which agrees to pay $3,500 for the space over the remainder of Gourmet's term. Food's measure of damages is a. $1,500, minus any expenses reduced by mitigating the damages. b. $6,500. c. $5,000. d. $1,500, plus any additional expenses to find the new tenant.

d. $1,500, plus any additional expenses to find the new tenant.

The waiters who work for Sports Time Grill receive tips on the job. Under the Fair Labor Standards Act, Sports Time is required to pay the wait staff a. the federal minimum wage, minus the tips, which must be remitted. b. the federal minimum wage, plus the tips. c. the federal minimum wage, plus a tax credit for cash tips. d. $2.13 an hour, plus the tips, to equal at least the federal minimum wage.

d. $2.13 an hour, plus the tips, to equal at least the federal minimum wage.

Embers Corporation orders twelve fire extinguishers from Firefighting Inc., which delivers the equipment. This is most likely a. a gift. b. a sale of goods. c. a contract for services. d. a lease of goods.

d. a lease of goods.

Diamonds & Gold Inc. hires Esmé to buy gems and precious metals from various sources on its behalf. In this relationship, Diamonds is a. an independent contractor. b. an agent. c. an employee. d. a principal.

d. a principal.

Red offers to pay Sari to deliver certain documents within thirty minutes. Sari can accept the offer only by completing the task within the deadline. If she does, Red and Sari will have a. a void contract. b. a bilateral contract. c. an executive contract. d. a unilateral contract.

d. a unilateral contract.

The main goals of the Clean Water Act include a. making water safe for swimming. b. eliminating the discharge of pollutants into water. c. protecting fish and wildlife. d. all of the choices.

d. all of the choices.

Rene contracts with Scot to pay him $5,000 for repairs to Rene's lake cabin. After Scot performs, Rene tells him that she cannot pay him in full immediately. They sign an agreement in which Rene promises to pay $2,500 now instead of $5,000 later. This is a. specific performance. b. a mutual agreement to rescind. c. a novation. d. an accord and satisfaction

d. an accord and satisfaction.

Maeve posts her motorcycle for sale on an online auction site. This is a. an offer. b. a price list, not an offer. c. a request, not an offer. d. an invitation to negotiate, not an offer.

d. an invitation to negotiate, not an offer.

Steel Mill Inc. makes an offer to Teri to enter into a contract to work as an metallurgical engineer for a certain salary for one year subject to a five-year renewal based on his performance. Teri accepts the offer. This is a valid contract because it includes a. a duration and a termination. b. a price and a subject. c. specific quality standards. d. an offer and an acceptance.

d. an offer and an acceptance.

Beryl enters into a contract with Clay for a guided tour of Deep Canyon. Clay represents that he is an experienced, knowledgeable guide, when in reality he has never been in the canyon. Most likely, Beryl a. could exert duress to obtain a new guide. b. must comply with the contract because the representation is an opinion. c. might recover damages for the mistake. d. can rescind the deal based on fraudulent misrepresentation.

d. can rescind the deal based on fraudulent misrepresentation.

Corporate Enterprises Inc. provides its employees with a closed, in-house, e-mail system, which the company expressly restricts to business-related interactions. Employees who use the system a. are protected from monitoring but cannot sue their employer. b. can hold the employer liable for monitoring their communications. c. have a reasonable expectation of privacy in their use of the system. d. cannot reasonably expect their interactions to be private.

d. cannot reasonably expect their interactions to be private.

Megan contracts to sell Nonny her horse for $4,000. This contract will be fully discharged when Megan and Nonny a. sign a receipt. b. agree that the deal is fair. c. execute a bill of sale. d. exchange the horse for the money.

d. exchange the horse for the money.

Federal employment discrimination laws restrict the ability of employers to discriminate against workers on the basis of a. experience. b. all of the choices. c. education. d. gender.

d. gender.

Myra, a female, and Neil, a male, are employees of Operation Business Corporation. Myra regularly e-mails sexually explicit images via Operation's network to Neil, who finds the images offensive. This is most likely a. none of the choices. b. quid pro quo harassment. c. a constructive discharge. d. hostile work environment harassment.

d. hostile work environment harassment.

Cosmétique Inc. makes and sells cosmetics and related products. By selling its goods at prices substantially below the normal cost of production, the firm hopes to drive its competitors from the market. This is a. price discrimination. b. price-fixing. c. market power pricing. d. predatory pricing.

d. predatory pricing.

Shep offers to make digital copies of Reliable Company's business conference videotapes, CDs, DVDs, and other media for $500. Under the mailbox rule, Reliable's acceptance by e-mail will be considered effective when A. received. b. followed up by a confirmation letter sent by regular mail. c. composed on a Reliable computer. d. sent.

d. sent.