MGMT Final Exam

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A clause in a collective bargaining agreement that requires the employer to only hire new employees who are existing union members, is a(n) __________________. A. Illegal subject. B. Mandatory subject. C. Permissive subject. D. Bargaining subject.

Answer: A

A foreign citizen with a bachelor's degree in electrical engineering would most likely come to the U.S. to work under which type of visa? A. H-1B B. EB-1 C. H4 D. No visa would be required

Answer: A

A group of similarly situated employees who can form a union is known as a(n) _______________. A. Bargaining unit. B. Collective unit. C. Negotiating unit. D. G-unit.

Answer: A

Which of the following types of mistake will allow one party to rescind a contract? A. Mutual mistake of fact. B. Mutual mistake of value. C. Unilateral mistake of fact. D. Unilateral mistake of value.

A. Only a mutual mistake of fact will allow one party to rescind a contract.

A lawsuit alleging an employee was fired in violation of Title VII of the Civil Rights Act of 1964 can be filed in federal court under the doctrine of _________________. A. Federal question jurisdiction B. Diversity jurisdiction C. General jurisdiction D. Limited jurisdiction

Answer: A

An agent's responsibility to keep an accurate record of its activities and money spent on behalf of the principal is called the _______________. A. Duty to account B. Duty of obedience C. Duty to notify D. Duty of loyalty.

Answer: A

As a general rule, contracts that have an illegal purpose are ________. A. Void B. Voidable C. Enforceable D. Usurious

Answer: A

Assume the federal minimum wage is $7.25 per hour (which it is), and that Florida law requires a minimum wage of $31 per hour (which it is not). If a Florida employer decides to pay its employees $7.25 per hour and is sued for failing to pay the minimum wage, will the employer win the lawsuit? A. No, because states are free to raise the minimum wage within their state above the federal level. B. Yes, because federal laws take precedence over state laws, meaning employers should always follow federal laws when they conflict with state laws. C. No, because $7.25 is not enough to support an individual or a family. D. Yes, because $31 per hour is an outrageously high minimum wage.

Answer: A

Batteries, Batteries, Batteries ("BBB") discovers that TIP Tech is planning to use the slogan "Power for Days" in its marketing materials. BBB quickly files a trademark application for that phrase to prevent TIP Tech from using it, although BBB has no plans of using the slogan. Will BBB's application be granted? A. No, because an applicant must actually use, or intend to use, the mark in commerce for a trademark to be granted. B. Yes, because BBB was the first to file for the trademark and the U.S. operates on a first-tofile system. C. No, because TIP Tech can prove that it thought up the slogan before BBB did. D. Yes, because "Power for Days" is a phrase that can acquire a secondary meaning

Answer: A

Contracts entered into with an adjudged insane person are _________, whereas contract entered into with an insane person who has not been adjudged insane are ___________. A. Void; voidable B. Voidable; void C. Void; void D. Voidable; voidable

Answer: A

Disparate impact discrimination occurs when ______________. A. An employer unlawfully discriminates against an entire protected class of employees. B. An employer unlawfully discriminates against an individual employee. C. An employer takes an adverse employment action against someone who has helped a coworker file a discrimination claim. D. An employer fails to stop a coworker from harassing another employee.

Answer: A

Hiring a new employee with 25 years' experience in the industry instead of one with 2 years' experience in the industry will probably not be considered discriminatory because of which defense? A. Merit defense B. Seniority defense C. Bona fide occupational qualification defense D. Undue hardship defense

Answer: A

How many weeks of paid leave is an employee legally required to be given for the birth or adoption of a child? A. 0 B. 12 C. 26 D. 52

Answer: A

How prevalent are federal trial courts? A. There are anywhere from 1 to 4 Districts in each state. B. There is 1 District in each county. C. There is 1 District for a group of several states. D. There are anywhere from 3 to 8 Districts in each state.

Answer: A

If Jack is 38 years old, which of the following individuals may a company hire instead of Jack without having to worry about being sued for age discrimination under the ADEA? A. Any of these. B. Ryan, who is 23. C. Chelsea, who is 28 and disabled. D. Carol, who is 54.

Answer: A

If Jane is 15-years-old and wants to get a job, what type of job is she legally permitted to obtain? A. A part-time, non-hazardous job. B. A full-time, non-hazardous job. C. No job, except for those jobs specifically exempted from the FLSA's child labor rules. D. A part-time, hazardous job.

Answer: A

If an employee is also an agent, then the employer's obligation to pay the employee her wages and/or commissions is part of the employer's _____________. A. Duty to compensate B. Duty to reimburse C. Duty to indemnify D. Duty to act in good faith

Answer: A

If an employee is fired because he's not very good at his job, although he tries hard and gets along well with everyone, can he collect unemployment compensation while he looks for another job? A. Yes, because the firing was not the result of improper behavior. B. No, because he was fired for good cause. C. Yes, because he did not quit voluntarily. D. No, because he performed poorly at work.

Answer: A

If an employee is not paying attention and negligently slams the door to her workplace on the fingers of a customer, can the customer recover her damages from that employee? A. Yes, because everyone is always liable for their own torts. B. No, because it happened at a business, so only the business is liable. C. Yes, but only if the employee's actions were not motivated by a desire to further the employer's purposes. D. No, because the action was unintentional.

Answer: A

If an employer and a union come to an impasse when renegotiating their collective bargaining agreement, and the current CBA has a no-strike clause prohibiting strikes in the month of December, when is the earliest a strike can begin if the breakdown in negotiations occurs on December 15? A. February 13 B. January 1 C. December 16 D. Never

Answer: A

If an employer has 13 employees, from which federal anti-discrimination law is it exempt? A. All of these B. Title VII C. ADA D. ADEA

Answer: A

If two people have never agreed to enter into an agency relationship, but it's a reasonable inference from their actions that they would want to become principal and agent, then a court will probably conclude that they have which type of agency relationship? A. Implied agency B. Agency by ratification C. Apparent agency D. Express agency

Answer: A

If two people have never agreed to enter into an agency relationship, but one of the parties has acted in such a way as to make some third party reasonably believe that the other party was its agent, then a court will probably conclude that they have which type of agency relationship? A. Apparent agency B. Implied agency C. Agency by ratification D. Express agency

Answer: A

In a state that has adopted a right-to-work statute, which type of employee cannot be required to pay any fees to a union? A. A non-union member in an agency shop. B. A union member in a closed shop. C. A union member in an agency shop. D. Any employee in a closed shop.

Answer: A

In a trial, which side puts on its case-in-chief first? A. The plaintiff B. The defendant C. Whichever party will be calling the most witnesses D. Whichever party wins a coin toss.

Answer: A

In order to call for a vote on whether to form a union, what percentage of employees in the bargaining unit must sign consent cards? A. 30% B. 50% C. 20% D. 40%

Answer: A

In what situation can an employee sue her employer in court without first going through the workers' compensation system? A. The employer intentionally injured the employee. B. The injury was severe enough to require a hospital stay. C. The injury occurred on work premises during normal work hours while the employee was performing a task specifically directed by the employer. D. The employee is exempt from the FLSA.

Answer: A

In which case is an employer strictly liable for illegal discrimination, meaning it has no defenses? A. When a supervisor harasses a subordinate and also makes an adverse employment decision with regard to that employee. B. When a coworker harasses an employee. C. When a supervisor harasses a subordinate and does not make any adverse employment decisions. D. When a company decides to hire a man instead of a woman for a certain job.

Answer: A

In which of the following scenarios will an employer be liable for the tort committed by its employee? A. The employee was on a dual-purpose mission when the tort was committed. B. The employee was on a frolic and detour when the tort was committed. C. The employee was commuting to or from work when the tort was committed. D. The employee committed the tort intentionally for his personal benefit, after working hours and not at his work location.

Answer: A

In which scenario will the principal NOT be liable for the contract? A. The agent signs the agreement and discloses that she is an agent for the principal, but the principal did not authorize the signature. B. The agent is authorized to sign the contract on behalf of the principal, but does not disclose the principal's existence or identity to the other party. C. The agent is not authorized to sign the contract, but the principal gave the other party reason to believe that she was, and the agent signs the contract on behalf of the principal. D. The agent is authorized to sign the contract and the other party knows of the existence and identity of the principal, so the agent signs the contract on behalf of the principal.

Answer: A

In which situation will a court enforce a liquidated damages clause? A. The amount of liquidated damages is rationally related to the amount of actual damages. B. The amount of liquidated damages is excessively larger than the actual damages. C. The actual damages are very easily to calculate. D. The liquidated damages are intended to penalize a breaching party for its actions.

Answer: A

In which situation would a Kansas court not have personal jurisdiction over Inez? A. Inez drove through Kansas on vacation, but doesn't live there, and is sued there as a result of a car accident she caused in New Hampshire. B. Inez lives in Kansas and is sued there as a result of a car accident she caused in New Hampshire. C. Inez lives in New Hampshire and is sued in Kansas as a result of a car accident she caused while driving through Kansas. D. Inez lives in New Hampshire, but agrees in writing to be subject to personal jurisdiction in Kansas courts.

Answer: A

Letty is an attorney employed by a law firm. As a young lawyer, she makes $37,000 per year. She is working on a very important case and in one week Letty works 95 hours! Does Letty's law firm have to pay her overtime for the hours she worked in excess of 40 hours during that week? A. No, because Letty is exempt from the FLSA as a learned professional. B. Yes, because Letty makes less than $100,000 per year. C. No, because she makes more than $455 per week. D. Yes, because Letty is not exempt from the FLSA.

Answer: A

Limitations on consequential damages in contracts for the sale of goods are generally enforceable, except for ___________. A. When they limit a consumer's right to recover for personal injuries B. When they limit a business's right to recover for lost profits C. When the limit a consumer's right to recover for lost profits D. When they limit a business's right to recover for administrative expenses

Answer: A

Principals must notify third parties of the termination of an agency relationship so that the principal will not suffer losses under the doctrine of ______________. A. Apparent agency B. Wrongful termination C. Implied agency D. Undisclosed agency

Answer: A

Question #6: In which situation will rescission and reformation be an available remedy? A. One party has materially breached the contract B. The subject matter of the contract is unique C. The contract contains a clerical error that materially alters the nature of the agreement D. One party will suffer irreparable harm without it

Answer: A

The Norris-LaGuardia Act prohibited "yellow dog contracts," which said that _____________ A. Employees would only be hired if they agreed not to join a union. B. Employees would only be hired if they were already members of the union. C. Employees would be hired as long as they agreed to join the union as a condition of their employment. D. Employees would only be hired if they owned a golden retriever dog.

Answer: A

The decision of whether to file a lawsuit in state court or federal court is a question concerning ____________. A. Forum B. Venue C. Statute of limitations D. Personal jurisdiction

Answer: A

The doctrine of promissory estoppel requires each of the following elements to be present, except __________. A. One party intentionally misled the other party. B. One party relied on a promise made by the other party. C. The fact that one party would take an action was foreseeable. D. Injustice would result unless a court enforces a promise.

Answer: A

The most important requirement in determining if an employer will be forced to pay for an employee's injury is whether _____________. A. The injury was employment-related. B. The employer intentionally caused the injury. C. The injury was severe enough to require an emergency room visit. D. The injury happened in the employee's office.

Answer: A

What is a tort? A. When someone wrongs you and you can recover damages from that person in court. B. A delicious German cake. C. When someone wrongs you and they can be prosecuted by the government and sent to jail. D. When someone accidentally, but never intentionally, injures you.

Answer: A

When an employer creates intolerable working conditions for someone because he or she is a member of a protected class and the employee ends up quitting as a result, the employee has a claim for discrimination under the doctrine of _______________. A. Constructive discharge. B. Effective discharge. C. Disparate impact. D. Retaliation.

Answer: A

When he turned 16, Paulo really wanted a new car, so he went to the local Ferrari dealer and took out a loan to buy a new Ferrari. The terms of the loan called for Paulo to make payments every month for 10 years. When Paulo turned 18 (the age of majority in his state), he decided that he should disaffirm the contract, but he kept putting it off because he loved his Ferrari so much. Finally, shortly after his 20th birthday, Paulo informed the Ferrari dealer that he was disaffirming the contract. Can the dealership enforce the agreement against Paulo? A. Yes, because he ratified the contract by not disaffirming it within a reasonable time. B. No, because people can disaffirm contracts entered into as minors. C. Yes, because contracts for necessaries of life are enforceable against minors. D. No, because the dealership should have known that Paulo was a minor.

Answer: A

When one party sends a written list of questions to the other party as part of the discovery process, this is known as ________________. A. Interrogatories B. A request to produce C. A deposition D. A request to admit

Answer: A

Which federal statute created an executive branch agency that has the power to investigate and bring charges related to unfair labor practices? A. National Labor Relations Act B. Taft-Hartley Act C. Norris-LaGuardia Act D. Landrum-Griffin Act

Answer: A

Which of the following actions would not be a breach of the agent's duty of loyalty? A. Deciding not to inform the principal about an aspect of a business deal that could negatively impact the principal. B. Working on the side for a business that directly competes with the principal. C. Disclosing confidential information about the principal's business to a customer. D. Deciding not to inform the principal about a potential business opportunity in order to take the opportunity for himself.

Answer: A

Which of the following affirmative action plans will likely be considered permissible by a court? A. An employer considers race as one factor among several when hiring qualified employees. B. An employer decides that all new hires should consist of at least 30% Hispanic workers because the community where the business is located is 30% Hispanic. C. An employer with 80% female managers and executives implements a plan to increase the ranks of female executives and managers. D. An employer decides not to hire any white employees for five years to make up for past discrimination.

Answer: A

Which of the following awards ordered by a court is not an equitable remedy? A. Back pay for the time an employee was out of work B. An injunction to stop an employer's discriminatory practices C. Reinstatement to the employee's previous job title and salary D. Forcing an employer to grant an employee a certain amount of seniority

Answer: A

Which of the following documents in the litigation process is not considered part of the pleadings? A. Motion for summary judgment B. Complaint C. Counterclaim D. Answer

Answer: A

Which of the following employee screening actions are prohibited by law? A. An employer asks for an employee's social media passwords to determine whether the employee has made any private racist posts. B. An employer enlists a private investigator to determine whether the employee has ever been convicted of a crime. C. An employer frequently tests its employees who drive delivery trucks for drug and alcohol use. D. An employer monitors instant messages between employees using the company's internal messaging system.

Answer: A

Which of the following is not a duty imposed on employers by ERISA? A. Employers must provide retirement savings plans for their employees. B. Employers must provide their employees with certain disclosures about the management of their retirement savings plans. C. Employers must act as responsible fiduciaries with respect to their management of their retirement plans' assets. D. Employers must provide employees with a method to submit complaints if they believe their retirement plans are not being properly administered.

Answer: A

Which of the following is not a protected class under Title VII? A. Disability B. Race C. Religion D. Sex

Answer: A

Which of the following is not a remedy available to a seller of goods when the buyer breaches the contract and the goods are not in the possession of the buyer? A. Sue for the full purchase price and sell the goods to a different buyer B. Dispose of partially manufactured goods for their scrap value and sue the buyer for compensatory damages C. Stop delivery of goods in transit and sell them to a different buyer D. Sue for the full purchase price if the goods cannot be re-sold to a different buyer

Answer: A

Which of the following is not a requirement in order to have standing in a lawsuit? A. The plaintiff must have witnessed the events giving rise to the lawsuit B. The plaintiff has a personal stake in the case C. The harm in the case is not contingent upon some future event D. There is an actual dispute

Answer: A

Which of the following is not a right granted to a buyer of goods when the seller delivers nonconforming goods? A. Recover the goods from the seller if the seller is insolvent B. Make cover and sue for damages C. Reject the goods D. Accept the goods and sue for damages

Answer: A

Which of the following is not an example of an employer's unfair labor practice? A. Prohibiting non-employees from soliciting for the union on the employer's premises. B. Informing employees that voting in favor of unionization will result in the closing of the facility. C. Giving a one-time bonus to each employee who votes against unionization. D. Firing any employee who signs a consent card.

Answer: A

Which of the following is not one of the three levels of judicial branch courts? A. Administrative court B. Trial court C. Supreme court D. Appellate court

Answer: A

Which of the following is true of employers in states with right-to-work laws? A. Employees cannot be made to join a union or pay union fees. B. Employees cannot be made to join a union, but can be made to pay union fees. C. Employees can be made to both join a union and pay union fees. D. Employers can only hire employees who are already members of a union.

Answer: A

Which provision in the U.S. Constitution requires a person to receive notice and a fair hearing before the government can deprive her of life, liberty, or property? A. Due Process Clause B. Equal Protection Clause C. 1st Amendment D. Commerce Clause

Answer: A

Which type of employee communication can an employer never monitor? A. Personal text messages from a mobile phone owned by the employee. B. Personal emails sent using a work computer. C. Phone calls made from the employee's personal mobile phone to another employee who is using a work phone. D. Phone calls made from the employee's work phone to the employee's friend to discuss a personal matter.

Answer: A

Which type of strike is generally illegal? A. Wildcat strike B. Sympathy strike C. Economic strike D. Unfair labor practice strike

Answer: A

Why are not all employer-employee relationships also principal-agent relationships? A. Because not all employees have the authority to bind their employer. B. Because employees do not have a duty of obedience to their employer. C. Because employees are not independent contractors. D. Because employees have the authority to make their own decisions about how to complete their tasks.

Answer: A

Absent and intentional or reckless damages, the biggest difference between contracts entered into by intoxicated persons, insane persons, and minors is ____________________. A. Intoxicated and insane persons owe a duty of restitution, but minors owe a duty of restoration. B. Intoxicated persons and minors owe a duty of restoration, but insane persons owe a duty of restitution. C. Intoxicated persons and minors owe a duty of restitution, but insane persons owe a duty of restoration. D. Intoxicated and insane persons owe a duty of restoration, but minors owe a duty of restitution.

Answer: A.

If an illegal contract is ___________, courts will usually still try to enforce the legal parts of it, but if it is ____________, the entire thing will usually be void. A. Severable; indivisible B. Indivisible; severable C. Severable; integrated D. Integrated; indivisible

Answer: A.

If you have a secret formula that you want to protect as a trade secret, what is the best strategy for doing so? A. Tell as few people as possible, and just keep it secret. B. Make sure to register it with the federal government. C. Make everyone in your company sign an agreement promising not to share the technology with anyone else. D. Keep the formula on an unsecured computer in your office.

Answer: A.

Inez is intoxicated and very, very hungry when she goes to the convenience store to purchase a hot dog. Noticing her intoxicated state, the cashier charges her $50 for the hot dog, instead of the usual price of $2. After she sobers up, Inez seeks to disaffirm the contract for the sale of the hot dog. Will she be made to pay for it? A. Yes, but only the reasonable value of the hot dog. B. Yes, the entire $50 because food is a necessary of life. C. No, because intoxicated people can disaffirm their contracts. D. No, because the cashier took advantage of her.

Answer: A.

The employment agreement between TIP Tech and Inez includes the following clause: "The parties agree that TIP Technologies will not be liable for any injuries to Inez as a result of her work-related activities." If Inez is injured on the job, will TIP Tech be held liable for the injury? A. Yes, because exculpatory clauses for workplace injuries are not enforceable. B. Yes, because employment agreements are against public policy. C. No, because Inez signed the exculpatory clause. D. No, because employers are never liable for the injuries of their employees.

Answer: A.

Tyler enters into a contract that he wants to get out of, so he claims that he was legally insane at the time he signed the contract. Which of the following circumstances would allow him to disaffirm the contract because of insanity? A. Tyler has a diagnosed mental illness and was not taking his medications and was incapable of understanding his actions at the time of the contract. B. Tyler has a long-term mental illness that makes him incapable of understanding his actions almost all the time, but he was lucid during the time when he signed the contract. C. Tyler had just found out that his wife was leaving him for another man and he was in a severe emotional state. D. Tyler thought the contract would be a good deal at the time he signed it, but changed his mind after he thought about it some more.

Answer: A.

Under UCC Article 2, when does a buyer's duty to pay for goods arise? A. When the seller tenders delivery of conforming goods. B. At the time the goods are delivered. C. Within 30 days of accepting the goods. D. Whenever the parties agree that payment for the goods shall be made.

Answer: A.

When one party to a contract commits a minor breach of the agreement, this is most closely associated with what level of performance? A. Substantial performance B. Anticipatory repudiation C. Inferior performance D. Complete performance

Answer: A.

When one party to a contract engages in anticipatory repudiation, at what point may the other party file a lawsuit for breach of contract damages? A. Immediately B. Only after the other party's obligations have become due C. Only after suffering significant and substantial damages D. Only if the breach is accompanied by negligence

Answer: A.

Which form of breach of contract remedy requires the breaching party to pay for the foreseeable damages incurred by the non-breaching party, as long as the breaching party knew, or had reason to know, of the likelihood of those damages? A. Consequential damages B. Compensatory damages C. Liquidated damages D. Nominal damages

Answer: A.

Which of the following contracts does not need to be in writing? A. TIP Tech's agreement to borrow $10,000,000, plus interest, from Big Bank. B. TIP Tech's lease of new office space. C. A contract where TIP Tech is required to deliver $10 worth of batteries each month for 15 months. D. A contract whereby TIP Tech sells a giant $800 home battery backup system to a consumer.

Answer: A.

Which of the following contracts would be unenforceable because it lacks legality? A. Ginger sues TIP Tech to recover fees for legal services she provided, even though she failed to pass the bar exam and isn't technically a licensed attorney. B. TIP Tech sues Paulo to enforce a covenant not to compete that he signed which is reasonable in scope, geographic area, and duration. C. Ginger sues TIP Tech to recover fees for legal services she provided, even though her license to practice law has expired because she forgot to pay the annual fee. D. TIP Tech borrows money from a lender at 15% annual interest. The usury rate in the state is 12%, and this lender is exempt of usury laws.

Answer: A.

Which of the following is not a necessary element of a valid contract? A. Mutuality B. Agreement C. Capacity D. Legality

Answer: A.

Which of the following is not a type of patent recognized by federal patent law? A. Theory Patent B. Utility Patent C. Plant Patent D. Design Patent

Answer: A.

Which of the following is not an option under UCC Article 2 for buyers who receive a shipment of nonconforming goods? A. Reject part of the shipment without informing the seller. B. Accept the entire shipment. C. Reject the entire shipment. D. Accept part of the shipment and reject part of the shipment.

Answer: A.

Tyler is quite enamored with Beatrice, the equipment saleswoman. She knows that he has a crush on her, and she persuades him into signing a contract that has very unfair terms for TIP Tech. Can Tyler rescind the contract because of undue influence? A. No, because Tyler and Beatrice did not have a fiduciary relationship. B. No, because Tyler should have been more aware of his feelings. C. Yes, because Beatrice took advantage of Tyler's emotional weakness. D. Yes, because the terms were very unfair.

Answer: A. A claims of undue influence cannot be sustained unless the parties have a fiduciary relationship.

If Tyler offers $5,000 to a saleswoman to purchase a machine and the saleswoman replies, "My boss won't let me go that low, but I will sell it to you for $6,000," then Tyler's offer has been _____________ and the saleswoman is now the _______________. A. Rejected; offeror B. Accepted; offeror C. Rejected; offeree D. Accepted; offeree

Answer: A. A counteroffer is a rejection plus a new offer, so Tyler's offer has been rejected and the saleswoman made a new offer and is now the offeror.

After becoming very wealthy later in life, Tyler is so thankful for his education that he calls up his old college and says, "I pledge to give you $10 million!" The college is so excited that it announces the construction of a brand new building to be named after Tyler, and begins the planning work for it. Later, Tyler decides that he would rather buy a new private jet instead, so he decides not to give the money to the school. The school sues him to make him pay. Who wins? A. The school wins because it reasonably relied on his promise to make a gift. B. Tyler wins because a promise to make a gift lack consideration and is therefore unenforceable. C. The school wins because it entered into a valid contract with Tyler that was supported by adequate consideration. D. Tyler wins because the contract with the school was unconscionable.

Answer: A. A promise to give a gift to a charity, school, church, etc. will often be enforced, especially if the organization has acted in reliance on the promise.

If you live in a state where gambling is prohibited by law, and your grandfather offers you $10,000 on your 18th birthday if you will agree to refrain from hosting gambling parties in your home until you turn 21, is this an enforceable promise? A. No, because it is supported by illegal consideration. B. Yes, because it is a unilateral contract, which you can accept by performance. C. No, because you are not contributing anything of legal value to the contract. D. Yes, because it is a bargained-for exchange and both parties are giving something of legal value.

Answer: A. A promise to refrain from engaging in illegal activity does not count as consideration. It is known as illegal consideration

Big-Mart ran a television advertisement stating that they were selling tablets for $299. Paulo rushes down to Big-Mart and attempts to purchase three tablets, but just as he arrives, he sees a Big-Mart employee changing the price tag on the tablets from $299 to $599. Paulo insists that he be allowed to buy the tablets at $299 because he saw the ad. Is he correct? A. No, because advertisements are generally not offers. B. No, because Big-Mart ran out of the items in question. C. Yes, because he accepted the offer stated in Big-Mart's advertisement. D. Yes, because Big-Mart had tablets in stock and should have sold him one at the advertised price.

Answer: A. Advertisements are generally not offers, but instead are invitations to make an offer. Therefore, Big-Mart will not be held to the price stated in the ad.

Which of the following would not constitute a valid signature on a contract? A. Someone writing the word "no" on the signature line on a contract. B. Someone signing her name on the back of the second page of a 40-page contract. C. Someone writing nothing more than a large "X" on the signature line on a contract. D. Someone typing his name on the bottom of an email.

Answer: A. Any mark that indicates the person signing the contract intends to be bound by it can constitute a signature, and writing "no" on the signature line would not indicate this.

"Netflix" is a strong trademark because _____________. A. It is very unique. B. It has acquired a secondary meaning. C. It has become genericized. D. It is famous.

Answer: A. As an invented word, "Netflix" is unique and therefore a strong trademark.

Mobilio owes TIP Technologies $100,000 for batteries it purchased. Mobilio acknowledges that the contract price for the batteries was $100,000, but doesn't want to pay that amount because it thinks some of the batteries it received were defective. TIP Tech agrees to accept $85,000 instead of the full amount owed. After Mobilio pays the $85,000, TIP Tech decides that it wants to sue for the remaining $15,000. Will TIP Tech be successful in this lawsuit? A. No, because this was an accord and satisfaction that was fully satisfied. B. Yes, because this is a liquidated debt and therefore any agreement to accept less than the full amount is not binding. C. No, because Mobilio only owed the money if TIP Tech provided non-defective batteries. D. Yes, because the contract clearly provided that Mobilio owed TIP Tech $100,000.

Answer: A. Because there was a dispute over the amount owed, this was an unliquidated debt, and TIP Tech's agreement to accept less than the full amount was an accord, which was satisfied by Mobilio's payment. Therefore, TIP Tech cannot pursue the unpaid portion of the original debt.

Which of the following would likely not be eligible to receive a patent? A. A new type of cooking method that is used in Asia, but has never been used in the U.S. B. A new type of engine for a car. C. An improvement to an invention that has already received a patent. D. The chemical composition of a new cancer drug.

Answer: A. If it's been used elsewhere before, then it's not novel.

Which of the following is not necessary in order to form a valid contract? A. Terms that are fair to each party. B. An effective offer. C. A valid acceptance of the offer. D. The assent by each party to the terms of the agreement.

Answer: A. Parties are free to enter into contracts with unfair terms, as long as there has been a valid offer and acceptance and both parties assent to the terms.

If one of TIP Tech's competitors intentionally uses its patented technology without permission, TIP Tech could possibly obtain all of the following remedies except ___________. A. The competitor's officers could face jail time. B. The competitor could be made to pay TIP Tech three times the amount of TIP Tech's actual losses. C. The competitor could be made to pay TIP Tech any of the profit it received from using TIP Tech's patented technology. D. The competitor could be made to destroy any products in its possession that infringe upon TIP Tech's patents.

Answer: A. Patent infringement is not a criminal offense.

If Ergoffice offers to sell Paulo three desk chairs and the offers states, "this offer may only be accepted by telephoning us before 5:00pm," and Paulo sends an email accepting the offer at 4:59pm, have they formed a contract if the email doesn't arrive in Ergoffice's inbox until 5:02pm? A. No, because Paulo did not use an authorized means to accept the offer. B. Yes, because Paulo sent the acceptance prior to the deadline, in accordance with the mailbox rule. C. No, because Paulo's acceptance did not reach Ergoffice until after the deadline. D. No, because Paulo did not use an authorized means to accept the offer AND his acceptance did not reach Ergoffice until after the deadline.

Answer: A. Paulo's acceptance was timely because the mailbox rule states that an acceptance is effective at the time it is sent. However, Paulo did not use an authorized means to accept the offer and therefore there is no contract.

What must the creator of a writing do in order to obtain a copyright on a work? A. Nothing. B. File the work with the Copyright Office. C. Apply to the Copyright Office for a copyright and wait for the Office to evaluate the merits of the application. D. Research to ensure that the work is truly unique and beneficial to society, then apply to the Copyright Office.

Answer: A. The creator of a writing (as defined by the statute) automatically owns the copyright from the moment the work is set forth in recorded form.

If a salesman offers to sell Tyler a piece of equipment for $10,000, and Tyler says, "I accept your offer to purchase the equipment for $9,900," have they formed a contract? A. No, because Tyler's acceptance violated the mirror image rule. B. No, because Tyler's acceptance violated the mailbox rule. C. Yes, because Tyler accepted the offer. D. Yes, because Tyler's acceptance only modified the offer slightly.

Answer: A. The mirror image rule states than an acceptance cannot change the terms of an offer in order to be effective.

If you are the offeree, then.... A. You have the power to accept the offer and form a binding contract. B. The other party has the power to accept the offer and form a binding contract. C. You have made an offer and can form a binding contract. D. The other party has made an offer and he or she can form a binding contract.

Answer: A. The offeree receives the offer and has the power to accept or reject it.

TIP Tech is negotiating with a landlord to lease some new office space. They finally agree on all the terms of the lease and both parties are ready to sign the written agreement. At the meeting where they are both getting ready to sign, TIP Tech informs the landlord that it wants the right to use ten extra parking spots free-of-charge, which was not part of the original contract. The landlord verbally agrees, and both parties sign the contract without changing any of the written portion. Once TIP Tech moves into the space, the landlord informs the company that it is using the ten parking spots without permission and any cars parked there will be towed. Does TIP Tech have the right to use these parking spaces? A. No, because the parol evidence rule prohibits this contemporaneous oral agreement from being enforced. B. Yes, because the landlord agreed to let the company use the spots before the contract was signed. C. No, because TIP Tech did not bargain for the use of the spots. D. Yes, because the parking spots are real estate, and this was a written contract for the sale of an interest in real estate.

Answer: A. The parol evidence rule assumes that the written words of a contract are the complete expression of the parties' agreement and thus any prior or contemporaneous oral agreements will be unenforceable if they are not included in the final written agreement.

If a police officer knocks on your door and offers to keep an eye on your neighborhood and try to prevent crime if you will pay him some money, and you agree to do so, is this an enforceable contract? A. No, because the police officer had a preexisting duty to do those things, so there is no consideration. B. Yes, because you both bargained for the exchange of something of legal value. C. No, because you were forced to enter into the contract under duress. D. Yes, because there is adequate consideration.

Answer: A. The police officer already had the duty to prevent crime and protect your neighborhood, therefore this action cannot qualify as consideration to support a new contract.

If TIP Tech signs a contract to lease office space, which of the following is most likely a material term of the contract? A. An agreement on the time when TIP Tech can move into the space. B. An agreement on the carpet color in the space. C. An agreement on which day of the month the rent is due. D. An agreement on which day of the week the garbage is collected.

Answer: A. The time for each party to perform its duties is typically a material term.

Which of the following is not required to be present in order for a contract to be said to have consideration? A. Both parties giving goods or services of equal value B. A bargained-for exchange C. Each party giving something of legal value D. Neither party receiving a gift

Answer: A. The value given by each party does not have to be equivalent to the value given by the other party.

Each of the following types of intellectual property can be registered with the federal government, except ___________. A. Trade Secrets B. Patents C. Trademarks D. Copyrights

Answer: A. Trade secrets are just that: secret.

Virgin Galactic is a company that is attempting to pioneer commercial space travel. What type of mark would the name "Virgin Galactic" be? A. Service mark B. Trademark C. Certification mark D. Collective membership mark

Answer: A. Transportation is a service. Therefore, any branding of Virgin Galactic's services would be registered as a service mark.

If a professor shows a clip of the 1988 movie Coming to America in his business law class to illustrate the concept of trademark infringement, but he does not obtain permission from the studio that owns the film to do so, has he engaged in copyright infringement? A. No, because this is one of the fair use exceptions. B. Yes, because this is not one of the fair use exceptions. C. No, because the movie is old and the copyright has expired. D. Yes, because he did not obtain permission from the movie studio that owns the film.

Answer: A. Use of a short clip in a classroom for educational purposes fall under fair use (phew!)

Which of the following is NOT something you must prove in order to have a claim for fraud? A. The other person told you something that wasn't true. B. The other person thought that what he was telling you was true. C. You relied on what the other person told you when making your decision. D. You suffered some sort of economic harm as a result of relying on what the other person told you

Answer: B. The other person must know that his statement is false, and intend to deceive you.


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