BLAW FINALEXAM
Trade name
"part or all of a business's name" The name of a company or a business that has become sufficiently associated with a product over a period of time that it has lost its primary meaning and has acquired a secondary meaning; once so established, the company has a right to bring a legal action against those who infringe on the protection provided the trade name.
proxy
(n.) an agent, substitute; a written permission allowing one person to act in another's place
Insider trading
(when people buy or sell securities on the basis of inside information).
An author may expect to receive copyright protection for the life of the author plus:
70 years
investment company
A company that acts on the behalf of many smaller shareholders-owners by buying a large portfolio of securities and professionally managing that portfolio.
The securities exchange act of 1934
A federal law dealing with securities regulation that established the Securities and Exchange Commission to regulate and oversee the securities industry.
Clayton Act
A federal law that prevents price discrimination
Formal versus informal
A formal contract requires a special form, and an informal contract does not
horizontal merger
A merger betwéen two firms that are competing in the same market.
A written agreement outlining the roles of partners, their rights, and their duties are called;
A partnership agreement
What does the ratification of an agency relationship include?
A party affirms the contract another person made with a third party.
Disclosed Principal
A principal whose identity is known to a third party at the time the agent makes a contract with the third party.
Undisclosed Principal
A principal whose identity is unknown by a third party, and that person has no knowledge that the agent is acting for a principal at the time the agent and the third party form a contract.
Bilateral versus Unilateral Contracts
A promise for a promise, while a unilateral contract is a promise for an act.
tying arrangement
A seller's act of conditioning the sale of a product or service on the buyer's agreement to purchase another product or service from the seller.
Corporations
A separate legal entity created by law that is comprised of one or more persons identified under a common name. A corporation can last forever.
mutual fund
A specific type of investment company that continually buys or sells to investors shares of ownership in a portfolio.
Which of the following types of intellectual property may only be owned by a business?
A trade secret
What authority is ended with the termination of an agency relationship?
Actual authority
Treble damages are awarded to a private plaintiff for antitrust violations and are assessed as a multiplier of three to which type of damages?
Actual damages
resale price maintenance agreement
An agreement between a manufacturer and a retailer in which the manufacturer specifies what the retail prices of its products must be.
Partnership
An agreement by two or more persons to carry on, as co-owners, a business for profit. Can be created in writing, orally or implied-by-conduct.
Group Boycott
An agreement by two or more sellers to refuse to deal with a particular person or firm.
Executed versus implied
An executed contract is a fully performed contract, while an executory contract has not yet been fully performed.
Trustee
An official that is appointed to administer the debtors estate( gather assets, liquidate assets and pay bills)
What is a written partnership agreement called
Articles of Partnership
Liquidation
Assets are liquidated and proceeds distributed to creditors.
The earliest international agreement that provided copyright protections among the signatories to the agreement was the:
Berne Convention
Who may certify financial filings for the SEC? Choose 2 answer choices.
CFO , CEO
When used as collateral, a laptop computer used by a family for email, games, and schoolwork would be classified as:
Consumer Goods
A purchase money security interest (PMS) is created when a seller or lender agrees to extend credit to a buyer for all or part of the purchase price
Consumer goods
Howey Test
Created by the U.S. Supreme Court; it defines a security as an investment in a common enterprise that earns profits from the efforts of others.
Federal agencies enforcing antitrust laws may ask the courts to order a company to cease its operations and liquidate all of its assets in a process
Dissolution
Who can terminate an agency relationship?
Either the agent or the principal may terminate.
Examples of trade secrets
Example: recipe for Coca Cola product
Sherman Act
First federal action against monopolies, it was signed into law by Harrison and was extensively used by Theodore Roosevelt for trust-busting. However, it was initially misused against labor unions
The process by which a creditor may take possession of (and usually sell) collateral to satisfy an unpaid debt is called:
Foreclosure
Valid contract
Has the four necessary contractual elements of agreement, consideration, contractual capacity and legality.
Limited liability corporation
Hybrid form of business enterprise that combines the tax advantages of a partnership with the limited liability of a corporation. Can be 1 person, a P/S, a corporation or a trust. You can have foreign members. (The owners of an LLC are called members as opposed to shareholders.)
When is an agent liable on a contract that the agent entered into in the business of the agent's principal? Choose 3 answers.
If the agent entered into the contract in a personal capacity, when the principal is undisclosed, when the agent is acting without authority
Misappropriation Theory
If you wrongfully obtain (misappropriate) inside information and trade on it for your personal benefit. Basically the theory is that you stole information that belongs to another.)
Sabanes-Oxley Act of 2002
Increases corporate accountability by imposing strict disclosure requirements and harsh penalties for violations of security laws.
Unenforceable Contract
Is a valid contract that cannot be enforced because of certain legal defense.
Voidable Contract
Is a valid contract that one party has the option of avoiding.
antitrust laws
Laws protecting commerce from unlawful restraints and anticompetitive practices.
Different types of liens
Mechanic lien, artisan lien, judicial lien
Which of the following is the lowest priority of claims in bankruptcy?
Medical debts
close corporation
Most corparations in the U.S, fall into this category in which the shares are held by a relatively small group of people or by members of a family.
Independent Contractor
One who works for, and receives payment from, an employer but whose working conditions and methods are not controlled by the employer. An independent contractor is not an employee but may be an agent.
Which of the following types of intellectual property protection usually has a set term of 20 years?
Patent
Agency by Ratification
Principal either by act or by agreement ratifies conduct of a person who is not in fact an agent
The private securities litigation reform acts of 1995
Provides a "safe harbor" for publicly held companies that make forward-looking statements such a financial forecasts. If the forecast turns out to be wrong, they are protected against liability for securities fraud as long as the statements are accompanied by "meaningful cautionary statements identifying important factors that could cause actual results to differ materially from those in the forward-looking statement.
Fred and Wilma enter into a contract for horse riding lessons. Fred accidentally types the price for lessons to be $4.00 each instead of $44.00 each. Wilma wishes to enforce the contract at $4.00 per lesson. Which remedy would be most effective? A. Specific performance B. Injunction C. Reformation D. Rescission
Reformation
Price discrimination that is not justified by differences in costs, such as production costs or transportation costs, is prohibited by the:
Robinson-Patman Act
When securities are being offered by a company only to residents of the state in which the company has its principal place of business, the securities may be exempted from registration under:
SEC Rule 147.
Any person who knowingly fails to include a material fact on a registration statement can be held liable under:
Section 11 of the Securities Act of 1933.
Which of the following is the proper order for the payment of bankruptcy claims by class from highest priority to lowest priority?
Secured claims, priority claims, unsecured claims
How is substantial performance involved with the classification of material breaches versus immaterial breaches?
Substantial performance involves an immaterial breach.
A U.S. citizen who writes a book in the United States automatically has copyright protections in other signatory countries under which agreement?
The Berne convention
monopoly power
The ability of a monopoly to dictate what takes place in a given market.
vertical merger
The acquisition by a company at one stage of production of a company at a higher or lower stage of production (such as a company merging with one of its suppliers or retailers).
What is required to form an agency relationship?
The agent and principal must agree to enter the relationship.
Apparent authority
The appearance or the assumption of authority based on the actions, words, or deeds of the principal or because of circumstances the principal created.
Securities Act of 1933
The first major federal law regulating the securities industry. It requires firms issuing new stock in a public offering to file a registration statement with the SEC.
trade dress
The image and overall appearance of a product
Which of the following does NOT qualify an object as a fixture?
The object was in or on the property at the time of sale.
Which of the following scenarios illustrates a business world without agency relationships?
The owner prepares the tax returns.
What does the law require for a personal service contract?
The personal service requirement must be stated.
Market power
The power of a firm to control the market price of its product. A monopoly has the greatest degree of market power.
predatory pricing
The pricing of a product below cost with the intent to drive competitors out of the market. reason
Principal
The principal has the right to control the agent's conduct in matters entrusted to the agent.
Sole Proprietorship
The simplest form of business organization in which the owner is the business. When the owner dies, so does the business.
What happens if debtor does not pay his debt
Then a secured creditor can foreclose on its lien and/or take the security/property from the debtor either through court action or without court action, depending on how the security interest/lien was created.
The following are true for Chapter 7 Bankruptcies: (Choose 2 answer choices.)
They are for individuals, The debtor must pass the means test.
Which of the following is one of the elements of liability under Section 10 (b) of the Securities Exchange Act of 1934?
Use of the mail or facilities of interstate commerce
Which of the following does the SEC evaluate in a registration statement?
Whether appropriate disclosures have been made
Where should Articles of Incorporation be filed?
With the state
Is a principal liable for the tortious actions of the principal's agent?
Yes, but the agent must reimburse the principal.
Is a principal under a duty to compensate an agent who works on the principal's behalf?
Yes, if the contract requires compensation.
Which of the following is a requirement for the initial formation of a corporation?
a charter
A corporation that is formed in one state but does business in another state is referred to in the second state as:
a foreign corporation.
Ponzi Scheme
a form of fraud in which belief in the success of a nonexistent enterprise is fostered by the payment of quick returns to the first investors from money invested by later investors.
Copyright
a grant to an author or a publisher of an exclusive right to print, reprint, publish, copy and sell literary work, musical compositions, works of art, and motion pictures for the life of the author plus an additional seventy years (denoted by word copyright, the symbol ©, or the abbreviation_G0R)
To meet the standard for the duty of care, a person must:
act in good faith and with the judgment of an ordinarily prudent person.
The first sale doctrine
allows a person who owns a lawfully made copy of a copyrighted work to sell the copy.
Implied authority
an agent's authority to do things not specifically authorized in order to carry out express authority
Failure to pay a debt for having a car bumper replaced and painted to match the car would lead to:
an artisan's lien.
Horizontal Restraint
any agreement that restrains competition between rival firms competing in the same market
Secured Creditors
are those creditors who have a security interest in the debtor's property as collateral and have perfected their liens against the property properly.
Assuming there are not enough assets to pay the debts of an entire class of creditors, creditors must:
be paid at a pro rata share.
Which mistake is likely to be voidable?
bilateral mistake
Examples of copyright
books, poetry, music, CDs, plays, musicals, movies, music videos, paintings, architectural plans, cartoons, computer software, product packaging, menus
Who is liable to third parties for damage caused by an agent's tortious conduct if the principal had directed the agent to take that action?
both the agent and the principal
When used as collateral, a laptop computer used by a family for email, games, and schoolwork would be classified as:
consumer goods.
For an original work of authorship, such as a book, song, poem, article, recording, or other work, an author would seek the protection of a
copyright.
A secured party who has control will prevail over a secured party who has only filed for these types of collateral:
deposit accounts, investment property, and letter-of-credit rights.
The TRIPS Agreement does which of the following? Choose 2 answer choices.
establishes standards for protection of intellectual property, requires members of the WTO to have laws and remedies protecting intellectual property rights
Which of the following provisions are typically in an operating agreement for a limited liability company (LLC)? Choose 2 answers.
how membership interests may be transferred, whether the dissociation of a member, such as by death or departure, will trigger dissolution of the LLC
A business will be able to protect its trademark for how long?
if unregistered, as long as it is in use
Agency by Estoppel
is an agency relationship that is created because the principal's action caused a third party to believe that an agency relationship exists.
The Bankruptcy Code exempts (limited to a certain dollar amount) which type of property?
jewelry
Real Property
land and anything attached to it, everything below it and everything above it
A partnership in which the liability of all the partners is limited to the amount of their capital investment in the firm is called a:
limited liability limited partnership.
Which of the following is a duty of both corporate directors and corporate officers?
making a full disclosure of potential conflicts of interest
What type of corporation is formed for the purpose of doing a public service instead of making money?
nonprofit
What are the fiduciary duties of an agent to her principal? Choose 3 answers.
obedience, accounting, loyalty
To prevent others from making, selling, or using an invention, an inventor should seek what type of intellectual property protection?
patent protection
SEC Rule 10b-5
prohibits the commission of fraud in connection with the purchase or sale of any security
Common shareholders have the right to vote on:
proposals for fundamental changes affecting the company such as mergers or liquidation.
Crowdfunding
raising money for a project or venture by obtaining many small amounts of money from many people
In 2005, bankruptcy reform laws:
required debtors to pay more of their debts in bankruptcy.
The simplest form of business to establish is a:
sole proprietorship.
Securities
stocks and bonds
A business filing for a Chapter 11 Bankruptcy must:
submit a payment plan for approval by creditors and the court.
Express Authority
the authority of an agent, stated in the document or agreement creating the agency
What documents spell out the powers of a corporation? Choose 2 answers.
the charter (also called the articles of incorporation),the bylaws
Examples of trade dress
the distinctive decor, menu, layout, and style of service of a particular restaurant. Basically, trade dress is subject to the same protection as trademarks.
A sole proprietorship differs from a limited liability company (LLC) in:
the documentation required for formation.
The formation of LLCs is governed by:
the laws of the state in which the LLC is created.
Which of the following provisions are typically in a charter for a corporation? Choose 2 answers.
the name and address of the corporation's agent, the intended business purpose of the corporation
Examples of trade name
the names Coca Cola, Rollerblade, Xerox, Hoover, Pepsi-Cola
Who is liable for contracts entered into on behalf of the corporation before the corporation is formed?
the promoter
Corporate Governance
the relationship between a corporation and its shareholders
A written or authenticated security agreement is a requirement when creating a secured transaction unless:
the secured party has possession or control of the collateral.
Land burdened by an easement is called:
the servient estate.
Examples of trade mark
titles of movies, advertising slogans, titles of comic books, and ficti characters, like Batman. Specific Examples: Lamar's Big Red symbol, the Coca Cola sym symbol for Burger King, McDonald's Golden Arches, the word IBM, Pillsbury's Dough Boy
An operating agreement for a limited liability company:
typically includes provisions about choosing the LLC's management.
In ordinary circumstances, when the corporate veil has not been pierced, a shareholder may be liable for:
unpaid amounts on the shares held by that shareholder.
Which of the following are rights of common shareholders? Choose 3 answers.
voting on matters such as election of directors and proposals for mergers or liquidation, transferable ownership,opportunity to inspect corporate books and records
Partially Disclosed Principal
A principal whose identity is unknown by a third party, but the third party knows that the agent is or may be acting for a principal at the time the agent and the third party form a contract.
Respondeat Superior
A relationship between two parties in which one party (the agent) agrees to represent or act for the other (the principal)
agency
A relationship between two parties in which one party (the agent) agrees to represent or act for the other (the principal).
Vertical Restraints
A restraint of trade created by an agreement between firms at different levels in the manufacturing and distribution process.
Stocks option
A right to buy a given number of shares of stock at a set price usually within a specified time period. y The idea behind this is that by giving the officers of the corporation a financial stake in the corporation's success will supposedly encourage them to work hard for the benefit of the shareholders.
equal dignity rule
A rule requiring that an agent's authority be in writing if the contract to be made on behalf of the principal must be in writing.
Prospectus
A written document required by securities laws when a security is being sold. The prospectus describes the security, the financial operations of the issuing corporation, and the risk attaching to the security.
Personal Property
All property not classified as real property
Fixtures
Built in refrigerators; black boards , bulletin boards, and over head screens or equipment installed in classrooms.
Examples of service mark
Burger Kings phase "Home of the whopper" the international silk industry's motto "only silk is silk" the names United Airlines, Marriott Hotels, and weight watchers, monster.com
What must a plaintiff prove in an express warranty case?
Buyer reliance on the seller's promises
Trademark
"a distinctive mark, motto, device, or implement that a manufacturer stamps, prints, or otherwise affixes to the goods it produces so that they can be identified on the market and their origins made known"
Which of the following are advantages of operating as a partnership? Choose 2 answers.
Forming a partnership is simple and relatively inexpensive. Partnerships are not taxed.
What is the key factor in apparent authority?
The principal's actions
Patent
"a grant from the government that gives an inventor the right to exclude others from making, using, or salling his or her invention for a period of twenty years from the date of filing the application for a patent" (fourteen years for a patent for designs)
Ratification
A party's act of accepting or giving legal force to a previously unenforceable contract or other obligation entered into on that party's behalf by another party.
Tippee
A person who receives inside information.
price discrimination
A seller's act of charging competing buyers different prices for identical products or services.
service mark
A trademark that is used to distinguish the services (rather than the products) of one person or company from those of another.
For what terminations does a principal NOT have a duty to notify third parties?
Agencies terminated by operation of law
Agency by Operation of Law
Agency based on social duty is formed in certain situations when the agent is unable to contact the principal: Necessaries, Emergencies.
Agents
Agents must exercise their powers "for the benefit of the principal only,
Express versus implied
An Express contract is formed by words, while an implied contract is formed, at least in part, by conduct of the parties.
attempted monopolization
An action by a firm that involves anticompetitive conduct, the intent to gain monopoly power, and a "dangerous probability" of success in achieving monopoly power.
price-fixing agreement
An agreement between competitors to fix the prices of products or services at a certain level.
Which international agreement requires its member countries to establish border procedures for searching international shipments of goods?
Anti-Counterfeiting Trade Agreement
Fiduciary
As a noun, a person who, having undertaken a certain enterprise on behalf of another person, has a duty to act for the other person's benefit in all matters related to that enterprise. As an adjective, a relationship founded on trust and confidence.
power of attorney
Authorization for another to act as one's agent or attorney in either specified circumstances (special) or in all situations (general).
The Uniform Commercial Code applies to what types of contract?
Contracts for goods over $500
In which situation does an agent have the least exposure to liability?
Fully disclosed principal
Examples of patent
General Examples: machines, processes, compositions of matter, improvements to existing machines, processes, or compositions of matter, designs for an article of manufacture, asexually reproduced plants, living material invented by a person. Specific Examples: Noralco air filter, formula for Calebrex or Lipitor, Polaroid instant camera and film
Unsecured creditor
Is a creditor with no collateral protecting its claim for repayment of debts.
If harm is done by an agent, and it is discovered that this agent has been convicted of the same harm before at a previous job, what r principal be liable for?
Negligent hiring
Which statement is true about creating a sole proprietorship?
No documentation is required to create a sole proprietorship.
Which of the following is a disadvantage of operating as a partnership?
Partners may suffer financial loss if the partnership is not profitable.
Which of the following are essential elements of a partnership? Choose 2 answers.
Profits and losses are shared among the members. All members have equal right to be involved in the management of the business.
Section 16 B
Short-swing profits (6-month period) must be returned to the corporation. Applies to corporate insiders but doesn't require the use of inside information.
Blue Sky Laws
State corporate securities laws. State and federal laws run concurrently. Issuers must comply both
How does a principal become liable to third parties on contracts?
The principal's agent has the authority to bind the principal in a contract with a third party
reorganization
This bankruptcy allows a business to keep operating without liquidating its assets.
The Sherman Antitrust Act prohibits businesses from joining together to do which of the following? Choose 2 answers.
To form a monopoly, to control prices within an industry
A business using a word, phrase, symbol, or design to identify and distinguish its brand of goods would protect that branding with a:
Trademark
A general partnership differs from a limited partnership in: (Choose 2 answers.)
a partner's management rights. the documents required for creation.
How may an agency relationship be formed? Choose 3 answers.
implied by the conduct of the principal, by express written agreement between agent and principal, by express oral agreement between agent and principal
If a consumer falls when a step on a new ladder breaks, what warranty could apply?
implied warranty of merchantability
A shareholder has the right to inspect the corporate books, if done:
in good faith and for a proper purpose.
Void contract
Has no legal force or binding effect
- Adjustment of Debts of Individual with Regular Income
Only applies to individuals. Upon filing, there is an automatic stay on all actions by creditors. Debtor files a plan for payment of creditors over lime (3-5 years depending on debtor's family income). Debts are not discharged, just re-scheduled. Debtor keeps possession of the estate's property. Debtor and a court-appointed trustee co-administer the bankrupt estate. If Chapter 13 fails, some can shift to a Chapter 7. Advantage: Debtor remains in possession of assets and continues in business. If plan is approved, most debts are discharged after the plan period. (Pages 368-369)
trade secret
"information of a commercial value," ie., a plan, research and development, pricing information, marketing methods, production techniques, product formula, pattern, design, compilation of data, customer list, or other business secret - Could be an idea that makes franchise successful but that does not qualify for trademark, patent, or copyright protection.
Family Farmer or Family Fisherman bankruptcy
- This bankruptcy only applies to family-farmers and family-fishermen. Upon filing, there is an automatic stay on all actions by creditors. Debtor Files a plan for payment of creditors over time similar to a Chapter 13 plan (3 years or longer with court approval). Debts are not discharged, just re- scheduled. Debtor keeps possession of the estate's property. Debtor and court-appointed trustee co-administer the bankrupt estate. If farmer or fisherman filed a Chapter 13 first, s/he may convert it to a Chapter 12. If Chapter 12 fails, debtor may convert to a liquidation plan under Chapter 7 but cannot be forced to do so. Advantage: Debtor remains in possession of assets and continues in business. If plan is approved, most debts are discharged after the plan period. (Pages 367)
Which of the following are objections that a creditor may bring to bankruptcy distribution proceedings? Choose 3 answers.
A secured creditor may object to being excluded from the distribution if st had not been notified of the bankruptcy, An unsecured creditor may object to being excluded from the distribution if she had not been notified of the bankruptcy, A creditor may object to a distribution plan if the debtor has been fraudulent.
One of the key purposes of the Digital Millennium Copyright Act (DMCA) is to bring copyright laws into the digital age by regulating digital media copyright infringement. As with non-digital assets, an owner of copyrightable material:
does not need to include a (c) symbol on their digital work in order to be protected from reproduction.