Business Law Final
Adele borrowed $1,000 from Beatrice and signed a promissory note due on January 1. On December 1, Beatrice agreed to accept immediate payment of $800 in full satisfaction of the debt. In January, Beatrice sought to receive the $200 unpaid balance. What will be the result? A. Adele will win because she provided consideration for Beatrice's new promise. B. Adele will win because the debt was unliquidated. C. Beatrice will win because of the pre-existing contractual obligation rule. D. Beatrice will win because the debt was liquidated.
A
Bill Cratchett leased an apartment from Grendel. Cratchett was a person of limited means in a locality where low-income housing was scarce. Shortly after signing the agreement, he fell in an unlit stairwell when a step unexpectedly gave way. In a suit for damages, Grendel relied on a clause in the lease that stated, "Tenant agrees to hold Owner harmless from any claims for damages no matter how caused." Cratchett should: A. Win because the exculpatory clause was unenforceable as a violation of public policy. B. Win because the lease was a contract of adhesion. C. Lose because nothing indicates that the lease was unconscionable as a whole. D. Lose because exculpatory clauses are usually upheld in the interest of freedom of contract.
A
Which of the following is included within the scope of the Secured Transactions article of the UCC? A. The outright sale of accounts receivable. B. A landlord's lien. C. The assignment of a claim for wages. D. The sale of chattel paper as part of the sale of a business out of which it arose.
A
Which of the following is true about the duty of care? A. Breach of the duty of care is not actionable unless the plaintiff suffers personal injury or injury to his or her property. B. The reasonable person standard is used to determine the amount of damages that a defendant owes a plaintiff. C. A firefighter who refuses to put out a fire when his safety is not at stake does not breach his duty of care. D. The damages recoverable for breach of the duty of care are independent of the effect of the injury on the plaintiff's life or profession.
A
Which of the following statements is true of email contracts? A. All email contracts require agreement, consideration, capacity, and lawful object. B. Email contracts are exempted from the requirements of the Statute of Frauds. C. Email contracts are enforceable even if they do not meet the requirements of a traditional contract. D. All emails cannot be integrated to determine the parties' agreement.
A
Wilcox Co. contacted with Ace Painters, Inc. for Ace to paint Wilcox's warehouse. Ace, without advising Wilcox, assigned the contract to Pure Painting Corp. Pure failed to paint Wilcox's warehouse in accordance with the contract specifications. The contract between Ace and Wilcox was silent with regard to a party's right to assign it. Which of the following statements is true? A. Ace remained liable to Wilcox despite assigning the contract to Pure. B. Ace would not be liable to Wilcox if Ace had notified Wilcox of the assignment. C. Ace's duty to paint Wilcox's warehouse was nondelegable. D. Ace's delegation of the duty to paint Wilcox's warehouse was a breach of the contract.
A
________ is a doctrine that raises a presumption of negligence and switches the burden to the defendant to prove that he or she was not negligent. A. Res ipsa loquitur B. Negligence per se C. The doctrine of proximate cause D. The doctrine of comparative negligence
A
________ refers to a contract provision that designates a certain state's law or country's law that will be applied in any dispute concerning nonperformance of the contract. A. Choice of law clause B. Forum-shopping C. Arbitration clause D. Forum selection clause
A
A security interest in certificated securities is best protected against other security interests in those securities: A. By filing a financing statement against the securities. B. By taking possession of the securities, duly endorsed for transfer. C. By notifying the issuer of the securities of your lien. D. By taking a certificate of title with respect to those securities.
B
Which of the following acts by a debtor could result in a bankruptcy court's revoking the debtor's discharge? i. Failure to list one creditor. ii. Failure to answer correctly material questions on the bankruptcy petition. A. I only. B. II only. C. Both I and II. D. Neither I nor II.
B
Which of the following methods is used to appoint a manager of a manager-managed LLC? A. Appointment by the secretary of state. B. Majority vote of the members. C. Unanimous vote of the members. D. Unanimous vote of the shareholders.
B
A written document in which a shareholder authorizes a person to vote the shareholder's shares at the shareholders' meetings in the event of the shareholder's absence is known as a _________. A. Quorum. B. Notice of shareholder's meeting. C. Certificate of authority. D. Proxy.
D
Quick Corp. has $270,000 of outstanding accounts receivable. On March 10, Quick assigned a $30,000 account receivable due from Pine, one of Quick's customers, to Taft Bank for value. On March 30, Pine paid Quick the $30,000. On April 5, Taft notified Pine of the March 10 assignment from Quick to Taft. Taft is entitled to collect $30,000 from: A. Either Quick or Pine. B. Neither Quick nor Pine. C. Pine only. D. Quick only.
D
Which of the following actions would make Sarah liable for battery? A. She publishes an article which calls for the current U.S. president to quit because she thinks he is not doing a good job. B. She extends the boundary of her plot of land encroaching two feet of her neighbor's plot. C. She smuggles marijuana into the country. D. She slaps her ex-husband because he denied her alimony.
D
Which of the following is tortious conduct? A. Beth agrees to sell 100 whistles to May for $1 each. On the day of delivery, Beth tenders 50 whistles. B. Andre intentionally fails to report a substantial amount of income subject to federal tax. C. Pops promises to give David a car for his birthday but forgets to. D. Myra abducts Reginald at gunpoint and holds him for ransom.
D
Jasmin, Shou-Yi, and Vanessa form an LLC, and each contributes $25,000 in capital. The LLC operates for a period of time, during which it borrows money from banks and purchases goods on credit from supplies. After some time, the LLC experiences financial difficulties and goes out of business. If the LLC fails with $500,000 in debts, which of the following is an accurate statement regarding the liability of Jasmin, Shou-Yi, and Vanessa? A. Each will lose her capital contribution of $25,000, but will not be personally liable for the rest of the unpaid debts of the LLC. B. Each will lose her capital contribution of $25,000, and will be personally liable for the rest of the unpaid debts of the LLC. C. Each will not be personally liable for the $500,000 in debts, and will be reimbursed for her $25,000 capital contribution. D. Each will not be personally liable for the $500,000 in debts, and a constructive trust for the entire $75,000 in capital contributions will be imposed so that Jasmin, Shou-Yi, and Vanessa can form a new business venture.
A
Peter, Preston and Penny organize an LLC in January. While composing the operating agreement, they forget to include an amendment clause. Six months later, the situation demands an amendment to the operating agreement. Which of the following would best apply in this scenario? A. The operating agreement can be amended if all three members approve. B. The operating agreement cannot be amended as it contains no amendment provisions. C. The operating agreement can be amended with the affirmative majority of all shareholders. D. The operating agreement can be amended only 60 days after a new amendment provision in included.
A
Same facts as previous question, except that Holmes lives in a comparative negligence state. Which of the following answers is then correct? A. Yes, to the extent the driver's speeding contributed to Holmes's injuries. B. Yes, because the driver had the last clear chance to prevent the injury. C. No, because Holmes contributed to his own injury. D. No, because Holmes had the last clear chance to prevent the injury.
A
Stanley Kawalski is a well-known retired movie personality, who purchased a limited partnership interest in Terrific Movie Productions upon its initial syndication. Which of the following is true? A. If Stanley permits his name to be used in connection with the business and is held out as a participant in the management of the venture, he will be liable as a general partner. B. The sale of these limited partnership interests is not subject to SEC requirements. C. This limited partnership may be formed with the same informality as a general partnership. D. The general partners are prohibited from also owning limited partnership interests.
A
Supplier has a contract with Factory to provide its needs for widgets. Fabriken, a major competitor of Factory, hoping to disrupt Factory's production schedule, induces one of Supplier's subcontractors to delay delivery of materials necessary for the production of widgets. As a result, Factory sustains millions of dollars in losses when the widgets are not promptly delivered. On what theory could Factory prevail in an action against Fabriken? A. Interference with contractual relations. B. Fraud. C. Breach of contract. D. Factory has no action against Fabriken.
A
The principle of res judicata: A. Prevents re-litigation of a cause of action that has been fully, fairly, and finally decided on the merits by a court of competent jurisdiction. B. Is synonymous with comity. C. Is the basis for requiring that the subject matter of a suit (the res) be located within the forum state in order for the court to have in rem jurisdiction. D. Permits a court to adjudicate disputes.
A
What function of the law is being served when passing laws that protect the U.S. government from the risk of being forcefully overthrown? A. maintaining the status quo B. shaping moral standards C. facilitating orderly change D. promoting social justice
A
What is a sole proprietorship? A. An unincorporated business with only one owner. B. A corporation with only one shareholder. C. A corporation or LLC with no employees other than the owners. D. A partnership that has dissolved.
A
What is the function of the judicial branch of the federal government? A. It has the power to interpret and determine the validity of the law. B. It has the power to enact the law. C. It has the power to enforce the law. D. It has the power to act as a liaison between the legislative and executive branches.
A
Filmore purchased a TV set from Allison Appliances, an authorized dealer, for $499. The written contract contained the usual one-year warranty as to parts and labor as long as the set was returned to the manufacturer or one of its authorized dealers. The contract also contained an effective disclaimer of any express warranty protection, other than that included in the contract. It further provided that the contact represented the entire agreement and understanding of the Parties. Filmore claims that during the bargaining process Surry, Allison's agent, orally promised to service the set at Filmore's residence if anything went wrong within the year. Which of the following would be Allison's best defense? A. The statute of frauds. B. The parol evidence rule. C. All warranty protection was disclaimed other than the express warranty contained in the contract. D. Surry, Allison's agent did not have express authority to make such a promise.
B
Helen is the vice president of Gotspeed corporation, a company that designs, manufactures and sells sports shoes. Nestor, and independent entrepreneur, designs a new shoe that helps the user's foot grip the shoe better, and he calls it the Anklator. Nestor's friend schedules an appointment for him to meet Helen and present the Anklator for possible adoption by Gotspeed. Instead of presenting the opportunity to Gotspeed's board of directors, Helen pays Nestor's asking price and purchases the Anklator design for herself. She then quits and forms her own company to manufacture and sell Anklator shoes. Helen has breached her duty of loyalty to Gotspeed corporation by __________: A. Self-dealing. B. Usurping a corporate opportunity. C. Making a secret profit. D. Competing with the corporation.
B
If a corporation had nine directors, how many votes would be required to pass a resolution at a meeting at which the minimum quorum was present, assuming the RMBCA established the requisite quorum? A. Five. B. Three. C. Four. D. Six.
B
Imposing a ban on public smoking can serve as an example of a law that adheres to the ________ School of jurisprudence. A. Command B. Sociological C. Law and Economics D. Analytical
B
In a general partnership, which of the following acts must be approved by all the partners? A. Dissolution of the partnership. B. Admission of a partner. C. Authorization of a partnership capital expenditure. D. Conveyance of real property owned by the partnership.
B
LLCs typically are managed: A. By a board of directors. B. By the members or by managers appointed by the members. C. By the general partner. D. By a chief executive officer.
B
Payne entered into a written agreement to sell a parcel of land to Stevens. At the time the agreement was executed, Payne had consumed alcoholic beverages. Payne's ability to understand the nature and terms of the contract was not impaired. Stevens did not believe that Payne was intoxicated. The contract is: A. Void as a matter of law. B. Legally binding on both parties. C. Voidable at Payne's option. D. Voidable at Steven's option.
B
Seymore was recently invited to become a director of Buckley Industries, Inc. If Seymore accepts and becomes a director, he along with the other directors will not be personally liable for: A. Lack of reasonable care. B. Honest errors of judgment. C. Declaration of a dividend that the directors know will impair legal capital. D. Diversion of corporate opportunities to themselves.
B
The U.S. Constitution defines the powers of the federal government. Which of the following is a false statement concerning the scope of those powers? A. Congress has the power to make all laws that are necessary and proper for carrying into effect the enumerated powers conferred by the U.S. Constitution upon the U.S. government. B. Congress has the exclusive power to make laws regarding commerce. C. The states have an implicit power to provide for the general health, safety, welfare and morals. D. The powers not delegated to the United States by the U.S. Constitution or prohibited by it are reserved to the states or the people.
B
The ________ doctrine allows for certain limited unauthorized use of copyrighted materials. A. express use B. fair use C. limited use D. partial use
B
Under common law, which of the following statements is true about a counteroffer? A. An offeree who makes a counteroffer is still considered the offeree. B. A counteroffer terminates the existing offer. C. A counteroffer can only be made by the original offeror. D. A counteroffer is effective even before it has been received by the original offeror.
B
Utility patents for inventions are valid for ________. A. the whole of the inventor's life plus 70 years B. 20 years C. 14 years D. 10 years and renewable indefinitely
B
What happens to the ownership of a copyrighted work after the copyright period expires? A. A non-copyright holder can use the work, but he or she must first purchase the rights to the work. B. The work enters the public domain and can be used for free. C. The copyright can be renewed for a fee by the original creator of the work. D. The government takes over ownership of the work and provides public access for a fee.
B
What is meant by "causation in fact"? A. the facts stated by a plaintiff during trial B. a defendant's negligent act that caused the plaintiff's injuries C. a defendant's defense against a case of negligence D. a defendant's plea of guilt due to negligence
B
A competitor can lawfully use a rival's trade secret if the competitor discovers the trade secret by means of ________. A. copyrighting B. cross-licensing C. patenting D. reverse engineering
D
With respect to a security interests, which of the following statements is false? A. Except with respect to perfection by control, a security agreement must be executed by the debtor. B. "All assets of the debtor and proceeds thereof, whether now or hereafter acquired" is a sufficient description of the collateral in a security agreement. C. "All assets of the debtor and proceeds thereof, whether now or hereafter acquired" is a sufficient description of collateral for a financing statement. D. A description of the collateral using generic terms from Article 9 of the UCC is a sufficient description of the collateral in a security agreement.
B
Bill is trying to sell his house in Oklahoma City, OK, to George, who lives in Little Rock, AR. They have a dispute over the terms of the contract, and Bill decides to sue George. Which of the following statements is true in this scenario? A. The Arkansas state court must hear this case as it has personal jurisdiction over George. B. The Arkansas state court has in rem jurisdiction to hear this case. C. The Oklahoma state court has in rem jurisdiction to hear this case. D. The Oklahoma state court does not have jurisdiction to the case as the defendant is from another state.
C
Hemlock Holmes lives in a contributory negligence state. Holmes drank four ounces of straight gin in 30 minutes and became intoxicated. Then, on an unlighted street, he walked without looking from between two parked cars in front of a speeding car. The driver was unable to stop before hitting Holmes. Holmes has sued the driver to recover for his damages. Will he win? A. Yes, to the extent the driver's speeding contributed to Holmes's injuries. B. Yes, because the driver had the last clear chance to prevent the injury. C. No, because Holmes contributed to his own injury. D. No, because Holmes had the last clear chance to prevent the injury.
C
____________ is a process that establishes the right of a secured creditor against other creditors who claim an interest in the collateral. A. Disposition of collateral. B. Retention of collateral. C. Perfection of a security interest. D. Repossession of a security interest.
C
How is legal precedent used between courts of different states? A. Courts of a state cannot cite the judicial decisions of courts of another state in its decisions. B. Courts of a state must follow precedent from courts of another state for similar cases. C. Courts of a state can use precedent from courts of another state as a form of guidance. D. Courts of a state cannot challenge the precedence of courts of another state.
C
In which type of business organization are income taxes always required to be paid by the entity on profits earned as well as by the owners upon distribution thereof? A. General partnership. B. Limited liability company. C. C Corporation. D. S Corporation.
C
On July 1, Silk, Inc. sent Blue a telegram offering to sell Blue a building for $80,000. In the telegram, Silk stated that it would give Blue 30 days to accept the offer. On July 15, Blue sent Silk a telegram that included the following statement. "The price for your building seems too high. Would you consider taking $75,000?" This telegram was received by Silk on July 16. On July 19, Tint made an offer to Silk to purchase the building for $82,000. Upon learning of Tint's offer, Blue on July 27 sent Silk a signed letter agreeing to purchase the building for $80,000. This letter was received by Silk on July 29. However, Silk now refuses to sell the building to Blue. If Blue commences an action against Silk for breach of contract, Blue will: A. Win, because Blue effectively accepted Silk's offer on July 27. B. Win, because Silk was obligated to keep the letter offer open for the 30—day period. C. Lose, because Blue sent the July 15 telegram. D. Lose, because Blue used an unauthorized means of communication.
C
Piercing the corporate veil enables a creditor to impose shareholder liability. Which of the following is least likely to cause a court to decide to pierce the corporate veil? A. The corporation fails to keep any books or records. B. The sole shareholder treats the corporation as her alter ego, and uses the corporation to pay personal bills. C. An existing company forms a new company to engage in a new enterprise. D. The corporation's capital is inadequate for its intended activities.
C
What was the key factor in the development of the English common law? A. the development of forensic science in helping decide cases B. the supremacy of the king and his intervening powers when deciding cases C. the use of precedence of past cases for judges to decide present similar cases D. the subjective decision making of judges when it came to similar cases
C
Forward Motors, Inc. is a franchised automobile dealer for National Motors. National provides the financing of the purchase of its automobiles by Forward. It sells Forward 25 to 50 automobiles at a time and takes back promissory notes, a security agreement, and a financing statement on each sale. The agreement between Forward and National includes an after-acquired property clause. The financing statement covering this revolving inventory has been duly filed. A. Each automobile sold to Forward must be described and the serial number listed on the financing statement. B. Sales by Forward to buyers in the ordinary course of business will be subject to the rights of National. C. No filing is required against the creditors of Forward because the automobiles are "consumer goods" in its hands. D. As against the creditors of Forward, National has a valid "floating lien" against the automobiles and the proceeds from their sale.
D
Gaagle Inc., a company resident in Texas, is sued by a plaintiff from the state of New York for breach of contract. The plaintiff alleges over $90,000 in damages. Which of the following statements is true in this scenario? A. The case can only be heard in a Texas state court, as the matter is not subject to federal jurisdiction. B. The case must be heard in the Texas federal court, as this is a subject matter in which federal courts have exclusive jurisdiction. C. If the plaintiff decides to bring the case in a federal court in New York, Gaagle Inc. can have the case moved to a New York state court. D. If the plaintiff chooses to bring the case in federal court in Texas, the case would stay in the federal court.
D
How is a copyright different from a patent? A. Federal law applies to a copyright, while individual state law applies to a patent. B. A copyright, not a patent, must be novel and useful. C. A copyright protects an invention, while a patent protects a tangible writing. D. The period of protection for a copyright is longer than the period of protection for a patent.
D
In order to obtain a patent, an invention must be: A. Novel, useful and non-obvious. B. Filed with the USPTO. C. Public. D. All of the Above.
D
Intellectual property falls into a category of property known as a(n) A. Tangible property. B. Moveable property. C. Real property. D. Intangible property.
D
John, who lives in Chicago, used the website of internet retailer Wikresco, located in Alabama, to purchase some camping supplies. When the goods arrived, John found them defective. What law would John most likely cite if he wanted to sue Wikresco in state court in Chicago? A. The Smoot-Hawley Tariff Act B. The Administrative Procedures Act C. The Alabama long-arm statute D. The Illinois long-arm statute
D
Jones agreed to purchase a tractor for $40,000 from Cat Co. Cat Co. had previously purchased the tractor for $32,000. Jones subsequently changed his mind and decided to purchase a different tractor from Harvest for $37,000. After being told that Jones no longer wanted the initial tractor, Cat Co. sold the tractor to another customer for $38,000. If Cat Co. were to sue Jones, how much is it likely to be awarded, assuming no additional costs were incurred by Cat Co. in connection with the second sale? A. Nothing, because Cat Co. still made a profit of $6,000. B. $1,000, because that is the difference between the price Jones paid for the second tractor and the resale price of the first tractor. C. $40,000, the contract price of the initial tractor. D. $2,000, because that is the difference between the price of the initial tractor and the amount recovered on its subsequent sale.
D
M.A. Genius invented, manufactures, and distributes a flashlight needing no batteries if used in direct sunlight. (But, why would you need a flashlight then?) Genius did not apply for a patent. Novelco bought one at a retail store, analyzed and copied it, and now sells an identical product under its own name. Which of the following is true? A. Genius can enjoin Novelco's activities on the basis of a trade secret violation. B. Genius can enjoin Novelco's activities because it clearly meets the novelty, utility, and non-obviousness criteria. C. If Novelco continues to make and sell the solar flashlights, it will have to pay Genius a royalty. D. Novelco has not violated any legal duty owned to Genius.
D
Which of the following is true of corporate bylaws? A. They only contain rules addressing how the corporation can interact with the government. B. They are only adopted by the shareholders of the corporation. C. They are not binding on the directors or shareholders of the corporation. D. They do not have to be filed with any government official.
D