Exam #4 - Chapters 12, 14, 16

Surveys show that people may prefer to deal with members of their own race. A company assigns white salespersons to white clients, and Hispanic salespersons to Hispanic clients. This makes commissions to all the salespersons higher than if the sales-persons were assigned randomly. Assignments based on race are: A. illegal disparate treatment under Title VII B. illegal only if the salespersons earn different wages C. legal if the salespersons of all races have approved the market division D. legal since the effect is to raise gross income on the affected group E. legal since the interests of the customers is the same as the interests of the firm

A. illegal disparate treatment under Title VII

The articles of incorporation usually include all of the following except: A. name of the CEO B. address of the corporation C. purpose of the business D. classes of stock to be issued E. all of the other choices are included

A. name of the CEO

Today a corporation must be created according to: A. state law B. common law C. the Uniform Incorporation Act D. the U.P.A. E. federal statutory provisions

A. state law

Carla agrees to try to sell Frank's prize do Spike for him. Carla does this as a favor to Frank because she knows many professional dog breeders. Carla may be best described as: A. a universal agent B. a gratuitous agent C. an agent who has an agency coupled with an interest D. a special agent E. none of the choices

B. a gratuitous agent

The duty of _______ requires an agent to place the principal's interests before the agent's personal interests or those of any third party. A. accounting B. loyalty C. performance D. reasonable care E. none of the choices; there is no such duty

B. loyalty

A legal document that establishes some agency relationships is known as: A. articles of incorporation B. power of attorney C. partnership agreement D. decree of guardianship E. motion to represent

B. power of attorney

The most likely example of quid pro quo sexual harassment would be: A. discussing sexual activities at work B. promoting a woman because she accepts dates with her boss C. saying demeaning things about women D. showing sexually explicit photos E. all of the other choices

B. promoting a woman because she accepts dates with her boss

The business judgment rule: A. is applied when directors of a corporation act negligently B. protects directors and managers of a corporation who have made honest mistakes in judgment C. is used by courts to impose strict liability on directors and managers when violated D. protects directors and managers of a corporation who have made honest mistakes in judgment and is used by courts to impose strict liability on directors and managers when violated E. none of the other choices

B. protects directors and managers of a corporation who have made honest mistakes in judgment

Suppose a newly hired utility repairman has a fear of heights that means he cannot climb ladders or telephone poles to do repairs. This condition of his: A. can not be held against him, as he could be assigned to job duties that would not require climbing ladders B. qualifies as a mental disability, so he is protected C. does not qualify as a disability, so he could be fired D. does not qualify as a disability under respondent superior liability, so he could be fired E. none of the other choices

C. does not qualify as a disability, so he could be fired

A shareholder's relation to creditors of the corporation is generally that the shareholder: A. is a secured creditor B. is an unsecured creditor C. has no relation to creditors D. is a third-party beneficiary to creditors E. none of the other choices

C. has no relation to creditors

In Harris v. Forklift Systems, a woman sued her employer based on the conduct of her male boss. The Supreme Court held: A. all offensive conduct is illegal sexual harassment B. even if the subject of the harassment does not care, an employer may still be liable for remarks that a reasonable person would find offensive C. if a work environment becomes hostile or abusive due to sexual harassment, an employer may liable D. employers will be liable only if the employee can prove physical harm E. none of the other choices

C. if a work environment becomes hostile or abusive due to sexual harassment, an employer may liable

Title VII restricts discrimination based on: A. appearance B. experience C. national origin D. attitude E. education

C. national origin

The rules that regulate and govern the internal operations of a corporation are known as: A. the certificate of incorporation B. the bond C. the bylaws D. statutes of business E. the corporate constitution

C. the bylaws

There are two types of dissolution of a corporation: A. abstract and remote B. real and abstract C. voluntary and involuntary D. finite and indefinite E. none of the other choices

C. voluntary and involuntary

A person authorized to execute all regular transactions connected with a business is called a: A. universal agent B. special agent C. gratuitous agent D. general agent E. none of the choices

D. general agent

When employers have been sued for monitoring the content of their employees' e-mails at work, the court have generally held that the monitoring: A. is an invasion of privacy B. is an invasion of privacy if personal e-mails are reviewed, not work-related e-mails C. is sexual harassment if directed at women employees D. is legal, employers have the right to do so, in part to prevent sexual harassment E. none of the other choices

D. is legal, employers have the right to do so, in part to prevent sexual harassment

Suppose a hurricane is going to hit South Florida; there are two days to prepare for it and the owner of a house is on a raft trip in Brazil and cannot be reached. The next door neighbors spend $800 on plywood and other materials to protect the house from the hurricane. Legally, this expenditure is likely to be: A. is a gift from the neighbors, nothing more B. is the responsibility of the homeowner; there is an agency by estoppel C. is the responsibility of the homeowner; there is implied ratification of the agency D. is the responsibility of the homeowner; there is agency by operation of law E. none of the choices

D. is the responsibility of the homeowner; there is agency by operation of law

Most shareholders give third parties their ____. It is a written authorization to cast their vote so they do not have to attend a shareholder meeting in person. A. charter B. shares C. resolution D. proxy E. none of the other choices

D. proxy

A close corporation is one: A. with a pending application for incorporation B. with stock that can only be traded with other corporations C. that is in the process of dissolution D. that has a small number of stockholders E. that issues only preferred stock

D. that has a small number of stockholders

The duties of a principal to an agent do not include: A. cooperating with the agent B. paying agent for services rendered C. reimbursing the agent for any reasonable expense D. indemnifying the agent for legal liability incurred in completing the purpose of the agency E. all of the choices are required

E. all of the choices are required

A person who has which of the following conditions is not protected under the Americans with Disabilities Act? A. severe disfigurement B. heart attack C. a history of cancer D. hearing impairment E. all of the other choices are likely to be protected

E. all of the other choices are likely to be protected

Sexual harassment does not appear to include: A. commenting on physical attributes B. deliberate, unsolicited touching of a sexual nature C. using crude or offensive language directed at a woman D. discussing explicit sexual activities E. all of the other choices may be included

E. all of the other choices may be included

You hire an agent to sell your house for you. Typically, such an agent receives a fee only if they actually sell the house. This person is most likely: A. a universal agent B. a gratuitous agent C. an agent who has an agency coupled with an interest D. a special agent E. none of the choices

E. none of the choices

[True or False] A principal may designate someone to execute all transactions connected with running a business. Such a person is known as a special agent.

False

[True or False] All employers are subject to Title VII rules regarding discrimination in employment.

False

[True or False] An employer cannot be found liable for sexual discrimination based on the content of e-mails that employees send each other.

False

[True or False] By law, all partners in a general partnership must have equal votes.

False

[True or False] Fewer than half the states have adopted the Uniform Partnership Act.

False

[True or False] In a partnership, partners are presumed to place their individual interests above those of the partnership.

False

[True or False] Like a general partnership, all partners in a limited partnership have unlimited personal liability for the debts of the business venture.

False

[True or False] Ordering Spanish-speaking workers to always speak English to each other while they are at the workplace does not violate Title VII.

False

[True or False] Proprietorships must receive a license from the state be able to operate a business legally.

False

[True or False] The Age Discrimination in Employment Act prohibits discrimination in employment against individuals over the age of 50.

False

[True or False] The federal government issues certificates of incorporation for corporations with over one billion dollars in assets, if the firm wishes to have federal registration.

False

[True or False] The formation of limited partnerships is governed by the Federal Uniform Partnership Act.

False

[True or False] There is no formal definition of "race." Under Title VII, one may declare any race of one's choosing.

False

[True or False] Under Title VII, employment discrimination based on sexual preference is prohibited.

False

[True or False] Verbal comments that happen to be of a sexual nature do not constitute sexual harassment because it is speech protected by the First Amendment.

False

[True or False] A defense in suits for discrimination based on religion is that accommodation of religious beliefs would impose undue hardship on the employer.

True

[True or False] A major duty of principals to their agents is to indemnify them under most circumstances for liabilities incurred in completing the purpose of agency.

True

[True or False] A principal may designate someone to do all acts that can be legally delegated to an agent. That agent is called a universal agent.

True

[True or False] Agents have no obligation to engage in activity on behalf of principals that could lead to personal liability.

True

[True or False] Corporations are "persons" that enjoy many of the same rights and privileges accorded real persons.

True

[True or False] If a principal behaves as if he intended to ratify an unauthorized agreement between his agent and a third party, a court will find that implied ratification has occurred.

True

[True or False] Partnership agreements typically state what the voting rights of partners will be and how the profits will be shared.

True

[True or False] The Pregnancy Discrimination Act amended Title VII.

True

[True or False] The income of proprietorships is often treated as personal income of the owner.

True

[True or False] Title VII of the 1964 Civil Rights Act does not protect against employment discrimination based on disabilities.

True

[True or False] To require employees to retire at age 70 would usually violate the Age Discrimination in Employment Act.

True

[True or False] Under Title VII, the definition of sex is only gender-male or female-not sexual orientation.

True