L-201 Exam 3 Prep
Which of the following is an example of puffery?
"This car's an antique."
Ben leases an apartment from Caren. Aaron agrees to act as a surety for Ben on the lease. If Aaron has the pay the rent because of the surety agreement, which of the following allows Aaron to recover the amount that he paid from Ben?
Right to reimbursement
Ryan enters into a contract with Dave, the neighborhood grocer, to supply fresh vegetables daily. After four months, the grocery store expands its business considerably and attracts customers from the neighboring areas as well. As a result, Dave demands that Ryan triple his supply as he cannot keep up with the demand. Which of the following will apply in determining the amount that can be supplied in such circumstances?
Rule of good faith
Which section of the UCC defines what a merchant is?
2-104(1)
Which of the following is most likely to be considered a sale of goods to which the UCC applies?
A department store sells a car battery.
Which of the following would not be an example of negligent failure to warn?
A mousetrap with a metal catch mechanism.
Which of the following is a good under the UCC?
A used computer worth $200.
The following characteristic(s) distinguish(es) an S Corporation from other corporations:
All of the above.
What is/are the advantage(s) of a manager-managed limited liability company?
All of the above.
Actual authority is created by:
All of these.
Which of the following corporation classes' profits are taxed only at the shareholder level?
An S corporation
Which of the following is most likely to be classed as an independent contractor rather than an employee?
An autonomous franchisee of a fast food fried chicken chain.
Which of the following is an example of an unsecured debt?
An employee provides babysitting services for a daycare service that promises to pay her at the end of each week.
Which of the following is least likely to be considered a sale of goods to which the UCC applies?
An optometrist gives a contact case to a patient.
Megan has purchased two tickets for a lucky draw at the local supermarket, which are with the store's cashier. Tracy, her friend, who knows about this, convinces the cashier that she is Megan and takes the tickets. She then goes and sells the tickets to Anya, who has no knowledge of the case. Which of the following statements is true?
Anya is a good faith purchaser.
Ralph is claiming that he has a disability under the Americans with Disabilities Act. Which of the following is not a major life activity that Ralph may claim is restricted by his disability?
Running a marathon
A business form owned by shareholders who elect a board of directors to manage the business, but enjoy tax status similar to that of a partnership is called a(n):
S Corporation.
Sean goes to Pinnacle Corp., convinces the store manager that he is their loyal online customer Ryan and purchases a DVD credited to Ryan's account. He then sells the DVD to Jason for a higher price. When Ryan finds out, he wants the DVD back from Jason. Which of the following is true of the case?
Sean has voidable title to the DVD.
Tying agreements may be challenged under both:
Section 1 of the Sherman Act and Section 3 of the Clayton Act.
Which of the following is not required for a good to be considered to be merchantable?
Be of the highest possible quality.
In the International Shoe case, the United States Supreme Court held that a foreign corporation must have certain "minimum contacts" with the state such that asserting jurisdiction over the corporation does not offend "traditional notions of fair play and substantial justice." Which of the following did the Court use to justify its holding?
Benefit theory
Which of the following situations does not violate the Age Discrimination in Employment Act if the decision in question is based on age and the employer in question has more than 20 employees and is in an industry affecting interstate commerce?
Beryl, a 21 year old, is not hired, instead John, a 70 year old, is.
Which of the following business forms means personal liability for the owner of the business?
Sole proprietorship
The only difference between C & F and CIF shipping contracts is:
C & F shipping contracts do not require the seller to insure the goods
In a sale or return, goods are delivered to a buyer for resale with the understanding that the buyer had the right to return them. Under this doctrine, the buyer must pay the expense of returning the items.
CIF
All states, except ___, permit professionals to organize as a limited liability company:
California
Nineteenth century product liability law is best characterized by which of the following phrases:
Caveat emptor.
Which of the following documents is required for a foreign corporation to do intrastate business in a state?
Certificate of authority
The controlling shareholders are the only managers of the business in which class of corporation?
Close corporation
Bob Jones, a gardener, wants to get a haircut. This transaction is governed by:
Common law.
Which of the following situations is most likely to be deemed in violation of Section 2 of the Sherman Act?
Conspiracy to monopolize
Which of the following gives certain exclusive rights to creators of original works of authorship?
Copyright law
Which of the following distinguishes a copyright from a patent?
Copyrightable works need not be novel.
This business form is unique from many other business forms because ownership and management are completely separate:
Corporation.
Assume Linares chose the name "Apollo" because Apollo is the god of light and sun in Greek mythology and Linares wants people to think of Apollo diamonds as giving off dazzling, sparkling light like the sun. If so, "Apollo" for the diamonds would mostly likely fall into which category of distinctiveness for trademarks?
Suggestive
Which of the following is least likely to be forbidden by Title VII?
Discrimination against a woman solely because she is a lesbian.
What is the principal's duty when his agent makes express or implied authorized expenditure while acting on his behalf?
Duty to reimburse
Which of the following statements about nineteenth-century law and employee injuries is false?
Employees never had problems with proving the employer's negligence.
Which of the following is one of the four material elements required for meeting the substantially-equal-work condition for application of the Equal Pay Act?
Equal responsibility
Suppose that European Airlines is contracting with Wright Bros. Airplanes to test a new type of airplane that Wright has developed, the 797 Starliner. The 797 is delivered to European Airlines and begins making regular flights with it, but never formally accepts the contract. Under this scenario:
European Airlines would likely be deemed to have accepted the 797 under the sale on approval doctrine.
Which of the following regulates child labor?
Fair Labor Standards Act
______________________ regulates wages and hours of certain covered employees by specifying a minimum wage and setting the 40-hour work week.
Fair Labor Standards Act
Which of the following characterizes a trademark?
Federal registration of a trademark lasts for 10 years.
Which security instrument requires a creditor to file a separate lawsuit solely for the purpose of recovering a deficiency from a defaulting debtor?
Foreclosure of a mortgage by "power of sale"
If Deb's debt is a mortgage and Creed pursues strict foreclosure when Deb defaults on it, which of the following is true?
If Deb owes $75,000 and the house is worth $100,000, Deb does not have a right to recover the $25,000 difference.
Suppose Capital Bank pursues strict foreclosure of Bill's mortgage on a rental property. Which of the following is true?
If the property is worth less than Bill owes, the bank has no right to recover the deficiency.
Which of the following is NOT a requirement for a state tax on foreign corporations to comply with the Commerce Clause?
It must treat intrastate transactions more favorably than interstate transactions.
In Zaretsky v. William Goldberg Diamond Corp., the case in the text, the court held that:
Khan was not a merchant because he did not regularly sell diamonds or other high-end jewelry.
The business form that is identical to the limited partnership, except that both limited partners and general partners have no liability for most obligations is called a(n):
Limited liability limited partnership.
A business form that is managed by partners who all share the same rights and liabilities, limits partners' liability to only their individual torts, and is formed by agreement of the owners in compliance with the relevant statute is a(n):
Limited liability partnership.
Which of the following types of items would be covered by the Magnuson-Moss Act?
Liquid soap costing $12.99.
Mike, Randy, and Steve are partners of a partnership. Mike and Steve loan the partnership $10,000 each. Which of the following statements is true?
Mike and Steve are both owners and creditors of the partnership.
Joe went to a music store and misrepresented himself as James to the store attendant. He buys a plasma television set on credit, charging it to James's account. He then sells that set to Mike. Mike buys the set in good faith. Which of the following is true?
Mike will hold a good title; hence no harm can be caused to him.
Which of the following is true of price terms in a contract?
No contract is created if price terms are not agreed on.
Express authority
No, because Shlomo did have apparent authority to sell that item.
Which of the following classes of corporation may not distribute surplus revenue from its operations to its members?
Not-for-profit corporation
What requirement for obtaining a U.S. patent requires that the applicant must be the first person to have invented the process?
Novelty
Constructor Co., a commercial construction company, must comply with which of the following to provide its employees with a workplace and jobs free from recognized hazards that may cause death or serious physical harm?
Occupational Safety and Health Act
Under the Restatement (Third) of Agency, which of the following is true of termination of agency by operation of law?
Termination by the death of the principal is effective only when the agent has notice of the principal's death.
The limited liability partnership is a business form that was created first in the state of __, in __.
Texas, 1991
Which of the following characterizes copyright transfer?
Ownership can be retained while licensing part of the work.
A liability inherent in a sole proprietorship is that the sole proprietor is:
Personally liable for costs associated with poor business decisions.
Information that is reasonably discoverable by proper means may not be protected as a trade secret. Which of the following would not constitute "proper means"?
Reverse engineering of an illegitimately acquired product
Assume Will signed a guaranty for rent that Jack owes to Karen. Which of the following gives Will the ability to require Jack to pay the rent if Jack is able to do so and does not have a valid defense against paying the rent?
Right of exoneration
A local chemical company should be punished for polluting the town reservoir. What types of damages would be awarded by a jury specifically to punish the chemical company?
Punitive.
Which of the following is not a major life activity under the Americans with Disabilities Act?
Speaking a foreign language
Mary Lee James, a certified public accountant in Edgewater, Florida, wishes to incorporate. According to the corporate law requirements, she needs to incorporate under the:
professional corporation acts.
The liability of a purported partner is based on:
substantial, detrimental reliance on the appearance of a partnership.
For antitrust purposes, monopoly power is usually described as _________________.
the power to fix prices or exclude competitors from a given market
In a lawsuit for intentional interference with contractual relations, the existing contract includes:
unenforceable contracts
The failure of a foreign nonprofit corporation to qualify to do intrastate business in a state prevents it from:
using the state's courts to bring lawsuits.
The Sherman Act states that corporations convicted of violating it may be fined as much as:
$100 million per violation
LMNOP Corp. has been convicted under the Sherman Act for two distinct and separate violations. LMNOP may be fined as much as _____ for these two violations.
$200 million
Mr. Blue has invested in SuperMart, Inc. Mr. Blue purchased $5,000 worth of shares or 3% equity in the company. Shortly after investing, SuperMart, Inc. is found guilty of various civil wrongs and a judgment is entered in against the company for 3.1 million dollars. How much liability will Mr. Blue have?
$5,000 will be the limit of his liability
What is the number of events considered sufficient under the minimum contacts test to confer jurisdiction on a state's courts?
1
Under the general incorporation law, the minimum number of owners a business needs to be incorporated as a for-profit corporation is:
1.
Today, less than _____ of the workforce are members of labor unions.
13 percent
Which section of the UCC will govern the supplying of a missing price in a commercial transaction?
2-305
Which section of the UCC addresses sale or return contracts and sale on approval contracts?
2-326
Which section of the UCC states that title passes to the buyer when seller has completed physical delivery of the goods?
2-401
Market shares in excess of ___ percent have historically justified an inference of monopoly power.
70
Market shares in excess of _____ have historically justified an inference of monopoly power.
70 percent
In United States v. Microsoft Corp., the court held that Microsoft held a ____ percent share of the worldwide market for Intel-compatible personal computer operating systems.
95
Which of the following is an example of an unsecured debt?
A bar sells alcohol to a customer on credit (a "tab") that the customer promises to pay off at the end of each month.
A business form in which there is only one owner is called a
A business form in which there is only one owner is called a
Which of the following is not a breach of the implied warranty of merchantability?
A car that was sold as a sports car capable of high speeds but still adequately runs.
To have standing in a federal antitrust case, what must a potential plaintiff have?
A direct injury resulting from the antitrust violation
Which of the following types of items would not be covered by the Magnuson-Moss Act?
A factory lighting system costing $1,500.
Which of the following is an example of an unsecured debt?
A farmer sells fruits and vegetables to a grocery store that promises to for them within 30 days after receipt.
Which of the following is most likely to be classed as an independent contractor rather than an employee?
A franchisee of a fast-food chain
Which of the following is most likely to be considered a sale of goods to which the UCC applies?
A gas station sells a new battery for a car.
In which scenario is a company least likely to be able to assert ownership of intellectual property?
A janitor for the company invents a new type of floor polish while experimenting with his own materials in his basement at home.
Which of the following entities does Title VII cover? Assume that the entity in question discriminates on one of the bases forbidden by Title VII.
A labor union with 20 members.
Which of the following is true about a limited partnership?
A limited partnership can be created only by complying with a state statute permitting limited partnerships.
In which scenario is a company least likely to be able to assert ownership of intellectual property?
A movie star is wearing one of their products in a movie.
Which of the following would have an argument for being exempt from using materials that were copyrighted?
A news organization transmitting information to the public
Which of the following statements about the public policy exception to the employment-at-will rule is false?
A plaintiff that satisfies all of the required elements will win the suit, regardless of whether the employer was justified in terminating the plaintiff based on legitimate business reasons.
Which of the following is true of a person's capacity to be a principal or agent?
A principal must have the capacity to do the acts for which the agent has been retained.
Which of the following statements about professional corporations is false?
A professional corporation's shareholders have personal liability for the obligations of the professional corporation.
Which of the following is true about the effect of purported partnerships?
A purported partner is liable on contracts entered into by third parties on their belief that he is a partner.
Which of the following is true of a subagent's duties to a principal?
A subagent who knows of the original principal's existence also owes that principal all the duties agents owe their principals.
Under the RUPA, a person will be a purported partner and have liability when three elements of section 308(a) are met. Which of the following is not one of those elements?
A third party suffered actual, tangible harm.
Which of the following must exist in order for a person to possess apparent authority?
A third party's belief that agency exists
In which scenario is a company least likely to be able to assert ownership of intellectual property?
A worker is wearing a trademarked product in a picture on her social media website.
Which of the following is an example of actual notification of termination of agency to third parties?
A writing delivered to the third party's place of business
Tina and Tom are co-workers at Acme Corporation. As night custodians, they work together cleaning the Acme office building at night when the building is empty. Tom regularly makes sexual advances toward Tina that distress her. However, Tina has never complained about Tom's conduct to her supervisor, Mary, who only works during the day. Which of the following statements is most accurate?
Acme Corporation may defend that it did not know about Tom's harassment of Tina.
Generally, an agency relationship is terminated by operation of law in all of the following situations except:
Agent's renunciation of the agency.
In a traditional partnership, the partners
All of the above.
The following statements pertain to alleged violations of Section 1 of the Sherman Act. Which statement is accurate?
Although tying agreements are classified as per se violations of Section 1, the judicial treatment given to them differs from pure per se treatment.
Generally, an agency relationship is terminated by operation of law in all of the following situations except:
An agent's illness.
Which of the following statements about the Equal Pay Act (EPA) is accurate?
An employee may recover liquidated damages under the EPA.
Which of the following characterizes the transfer of trademark rights?
An uncontrolled license is generally not advised.
Which of the following constitutes a necessary part of a larger joint undertaking serving procompetitive ends?
Ancillary horizontal restraints
After an agency relationship is terminated, which of the following types of authority generally still in exists?
Apparent.
Which section of the United States Constitution empowers Congress to promote progress of science by enacting copyright and patent laws?
Article I, § 8
A benefit of the sole proprietorship form of business is that
As the only owner, the sole proprietor makes all decisions and keeps all profits.
Which of the following agreements will result in the formation of an agency coupled with an interest?
Borrower shall pledge securities to a lender, authorizing the lender to sell the securities and apply the proceeds to the loan in the event of default.
Which of the following is a similarity between Title VII and the employment discrimination provision known as "Section 1981"?
Both Title VII and Section 1981 apply to racial discrimination.
Which of the following is the reason why the UCC distinguishes between merchants and nonmerchants?
Buyers tend to place more reliance on professional sellers because they are generally more knowledgeable and better able to protect themselves than nonprofessionals.
Suppose that Chemicals 'R Us is contracting with several international suppliers to provide chemicals for their operations. Part of their contract requires that Chemicals 'R Us insure the goods. This provision is called:
C&F
Suppose that Indiana College is contracting with several local farms to provide food for the residence halls. Part of their contract requires that the farms insure the goods. This provision is called:
CIF
In a contract for the sale of goods between two merchants, if a term is omitted the UCC Article 2:
Can use gap fillers to fill in the blank.
Under the _____ Clause, the power to regulate interstate trade is given to the federal government.
Commerce
Which of the following security instruments, if any, does not allow the debtor the right of redemption upon default?
Debtors have a right to redeem property under all of these security instruments.
Which security instrument requires a creditor to file a separate lawsuit for the sole purpose of recovering a deficiency from a defaulting debtor?
Deed of trust
Assume that Apollo began selling a diamond under the name "Sparkle" because it wants to convey to consumers that the diamond sparkles in the sunlight. If so, "Sparkle" for the diamond would mostly likely fall into which category of distinctiveness for trademarks?
Descriptive
Suppose consumers don't confuse Nike's shirts and the students' shirts, but they do think of Nike's famous slogan "Just Do It" when they see the students' slogan "Just Done It" and, as a result, Nike's slogan becomes less distinctive and unique. If so, what type of legal claim should Nike assert against the students?
Dilution by blurring
Suppose consumers are likely to associate the "Just Done It" slogan with Nike's "Just Do It" slogan and, as a result of the low quality of the students' shirts, are likely to think less of Nike's shirts. If so, what type of legal claim should Nike assert against the students?
Dilution by tarnishment
Cleanify Corp., a corporate housekeeping and janitorial services company, requires all applicants to take a rather challenging English language vocabulary test. Any applicant who fails the vocabulary test—whether or not English is that applicant's native language—is not considered for employment at Cleanify. Cleanify has 200 employees. Housekeeping is an industry affecting interstate commerce. Cleanify is located in New Hanoi, a small Midwestern town where 50% of the population consists of recent Vietnamese immigrants. While roughly half of Cleanify's applicants are Vietnamese immigrants or of Vietnamese ancestry, only about 10% of its workforce is Vietnamese. Cleanify's managers and owners actually have had uniformly positive experiences with their employees who are from the local Vietnamese community and would be happy to hire more of them but for the difficulty a majority of the Vietnamese applicants seem to have with the English language vocabulary test. Hao is a Vietnamese immigrant who fails the English test. He wants to sue Cleanify for national origin discrimination under Title VII of the Civil Rights Act of 1964. What theory would Hao most likely use to support his Title VII claim on these facts?
Disparate impact
Ima Restauranteur owns Burrito Chime, a fast food Mexican restaurant. Ima has a rule—due to the physical layout of the restaurant, including the relatively low level of the stove and of the countertops and prep areas on which the cooking occurs—that she only hires cooks who are shorter than six feet tall (to avoid requiring the cooks to spend too much time being bent over). Ima is willing to hire anyone who is shorter than six feet tall and who is otherwise qualified for the job. Burr Nowt, an applicant for a cook position at Burrito Chime, is six feet and two inches tall, so he does not get the job. Burr believes he is a victim of sex discrimination as prohibited by Title VII of the Civil Rights Act of 1964 (assume that Burrito Chime is a covered entity under Title VII). What theory would Burr most likely use to support his Title VII claim on these facts?
Disparate impact
Petite Enterprises has a maximum weight requirement for all of its employees. No one can be hired if he or she is over 135 pounds; however, anyone who is 135 pounds or less is considered for hiring regardless of that person's race, color, sex, national origin, religion, age, or disability status. Nevertheless, the weight limit results in far fewer male applicants being hired than female applicants. In fact, while males and females apply to Petite Enterprises in roughly equal numbers, Petite Enterprises employs three times as many females as males. Ernie applies to Petite Enterprises, but is not hired because he weighs 170 pounds. If Ernie sues Petite Enterprises for sex discrimination under Title VII, what mode of proof best suits Ernie's case?
Disparate impact
The Naples Police Dept. (NPD) has 55 officers and 30 support personnel. NPD has just adopted new hiring standards for new police officers. These include a minimum height of 5'8" and a minimum weight of 160 pounds. Susan is a recent graduate with a Bachelor's Degree in Police Science. She wants to get a job as a police officer in Naples. However Susan is only 5'5" and weighs 130 pounds. If Susan brings a legal challenge to NPD's new hiring standards, what legal basis might she have?
Disparate impact
Which of the following describes when a corporation pays income tax on its profits, and when the corporation distributes the after-tax profits as dividends, the shareholders may tax on the dividends?
Double taxation
Andrea works for a parking garage, taking tickets and collecting money. Andrea forgot to keep track of the number of people who paid for parking and the number who had tickets but left without paying. Andrea likely violated:
Duty to account.
Suppose that an NBA franchise owner orders that a player take a fall during a game. The player refuses, and the franchise owner brings suit. What type of fiduciary duty is in play, and how will the case likely turn out?
Duty to obey reasonable instructions; for the player.
John is working hard for his employer, Big Corp. He goes on a sales trip for Big, and while on the trip purchases food and lodging, which was impliedly authorized by Big. Which of the following identifies Big's fiduciary duty to pay John?
Duty to reimburse.
John gets a call that the car has arrived at the Electric dealership, but when he arrives to pick it up he finds out that the car takes two hours to charge fully, and upon closer examination finds that the motor does not conform with the schematics that he was shown. Assume that the car still merchantable. Under this scenario:
Electric has breached their express warranty.
Suppose that the salesman told John that, even if he wasn't happy with the car, "You'd probably be able to resell it at any point for more than the purchase price of $19,900." John attempts to resell the car, but cannot get more than $18,000. Under this scenario:
Electric likely did not make an express warranty about resell value because this is a statement of value.
Jackson is a pension fund manager for several large corporation's pension funds. Which of the following imposes certain fiduciary duties on Jason regarding the pensions funds?
Employee Retirement Income Security Act
Identify the type of employers covered by Title VII of the Civil Rights Act of 1964.
Employers with 15 employees or more and engaged in an industry affecting interstate commerce.
Which of the following would not constitute oppressive child labor according to the Fair Labor Standards Act (FLSA)?
Employment of children under the age of 18 in any occupation approved by the Department of Labor
Which of the following is NOT an improper use of a dominated corporation, which can lead to the corporate veil being pierced?
Engaging in isolated transactions outside the state of incorporation
Suppose that European Airlines is contracting with Wright Bros. Airplanes to test a new type of airplane that Wright has developed, the 797 Starliner. The 797 is delivered to European Airlines, which decides to return the aircraft but never informs Wright of this decision. Under this scenario:
European Airlines would likely be deemed to have accepted the 797 under the sale on approval doctrine.
Suppose that European Airlines is contracting with Wright Bros. to test a new type of airplane that Wright has developed, the 797 Starliner. The 797 is delivered to European Airlines, which decides to return the aircraft but never informs Wright of this decision and instead uses it in regularly scheduled flights. Under this scenario:
European Airlines would likely be deemed to have accepted the 797 under the sale on approval doctrine.
The two types of actual authority are
Express and implied.
_____ is actual authority that the principal has manifested to the agent using very specific or detailed language.
Express authority
An authority which is created by principal's own words is called
Express authority.
Susan is hired to manage a business that manufactures basketballs. This means that she has the authority to make contracts that are reasonably necessary for conducting the business, such as purchasing supplies. After not doing so for two months, Susan's boss directly told her to purchase these supplies. The boss's statement is called:
Express authority.
Throgmartin works as a clerical employee at Cheapskate Industries. He is paid only $1.50/hour. Which of the following federal laws provides him with a remedy for being paid less than a mandatory nationwide minimum wage?
Fair Labor Standards Act
Assume that Apollo began selling a diamond using the made-up word "Zizazozu" because it wanted its product to have a completely original name. If so, "Zizazozu" for the diamond would mostly likely fall into which category of distinctiveness for trademarks?
Fanciful
Which of the following is least likely to make an employer liable for unjust dismissal or wrongful discharge under the public policy exception to the employment at will doctrine?
Firing an employee for his refusal to work on a contract to manufacture weapons because of his religious convictions.
Which constitutional amendment requires public employers to be careful when implementing drug testing programs to ensure that they do so only when there is a reasonable basis for suspecting that an employee is using drugs or alcohol, or that they only test employees whose drug or alcohol use would threaten the public interest of public safety?
Fourth
Suppose that while John was initially speaking with the salesman about the car, the salesman made a number of claims about how revolutionary the Model X will be. For example, he told John not only about the mileage per charge, but that it would go from 0 to 60mph in 3.7 seconds. When John went home to think about the purchase, the salesman gave him some technical literature, which stated that it takes 4.5 seconds for the Model X to go from 0 to 60mph. If John buys the car, and finds that the car does in fact take 4.5 seconds to go from 0 to 60mph, then:
He will not be able to sue for breach of an express warranty because technical specifications defeats descriptive language.
Which of the following statements about recording certain security interests with the appropriate government office is correct?
If it is not recorded, the security interest will not be effective against subsequent purchasers or creditors who have no notice of the security interest.
Cey Corp. entered into a contract to sell parts to Deck, Ltd. The contract provided that the goods would be shipped "FOB Cey's warehouse." Cey shipped parts different from those specified in the contract. Deck rejected the parts. A few hours after Deck informed Cey that the parts were rejected, they were destroyed by fire in Deck's warehouse. Cey believed that the parts were conforming to the contract. Which of the following statements is correct?
If the parts were nonconforming, Cey will bear the risk of loss, even though the contract was a shipment contract.
Bill has a mortgage on a rental property and he defaulted on his payments. Which of the following statements is correct if the bank were to pursue foreclosure by power of sale on Bill's mortgage?
If the property is sold for less than Bill owes, the bank must file a lawsuit to recover the deficiency.
Bill has a mortgage on a rental property and he defaulted on his payments. Which of the following statements is correct if the bank were to pursue foreclosure by an action and sale of Bill's mortgage?
If the property is sold for less than Bill owes, the court will enter a deficiency judgment for the bank.
Susan is hired to manage a business that manufactures basketballs. This means that she has the authority to make contracts that are reasonably necessary for conducting the business, such as purchasing supplies. This type of authority is called:
Implied authority.
After buying the Model X, John finally sets out on his cross-country road trip. He starts driving from San Francisco, with the goal of getting to the first recharging station in Battle Mountain, Nevada, some 450 miles away. Despite prominent labels on the car itself, it only makes it to Reno, Nevada, which is only 240 miles from San Francisco. Frustrated, John decides to sue Electric. Under which of the following claims would he likely have the most success? [Assume that the salesman was walking away and did not know about John's cross-country road trip plans.]
Implied warranty of merchantability.
If Deb's debt is a mortgage and Creed pursues foreclosure and sale of the property when Deb defaults on the mortgage, which of the following is true?
In all states, Deb will have a right to redeem the property after default during a period that, depending on the state, may run before or after the foreclosure and sale of the property.
Several chemical manufacturers are selling a harmful fertilizer. It's impossible to prove which firm produced the fertilizer. Which type of liability arises under these circumstances?
Industrywide liability.
Suppose that Indiana Power and Light (IPL) has been running two nuclear power plants in Northern Indiana for several years. Michigan Power and Illinois Electric also run power plants in the area. A river becomes contaminated with nuclear waste, and it is impossible to say for sure which nuclear power plant is to blame. Which is the best theory of liability that would allow plaintiffs to recover?
Industrywide liability.
A state may impose its laws on a foreign corporation if such imposition does not violate the Constitution of the United States, notably the Due Process Clause of the Fourteenth Amendment and the Commerce Clause. The leading case in this area is the _____ case.
International Shoe
Which of the following antitrust activities can be challenged only under state law?
Intrastate agreements in restraint of trade.
Which of the following is true of apparent authority?
It arises when the principal leads a third party to believe that an agent is authorized.
Which of the following is an advantage of a limited partnership?
It has the ability to attract large amounts of capital.
Suppose that, in the Wal-Mart case mentioned by the students, the people used Wal-Mart's copyrighted materials as part of a parody intended as a criticism of Wal-Mart's labor practices. If so, what would be the people's best defense if Wal-Mart sued them for copyright infringement?
It is a fair use
If Janet and Joan, a buyer and seller of a used car, fail to specify when title for the car is to pass, UCC gap fillers provides that title will pass when:
Joan, the seller, completes her obligation with respect to physical delivery of the goods.
Suppose that Local, a small town bookseller, contacts Kangaroo Press, a publisher, requesting Kangaroo to send 1,000 copies of the new thriller, "White Out," to three of its stores in Indianapolis, Indiana with the understanding that unsold copies could be returned to the publisher. The books arrive, but severe thunderstorms are forecast and Local decides to shut down and ship its books back to avoid liability. Local requests that Kangaroo pay the price of the return. It refuses. Under this scenario, which company is correct, and under what doctrine?
Kangaroo; Sale or Return.
John is a construction contractor. Based on Kevin's advanced skill and training as a plumber, John hires Kevin to install plumbing in ten houses that he is building. Jon does not pay payroll taxes or provide employee benefits to Kevin. Kevin provides his own tools and equipment to complete the job. Which of the following is a court most likely to find?
Kevin is an independent contractor of John.
Wei was an employee at private company, LMNOP, Inc. He was terminated from his job because he refused to submit to a polygraph test. LMNOP was losing inventory due to theft (often referred to as "shrinkage") and began a polygraph program in which employees working in the relevant sections were all tested. When Wei said the test was stupid and refused to take it, he was terminated. Which of the following is true?
LMNOP may use the polygraph test in this situation only if it meets an exception for theft investigations in the Employee Polygraph Protection Act.
Which of the following is a transfer of the right to possess and use goods belonging to another?
Lease
Which of the following exists when the owner of a trade secret retains title but allows the transferee certain uses of the secret?
License
A business form designed to combine the nontax advantages of corporations with the favorable tax treatment of partnerships is a(n):
Limited liability company.
Which of the following business forms is an especially good form of business for professionals such as consultants and auditors, allowing them management flexibility while insulating them mostly from personal liability?
Limited liability partnership.
For a business needing millions of dollars of capital, wanting only a few owners to manage the business, and expecting to lose money in its early years, what business form would be particularly attractive?
Limited partnership or limited liability limited partnership.
Suppose that Local, a small town bookseller, contacts Kangaroo Press, a publisher, requesting Kangaroo to send 1,000 copies of the new thriller, "White Out," to three of its stores in Indianapolis, Indiana with the understanding that unsold copies could be returned to the publisher. The books arrive, but a freak tornado destroys the bookstores. Under this scenario, which company bore the risk of loss, and under what doctrine?
Local; Sale or Return.
Suppose that Local, a small town bookseller, contacts Kangaroo Press, a publisher, requesting Kangaroo to send 1,000 copies of the new thriller, "White Out," to three of its stores in Indianapolis, Indiana with the understanding that unsold copies could be returned to the publisher. The books arrive, but severe thunderstorms are forecast and Local decides to shut down and ship its books back to avoid liability. Local request that Kangaroo pay the price of return. Finally, Local pays, but the books are destroyed in transit. Under this scenario, which company is liable, and under what doctrine?
Local; Sale or Return.
Rewrite the question to read "Chestnut Electronics, Inc. transfers many of its major assets to its shareholders for far less than the fair market value. Chestnut is engaged in ________________, which can lead to corporate veil piercing because it _______________________________."
Looting; defrauds creditors of the corporation
Which of the following statements about the Anticybersquatting Consumer Protection Act (ACPA) is true?
Many cases in which a trademark owner complains about another party's registration of a domain name have been submitted to arbitration, rather than to a court, in recent years.
Suppose the students disclose their secret business strategy to Nike, but only after Nike signs a noncompetition agreement. If Nike then uses the students' idea without their permission, what legal claim should the students assert against Nike?
Misappropriation of trade secrets
Which of the following is defined for antitrust purposes as the power to exclude competitors in a given market?
Monopoly power
Which of the following has no other purpose or effect except to restrain competition?
Naked horizontal restraints
A manufacturer is developing a new type of baby carriage. It puts a warning label on the baby carriages, but does not include a warning to lock the wheels when the carriage is standing still. Several babies are injured because of the carriages rolling on very small inclines. The parents of these babies sue the manufacturer. Their best cause of action would be:
Negligent failure to warn.
Murray, an accountant, sells his motorcycle to Emily, a rock star. Has an implied warranty of merchantability been created?
No, because Murray is not a merchant.
Assume Linares wants to obtain a patent for his manufacturing process. What requirement for obtaining a U.S. patent requires that Linares' invention must be something that would not have been readily apparent to a person who is skilled in the existing technology ("prior art") in the same or related fields?
Non-Obviousness
_______ generally contract with the principal to produce a result and determine for themselves how that result will be accomplished.
Nonemployee agents
Jim created a shoe-manufacturing corporation by contributing $1,000. He stayed as the sole shareholder and director of the corporation. To inject further capital into the corporation, he loaned the corporation $100,000 and secured the loan in exchange for all the corporation's assets. Five years into operations, the corporation has still failed to make profits and consequently filed for bankruptcy. Who has been defrauded?
Nonshareholder-creditors
In which of the following business forms are all of the partners liable for the torts that are committed in the course of business by their partners?
Partnership.
Which of the following business forms includes unlimited liability, allows for the partners to be taxed individually, and can be formed automatically when there are people acting in concert and do not select an alternative business form?
Partnership.
Maple Interiors, located in Boston, contracted to sell and ship sofas to Peach Furniture, located in Atlanta. The contract stated that the goods were to be shipped "F.O.B. Boston, via XYZ railroad." Maple delivered the sofas to XYZ railroad. They were shipped from Boston but never seen again. Both Peach and Maple assumed that the other party had the risk of loss, so neither had obtained insurance. Who must bear this loss?
Peach must bear the loss because the risk passed to it after the sofas were delivered to XYZ railroad.
_____ analysis of behavior challenged under Section 1 of the Sherman Act is thought to provide reliable guidance to business.
Per se
Which of the following is not a major life activity under the Americans with Disabilities Act?
Playing basketball
______ have shares generally available to the public and tend to be managed by professional managers who own small percentages of the corporation.
Publicly held corporations
If Sammy the salesman is trying to sell a new tractor to Michael, and Sammy tells Michael "this tractor is a really good buy." This is an example of:
Puffery.
Pulse Corp. maintained a warehouse where it stored its manufactured goods. Pulse received an order from Star. Shortly after Pulse identified the goods to be shipped to Star and before moving them to the loading dock, a fire destroyed the warehouse and its contents. With respect to the goods, which of the following statements is correct?
Pulse has title and an insurable interest.
If a foreign corporation has to qualify to do business in a specific state, all of the following except which of these is required?
Reincorporate in that state
Assume Will, acting as surety for Jack, pays Jack's debts to Karen. Which of the following gives Will all of the rights that Karen had against Jack?
Right of subrogation
Assume Will and Grace sign an agreement making them equal sureties for rent that Jack owes to Karen. If Will is forced to pay the entire rent as surety for Jack, which of the following gives Will the ability to require Grace to pay him for her share of the rent as co-surety?
Right to contribution
Which of the following creates civil liability for a wide range of false, misleading, confusing, or deceptive representations made in connection with goods or services?
Section 43(a) of the Lanham Act
Smith Co. is accused of attempted monopolization. If charged, Smith will likely be charged with a violation of the _______ Act.
Sherman
The three federal antitrust statutes are the Clayton Act, the Robinson-Patman Act, and the ____________.
Sherman Act
Which Act deals with monopolies and restraints on trade?
Sherman Act
Which of the following is NOT true of a private employer's drug testing program?
The Fourth Amendment limits such programs to when an employee's drug use is reasonably suspected.
Which of the following permits a firm to register a trademark in all its signatory nations simultaneously by filing an application for registration in any signatory nation and was joined by the United States in 2003?
The Madrid Protocol
The federal and state governments are exempt from which of the following acts?
The Occupational Safety and Health Act
Which of the following was a characteristic of 19th century product liability law?
The buyer should beware.
Which of the following is true of a land contract?
The debtor makes periodic payments of the purchase price to the creditor, and the creditor retains title to the property and does not convey it to the debtor until the full purchase price is paid.
Samwise works as a diamond buyer for Frodo, owner of the jewelry store Rings, Etc. Without Frodo's knowledge or consent, Samwise has also been working as a diamond sales agent for Sauron Mines. On several occasions he has sold Sauron Mines's diamonds to Frodo for inflated prices and then pocketed the difference. Also, because of his position with Sauron Mines, Samwise has become aware that a supposedly impending strike by diamond workers in Sauron Mines, which has been driving up diamond prices, has been avoided. This information would be relevant to Frodo and material to decisions Frodo will be making about Rings, Etc. Samwise does not tell Frodo that the strike has been averted. Which of the following fiduciary duties to Frodo has Samwise not breached in this situation?
The duty not to disclose confidential information.
Which of the following is not an example of a fiduciary duty?
The duty of principals to train agents to become principals.
Which of the following, if true, is least likely to prevent a company from asserting trade secret rights in a secret formula or manufacturing process?
The formula or process has been used for more than 20 years.
Which of the following, if true, is most likely to prevent a company from asserting trade secret rights in a secret formula or manufacturing process?
The formula or process is used to make a product that is still in development and not currently being sold.
Which of the following statements about criminal prosecutions pursuant to the Sherman Act is false?
The government must only prove an unlawful purpose to sustain a criminal conviction.
Which of the following factors would not be considered by the courts in a negligent failure to warn case?
The importance of the product to society.
The primary difference between a limited partnership and a limited liability limited partnership is:
The limited partners and the general partners in a limited partnership will have no liability for most obligations of the limited liability limited partnership.
Assume Apollo markets its diamonds exclusively to jewelry stores. Which of the following marks, if later used by another company, is most likely to be considered an infringement of Apollo's rights in the trademark APOLLO for diamonds sold in jewelry stores?
The mark APOLLÓ used for emeralds sold in jewelry stores
Assume Apollo markets its diamonds exclusively to microchip manufacturers for use in making computer microchips. Which of the following marks, if later used by another company, is most likely to be considered an infringement of rights in the trademark APOLLO for diamonds used in computer microchips?
The mark APOLO for diamonds used in computer monitors
In the case in the text, Drake Manufacturing Company, Inc. v. Polyflow, Inc., why did the court find in favor of the defendant?
The plaintiff's actions in Pennsylvania constituted "doing business" and it failed to timely obtain a certificate of authority.
Assume Apollo uses marketing brochures to market its diamonds. Which of the following would be least likely to qualify for copyright protection?
The prices and weights of a company's products
Under the theory of agency law, the agent is required to follow whose instructions?
The principal
Which of the following terminates an agency relationship through operation of law?
The principal dies and the agent is notified of the death.
Which of the following is true of a principal's duty of indemnity?
The principal must indemnify the agent for tort damages resulting from authorized conduct that the agent did not believe was tortious.
Which of the following was not a characteristic of 19th century product liability law?
The seller should beware.
Which constitutional amendment protects employees from drug and alcohol testing at a private employer?
There is no constitutional protection since it is a private employer
Abe and Carlos want to form a general partnership. What must they do in order to create this legal form of business?
They can start a partnership without any formalities.
Which of the following is not one of the aims of the RUPA?
To maintain a level of exclusivity to partnership status
What is the main aim of commercial torts?
To maintain standards of commercial morality
Which of the following can be defined as any secret formula, pattern, process, program, device, method, technique, or compilation of information used in the owner's business, if it gives its owner an advantage over competitors who do not know it or use it?
Trade secret
Which type of intellectual property law is most likely to protect the use of logos such as the upside-down swoosh stripe when attached to a product?
Trademark Law
Which type of intellectual property is likely to protect the use of the design on the front of the shirt (i.e., the swoosh logo and the "Just Done It!" slogan in stylized font)?
Trademark and copyright
Suppose consumers are likely to confuse the two slogans, and—as a result—to buy the students' shirts under the mistaken belief that they are made by Nike. If so, what type of legal claim should Nike assert against the students?
Trademark infringement
What type of marks would the slogan and swoosh mark be if they are used to market and sell shirts?
Trademarks
Suppose that Acme is contracting with Office Paper to order printing paper. The contract omits a quantity term. But should a dispute arise, the _____ code supplies _____ to still create an enforceable contract.
UCC; gap fillers
___________________________ is not a factor used to determine if a man and a woman are performing substantially equal work for purposes of the equal pay act.
Whether their job descriptions are substantially similar
Julia has filed a lawsuit against her employer claiming a violation of the Equal Pay Act. She based her suit on a claim that she and Mike, her co-worker, were performing substantially equal work even though Mike was paid significantly more than her. Which of the following will the court NOT consider in evaluating the case?
Whether their job descriptions are substantially similar.
Which of the following is least likely to be an independent contractor?
Which of the following is least likely to be an independent contractor?
Which of the following is not an example of puffery?
Which of the following is not an example of puffery?
Which of the following relieves an employee of the hassle of separately filing charges under Title VII with the EEOC and with the state agency?
Worksharing agreements of the EEOC
Which of the following is NOT a claim or doctrine sounding in contract?
Wrongful discharge in violation of public policy
If required to qualify to do intrastate business in a state, a foreign corporation must file _______________________.
a certificate of authority
A loan made by a partner to a partnership business is:
a liability of the partnership business.
The usual Title VII suit is a suit brought by _____.
a private plaintiff
All of the gas stations in Smalltown agree to charge the same price for gas. The owners of the various companies get together every Friday in a coffee shop to decide what the price will be next week. This is:
a violation of the Section 1 of the Sherman Act.
Suppose Deb's mother agreed in writing that, without getting paid, she would be "jointly and severally liable" for Deb's debt.
accommodation surety
Anne worked as Amanda's assistant. Amanda told Anne to buy Amanda coffee every morning (using Anne's own money) and to buy Amanda the latest fashion accessory (scarf, purse, hat, watch, etc.) from Nordstrom on Friday of each week (using Amanda's store account with Nordstrom). Anne has done so for the past year. This past Friday, Anne bought Amanda coffee using Anne's own money, and bought a scarf for Amanda and a purse for herself from Nordstrom (both of which she charged to Amanda's store account). A court is most likely to find that Anne had _______ authority to buy the coffee and scarf; that Anne had _______ authority to buy the purse; and that Amanda has a duty to _______ Anne for the coffee.
actual; apparent; reimburse
A _____ takes goods free of any security interest in the goods that their seller may have given to a third party.
buyer in the ordinary course of business
According to the Chicago School viewpoint, the traditional antitrust focus on the structure of industry has improperly emphasized protecting ______ instead of protecting _______.
competitors; competition
A pseudo-foreign corporation is a:
corporation that conducts most of its business in a state other than the one in which it is incorporated.
Most of the common law of corporations deals with:
creditor and shareholder rights.
Suppose Deb and Creed agree that Creed will lend Deb the money to buy the house and the title to the house will be held by a third party, who will have the right to foreclose or sell the house for Creed's benefit if Deb fails to make payments on the loan. If so, Creed's loan to Deb will be secured by a _____.
deed of trust
Firms that develop monopoly power by acquiring ownership or control of their competitors are likely to be held to have ____________________.
intent to monopolize
Purposeful acquisition or maintenance of monopoly power is evidence that a defendant had ___________________.
intent to monopolize
Smith Co. is accused of monopolization. To prove this, it must be shown that Smith Co. had both monopoly power and ___________________.
intent to monopolize
When one party to a contract claims that the defendant's meddling with the other party's performance of the contract wrongly caused the plaintiff to lose the benefit of that performance, the plaintiff has a cause of action for:
interference with contractual relations.
Most of the states have passed _____ to permit their courts to exercise jurisdiction under the decision of the International Shoe case.
long-arm statutes
A limited partnership:
may be taxed either as a partnership or as a corporation.
An S corporation:
may have only one class of shares.
Today's market structure in many important industries is _________, meaning that a few dominant firms account for the bulk of production.
oligopolistic
As demonstrated in the case in the text, Darco Transportation v. Dulen, the ______ test is a liberal test that says an injured employee recovers if her employment caused her to be at the place and time where her injury occurred.
positional-risk
To qualify as a trade secret, it must:
possess sufficient value or originality.
Upholstery Inc. has a _____ in Deb's now-cleaned furniture stored in its warehouse.
possessory lien
The act of pricing below the appropriate cost for the purpose of eliminating competitors in the short run and reducing competition in the long run is known as ______________.
predatory pricing
As demonstrated in the case in the text, Finch v. Raymer, the presumption is very strong that:
property purchased with partnership funds and used in the partnership belongs to the partnership.
A corporation that conducts most of its business in a state other than the one in which it is incorporated is called a(n) _______________________________ in the state in which it conducts most of its business.
pseudo-foreign corporation
The damages recoverable in a patent infringement case cannot be less than:
reasonable royalty for the use of the invention by the infringer.
Termination of the agency relationship at the option of the agent is known as _____.
renunciation
The U.S. Transportation Department:
requires random drug testing of employees occupying certain safety-sensitive or security-related positions.
An employer is most likely to raise the _____ defense for a mixed-motives disparate treatment claim under Title VII.
same-decision
Susan was hired by Teddy & Co. as a sales woman. However, management, upon seeing her intelligence and capabilities allowed her to use the office library and research facility to create an inventive product. Susan now wants to patent the product in her own name. This is not permissible under the:
shop right doctrine.
Since the level of doing business that constitutes intrastate business for qualification purposes has been difficult to define, the Model Business Corporation Act lists several activities that do not require qualification. One such activity is:
soliciting orders by mail that require acceptance outside the state.
The _____ that the plaintiff is required to prove are his usual—and typically his only—remedy in injurious falsehood cases.
special damages
Risk of loss for international transactions is addressed by the UCC and:
the Convention on Contracts for International Sale of Goods.
A principal need not compensate his agent if:
the agent has committed a breach of a fiduciary duty.
In American Needle, Inc. v. National Football League, the case in the text, the U.S. Supreme Court held that:
the conduct at issue was concerted activity under the Sherman Act that was subject to Section 1 analysis.
In case of conflict of ownership between employee and employer over a trade secret, the employer is normally held to be the owner when:
the employee was hired to do work related to it.
A state law regulating the activities of a foreign corporation does not unduly burden interstate commerce if:
the foreign corporation has chosen the least burdensome means of promoting that interest.
Goods are being sold by Anne in Seattle and shipped by ABC Railroad to Brian in Portland, Oregon. In this situation, the term "FOB Seattle" means that the risk of loss passes from the seller to the buyer when:
the goods are delivered to ABC Railroad in Seattle.
In a "mixed" contract for the sale of both goods and services, the court will apply the contract rules of the UCC or of the common law, depending on whether:
the predominant purpose of the contract is goods or services.
If a buyer and seller of goods fail to specify in their contract when title is to pass, the UCC's "gap filler" provision provides that title will pass when:
the seller completes his or her obligation with respect to physical delivery of the goods.
Unemployment compensation is administered by _____.
the states
An agent's apparent authority ends when:
the third party receives notice of the termination of agency.
Forming a business with a high debt-to-equity ratio is an example of:
thin capitalization.
If a plaintiff proves that it has suffered a direct injury by another company in violation of the Sherman Act, it is entitled to recover:
three times the amount of loss it suffered as a result of the violation, plus court costs and attorney's fees.
Jackson, Inc. sells bleach in containers that are similar in size, shape, and color to a well-known competitor's containers for the same product. Jackson may face liability under section 43(a) of the Lanham Act based on a(n):
trade dress infringement claim.
To comply with the commerce clause, a state tax that is applied to a foreign corporation must do all of the following, except:
treat intrastate transactions more favorably than interstate transactions.
Resale price maintenance is also known as:
vertical price-fixing.
A seller who has a _____ has the power to pass good title to a good faith purchaser for value.
voidable title
In the case of Cleanify Corp. described in the previous question, what would Cleanify have to prove to avoid liability if Hao sues for national origin discrimination under Title VII?
That English language vocabulary test is job related and consistent with business necessity.
In the case of Burrito Chime described in the previous question, what would Burrito Chime have to prove to avoid liability if he sues for sex discrimination under Title VII?
That the maximum height requirement is job related and consistent with business necessity.
In the case of Petite Enterprises described in the previous question, what would Petite Enterprises have to prove to avoid liability if Ernie sues for sex discrimination under Title VII?
That the maximum weight requirement is job related and consistent with business necessity.
Which of the following legal provisions treats a corporation as a person?
The Constitution of the United States
Which of the following outlaws monopolization, attempted monopolization, and agreements in restraint of trade?
The Sherman Act
Which of the following is true of an agent who terminates in violation of the agency agreement?
The agent has the power, but not the right, to terminate.
Which of the following best represents an agent's duty of segregation?
The agent should not deal with the principal's property so that it appears to be the agent's.
Which of the following factors is most important in deciding who bears the risk of loss between merchants when goods are destroyed during shipment?
The agreement of the parties
Which of the following, if true, is most likely to prevent a company from asserting trade secret rights in a secret formula or manufacturing process?
The company informs employees that the information is valuable, but does not take any measures to keep the information secret.
Which of the following is true of a deed of trust?
The debtor buys and takes title to property on credit, and makes periodic payments on the debt to the creditor.
Which of the following is true of a mortgage?
The debtor buys and takes title to property on credit, and makes periodic payments on the debt to the creditor.
Which of the following requires an agent to subordinate his personal concerns?
The duty of loyalty
Which of the following is least likely to be covered for work leave under the Family and Medical Leave Act (FMLA)?
The employee needs to care for a grandparent with a serious health condition.
A patent can be viewed as a contract between the inventor and who?
The federal government
Assume Apollo markets its diamonds exclusively in jewelry stores. Which of the following marks, if later used by another company, is least likely to be considered an infringement of rights in the trademark APOLLO for diamonds sold in jewelry stores?
The mark APPALL used for motor oil sold in auto parts stores
Apollo is least likely to obtain copyright protection when using the Internet to market its diamonds for which of these?
The prices listed for products on an Internet website
In analyzing vertical restraints on distribution, courts today will apply what analysis?
The rule of reason
Which of the following is not a legal formality required for a mortgage?
The signature of the creditor-mortgagee
Which of the following statements about a transfer of a partner's transferable interest is true?
The transferee can ask a court to dissolve and wind up the partnership, but only if the partnership is at will.
which results from providing insufficient contributions of money and other property in relation to the nature and risks of the business, can lead to corporate veil piercing because it
Thin capitalization; defrauds creditors of the corporation
How long is the legal temporary monopoly that present patent laws provide to the inventor after the filing of the patent application?
Twenty years
Jonny, a high school history teacher, sells his car to Doris, a friend. This sale is governed by:
UCC Article 2.
Sandra Love, a tennis pro, enters into a contract to sell her tennis racket. This sale is governed by:
UCC Article 2.
What requirement for obtaining a U.S. patent requires that the invention must work and must be capable of having some useful application or serving some useful purpose?
Utility
When is proof of joint action required for violation of Section 1 of Sherman Act?
When more than one firm is charged with a conspiracy to monopolize.
When does an agent expressly bind herself to a contract made for a principal?
When the agent acts as a surety
Under Title VII, when can a private plaintiff file a lawsuit?
Within 90 days of receiving the "right-to-sue" letter
Why is agency important to sole proprietors?
Without agency, a sole proprietor's ability to engage in trade would be limited by the need to make purchases and contracts in person.
Which of the following is a tort claim for wrongful discharge or unjust dismissal?
Wrongful discharge in violation of public policy
Because she is a minor, Sarah cannot enter into contracts on her own behalf although she is perfectly competent. Her mother wishes to make Sarah an agent of the family business, and Sarah will be responsible for entering into contracts as an agent. Can Sarah act as an agent of the company?
Yes, because she has capacity to do the acts for which she has been retained.
Jack has been Will's personal assistant for 10 years. Jack's duties have always included arranging for one room in Will's house to be re-decorated every year while Will is on his annual vacation in Greece. For the last five years, Jack has hired Grace as the interior designer in charge of the re-decoration project. This year, two weeks before Will left for Greece, he and Jack had a major disagreement about how to decorate the spare bedroom. Will wanted to go with a French-toille inspired theme. Jack insisted on a Hello Kitty theme. The snit escalated into an all-out fight and Will abruptly fired Jack. Without Will's knowledge, Jack went ahead and hired Grace to decorate the spare bedroom in a Hello Kitty theme. He paid Grace's usual 50% up-front fee with Will's credit card, which Will forgot to take away from Jack. When Will returns from Greece he is livid. He refuses to pay Grace for the balance of the bill, because he claims that Jack acted without authority. Is Will liable to Grace for the balance of the bill?
Yes, because, even though the agency was terminated, Jack retained apparent authority to bind Will to contracts with Grace until Will actually notified Grace of the termination.
Partners of a partnership:
are entitled to income of the partnership, which must be reported on their individual federal income tax returns.
Government-owned corporations:
are owned by governments and perform governmental and business functions.
In a limited partnership, limited partners:
are passive investors.
Incorporation of a nonprofit corporation under state law requires delivering its ______ to the secretary of state.
articles of incorporation
The Benson Bearing Company sells Textron, Inc. a quantity of baseball bats that were stored in an independent warehouse at the time of the sale. The contract says that Textron is to pick up the bats at the warehouse. The risk of loss passes to Textron:
at the time it receives a negotiable warehouse receipt for the bats.
A(n) ________ is elected by shareholders to manage a corporation.
board of directors
An order charging all or part of the partner's transferable partnership interest with payment of the unsatisfied amount of the judgment is called a(n) _____.
charging order
Ice Blue Dressmakers, Inc. owns 70 retail outlets throughout the United States. To limit liability, Ice Blue Dressmakers operates as a holding company and owns each of the retail outlets as separate subsidiary corporations. Each of the subsidiaries owns and conducts the business of a separate retail outlet. As the parent corporation, Ice Blue Dressmakers wholly owns each subsidiary. To prevent piercing of the corporate veils between the subsidiaries and/or between the parent company and its subsidiaries, the companies should do all the following except:
collect subsidiaries' profits in an account held by the parent, which is used to timely pay the subsidiaries' debts.
Dr. Evil, the CEO of Evil Enterprises, Inc., convinces all of the company's competitors to merge with Evil Enterprises, Inc. He tells them that they will be able to "charge customers as much as they want, and become large enough to run any dissenting company out of business." In this situation, Dr. Evil is trying to engage in _____________.
conspiracy to monopolize
When two or more business entities work together to monopolize a relevant market, they may be guilty of _____________.
conspiracy to monopolize
A _________________________________, is known as a pseudo-foreign corporation.
corporation that conducts most of its business in a state other than the one in which it is incorporated
Chicago School advocates view _____ as the primary, if not sole, goal of antitrust enforcement.
economic efficiency
A joint venture is a(n):
enterprise engaged in a single project.
If a firm conducting interstate commercial activities is found to have monopolized or attempted to monopolize, it will be guilty of a(n) ___________.
felony
A corporation that is incorporated in one state and doing business in another state is called a(n):
foreign corporation
The Immigration Reform and Control Act prohibits employers with ____ or more employees from refusing to hire or terminating an employee on the basis of national origin or citizenship.
four
Suppose Deb's mother agreed in writing that she would make the payments on the debt in the event that Deb failed to make the payments. If so, Deb's mother would be a(n) _____ for Deb's debt.
guarantor
In a limited partnership, general partners:
have the right to manage the business.
A plaintiff will succeed against her employer in a disparate treatment case under Title VII if she can prove that:
her employer discriminates against her on the basis of race.
The bona fide occupational qualification defense under Title VII:
is available for cases of sex, religious, and national origin discrimination, but not for race or color cases.
Not-for-profit corporations:
issue no stock and expect no profit, but rather provide services to their members without a profit motive.
For-profit corporations:
issue stock to their shareholders, who invest in the corporation with the expectation that they will earn a profit.
A nolo plea or a consent decree is often attractive to antitrust defendants because:
it is not admissible as proof of a violation of the Sherman Act in a private plaintiff's later civil suit.
A _____ is found when an arrangement is made not to establish an ongoing business involving many transactions, but is limited to a single project.
joint venture
Suppose Deb and Creed agree that Creed will buy the house, Deb will move in and make a series of monthly payments to buy the house, and Creed will give Deb title to the house when Deb makes the last monthly payment. If so, the money Deb borrowed from Creed to purchase her house is secured by a _____.
land contract
As demonstrated in the case in the text, Kibler v. Hall, most of the court's attention in trademark infringement cases is concerned with the:
likelihood of confusion over the trademark.
A _____ is a partnership whose partners have elected limited liability status.
limited liability partnership
Windows Inc. has a _____ in the windows installed in Deb's house.
materialman's lien
Stavros has a _____ in the windows he installed in Deb's house.
mechanic's lien
Acton Supply Company has the power to fix prices and exclude competitors in its market area. This power is known as _________________.
monopoly power
When a firm has captured a predominant share of the relevant market, it is said to have acquired ____________
monopoly power
The case in the text, Peterson v. AT&T Mobility Services, LLC, demonstrates that the public policy exception to the employment-at-will rule is:
narrow.
Suppose that the Electric dealership had been warned by the factory a year before that because of an earthquake, they had been having problems with some of their battery output. As a result, they should be sure to double check the drive train in the cars that they are selling for latent defects, which takes over fifteen hours per car. The dealership disregards the factory's warnings because of high demand, and so far has not had a problem. Under this scenario, John would most likely sue for ______________, and the claim will likely ________
negligent inspection; fail.
Harris is a purchasing agent for Elkin, a sole proprietor. Harris has the express authority to place purchase orders with Elkin's suppliers. Harris typically conducts business through the mail and has very little contact with Elkin. Elkin was incapacitated by a stroke and was declared incompetent in a judicial proceeding. Subsequently, Harris placed an order with Ajax, Inc. on behalf of Elkin. Neither Ajax nor Harris was aware of Elkin's incapacity. With regard to the contract with Ajax, Elkin (or Elkin's legal representative) will:
not be liable because Harris was without authority to enter into the contract.
The ____ business form is recognized not only in the United States, but also in Australia, Canada, Cyprus, England, India, Israel, Russia, South Africa, Turkey, Zimbabwe, and many other nations.
partnership
A partner's ownership interest is called a _____.
partnership interest
Loans made by partners to a partnership are:
partnership liabilities.