Business Law Exam 2 Quiz Questions

Daria decided to open her own bakery. She consulted a lawyer and the lawyer filed the paperwork necessary to create a limited liability company. Daria's LLC leased space for the bakery. Due to some problems with some customer orders Daria's LLC was unable to pay rent. The landlord sued Daria's LLC and also sued Daria. Daria asks you who is liable for the unpaid rent.

Daria's LLC only

Jane takes an embarrassing picture of her boss and posts it on a social media site. When a co-worker shares it with her boss Jane is fired. She sues her employer. The likely outcome of the lawsuit is:

Jane's employer will win the lawsuit

For a plaintiff to bring a lawsuit under Title VII, they must

be a member of a protected class

Jacob finds a dream home on the lake. He wants to buy it but is unsure whether he can get a loan. He signs a contract with the seller that he will buy the home provided he can obtain a loan. Jacob also includes a clause in the contract with the seller stating that if he loses his job before the date the purchase contract is signed, the seller will release him from any obligation. The provision that the seller will release Jacob unless he is able to obtain a loan is _______________.

condition precedent

which of the following types of contracts are covered by the uniform commercial code:

contracts for the sale of goods

which of the following is false regarding corporations?

corporations cannot claim nonprofit status

which statement is true regarding the adequacy of consideration?

courts seldom consider the adequacy of consideration but will do so in some circumstances

Employers have been switching from defined benefit retirement plans to defined contribution plans because:

defined benefit plans must be funded to provide the benefit promised in the plan which requires an annual minimum contribution by the employer

in which of the following types of cases does a plaintiff attempt to prove that while an employer's policy or practice appears to apply to everyone equally, its actual effect is that it disproportionately limits employment opportunities for a protected class?

disparate impact cases

Dalynda and Phillip have a contract that Phillip will play at Dalynda's opening night reception. The night of the concert, Phillip refuses to go on stage unless Dalynda agrees to pay an additional $5,000 for him to perform. This is known as ________.

economic duress

Magenta has just taken a job with SMPB, LLC in which she will work 40 hours a week as a secretary. In regards to Magenta, as a new employee she is guaranteed __________.

employees are not guaranteed any holidays off or any extra pay for working holidays under federal law

Carl hires Bruce to perform 5 shows a week at carl's casino in Cincinnati. The contract is for 3 years. A year and a half after the contract has started Bruce quits and goes on tour. When Carl sues Bruce which of the following is most likely the result?

if contract has a liquidated damages provision, the court will award Carl liquidated damages

which of the following is false regarding requirements needed for a business to qualify as an S corporation?

individuals, trusts, partnerships, corporations, and most entities can be shareholders

which of the following is true regarding same sex sexual harassment?

it is considered by the courts to be included within Title VII's ban of discrimination based on sex

Bob is starting a new financial services business and would like to hire men for the advisor jobs. Which of the following is always true:

none of the answers is always true

upon reaching the age of majority, a person who entered into a contract to purchase goods while a minor may...

none of the answers is correct

if a contract does not clearly specify that the satisfaction is to be personal, the __________ standard applies

objective

which of the following is true regarding the ability of persons suffering from a mental illness to enter into a binding contract?

persons suffering from a mental illness may have full, limited, or no legal capacity to enter into a binding contract depending on the nature and extent of their mental deficiency

which of the following may be used by an employer as a defense in an employment discrimination case:

professionally developed ability tests

which of the following is true regarding the termination of an offer based on a rejection?

regardless of how long an offeror states that an offer will be held open, once the offeree rejects it, the offer is terminated

Anna feels that her employer has created a hostile work environment and hires an attorney who sues her employer. The result of her lawsuit will be:

she will lose because she did not first file with the EEOC or her state's equivalent to the EEOC

Daria decided to open her own bakery. She decided she did not need a lawyer to advise her on different forms of ownership. Unfortunately, Daria had not paid attention in business law class. She proceeded to simply open her business called Daria's Bakery. Eli told Daria that he wanted to order some cookies for his girlfriend, Kirsten, but that Kirsten had allergies to peanuts. Daria told him not to worry because she would make up a special batch just for him. Daria had hired some assistants because she was so busy. She told an assistant, Kate, to make up several batches of cookies for different customers including Eli and told her to leave out the peanuts in Eli's batch because of the allergy. Kate, however, forgot about the peanut allergy and proceeded to make Eli's cookies with peanuts. Eli picked up the cookies and gave one to Kirsten in the car. Kirsten became violently ill, vomited in Eli's car, and had to have her stomach pumped. Eli and Kirsten sought recovery from Daria who told them that Kirsten's doctor bill and Eli's car cleaning bill were business debts, that the business was new and not making any money at the moment, and that she had no personal liability. Following the incident involving Eli and Kirsten, Daria discussed her problems with the bakery with her parents. Daria's parents would like to invest in her business and share in any profits, but they do not want to share in the management responsibilities. Daria initially set up which type of business?

sole proprietorship

which of the following is a definition for consideration?

the bargained-for-exchange

which of the following occurs when a plaintiff established a prima facie case in an action alleging disparate treatment discrimination in employment in the form of an illegal discharge

the burden shifts to the defendant to articulate a legitimate, nondiscriminatory reason for the discharge.

In Delgado v. Phelps Dodge Chino, Inc. the case in which the plaintiff sued in tort seeking damages after her husband died from burn injuries he received after allegedly being required to perform a task in a smelting plant, which of the following was the result at the supreme court?

the case was allowed to proceed because the employer's acts of willfully causing injury prevented it from relying on the exclusive nature of the workers' compensation system.

which of the following was the result on appeal in Reisenfeld & Co. v, The Network Group Inc., the case in the text involving whether the plaintiff could recover from BSI in the situation in which BSI contracted the Network Group to lease property, and Network Group contracted with the plaintiff agreeing to pay a certain commission for his work but then defaulted on the contract?

the court ruled that because a quasi-contract was involved, BSI was required to pay the plaintiff the reasonable value of the services rendered, not necessarily the contractual amount promised for conditions

which of the following is not a reason for which leave may be requested under the family and medical leave act?

the need for fertility treatments in order to conceive

what was the result in the opening case in which the plaintiff attempted to buy a jet from Pepsi for Pepsi points and some additional funds?

the plaintiff did not prevail because Pepsi reserved the details of the offer to a separate writing, Pepsi had the authority to reject the plaintiff's offer to purchase, and a reasonable person would understand it was not meant to be an offer

which of the following statements is true regarding whether employers may discriminate against smokers?

there is no federal law prohibiting employers from firing employees who smoke, although some states have laws protecting the rights of smokers

which of the following is true about exculpatory clauses:

they are an attempt to limit the liability of one of the parties to a contract and whether they are valid will usually be determined on a case-by-case basis

which of the following is true about options:

they require the party getting the option to provide consideration

Dorian contracts with Julie to post on several social media accounts unflattering and false information about Julie's competitor to ruin the competitor's reputation which in theory would send all the customers towards Julie's business. This contract would be:

unenforceable because Dorian would be committing the tort of defamation

Jack offers selena his bicycle for $75. Which of the following is an example of an illusory promise on Selena's part?

"I'll take it if I decide to do so."

Ed, Ann, and Bob agree to go into business together and start a restaurant. They do not like lawyers so they did not sign any agreement related to the business. Ed invested $50,000, Ann invested $100,000 and Bob invested $350,000. The first year the business had $100,000 of taxable income. The income will:

Be reported by Ed, Ann, and Bob with each one reporting $3,333.33

Business law teacher Debby needed some yard work done. She entered into an agreement with Betty who agreed to trim some shrubbery for $40. Max went to mow Debby's yard. Unfortunately, just as he finished mowing, a neighborhood dog bit him, and he had to go to the ER for a couple stitches. Debby refused to pay Max because she said that he had angered the neighbors and their dog, and that he was more trouble than he was worth. Secretly, Debby was glad about the dog bite because she felt it gave her an excuse not to pay. Max refused to pay the ER because he said that they did not have a binding, bilateral contract. Betty refused to trim the shrubbery because she got a better offer and claimed that she was not bound on the contract until she started to perform. Which of the following is correct regarding Betty's statement that there was no contract?

Betty is incorrect because there was a bilateral, express agreement.

in return for his oral promise to pay her $100, Emma promises her uncle that she will not violate laws against speeding for one year. Emma abides by her promise, but her uncle refuses to pay. Which of the following is true regarding whether Emma is entitled to the money?

Emma is not entitled to recover because she had a preexisting duty to obey laws against speeding

Jose has been requiring his assistant to work a lot of overtime lately and it has been costing the employer a lot of money so Jose puts his assistant on a fixed salary to avoid overtime. The assistant's duties include answering phone calls, arranging meetings, setting up calls, making travel plans, completing expense reimbursements and doing other paperwork. She does not supervise anyone. The assistant wants to know if Jose violated the FLSA. Which of the following is true:

Jose has violated the FLSA

Fred agreed to sell his car to Rolando. The car had been in several accidents, but Fred did not tell Rolando about the accidents. When Rolando later found out about the accidents from someone else he called Fred and asked to return the car. Which of the following is true:

None of the answers are correct

Ed has been working four years at his current job and then quits two months before he reaches five years of employment. His employer has a 401(k) (a defined contribution plan) plan that matched employee contributions each year and his account balance in the plan is $10,000. When he leaves he is told he will not be entitled to any of the employer contributions. Is his employer correct?

No, his employer is not correct.

Anali sent emails to her friends during work to solicit customers to purchase pirated movies. After Anali was fired based on these emails, she sued alleging the employer violated her privacy rights by going though her personal email. Will Anali's suit likely be successful?

No, if the emails were sent using the employer's email system

Kolby worked as an information technology specialist. Kolby and his new supervisor got into an argument about the best type of movies. The next day, the supervisor fired Kolby because Kolby is a fan of science fiction, rather than drama. Kolby complained to Juna, the head of human resources, because he had worked for the company for 30 years without any problems and it was not fair to fire him. Kolby told Juna that now he and his wife will have no health insurance and he cannot even file for unemployment. Juna told him that the supervisor did not violate any laws and sometimes life is not fair. Was it illegal for the supervisor to fire Kolby because Kolby is a fan of science fiction?

No, under the employment-at-will doctrine, a contract of employment may be terminated at will by either party at any time for any reason

Raphael who owes $10,000 to his credit card company, sends a check to the credit card company for $50 and marks the check paid in full. Raphael does not contest any of the charges to his card. The credit card company inadvertently cashes the check, but the mistake is caught two weeks later and the offer to repay Raphael his $50. Raphael does not respond. does accord and satisfaction exist?

No.

Jeremy promises Gillian a job if she moves to California for the job. Gillian, excited for the new job, quits her current job and moves across the country to California in reliance on Jeremy's promise of the new job. Jeremy, however, tells Gillian once she gets to California, he has no job for her. Which doctrine would Gillian use to sue Jeremy?

Promissory estoppel

Sally sees a house she likes and the seller, Susan, offers to sell it to her for $400,000. Sally asks if the offer can remain open for a week to give Sally's husband to come and look at the house before entering into a contract. When sally and her husband show up 4 days later so he can see the house there is a "sold" sign in the yard. Sally and her husband sue Susan. Which of the following is likely the outcome:

Sally and her husband will lose

Penny hires Jackson to paint her back deck. She agrees to pay him $200 for the job, and he accepts sight unseen. They enter into the agreement on Tuesday, and he is to paint on Saturday. When Jackson arrives, Penny is not home. He mistakenly paints the neighbor's deck. Penny calls him the next day and asks him why he didn't paint her deck. He informs her that he did paint the deck. It is then discovered that he mistakenly painted the neighbors deck. Penny tells him not to worry because the neighbor will be required to pay him. Jackson says that if the neighbor does not pay, then he expects all of his funds from Penny, because the contract is executed. Which of the following is correct regarding Penny's assertion that the neighbor will required to pay Jackson?

She is correct if the neighbor was home and was fully aware Jackson was about to paint his deck and said nothing and watched him paint it

when Giuseppe hired Ines to work in his beauty shop as a hair stylist, she entered into an agreement with Giuseppe whereby if she left his employment she would not work for another beauty shop within 50 miles for 2 years. Giuseppe trained Ines in a number of new techniques. after nine months, Ines was offered a great job down the street at a new beauty shop. She quit Giuseppe's shop and a number of customers followed her down the street to her new job. If Giuseppe sues her for breaching the agreement:

She may win if the 50 mile restriction is considered unreasonable by the court

Alexandra and Tomas enter into a contract in which Tomas agrees to install a new door for Alexandra and to install a new silver doorknob. Tomas installs the door but silver doorknobs are out of stock he finds a chrome knob he believes looks silver and he installs it. Which of the following describes Tomas' performance of his duties?

Substantial performance

Ed feels he is being discriminated based on his age so he filed a charge with the EEOC. After reviewing the charge and contacting the employer the EEOC issues a right to sue letter. This means:

The EEOC will not be representing Ed in a lawsuit against his employer, but Ed may sue his employer

Zara and Wahid have a lot of money invested with a stockbroker named Dion and also with other brokers. Zara and Wahid decided to divorce. Zara was really interested in investments, so the divorce decree provided that Zara would retain "all investment accounts," and Wahid would receive a "cash settlement" from funds the parties had in the bank. Six months after the divorce was final, it was discovered that Dion had absconded to parts unknown with all the money invested with him. Zara could have withdrawn the funds at the time of the divorce, before Dion left town, but she had no reason for concern and left the funds there for investment purposes. After discovering Dion's wrongdoing, Zara asked Wahid to renegotiate the divorce agreement, but he refused. Which of the following is the most likely result of their dispute?

The original divorce agreement will be rescinded, and the parties will be required to renegotiate the agreement because Zara and Wahid were mutually mistaken in regard to investing with Dion.

Ben says he will sell Catalina a ring that he found in his yard. Ben and Catalina look at the ring and decide that they are not sure what it is, probably just a shiny stone. Catalina pays Ben $10 for the ring. The ring turns out to be a diamond worth much more than $10. Ben wants the ring back, and Catalina refuses. What is the most likely result?

The ring will remain with Catalina because the parties contracted on the assumption that they did not know the value of the ring.

Inez, wishing to sell a used business law book, calls Janice and tells her that if she does not hear from her with 24 hours, she will assume Janice wishes to purchase the book for $50. Which of the following is correct regarding the status of the proposed book sale.

There is no contract because in this situation silence cannot be used to form a contract

Earl has a contract to sell 1,000 pounds of perishable fruit to Fresh Food Corporation. Fresh Food refuses delivery of the fruit. Earl sells the fruit to Green Grocery Stores, Inc. This sale represents

a mitigation of damages

which of the following is true:

a plaintiff is NOT required to show a tangible psychological injury in order to prevail on a sexual harassment claim

Kolby worked as an information technology specialist. Kolby and his new supervisor got into an argument about the best type of movies. The next day, the supervisor fired Kolby because Kolby is a fan of science fiction, rather than drama. Kolby complained to Juna, the head of human resources, because he had worked for the company for 30 years without any problems and it was not fair to fire him. Kolby told Juna that now he and his wife will have no health insurance and he cannot even file for unemployment. Juna told him that the supervisor did not violate any laws and sometimes life is not fair. Can Kolby and his wife continue to receive health insurance after his termination?

Yes, COBRA ensures employees and their dependents can continue receiving health insurance under the employer's policy

Sally's mother (Jane) has to go into a nursing home because she can no longer take care of herself. Sally draws up a contract with Jane that makes Sally Jane's personal assistant for a salary of $10,000 a month. The contract is for 5 years. Jane has trusted Sally and relied on her to handle her finances for the past several years. When sally's sister Sarah hears about it she tells Jane the contract is voidable. Is there a possibility that contract can be avoided? If so on what basis?

Yes, on the basis of undue influence