Business Law Exam 3

Types of agents

1. Broker 2. General & Special Agents 3. Attorney: power of attorney & attorney in fact

What are the two types of agency authority?

1. Expressed * written * oral 2. Implied - arises from expressed authority and is an extension of it.

Good-faith purchaser

A buyer who pays value honestly believing he or she has the legal right to acquire valid title to the item purchased.

Per Se

A contract clause may be inherently illegal -- illegal per se, "by itself."

Rule of reason

A contract will be held illegal if the facts indicate that the anticipated arrangement will result in an unreasonable restraint of trade.

Agency

A fiduciary relationship between two parties in which one (the agent) acts on behalf of, and is subject to the control of, the other (the principal).

Illusory promise

A nonexisting or false commitment that is not consideration in support of a contractual obligation.

attorney in fact

A person acting for another under a grant of special power created by an instrument in writing.

Agent

A person who acts for another. Aka servant. Duties: 1. Loyalty 2. Obedience 3. Accounting 4. Inform 5. Performance (exercise reasonable skill, care and diligence) 6. Protect confidential information

independent contractor

A person who exercises his or her independent judgment on the means used to accomplish the result.

Fiduciary

A person who occupies a position of trust or confidence in relation to another person or his or her property.

Fiduciary

A position of trust and confidence in relation to a person or his or her property. Implied duties associated with being a fiduciary: 1. to be loyal to the principal 2. to protect confidential information 3. to obey all reasonable instructions 4. to inform the principal of material facts that affect the relationship 5. to refrain from being negligent 6. to account for all money or property received for the benefit of the principal

Exculpatory clause

A provision in a contract whereby one of the parties attempts to relieve itself of tort liability.

Mistake

A state of mind that is inconsistent with reality.

general agent

An agent authorized to do all the acts connected with carrying on a particular trade, business, or profession.

special agent

An agent with a limited amount of authority who usually has instructions to accomplish one specific task.

Promissory estoppel (detrimental reliance)

An equitable doctrine used as a substitute for consideration with respect to validating a contract-based promise -- often called unbargained for detriment.

power of attorney

An instrument authorizing another to act as one's agent or attorney in fact.

Liquidated debt

An obligation that has exact monetary value because it is not disputed.

Unliquidated debt

An obligation that is in dispute with respect to the dollar amount involved.

capacity of parties

Anyone who may act for himself or herself may act through an agent. Regarding minors: 1. a majority of the states hold that a contract of an agent on behalf of a minor principal is voidable. Therefore, such an agreement is subject to rescission or ratification by the minor, the same as if the minor personally had entered into the contract. 2. a minor may act as an agent for an adult. Any agreements the minor makes for a principal while acting within the authority of an agent are binding on the principal. Although the minor who acts as an agent has a right to terminate a contract of agency at will, so long as the minor continues employment, his or her acts within the scope of the authority conferred become those of the principal.

What are the determining criteria for who is an employee?

Anyone who works for pay is presumed to be an employee unless an independent contractor criteria are met.

agency relationships

As a general rule, agency relationships are based on the consent of the parties involved. No particular formalities are required to create a principal-agent relationship.. A principal may appoint an agent either in writing or orally. further, the agency may be either expressed or implied.

Restraint of trade

Contracts that impede free competition

Unconscionable

In the law of contracts, provisions that are oppressive, overreaching, or shocking to the conscience.

Scienter

Knowledge or deliberate disregard of the falsity of a representation.

Usury

Requiring a payment of a rate of interest in excess of that permitted by statute.

Misrepresentation

The affirmative statement or affirmation of a fact that is not true.

Principal

The person for whom the agent acts, and who controls the agent. Aka master. Three types: 1. disclosed - an agent who reveals that he or she working for another and who reveals the principal's identity. 2. undisclosed - a third party does not realize that any agency relationship exists...belief that the agent is acting alone. 3. partially disclosed - third party may know an agent represents a principal, but that third party may not know the identity of the principal. Duties: 1. Compensation 2. Reimbursement (expenses incurred) 3. Indemnification ("to save harmless"). The agent is entitled to be indemnified against tort losses where the agent is not at fault and the agent was acting within the scope of employment. 4. Cooperation 5. Safe working conditions

Mutuality of consideration

The principle that requires both parties to a contract to be bound to one another, or else neither party is bound.

Forbearance

When done in good faith, the giving up of the right to enforce what one believes to be a valid claim is sufficient consideration to make another party's promise binding.

Doctors, lawyers, executives and others who are not covered by laws regulating overtime pay are classified as ________employees. a. Vital b. Exempt c. Statutory d. Goodwill

b. Exempt

The Age Discrimination in Employment Act protects employees who are at least _____ years of age from employment discrimination. a. 40 b. 50 c. 60 d. 62

a. 40

Only employers who have ________or more employees are subject to the Family and Medical Leave Act. a. 50 b. 75 c. 100 d. 300

a. 50

Consideration in a bilateral contract always involves both a. A legal benefit and a legal detriment b. A legal detriment and a legal impediment c. A legal benefit and a legal waiver d. A legal waiver and a legal renunciation

a. A legal benefit and a legal detriment

Congress passed the _________ for the purpose of guaranteeing uniformity and fairness to all who are called to deal with federal administrative agencies. a. Administrative Procedure Act. b. Consumer Protection Act. c. Occupational Safety and Health Act. d. Equal Protection Act.

a. Administrative Procedure Act.

Mutuality of consideration is a requirement for a (n)_________________. a. Bilateral contract b. Unilateral contract c. Action for promissory estoppel d. Firm offer under the Code

a. Bilateral contract

A subpoena _______ is used to force an individual or entity to produce documents or other physical evidence that might be important to an investigation. a. Duces tecum. b. Ad testificandum. c. Ad hoc. d. Per se.

a. Duces tecum.

The federal agency that investigates and enforces anti-discrimination portions of Title VII is the a. Equal Employment Opportunities Commission b. The National Labor Relations Board c. The Special Employment Commission d. The Federal Antidiscrimination Administration

a. Equal Employment Opportunities Commission

A[n] ________ functions within the executive branch of the federal government, but is not directly connected to an executive department. a. Independent agency. b. State agency. c. Executive agency. d. Legislative agency.

a. Independent agency.

Guidelines from an administrative agency to those members of society regulated by the agency are ________. a. Interpretive rules. b. Administrative procedures. c. Administrative remedies. d. Internal rules.

a. Interpretive rules.

The ________ protects the confidentiality of private information collected by federal government agencies and provides a mechanism for citizens to correct information that was submitted to an agency. a. Privacy Act of 1974 b. Executive Privilege c. Federal Reserve Act d. Clayton Act.

a. Privacy Act of 1974

Courts provide administrative agencies significant discretion to ________. a. Regulate in their area of expertise. b. Overturn judicial precedent. c. Disregard contractual language. d. Interpret the U.S. Constitution.

a. Regulate in their area of expertise.

Which of the following is false about a renunciation? a. Renunciations are valid in common law but not under the Code b. A written renunciation does not require consideration. c. An oral renunciation does require consideration. d. The right that is waived in a renunciation is a contract right.

a. Renunciations are valid in common law but not under the Code

Big Oil Company has a contract with homeowner to deliver however much heating oil homeowner needs for the fall and winter seasons. This is an example of a(n) __________________contract. a. Requirements b. Output c. Unilateral d. Consumer lease

a. Requirements

Before a binding vote is held in which workers choose to unionize or not unionize, enough workers must sign authorization cards indicating that they are interested in joining the union. The percentage of the work unit who must sign these cards is a. 10% b. 30% c. 50% d. 80%

b. 30%

Which of the following employers is not subject to Title VII's antidiscrimination provisions? a. A business organized as a sole proprietorship b. A business that has 12 employees c. A US firm doing business in England d. A corporation with fewer than 15 shareholders

b. A business that has 12 employees

A subpoena _______ is an order from an administrative agency compelling an unwilling witness to testify under oath at an administrative agency proceeding. a. Duces tecum. b. Ad testificandum. c. Ad hoc. d. Per se.

b. Ad testificandum.

Which element of a contract is met by a bargained-for exchange? a. Agreement b. Consideration c. Capacity d. Legality

b. Consideration

The type of employment discrimination that occurs when employment practices have the effect of disqualify a large portion of a protected class is ___________discrimination. a. Disparate treatment b. Disparate impact c. Quid pro quo d. Malum in se

b. Disparate impact

The type of employment discrimination that requires a plaintiff to show that the discrimination is intentional is _____________________discrimination. a. Disparate treatment b. Disparate impact c. Malum in se d. Malum prohibitum

b. Disparate impact

An employer may be liable for a customer's repeated and public sexual harassment of an employee based on the theory of a. Respondeat superior b. Negligence c. Strict liability d. Employers have no control over customers and thus have no liability for their actions

b. Negligence

Bay Crab Processor has a contract with Jim, a local crabber, to buy all the crabs Jim catches during the season for $35 per bushel. This is an example of a (n) ___________contract. a. Requirements b. Output c. Unilateral d. Implied in law

b. Output

When an employer punishes an employee for reporting illegal employment practices to the EEOC, the employer engages in ______________. a. Retribution b. Retaliation c. Quid pro quo discrimination d. Disparate impact discrimination

b. Retaliation

Administrative agency action will be ______ if constitutional rights were infringed upon or other aspects of the Constitution were not followed. a. Deferred to. b. Struck. c. Adopted. d. Modified.

b. Struck.

The _______ is used by courts to review formal rule-making of an administrative agency and to review a formal adjudication. a. De novo test. b. Substantial evidence test. c. Beyond a reasonable doubt standard. d. Preponderance of the evidence test.

b. Substantial evidence test

Which federal statute sets standards for employee pension and benefits plans? a. The Fair Labor Standards Act b. The Employee Retirement Income Security Act c. The National Labor Relations Act d. The Landrum-Griffin Act

b. The Employee Retirement Income Security Act

The principal federal law regulating union-management relations is the a. Fair Labor Practices Act b. The National Labor Relations Act c. The Benson-Morley Act d. The Sarbanes-Oxley Act

b. The National Labor Relations Act

In an accord and satisfaction, the accord is a. The old agreement b. The substitute agreement c. The performance of the action called for in the substitute agreement. d. The liquidated portion of a debt.

b. The substitute agreement

The _______ requires a court to overturn a newly-crafted agency rule only when there is a showing of no factual basis for the rule. a. Clear and convincing evidence standard. b. Substantial factor test. c. Arbitrary and capricious test. d. The preponderance of the evidence standard.

c. Arbitrary and capricious test.

An employee who quits a job because the employer created an intolerable work environment has a cause of action under Title VII for a. Disparate impact discrimination b. Gross negligence c. Constructive discharge d. Invasion of privacy

c. Constructive discharge

Courts will apply the _________ when they give no deference to the administrative agency decision and make an independent determination of the facts after performing a new hearing. a. Arbitrary and capricious test. b. Blue-pencil rule. c. De novo test. d. Clear and convincing evidence standard.

c. De novo test.

The federal statute that prohibits employers from paying employees of one gender less than employees of another gender for doing substantially equal work is the a. Bona Fide Qualifications Act. b. Lanham Act c. Equal Pay Act d. Gender Equity Act

c. Equal Pay Act

At the federal level, a[n] _______ functions within an established cabinet department. a. Independent agency. b. State agency. c. Executive agency. d. Legislative agency.

c. Executive agency.

Congress passed the ________ with the purpose of empowering private citizens with tools to request information from the federal government. a. Truth in Lending Act b. Consumer Protection Act c. Freedom of Information Act d. National Labor Relations Act

c. Freedom of Information Act

The final vote in which workers decide whether or not to unionize must be conducted without undue influence from either union or management. The term for these voting conditions is __________________conditions. a. Neutral b. Equitable c. Laboratory d. Transparent

c. Laboratory

An employer who prevents employees from coming to work in an effort to accelerate contract negotiations between management and union leadership engages in a(n)_______. a. Boycott b. Job action c. Lockout d. Strike

c. Lockout

Which federal statute regulates minimum wages, overtime and the employment of minors? a. Employee Retirement Income Security Act b. The National Labor Relations Act c. The Fair Labor Standards Act d. The Taft-Hartley Act

c. The Fair Labor Standards Act

A prima facie claim of disparate impact discrimination is established if the selection rate for members in a protected class is less than ___________% of the selection rate for members in the majority class. a. 25 b. 30 c. 50 d. 80

d. 80

A[n] ________ presides over an administrative hearing. a. Justice of the Peace. b. Chancellor. c. Arbitrator. d. Administrative Law Judge.

d. Administrative Law Judge.

Promissory estoppel is best described as a. A contract remedy for breach of bilateral contracts b. A contract remedy for breach of unilateral contracts. c. An equitable remedy when an accord and satisfaction fails. d. An equitable remedy when one party suffers an unbargained-for detriment.

d. An equitable remedy when one party suffers an unbargained-for detriment.

Bona Fide Occupational Qualification can be used as a defense to employment discrimination if the discrimination is based on a. Gender b. Religion c. Race d. Both a and b e. a and b and c

d. Both a and b

To collect workers compensation, an employee must a. Suffer an injury that arose out of his employment b. Be included in the category of workers entitled to workers compensation c. Not be out of work for more than 10 days. d. Both a and b e. a and b and c

d. Both a and b

Under the National Labor Relations Act, businesses may not a. Prevent workers from forming a union b. Discriminate against workers for joining a union c. Lay off workers in business downturns without the approval of 2/3 of the workers in a shop vote. d. Both a and b e. a and b and c

d. Both a and b

Which of the following is not part of plaintiff's prima facie case for showing disparate treatment? a. Plaintiff is a member of a protected class b. Plaintiff was qualified for the position c. Plaintiff was rejected for the position d. Defendant has eliminated the position

d. Defendant has eliminated the position

Another term for promissory estoppel is a. Forbearance b. Restitution c. Good faith d. Detrimental reliance

d. Detrimental reliance

An administrative agency's ________ are those policies and procedures an administrative agency adopts for its own in-house operation. a. Enforcement functions. b. Rulemaking functions. c. Adjudicatory functions. d. Internal rules.

d. Internal rules.

Which of the following statements is true about an accord and satisfaction? a. It is only used in construction contracts. b. It is only used in labor contracts c. It can only be used in liquidated debt contracts. d. It can be used for unliquidated debts based on contract or tort claims.

d. It can be used for unliquidated debts based on contract or tort claims.

Which of the following category of worker is not covered by the National Labor Relations Act? a. Employees of the federal government b. Employees of state governments c. Independent contractors d. None of the above is covered by the National Labor Relations Act

d. None of the above is covered by the National Labor Relations Act

The type of sexual harassment that occurs when a promotion or other benefit is made conditional on the employee granting a sexual favor is _______________harassment. a. Hostile workplace b. Disparate impact c. Disparate treatment d. Quid pro quo

d. Quid pro quo

The party against whom an administrative complaint is filed is the _____, who is afforded the right to respond to the complaint in writing. a. Petitioner. b. Appellant. c. Plaintiff. d. Respondent.

d. Respondent.

The requirement that a person who wishes to sue show injury is called _______. a. Venue. b. Jurisdiction. c. Claim preclusion. d. Standing.

d. Standing.

Which federal statute requires that employers provide safe working conditions for their employees? a. The Landrum-Griffin Act b. The Taft-Hartley Act c. The Corporate Insurance Compensation Act d. The Occupational Safety and Health Act

d. The Occupational Safety and Health Act

A claim for discrimination cannot be brought under Title VII if the discrimination is based on a. Race b. Gender c. Religion d. National origin e. Sexual orientation

e. Sexual orientation