Legal Environment of Business Final
False
A breach of contract occurs only when a party fails to perform all of his or her duties under a contract.
False.
A creditor must exhaust all legal remedies against the principal debtor before holding the surety responsible for payment.
a nonprofit corporation.
A firm named Scientific Discovery Corporation (SDC) makes an attempt to incorporate for a purpose other than making a profit. SDC is
False
A material breach occurs when performance is substantial, but not complete.
False
A security interest cannot be perfected without the filing of a financing statement.
Falsa
A whistleblower is an employee who reveals confidential information about a fellow employee to an employer.
True.
An artisan's lien is effective only if a creditor has possession of the property.
True.
An employee who is fired outside of the terms of an implied employment contract may succeed in an action for breach of contract.
fraud
Andy knows nothing about horses. Peter, an expert horse trainer, knows that a certain horse has no talent and is not likely to win any competitions. Peter convinces Andy to buy the horse for $500,000 by assuring him that it has great talent. The horse turns out to have no talent and never wins any competitions. Andy can most likely recover damages based on
can only disaffirm the contract if she returns all the goods.
Beth is a minor. She buys a set of sessions with a personal trainer, and a water bottle and some weights from a fitness store. Later, Beth decides that she does not want the water bottle or weights. In most states, Beth
the objective theory of contracts.
Bobbie claims that Carly breached their contract. Carly responds that she never intended to enter into a contract with Bobbie. The intent to enter into a contract is determined with reference to
not collect the commission, keep it, or foreclose on the property.
Brasilia, a real estate broker licensed only in Connecticut, con¬cludes a land sale in Delaware. She can
the Food and Drug Administration.
Corner Market sells groceries. Delta Food & Drug Store sells groceries and fills prescriptions. The party with the chief responsibility to prevent unsafe food and drugs from being sold is
True.
Creditors can agree with a debtor to discharge the debtor's debts on payment of a sum less than that owed.
Creditworthy's credit terms.
Creditworthy Loan Company extends credit in the ordinary course of its business. Under the Truth-in-Lending Act, Creditworthy must inform potential borrowers of
a promise.
Cynthia tells Darryl that she will deliver his boxes of Paradise Cookies as he directs. A declaration that one will do something in the future is part of the definition of
she is a member of a protected class.
Dakota believes that Credit Services Corporation (CSC) has discriminated against her on the basis of gender. She files a suit against CSC under the Civil Rights Act of 1964. To establish a prima facie case of employment discrimination, Dakota must show that
resolutions.
DeFazio's Italian Restaurants, Inc., holds a shareholders' meeting. Corporate business matters are presented at the meeting in the form of
subordinate the corporation's welfare to their personal interests.
Denise, Ervin, and Flem occupy the positions of directors on the board of Gallery Corporation. As directors, they may not
not enforce the deal.
Doug agrees with Elinor to sell methamphetamine to patrons of Elinor's nightclub Garden of Eden for 25 percent of the take. Doug sells the drugs but keeps all of the money. Elinor can
performed.
Dylan enters into a contract to manage the operations of Cash's accounting office for one year, renewable for subsequent one-year terms. If this contract is discharged like most contracts, it will be
agreement.
Ellen offers to sell her math textbook to Julia for $50. Julia does not respond. Ellen and Julia do not have a contract because they lack the requirement of
True
For a creditor to have an enforceable security interest, the creditor must give something of value to the debtor.
not enforce it.
Genovese Contracting, Inc., agrees to build a warehouse for Hawthorne Distributors. Genovese runs into the types of difficulties that contractors ordinarily confront, and Hawthorne agrees to pay extra compensation to overcome them. Regarding the agreement to pay more, a court would likely
Bill.
George is the founder of Excellent Exotics Corporation. Wilson is a shareholder and director and Bill is an officer. The daily business operations of Excellent Exotics are overseen by
the difference between the wages at the two jobs plus $100.
Handy Hardware Store agrees to hire Ilsa for one year at a salary of $500 per week. When Handy cancels the contract, Ilsa spends $100 to obtain a similar job that pays $450 per week for a year. Ilsa is entitled to recover
bait-and-switch advertising.
Hearth & Home Furniture store advertises bedroom suites at a "Special Low Price of $599." When Ilene tries to buy one of the suites, Jill, the salesperson, tells her that they are all sold and no more are obtainable. Jill adds that Hearth & Home has other bedroom suites available for as low as $2,599. This is
An executory contract
Holiday Sales Company and Global Distributors, Inc., enter into a contract for the delivery of imported specialty goods. Until the goods are delivered and paid for, these parties have
the employer
Hu, Ivan, and Juana apply to work for King Meatpacking Company. These individuals' identities and eligibility to work must be verified by
the board of directors.
Inez and Jason are the shareholders and directors of Kleen Kustodial Corporation. Lily and Moe are Kleen's officers. As in other corporations, the responsibility for the overall management of Kleen rests with
browse-wrap terms.
Jared downloads some video games from the Internet. There is a page indicating the terms of use, but nothing that requires Jared to affirmatively indicate his consent before downloading the games. These terms are
an artificial legal person.
Jean and Olivia want to form and do business as Cake Cups Corporation. A corporation is
Annual wage basis
Jo works for Tall Tales Publishing, Inc. The basis for Jo's contribution under the Federal Insurance Contribution Act (FICA) is based on her
enforce the contract.
Kathleen sells Richard a racehorse for $1,000. Both Kathleen and Richard think that the horse is too slow to win any races. Richard then enters the horse in a race, and it wins easily. He enters it in more races, and the horse soon wins more than $1 million. Kathleen tries to rescind the contract to sell the horse, claiming that it was worth more than $1,000. A court will
ratified and Katie cannot recover her payments.
Katie buys a car when she is seventeen. When she is twenty-five, Katie tries to disaffirm the contract and recover all her car payments. A court will likely find that the contract was
Jake or Leonardo.
Leonardo contracts to install automatic watering troughs in Kendall's dairy barn. Leonardo then becomes seriously ill and contracts with Jake to install the troughs. Jake is unreliable and never shows up to install the troughs. Kendall can sue
False.
Liens usually do not take priority over other claims against the same property
must make a full disclosure of any conflicts of interest and abstain from voting on the proposed transaction.
Louise is a director for Icy Ices, Inc. Louise is also a director for Creamy Creams, Inc. When Icy Ices enters into a contract with Creamy Creams, Louise
not guaranteed any payments of dividends.
Lyla is a common shareholder in Norman's Nutty Nuts Corporation. As a common shareholder, Lyla is
against public policy.
Marco and Fred enter into a contract for the sale of Marco's apartment for which Fred agrees to pay him $100,000. Marco cannot prohibit Fred from transferring his right to the ownership of the apartment because such a prohibition is
not liable, because the consideration is in the past.
Mariah promises to pay her assistant Nadine $10,000 in consideration of the services she provided over the years. Mariah never pays Nadine. Mariah is
when Michael voluntarily surrenders possession of the car.
Michael contracts with Jill to fix the brakes on her Honda Civic. Jill leaves her car with Michael but refuses to pay when the work is done. Michael refuses to return the car until she pays. Michael's lien on Jill's car will end
the employees.
Network Industries, Inc., wants to monitor its employees' electronic communications. To avoid liability under laws related to employee monitoring, Network should announce the monitoring to
bankruptcy trustee
Norma Jean files for Chapter 7 bankruptcy. She turns her assets over to Addie, who sells the assets and then distributes the proceeds to Norma Jean's creditors. Addie is a
does not change the fact that Phil is bound by the contract.
Olivia, a minor, signs a contract to buy a bike from Phil, the owner of SuperCycles Bike Store. Olivia's right to disaffirm the contract
True.
One of the most important federal consumer protection laws is directed at deceptive trade practices.
prohibited because Pat and Ruth have very different skill levels.
Pat, a world-famous musician and composer, agrees to give ten piano lessons to Quinn in exchange for $1,000. Pat's attempt to delegate his contract to Ruth, an inexperienced pianist, will probably be
Portia's real estate
Portia owes Bon $500 on their contract but refuses to pay. To collect, Bon files a mechanic's lien, under which security for the debt is represented by
reasonably clear.
Quality Sales Corporation enters into contracts over the Internet. Quality can protect itself against disputes involving these contracts by making important terms
the Occupational Safety and Health Act.
Quinn is an employee of Regional Industries, Inc. Quinn is threatened with a discharge when he refuses a transfer to a Regional department in which several employees suffered serious injuries from exposure to hazardous chemicals. Quinn may be entitled to protection from discharge under
cannot disaffirm his contract with Jane because he is an adult.
Richard is an adult. He enters into a contract to sell sixteen-year-old Jane his car for $3,000. The next day Richard receives an offer of $4,000 for his car from twenty-year-old Bill. Richard
the assignment will materially increase the risk of nonperformance.
Richly Merchandise, Inc., contracts with Stand-Rite Contractors to build a store. Stand-Rite assigns the contract to Town Builders, which has a poor record of completing projects. Richly could most successfully argue that the contract cannot be assigned because
a domestic corporation.
Ruby Red Corporation is incorporated in South Carolina. In that state, Ruby Red is
not question the adequacy of the consideration.
Sparky offers Teodora $1,000 for her collection of rare coins. She accepts. If a dispute arises, a court would likely
an assignment.
Stephanie's sale of rights she has under a contract with Runway Retail, Inc., to buy the retailer's clothing overstock is
the Truth-in-Lending Act.
Teri borrows $10,000 from USA National Bank to remodel a room in her home. This transaction is subject to
True.
The Federal Trade Commission is charged with preventing unfair and deceptive trade practices.
True.
The Food and Drug Administration must ensure the safety of new drugs.
True.
The Truth-in-Lending Act applies to persons who, in the ordinary course of their business, lend money, sell on credit, or arrange for the extension of credit.
the Fair Debt Collection Practices Act.
The credit department of Mega-Mart often calls Nora at work about an overdue bill. Nora's employer objects. This is a violation of
file a financing statement with the appropriate authority.
The payment of Hu's debt to Ian is guaranteed by Hu's personal property. To give notice of his interest in Hu's property to other creditors, Ian is most likely to
allows minority shareholders to be represented on the board.
Thor Power Products Corporation permits its directors to be elected by cumulative voting. This
third-party beneficiary contract
Tristan promises to paint Katy's house in exchange for Lila's promise to plant trees on Tristan's property. This is
True.
Under the employment-at-will doctrine, an employer can end an em-ployment relationship at any time.
True.
Vague generalities and obvious exaggerations are permissible in advertising.
The quantity of saddles.
Valley Tack Shop signs a contract with Gary's Boots and Saddles for delivery of five saddles that cost $200 each. To be enforceable under the Statute of Frauds, the written contract must designate
True
Whistleblower statutes protect employees from retaliatory discharge.
allow the parties to rescind the contract.
Wilma, who lives in New York, enters into a contract to buy a painting from Fred, who lives in France. The contract includes all the costs of insuring and shipping the painting from France to New York. The agent that made the shipping estimate makes a mistake when adding up the costs and, as a result, the shipping cost listed in the contract is $1,000 less than the shipping actually costs. A court will most likely
unilateral contract.
Wilson buys a lottery ticket at his local gas station. Wilson has accepted an offer for a
Workbilt's liability for damages.
Workbilt Hardware Company employs workers, including Gina, at six locations in two states. Workbilt's discharge of Gina outside the terms of an employment contract may result in
