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BAM 521
Business Law
Text:
Contemporary Business and Online Commerce Law
Sixth Edition, 2009
ISBN: 10 013-601500-X
Author(s):
Henry R Cheeseman
Publisher:
Pearson Prentice Hal,
a.
Business Law
Multiple Choice Questions (Enter your
answers on the enclosed answer sheet)
~The court's decision in Brown v. Board
of Education had what effect on the decision
~ made in Plessy v. Ferguson?
b.
c.
d.
e.
f.
It showed that precedent can be overruled and IS not binding in every situation.
It applied the Doctrine of Stare Decisis
It showed that the Constitution IS not subject to interpretation.
It applied the principle of preemption
It followed precedent.
2)
Someone who believes that law is a reflect on of those in power, believes in which
school of jurisprudential thought?
a, The Analytical School.
b. The Natural School.
c. The Command School.
d. The Historical School
e. The Psychological School
(""hiCh of the following is a false statement regarding the citizenship and immigration
~liCY of the United States?
a.
b.
c.
d.
e.
Immigration quotas are different for each foreign country.
The first immigration quota policy was enacted in the 1920s.
The immigration quota policy was repealed after World War II.
There is an immigration quota policy in effect today In the United States.
Immigration laws are administered and enforced by the United States Customs and
Immigration Service.
4) The remedy, or relief that was available in the law courts of England was:
a.
b.
c.
d.
e.
specific performance.
monetary awards for damages.
fines and imprisonment.
returning the parties to their positions before the dispute arose.
Any of the above, and any other remedy determined to be fair in the particular case.
5) Chancery Courts were also known as:
a.
b.
c.
d.
e.
Criminal Courts
Equity Courts.
Legal Remedy Courts.
Merchant Courts.
Law Courts.
P'
'Business
Law
6) When statutes are organized by topic the
resulting compilation of law is known as:
a.
b.
c.
d.
e.
precedent.
a code.
civil law.
topical presentation
common law.
7) Which of the following IS not empowered to establish administrative agencies?
a.
b.
c.
d.
e.
A state executive branch.
Concress.
A federal or state judicial branch
A state leoislative branch.
The federal executive branch.
f7:J For which of the following in the U.S. Congress can the number to which a state is
~ entitled change over time?
a.
b.
c.
d.
e.
All members of the U.S. Congress.
Senators.
Both Senators and representatives.
Neither senators nor representatives
Representatives.
Ia? ~e power of the federal government to make treaties with Native American Nations
L/r~~arding land and land use IS derived from the:
a.
b.
c.
d.
e.
Privileces and Immunities Clause.
Supremacy Clause.
First Amendment.
Commerce Clause.
Equal Protection Clause
10) If there is an area of interstate commerce that the federal government has chosen not
to regulate, the states can
a.
b.
c.
d.
e.
65
not regulate in that area because states cannot pass laws affecting interstate commerce
reoulate in that area so long as the state law does not unduly burden interstate commerce.
not requlate in that area because the federal covernrnent's decision to not regulate in
an area implies that there is to be no requlation in that area at any level.
reculats without restriction In that area.
regulate in that area so long as it first gets the requisite approval from Congress.
I
Business
Law
/16')'Inmost cases, following a decision by the
~ Court of Appeals:
a.
b.
c.
d.
e.
either party has a right to have the Supreme Court review the merits of the case.
either party can request that the Supreme Court review the merits of the case, but the
Supreme Court denies this request in most cases
the case cannot be appealed further.
the Circuit Court of Appeals decision must be reconfirmed by the District Court where
the case was origi na lIy tried.
either party can request that the Supreme Court review the merits of the case, with
the request being granted unless the Circuit Court of Appeals decision was c early
correct.
~iCh of the following is true regarding federal question jurisdiction?
a.
b.
c.
d.
e.
There is a dollar-amount limit of $75,000 on federal question cases that can be
brought in federal court.
There IS a dollar-amount limit of $100,000 on federal question cases that can be
brought in federal court.
There is no dollar-amount limit on federal question cases that can be brought in federal court.
There is a dollar-amount limit of $50 000 on federal question cases that can be
brought in federal court
There is a dollar-amount limit of $10,000 on federal question cases that can be
brought in federal court.
r::l"'hen parties to a contract agree upon which state court will have Jurisdiction should
'(/I~tigation become necessary that contract clause is called a:
a.
b.
c.
d.
e.
jurisdiction selection clause
choice-of-Iaw clause.
s andings clause.
venue selection clause.
forum-selection clause.
19) Which of the following pleadings could typically be filed by a defendant in a lawsuit?
a.
b.
c.
d.
e.
Answer and complaint.
Complaint and cross-complaint.
Cross-complaint and reply
Answer and cross-complaint.
Motion to intervene and complaint.
I.
Business Law
20) When an appellate court receives a case
appealed to it, it will:
a.
b.
c.
d.
e.
retry the case with a new jury.
review the record of the trial court so see if there were any errors of law made by the
judge.
review the jury's verdict to see If the appellate court judges would have reached the
same result.
review the record to see if it would have made the same decision as the jury.
retry the case with the appellate court judge acting as the jury.
21) In general, an appellate court might typically reverse which of the following?
a.
b.
c.
d.
e.
The trial court's conclusions of law
The jury's findings of fact.
Both A and B.
Neither A nor B.
The trial court's findings of fact.
22) Arbitrators and mediators are also called:
a.
b.
c.
d.
e.
impartials.
disinteresteds
dispassionates.
neutrals.
equitables
23) The best descnptlon of misappropriation of the right to publicity is:
a.
b.
c.
d.
e.
publicizing private information about someone without that person's consent.
publishing the creative work of another and claiming that it IS yours.
claiming credit for the accomplishments of another
publicly claiming to have accomplished something that you have not accomplished
attempting to use another living person's name or identity for commercial purposes
without that person s consent.
24) A landowner owes a duty of ordinary care to:
a.
b.
c.
d.
e.
,;8
licensees and invitees.
licenses and invitees only if business activities are involved.
invitees only
licensees only.
none of the above.
k
Business
Law
25) Sam, who weighs 250 pounds,
calls his 110 pound girlfriend, Alice, one morning
while she is at work. He says, "You are to stay In your office until midnight. If you
come to my house before midnight, I will make you sorry that you did." Assuming
that Alice usually leaves her office at 5:00pm but stays until midnight that night
because of the threat if Alice files a false imprisonment case against Sam, a court
most ikely will find that
a.
b.
c.
d.
e.
69
there was no false imprisonment because Sam and Alice previously knew one another.
there was false imprisonment because Sam's threat forced Alice to stay in the office.
there was no false Imprisonment because Alice could have left the office and stayed
away from Sam's house, and because the threat related to future harm.
there was false imprisonment only if Alice can prove she reasonably feared Sam.
there was no false imprisonment because Alice's office was not a prison, even though
it might have felt like one to Alice.
l.
Business Law
Multiple Choice Questions (Enter your answers on
the enclosed answer sheet)
GhiCh of the following is true about crimes?
a.
b.
c.
d.
e.
Recklessness never provides a sufficient criminal intent.
Criminal liability exists only if there is a victim who suffered damages.
A criminal defendant will be found guilty whenever the jury believes it is more likely
than not that the defendant committed the crime.
Torts always accompany crimes, although the civil case is often not brought.
For some crimes recklessness provides a sufficient criminal intent.
2)
Sam is charged with the crime of theft and has also had a civil suit filed against him
by the victim. Which of the following could not be a consistent outcome?
a.
b.
c.
d.
e.
Not guilty in the criminal case, not liable in the civil case.
Guilty in the criminal case, not liable in the civil case.
Not guilty in the criminal case, liable in the civil case.
Guilty in the criminal case, liable in the civil case.
Both A and D.
3) Which of the following is true about how plea bargaining usually works?
a.
b.
c.
d.
e.
A defendant pleads guilty to the charged crime or to a lesser offense in exchange for
receiving a lighter sentence than if the defendant were to be tried and found guilty of
the original charges.
A defendant who is serving a prison sentence for a crime the defendant was convicted
of can get the sentence reduced for good behavior, community service or similar reasons.
A defendant waives certain constitutional rights in exchange for a lighter sentence.
A defendant waives the right to a jury trial and the judge determines guilt or innocence.
Both C and D.
4) Which is true about corporate criminal liability?
a.
b.
c.
d.
e.
147
Because a corporation cannot be sent to prison, they generally cannot be held criminally liable for the actions of their officers.
If the criminal conduct can be traced to a specific person or persons, those persons
will be liable and not the corporation.
Corporations have never been subject to criminal liability because they cannot go to
jail.
There can be liability for both the individuals who commit crimes and for the corporation on whose behalf the crimes were committed.
There can be no liability for individual employees of a corporation, but the corporation
can be held responsible for the crimes committed.
m.
Business Law
5) Which of the following statements is true?
a.
b.
c.
d.
e.
The attorney-chent privilege is the only privi ege that has been recognized under the
Fifth Amendment.
Even if immunity from prosecution has been granted, the defendant may still refuse
to testify.
The guarantee has been extended to include all business records and documents.
The Fifth Amendment guarantee against self-incrimination does prohibit the taking of
fingerprints against a suspect's will.
The Fifth Amendment guarantee against self-Incrimination does not prohibit the taking of fingerprints against a suspect's will.
6)
The Miranda decision requires that a criminal suspect be notified of the following
except:
a.
b.
c.
d.
e.
the fact that anything the suspect says may be used against the suspect.
the right to have an attorney appointed if the suspect cannot afford one.
the right to a trial by jury.
the nght to have a lawyer present during Interrogation.
the right of the suspect to remain silent.
7) The following can properly be the subject of a patent except:
a.
b.
c.
d.
e.
asexually reproduced plants.
conceptual ideas.
designs for manufactured objects.
mechanical processes.
compositions of matter.
@hiCh of the following is true about copyright law in the United States?
a.
A work must be published in order to receive COPYright protection.
b.
c.
d.
e.
A copyright is not created by the process of registration
A copyright must be registered before public disclosure of the copyrighted material.
State copyright laws supplement the federal copyright laws.
Both C and D.
(;;) bountries began entering into treaties with each other that provrded protection of
UI~ternational property rights In the:
148
a.
only since 2000.
b.
c.
d.
e.
1700s
16005.
19005
1800s.
n
Business
Law
G
Jhhn has invented a device to monitor
tire pressure on bicycle tires. This
device consists of a tire pressure sensor on the tire with a radio transmitter and a receiver mounted on the handlebars to give a readout of the pressure. The radio transmitter is similar to existing designs but one has never been used in this way. The
product cannot be produced for less than $120, but John's preliminary marketing
studies indicate that the product could not be sold for more than $25. Which of the
followi ng is true?
a.
b.
c.
d.
e.
tie
John cannot get a patent because the transmitter part is not a new invention.
John can get a provisional patent which would provide limited protection until he can
redesign It so that it can be made for under $25.
John cannot get a patent because the inability to produce the product at a cost low
enough to sell it means that it does not meet the usefulness requirement.
John can obtain protection for his invention even if someone else files a patent application for the same invention so long as John actually invented his first and only if
he pays a fee of $1 ,000.
John can obtain protection for his Invention even if someone else files a patent application for the same Invention so long as John actually invented his first.
~. Rusiness law teacher Sue Smith copies 5 pages out of a 999 page book in the library
Vcr use in class. Ms Smith did not want her students to have to purchase the entire
book because of the expense Involved. A qrumpv library assistant calls the publisher
of the book and informs on Ms. Smith. Is Ms. Smith in trouble?
a.
b.
c.
d.
e.
It is unlikely that Ms. Smith will be In trouble because her use of a few pages would
probably constitute a "fair use" under trademark law
Yes, Ms. Smith will be liable for trademark violation because the students should have
been required to buy the book.
Yes, Ms. Smith will be liable for copyright violation because the students should have
been required to buy the book.
It IS unlikely that Ms. Smith will be in trouble because her use of a few pages would
probably constitute a "fair use" under copyright law.
Ms. Smith will be liable for copyright Violation only if she made a profit from the use.
12) Wh ich of the followi ng statements is true regard i ng the relationsh i p of law and eth ics?
a.
b.
c.
d.
e.
149
The legal requirements will almost always be the same as the ethical requirement
because the law is based on the ethical standards.
In some cases ethics will require a higher standard of conduct than the law, but never
vice versa.
In some cases the law will require a higher standard of conduct than ethics, but never
vice versa.
There IS a disagreement about legal standards of conduct but not about ethical standards of conduct.
Depending on the circumstances, the law can require a higher, lower, or the same
standard of conduct as ethics demands.
()
Business
Law
13) Someone who believes that moral
decisions should be made such that the
greatest
amount of good in total results from the actions, believes in which moral theory?
a.
b.
c.
d.
e.
Kantian ethics
Rawls's distributive justice theory.
Utilitarianism.
Ethical fundamentalism.
Ethical relativism.
14) A criticism of utilitarianism IS that:
a.
b.
c.
d.
e.
moral and ethical rules are too rrgid and fixed over time.
some persons would take actions that they believe to be moral, but which most persons in society believe to be immoral.
decisions require the measurement of qualities that are not subject to precise measurements
decisions are not allowed to take into account an individual's station or place in society.
Both C and D.
~ ~'SS promoted which of the following?
~:-' The belief that the moral rules should be determined by persons who have a "veil of
ignorance" about their place or station in society.
b. The belief that a person must decide what course of action is proper based on that
person's own set of beliefs or feelings
c. Determining which couse of action produces the greatest amount of good for the
greatest number of people
d. A set of universal rules based on reasoning which must be applied in all situations
and are characterrzed by reversibihty
e. The consultation of an outside source, such as a book or person for guidance.
16) Big Green Company is considennq introducing a new product to replace an existing
product. The new product would result In Increased revenues. but slightly lower overall profits because the product will cause injury to a few users and Big Green will
compensate persons who are injured. The introduction of this product would be the
proper decision under:
a.
b.
c.
d.
e.
150
the moral maximum theory, but not under the moral minimum theory
neither the moral minimum theory nor the profit maximization theory.
both the moral minimum theory and the profit maximization theory.
the moral minimum theory, but not under the profit maximization theory
the profit maximization theory but not under the moral minimum theory
n.
Business Law
~~der the objective theory of contracts,
~~act could result from an offer made:
a.
b.
c.
d.
e.
due to fraud.
due to a need to sell an item quickly.
by someone who clearly had Alzheimer's disease.
under duress.
by someone who was clearly intoxicated.
18) Under the objective theory of contracts, whether or not a contract exists is based on:
a.
b.
c.
d.
e.
the statutory offers.
the objective contractor standard.
the judicial standard.
the objective constitutional standard.
the reasonable person standard
19) What is required for a contract to be an express contract?
a.
b.
c.
d.
e.
It is performed immediately after formation.
It is performed for mutual benefit.
It is stated in words.
It is written and signed
All of the above.
20) A contract under seal is called a/an:
a.
b.
c.
d.
e.
quasi contract.
informal contract.
bilateral contract.
express contract.
formal contract.
Qn
151
agreement that is lacking consideration
a.
wi II not be an enforceable contract, but may be enforced under the theory of prom is-
b.
c.
d.
e.
sory estoppel.
is void as against public policy
is not enforceable, and thus cannot be performed.
IS enforceable only If in writing.
will be enforced only against the party who gave consideration.
o.
Business Law
22) Offeror says, "1'11 sell you my car for
$15,000" Offeree says, "I accept your offer but
will pay $14 000." What is true at this point?
a.
b.
c.
d.
e.
This was a conditional acceptance
Offeror must sell car to Offeree If Offeree gives Offeror $15,000.
There are two open offers.
The offeree's statement was a revocation of the $15,000 offer
The only open offer IS for $14 000
23) Mary promises to give her car to her friend. The friend sells his current car at a fairly
low price because he is expecting to get a nearly new car at no cost from his rich and
generous friend, Mary. Mary changes her mind and decides to keep the car. If the
friend sues Mary the court most likely will:
a.
b.
c.
d.
e.
based on the theory of promissory estoppel require Mary to pay damages to the friend
for any loss he incurred in connection with Mary's not keeping her promise.
require Mary to give her friend the car because Mary made an Illusory promise.
require Mary to give her friend the car because his sale of his car was consideration.
not require Mary to do anything unless it can be proven that she subjectively intended
to cause her friend monetary diffculty.
not require Mary to do anything because this was a gift promise
ehiCh of the followmq is not true?
a.
b.
c.
a.
b.
What constitutes a necessary varies over time and can differ from state to state.
A minor can stili disaffirm a contract for a reasonable time after reaching majority.
A minor does not have to wait until reaching majority to disaffirm a contract.
In most states a minor who misrepresents his or her age has no duty to place the
com petent party In status quo if the minor disaffirms the contract.
A minor must pay the agreed price on a contract for necessaries.
r
\thY purchased a used car from Mint Motors Inc. on her sixteenth birthday and will
~~ making 48 monthly payments to Mint. Thirteen months later the car was stolen
and was never recovered. Which of the following statements is correct?
a.
b.
c.
b.
c.
152
The cars theft is an automatic ratification of the contract because it is now
impossible to return the car.
Kathy ratified the contract by driving the car for thirteen months.
Kathy may demand a new car from Mint as a penalty for dealing with a minor.
Kathy may not disaffirm the contract if she ratified the contract either orally or in
writing prior to the theft ..
Kathy may disaffirm the contract because she IS a minor.
BuslDess Law
r.
Multiple Choice Questions (Enter your answers on the enclosed answer sheet)
1)
In general, what is the effect of one party being mistaken about the subject matter of
a contract?
a.
b.
c.
d.
e.
The mistaken party can rescind the contract.
Either party can rescind the contract, and the mistaken party can recover damages.
Neither party can rescind the contract or recover damages.
Either party can rescind the contract and/or recover damages.
Either party can rescind the contract.
r;;\~
Krysa v. Paine, where Paine s Car Company was found to have committed fraud
Un the sale of a truck to Krysa, what did the court rule regarding the punitive damages
award?
a.
b.
c.
d.
e.
Punitive damages are allowed at 9: 1 in cases involving personal injury but in contracts must adhere to a 3: 1 ratio.
Punitive damages are limited to 9: 1 in all cases.
Punitive damages should never have a cap or their function as a deterrent and punishment would be lost.
Punitive damages are not available in a fraud action based on a contract.
Punitive damages of 27: 1 are permitted in cases of extreme fraud.
~he knowledge of a statement's falsity or the "guilty mind," in a fraud in the induce~ent case is also known as:
a.
b.
c.
parol knowledge.
justifiance.
reliance.
d.
scienter.
e.
guilty intent.
/lJndre has made a statement
that the average person
would realize is puffery.
Andre
(A
208
guilty of:
a.
b.
c.
d.
e.
duress.
fraud.
innocent misrepresentation.
undue influence.
nothing.
5)
In Wilson v. Western National Life Insurance Company, involving the party who lied
allegedly regarding prior drug abuse in order to obtain life insurance, what was
the holding of the court when the party later died from a drug overdose?
s.
t.
u.
v.
w.
x.
6)
Undue influence is characterized by one party being put at a disadvantage in a contract due to:
a.
b.
c.
d.
e.
a party taking advantage of superior knowledge about the subject matter in a contract.
a party taking advantage of a fiduciary relationship.
a party taking advantage of the other partys legal circumstances.
a party taking advantage of economic advantage In a transaction.
a party taking advantage of it being less urgent for that party to reach an agreement.
7)
If a judge rules that a party has lost its case because of the Statute of Frauds, the
judge has essentially stated that:
a.
the losing party was found by the court to have lied, and will therefore lose the case
b.
c.
d.
the losing party purposely deceived the other party about a material fact.
the losing party cannot enforce an oral contract that should have been in writing.
the winning party has proven criminally fraudulent conduct on the part of the losing
party.
the losing party is not allowed to introduce evidence to contradict a written agreement.
e.
8)
Frank had a bicycle that he advertised for sale, honestly believing it to be a 1999
model even though it was actually a 1996 model There were significant improvements in the frame material, not readily apparent, made between 1996 and 1999 to
this model bicycle. The buyer believed Frank's statement that it was a 1999 model,
and was excited to be getting a model incorporating the improvements. After discovering that the bike was actually a 1996 model, the buyer could avoid the contract on
the basis of:
a.
b.
c.
unilateral mistake.
fraud
mutual mistake
Band C
none of the above
d.
e.
209
The life insurance company had to pay the
proceeds because if the plaintiffs medical
records had been consulted, the drug abuse would have been discovered.
The life insurance did not have to pay the proceeds only because the deceased's wife
was unaware of the misrepresentation.
The life insurance had to pay the proceeds because the deceased's wife actually paid
the premiums.
The life insurance company had to pay the proceeds because the plaintiff was not
using drugs during the time the application for insurance was made.
The life insurance company did not have to pay the proceeds because of the concealment of the drug abuse
Busmess Law.
y.
!':'~e owner of a gym tells Ruppert that if he joins the gym for a year and hires a per~'nal trainer, his body will be more attractive to women and his life will change forever. Ruppert joins and hires a personal trainer but otherwise his life remains the
same. The statements of the gym owner could be described as:
a.
b.
c.
d.
e.
statements of fact.
statements of opinions.
predictions about the future
both Band C.
A, Band C.
~ ~~h of the following is the false statement?
Wegal right arisi ng from a breach of contract may be assigned.
b. The same right can be assigned more than once.
c. You must get everyone's consent to make a novation.
d. Purely mechanical duties are not delegable.
e. There is a guarantor in a delegation.
B)
a.
b.
c.
d.
e.
When there has been an assignment of rights under a contract who has a duty to
notify the obligor of the assignment?
The assignor.
The assignee.
Both the assignor and the assignee
Neither the assignor nor the assignee.
Whichever party is nearer the obligor geographically.
~-w,en an obi igor transfers her obi igation to perform a contract duty to another, th is is
lYown as am).
a.
b.
c.
d.
e.
delegation.
accord.
den igration.
assignment.
stipulation.
13) When there is an accord and satisfaction, when are the duties under the original con
tract discharged?
a.
b.
c.
d.
e.
210
When the accord is formed
When the duties of the original contract are fully performed by one of the parties.
When the original contract is breached.
When the duties under both the original contract and the accord are fully performed
by both parties.
When the duties under the accord are fully performed by both parties.
BusIQess Law__ _ _
z.
(2)
~ICh of the following IS true?
•....
a.
b.
c.
d.
e.
If a contract can be performed, but doing so has become illegal, performance will be
discharged on the basis of Impossibility.
A party can generally get out of a contract if it had entered into the contract without
all information relevant to the contract.
Death of a party will always result In discharge of that party's duties.
A seller's duty to sell goods .s discharged due to impossibility if the seller is unable to
acquire the goods from its normal supplier.
Both A and B.
~ \,\VorldRest Hotels has contracted with QuickBuild Construction to build a 650-bed
votel in Downtown Dallas. Marty has entered into a lease agreement for retail space
in an adjacent building to open a gift shop catering to the hotel guests. QuickBuild
was aware of Marty's lease agreement. QuickBuild breached its contract with WorldRest by not completing the hotel until seven months after the contractual due date.
Because the hotel was late opening and there were seven months when the hotel had
no guests, Marty lost considerable profits in the retail shop. Marty has sued QuickBuild to recover these lost profits. Which of the following is true?
a.
b.
c.
d.
e.
Marty is a donee beneficiary of QuickBuild's contract to build the hotel.
Because QuickBuild is now in debt to Marty for the lost profits, Marty is a creditor
beneficiary of the hotel construction contract.
Marty can recover in the Situation on the basis of an assignment of rights.
Marty cannot recover because Marty is an Incidental beneficiary of the hotel construc-
tion contract.
The court would likely order QuickBuild to delegate its duties on future contracts so
that they are finished on time.
16) What is tender of performance in connection with a contract?
a.
b.
c.
d.
e.
Performance whose terms have been ordered by the court.
One party's completion of duties under the contract.
An uncondtional offer by a contracting party to perform his or her obligations under a
contract.
A party's offering substitute performance that is superior to the performance called for
in the contract.
A party's offering to perform prior to full payment.
17) What kind of damages Will be awarded when there is no actual financial loss?
a.
b.
c.
d.
e.
Special damages
Nominal damages
Compensatory damages.
Consequential damages
There are no damages that a court will award in the absence of an actual flnancial
loss
llusme.ss Law
aa.
@hat does the term 'mitigation" refer to In connection with damages?
a.
b.
c.
d.
e.
The calculation of lost profits in determining damages
The combination of the different kinds of damages into a single dollar amount.
The duty of the breaching party to make a damages payment as soon as practical.
The requirement of the non-breaching party to allow the breaching party one final
chance to perform the contract before being entitled to collect damages.
The duty of a non-breaching party to make reasonable efforts to reduce damages.
~-What is the modern rule for who gets to keep an engagement ring given by the man to
Uhe woman If the planned wedding does not occur?
a.
b.
c.
d.
e.
It must be returned to the man regardless of who broke off the engagement.
It will be based on who was determined by the court to be more at fault in causing the
engagement to be broken off.
It will go to the party who has the least financial resources at the time the engagement is broken.
The party who did not break off the engagement gets to keep It.
The woman can keep it regardless of who breaks off the engagement.
20) What was the result in the Ethtcs Spotlight In the book in which "Kurupt was allegedly Induced by Death Row Records to breach an exclusive recording agreement with
the Brumfield?
a.
b.
c.
d.
e.
Death Row Records was held liable for the tort of intentional interference with a contract but could not be held liable for punitive damages.
Death Row Records was held liable for the tort of intentional interference with a contract but could not be held liable for compensatory damages.
Death Row Records was not held liable for anything because the plaintiff had been
prosecuted for fraudulent activities, and Death Row Records assisted the singer in
avoiding a bad deal
Death Row Records was not held liable for the tort of intentional interference with a
contract.
Death Row Records was held liable for the tort of intentional interference with a contract, and was held liable for compensatory and punitive damages.
I::,~
Reno Attorney General of the United States v. American Civil Liberties Union
l7o~vOlving a law restricting the sending of certain sexually oriented information over the
Internet, the U.S. Supreme Court ruled that:
a.
b.
c.
d.
e.
'12
the Telecommunications Act of 1996 violated the U.S Constitution for its restrictions
on the transfer of indecent material over the Internet.
the Communications Decency Act violated the U.S. Constitution for its restrictions on
the transfer of indecent material over the Internet.
the Internet had grown to a point that it should be placed into private ownership that
could contract regarding sexual content with individual service providers.
the Communications Decency Act did not violate the U S Constitution in any manner.
individual states could decide whether the Telecommunications Act of 1996 violated
the U.S. Constitution.
BlJsloes!> Law
bb.
Cz)
a.
b.
c.
d.
e.
;krder to obtain a domain name, one must
obtain clearance from the U.S Patent and Trademark office that the name is not confusingly similar to another name and pay the appropriate fee.
verify that the name is not already taken complete a registration form, and pay the
appropriate fee.
apply for the name with the appropnate county agency; state the purpose for which
the name will be used; and if the use IS approved, pay the appropriate fee
apply for the name and if within the waiting period there are no objections to the applicant taking the name pay the appropriate fee
post notice at the Network Web office of the intent to use the name. directly notify
parties who might object to obtain their waiver of objection and pay the appropriate
fee.
I
23) T}e Counterfeit Access Device and Computer Fraud and Abuse Act makes it illegal to
~o each of the following except:
a.
b.
c.
d.
e.
access a computer to knowingly obtain financial records of financial institutions.
access a computer to knowingly obtain grades and personal information pertaining to
students at a college or university.
access a computer to knowingly obtain restricted governmental information.
access a computer to knowmqly obtain consumer reports of consumer reporting agencies.
all of the above are illegal under the Counterfeit Access Device and Computer Fraud
and Abuse Act.
4) }Jnder the Uniform Computer Information Transactions Act the licensee can revoke
(/acceptance of the information if
a.
b.
c.
d.
e.
there is a material breach and discovery of the nonconformity was difficult at the time
of delivery but was later discovered
there s a breach of any kind and discovery of the nonconformity was difficult at the
time of delivery but was later discovered
there is a material breach and after discovering the nonconformity at the time of
del ivery, the I icensor agreed to cure the defect but has not done so.
there IS a breach of any kind, and after discovering the nonconformity at the time of
del ivery the I icensor agreed to cure the defect but has not done so.
A or C Will allow the licensee to revoke acceptance.
r~he Electronic Communications Privacy Act makes it a crime to do which of the fol~OWing?
a.
b.
c.
213
To intercept an electronic communication while in transit.
To intercept an electronic communication at the point of transmission.
To intercept an electronic transmission when stored by a router or server or after
receipt by the Intended recipient.
d.
Both A and B.
e.
A, Band C.
cc
Business Law
Multiple Choice Questions (Enter your answers on
the enclosed answer sheet)
(2)
~hat is the definition of "goods" under Article 2 of the UCC?
a.
b.
c.
d.
e.
"Goods" are defined as tangible things that are Immovable at the time of their identification to the contract.
"Goods" are defined as fixtures.
"Goods" are defined as intangible things that are immovable at the time of their identification to the contract.
"Goods" are defined as Intangible things that are movable at the time of their identification to the contract.
"Goods" are defined as tangible things that are movable at the time of their identification to the contract.
(2)~~egarding differences under Article 2 of the UCC in the treatment of merchants and
L/nonmerchants, which is true?
a.
b.
c.
d.
e.
Article 2 holds merchants to a lower duty than non merchants.
Article 2 applies to merchants, but never to nonmerchants.
Article 2 contains several provisions that either apply only to merchants or impose a
greater duty on merchants.
Article 2 does not differentiate at all between merchants and non merchants, and they
are treated the same under all circumstances.
None of the above is true.
f:::\ Where a contract for the sale of goods does not mention the place of delivery for the
V
a.
b.
c.
d.
e.
goods, which of the following is true?
The seller IS obligated to deliver the goods to the buyer's place of business.
The contract fails for failure to state a material term.
The seller is obligated to deliver the goods at the seller's place of business.
Sellers without a place of business are obligated to deliver the goods at the seller's
home.
Both C and 0 are true.
I
L
4~nder the UCC, if an offer is received by mall, the acceptance:
a.
b.
c.
d.
e.
270
can be made by another means, but only if the offer so states.
must also be made by mail
can be made in any commercially reasonable manner
is effective on Iy once it is received by the offeror.
can be canceled by the offeree at any time during the period of a firm offer.
clef
Business
Law
)he parol evidence rule would not allow
which of the following items Into
evidence
when interpreting a written contract?
a.
b.
c.
d.
EVidence of the meaning of a term in the parties' line of business that differs from the
meaning of that term in everyday language.
Evidence based on prior conduct in similar contracts between the parties to explain
the meaning of an ambiguous term in the contract.
Evidence of a price change agreed upon after the contract was signed
Evidence of an oral statement regarding the contract pnce made when the written
contract was signed that was different from the price in the written contract.
All the above would be allowed into evidence under the parol evidence rule.
e.
~ ~hat is required to meet the writing requirement of the statute of frauds under the
Vu'CC?
a.
b.
c.
d.
e.
I n cases where both parties are merchants, a writi ng signed by the party to be charged
or a written confirmation of an oral agreement that is sent by one party to the other
and not objected to by the other party; in all other transactions, a writing signed by
the party to be charged.
I n cases where at least one party is a merchant, either a writi ng signed by the party
to be charged or a written confirmation of an oral agreement that is sent to the merchant and not objected to by the merchant; in transactions not involving a merchant,
a writing signed by the person to be charged
I n cases where both parties are merchants, a writing signed by the party other than
the party to be charged at the end of the document.
In all cases, a writing signed by the party to be charged.
In all cases, a writing signed by all parties to the contract.
7) Which of the following is true relating to a "firm offer" under the UCC?
a.
b.
c.
d.
e.
It must be in writing and signed by the merchant
It can be made only by a merchant.
It may provide that the offer remain open for any period of time up to SIX months.
A. Band C.
A and B only.
(8) ,Susan decides to buy new carpet for her home. She goes to Carpet City and chooses
Uthe carpet she likes. As part of the deal, Carpet City agrees to install the carpet. The
carpet is installed while Susan is at work. When she returns home and sees it, Susan
immediately notices problems The carpet is not the same quality of carpet she ordered, and the color is off. Does the UCC apply, and why or why not?
271
~f'
Business Law
a.
b.
c.
d.
e.
The UCC does not apply because the
deal with Carpet City included service that
is not
covered by the UCC
The UCC does not apply because it does not apply to mixed contracts of goods and
services.
The UCC applies because it applies to service contracts as well as to contracts for the
sale of goods.
The UCC applies because the predominant part of the transaction between Susan and
Carpet City was the sale of goods.
The UCC does not apply because Susan and Carpet City did not agree in writmq before the carpet was installed that the UCC would apply.
@iCh of the following situations creates a sale that falls under UCC sales law rules?
a.
b.
c.
d.
e.
Dr. Mackey agrees to teach at Pollak university for 1 year.
Abc rentals rents a cement mixer to Isabel
Katherine makes a contract to purchase a shed that requires assembly. The contract
price is for $8 000.00 which includes $400.00 for labor.
Allison contracts to pay Mike $880.00 to have her bedroom painted. $800.00 is
for labor and $80.00 is for the paint.
All of the above are UCC sales contracts.
!~
~~eller who is located in Atlanta, Georgia contracted to sell a shipment of peaches to
L/the 1910 fruit gum company located In Buffalo, New York. The peaches were sold
f.o b. Buffalo. Seller delivered the peaches to the proper earner in Atlanta and the
peaches were destroyed during shippmg. Under these facts:
a.
b.
c.
d.
e.
Seller bears the risk of loss and IS responsible.
Seller and buyer share the risk of loss.
This is a trick question; goods can t be shipped f.o.b. Buffalo.
Buyer bears the risk of loss and IS responsible
Neither the seller nor the buyer bear risk of loss, the carrier bears the risk of loss.
G :V~h
a.
b.
c.
d.
e.
of the following is true regarding a shipment contract?
Such contracts require the seller to bear the risk of loss to the goods during their
transportation.
The risk of loss does not pass until the goods are tendered to the buyer at the specified destination.
It requires the seller to deliver conforming goods to the buyer by use of the seller's
own trucks.
It requires the seller to ship goods conforming to the contract to a buyer via a carrier.
It requires the seller to deliver conforming goods to a specific destination.
ff
Business
Law
~
12) When a seller breaches a contract for
the sale of goods by delivering
nonconforming
goods that are so nonconforming that the buyer has the right to reject them, the risk
of loss:
V
a.
b.
c.
d.
e.
is unaffected by the seller's breach.
is transferred to the buyer as a matter of law within 24 hours.
remains on the seller until the nonconformity is cured or the buyer accepts the nonconform i ng goods
remains on the seller indefinitely.
is transferred to the buyer upon delivery of the nonconforming goods, but is transferred back to the se lIer if the buyer returns the goods.
r)
nder Article 2A of the UCC, for which types of lease(s) is the risk of loss on the les~or d uri ng the term of the lease?
a.
Ordinary leases.
b.
c.
d.
e.
Both ordinary and finance leases
Finance leases.
Neither ordinary nor finance leases.
Loss-shifting leases.
~1n Lindholm v. Brandt, when Malmberg sold Lindholm's "Red Elvis" to Brandt, the
court found that:
a.
b.
c.
d.
e.
Malmberg had been entrusted with the artwork but had a void title because he
breached the terms of the entrustment so he couldn't pass good title to Brandt.
Malmberg had been entrusted with the artwork and could pass the voidable title to
Brandt because Brandt qualified as a good faith purchaser
Malmberg had stolen the artwork and could pass the void title to Brandt because
Brandt qualified as a good faith purchaser.
Malmberg had been entrusted with the artwork and could pass the void title to Brandt
because Brandt qualified as a good faith purchaser.
Malmberg had stolen the artwork, so he couldn't pass his void title to Brandt.
"c\)JOSh had a computer that needed repair. He took the computer to a used computer
\Y
(1
dealer that repaired computers as well. While talking with the owner, Josh learned
that the owner also knew how to repair bicycles. Josh happened to need some repairs done on his bike, so he left it at the computer shop as well. A week later, Josh
went to pick up his bike and computer. When he got to the store, the owner said he
had bad news. He had hired a new employee who was totally incompetent and had
sold a number of items that were in for repair. He sold both Josh's computer and his
bike. The store owner knows who purchased them from the credit card records. In
this situation, assuming he can locate the purchasers, Josh can recover:
a.
his computer but not his bike.
b.
c.
d.
e.
both his bike and his computer.
his bike, but not his computer
neither his bike nor his computer.
the computer only if Josh can establish that the purchases had not resold it.
)
(;;[ Assuming that goods are nonconforming and that the nonconformity substantially
impairs their value to this buyer, which of the following additional factors must be
present for a valid revocation of the acceptance of goods?
pp
Business
Law
a.
Nothing else is necessary to revoke the acceptance of the goods.
The cocos were accepted on the reasonable assumption that the seller could and
would cure the nonconformity.
The goods were accepted before the nonconformity was discovered, and the nonconformity was difficult to discover.
Both Band C must be present in order to revoke the acceptance of the goods.
If either B or C is present, the acceptance of the goods can be revoked.
b.
c.
d.
e.
(
I
Which of the following must be met in every Instance in order to revoke an accep17) tance of goods?
a.
The seller s promise to cure the nonconformity has not been met.
The seller must have fully paid for the goods prior to revocation.
The nonconformity is one that substantially impairs the value of the goods.
The goods were accepted before discovery of the nonconformity and the seller had
assured the buyer that the goods were conforrnnq.
The goods were accepted before discovery of the nonconformity and the nonconform ity was one that was d iffic u It to discover.
b.
c.
d.
e.
.-...
\
8
L)
a.
b.
c.
d.
e.
)
Which of the following is true regarding the rights of the buyer or lessee if the goods
fai I to conform to the sales or lease contract in any way?
The buyer or lessee may accept the whole.
The buyer or lessee may reject the whole.
The buyer or lessee may accept any commercial Unit and reject the rest.
Both A and B are true.
Both A, B, and C are true.
19) What is the right of the buyer or lessee to purchase or rent substitute goods if the
seller or lessor fails to make delivery of the goods called?
a.
b.
c.
d.
e.
The right to recovery.
The right to purchase.
The nght to cover
The right to recoup.
The right to capture.
G'wlJat are the rights of the aggrieved party If an anticipatory repudiation occurs?
a.
b.
c.
d.
e.
The aggrieved party may await performance by the repudiating party for a commercially reasonable time.
The aggrieved party must await performance for 7 days.
The aggrieved party may await performance for 48 hours.
The aggrieved party may treat the contract as breached at the time of the anticipatory
repudiation which gives the aggrieved party an immediate cause of action.
Both A and D.
&iCh of the following is presumed to become part of the "basis of the bargain"?
274
Business
Law
a.
b.
c.
d.
e.
Statements of "puffing".
All statements of opinion by the seller.
All statements of fact by the seller at the
time the contract is made.
A and Conly.
A and B only.
@hiCh of the following best describes a defect in packaging under products liability'
a.
b.
c.
d.
e.
The packaging of a product fails to contain necessary warnings about the dangers
associated with a product.
The packaging of a product is such that it allows the product to spoil.
The packaging of a product contains misleading or deceptive information about the
product contained inside.
The packaging of a product, such as a bottle or can, causes an injury to the user.
The packaging of a product allows children to access a product, such as drugs or
poisons, that is generally safe when used as directed, but can be harmful if not used
properly.
Dn Elsroth v. Johnson & Johnson, involving cyanide placed in Tylenol capsules causing
Uiane Elsroth's death, the court found:
a.
b.
c.
d.
e.
the construction of tamperproof packaging is impossible.
Johnson & Johnson had not followed Food and Drug Administration guidelines appropriately by using only three tamper resistance techniques when a minimum of four
were required.
liability for defective design involves the product itself but not the product packaging.
A and B only.
A and Conly.
A
Philip MorrisUSA v. Williams, the Supreme Court looked at the issue of punitive
~mages in product liability suits and decided:
a.
b.
c.
d.
e.
the Due Process Clause of the Constitution forbids the use of punitive damages to
punish a defendant for injuries to non parties.
treble punitive damages are warranted in product liability cases.
punitive damages are not permitted in product liability suits.
punitive damages may not exceed 9X the compensatory damages.
the Equal Protection Clause of the Constitution forbids the use of punitive damages to
punish a defendant for injuries to non parties.
8WhiCh of the following best describes the defense of correction of a defect?
a.
b.
c.
d.
e.
275
The defense applies even in a situation where a user received a recall notice to correct
the defect but did not comply with the notice.
It applies only if the manufacturer replaces the defective product at no additional
charge to the owner.
The defense applies only if the particular sample of the item was repaired, thus fixing
the defect.
The defense applies if the user realizes there is a defect and assumes the risk.
The defense applies if a product is redesigned such that future production does not
contai n the defect.