Reference no: EM13789340

1. Vista Properties, Inc., leases an office building to World Corporation. At the time, the amount of damages on World's default is difficult to determine, so the parties reasonably estimate, and the lease provides, that if World defaults, Vista is entitled to $50,000 as liquidated damages. This amount is

an unenforceable limitation of liability.

an unenforceable penalty.

liquidated damages.

punitive damages.

Question 2. Retail Investment Company offers to sell a certain mall to Shopping Stores, Inc. if it accepts before 10 a.m. Monday. A contract is formed if Shopping Stores's acceptance is received

any time on Monday.

before 10 a.m. Monday.

before 11 a.m. Monday.

within 24 hours of 10 a.m. Monday.

Question 3. Justifiable reliance on a misrepresentation is an element of fraud.

True

False

Question 4. To be enforceable, an assignment must be in writing.

True

False

Question 5. In studying the legal environment of business, Professor Dooley's students also review ethics in a business context. Ethics includes the study of what constitutes

fair or just behavior.

financially rewarding behavior.

legal behavior.

religious behavior.

Question 6. Rolling Stock Corporation and Short Supply, Inc., business firms, transact a deal over the Internet. Their contract does not mention the UETA. The UETA covers

none of the contract.

only the part of the contract that concerns computer information.

only the part of the contract that does not concern computer information.

the entire contract.

Question 7. USA Transport Company uses a mark associated with its name to distinguish its services from those of other transport firms. The mark is

a certification mark.

a collective mark.

a service mark.

trade dress.

Question 8. The terms in a click on agreement may be enforced if they are construed as parts of a contract.

True

False

Question 9. Lora files a suit in Michigan against Ned over the ownership of a boat docked in a Michigan harbor. Lora and Ned are residents of Ohio. Ned could ask for a change of venue on the ground that Ohio

has a sufficient stake in the matter.

has jurisdiction.

has sufficient minimum contacts with the parties.

is a more convenient location to hold the trial.

Question 10. In a limited liability limited partnership, the liability of a general partner is limited to the amount of capital he or she invests in the partnership.

True

False

Question 11. Callie, a lawyer on the staff of Droll International Ltd., applies the utilitarian theory of ethics in business contexts. Utilitarianism focuses on

moral values.

religious beliefs.

the consequences of an action.

the nature of an action.

Question 12. A breach of contract entitles the breaching party to obtain damages.

True

False

Question 13. Roc buys a farm from Steve, who claims that it would be a prime site for a housing subdivision. Roc later learns that the law does not permit the land to be used for housing. Roc may

not rescind the contract.

rescind the contract only if Roc did not know the law before the deal.

rescind the contract only if Steve knew about the law before the deal.

rescind the contract only if the law is not common knowledge.

Question 14. Parents are required by law to provide necessaries for their minor children.

True

False

Question 15. A joint venture is treated like a partnership.

True

False

Question 16. Cory enters into a contract with Dian to act as her personal sports trainer. If they later dispute the meaning, and the contract contains unclear terms, the rules of contract interpretation will give effect to

the parties' intent as expressed in their contract.

what the defendant claims was the parties' intent.

what the plaintiff claims was the parties' intent.

what the parties now agree they intended.

Question 17. Remedies that an innocent party may use on a contract's breach include damages, rescission, specific performance, and reformation.

True

False

Question 18. Kelly is an appliance salesperson. Kelly commits fraud if, to make a sale, she

discloses the truth.

represents as a fact something that she knows is untrue.

states an opinion concerning something that she knows nothing about.

uses puffery.

Question 19. Gregor uses duress to force Honi to agree to pay him for protecting Honi's Coffee Shop against vandalism and destruction. Honi may

avoid the contract or choose to carry it out.

do nothing once she has agreed to pay.

recover from her insurer for a failure to direct her protection.

recover from the local police for a failure to protect her "direction."

Question 20. To have standing to sue, a party must have been harmed or have been threatened with harm by the action about which he or she complains.

True

False

Question 21. Any corporation with more than $10 million in assets and 500 or more shareholders must register with the Securities and Exchange Commission.

True

False

Question 22. Criminal liability depends on the commission or omission of an act.

True

False

Question 23. Kirk is the chief financial officer of Lemon Corporation, which is required to file certain financial statements with the Securities and Exchange Commission (SEC). Under the Sarbanes-Oxley Act of 2002, Kirk must personally

certify that the statements are accurate.

delegate the responsibility for preparing the statements.

deliver the statements to the appropriate SEC officer.

prepare the statements.

Question 24. First Design Corporation, a business firm, and Gary, a consumer, make a deal over the Internet that involves e-signatures. Under the E-SIGN Act, for the e-signatures to be enforceable

both parties must have agreed to use e-signatures.

neither party must have agreed to use e-signatures.

only First Design must have agreed to use an e-signature.

only Gary must have agreed to use an e-signature.

Question 25. Forming a limited liability company requires filing articles of organization in a state office.

True

False

Question 26. Aero Cola features Bubbly Cola's trademark without its owner's permission. Dana buys a bottle of Aero Cola. The mark has been infringed by

Aero.

Bubbly.

Dana.

none of the choices.

Question 27. An offer to form a unilateral contract is accepted by a promise to perform.

True

False

Question 28. "Piercing the corporate veil" means revealing to shareholders the internal rules of corporate management.

True

False

Question 29. A franchise exists when the owner of a trademark licenses its use to another party to sell goods or services.

True

False

Question 30. In 2009, Sara writes Terror at the Track, a novel about racecar driving. Sara does not register the work with the appropriate government office. Under federal copyright law, Sara's work is protected

for 10 years.

for 20 years.

for the life of the author plus 70 years.

forever.

Question 31. Corporate officers hire corporate directors.

True

False

Question 32. A party seeking to recover compensatory damages may also be entitled to recover incidental damages.

True

False

Question 33. Compensatory damages are foreseeable damages that arise from a party's breach of a contract.

True

False

Question 34. Jill and Kelly are architects and members of Jill & Kelly, P.C., a professional corporation. Jill supervises Lucy, an employee of the firm. As a member, Jill:

is personally liable for any tort committed by Kelly.

has limited liability for any of Kelly's acts of malpractice.

has no liability for any torts committed by Kelly or Lucy.

may be personally liable for malpractice committed by Lucy.

Question 35. A principal has a duty to cooperate with the agent.

True

False

Question 36. Kelly, Lars, and Mona agree to be partners in Neighborhood Delivery Service (NDS), splitting the profits equally. Kelly contributes 67 percent of the capital. When NDS is dissolved, its liabilities are greater than its assets. The losses are paid by

all of the partners in proportion to their capital contributions.

all of the partners in proportion to their shares of the profits.

Kelly because she contributed most of the capital.

Lars and Mona because they contributed the least of the capital.

Question 37. Because the Internet is vast, the unauthorized use of another's mark in a domain name is generally permissible.

True

False

Question 38. Omni Products, Inc., and Plenty Sales Corporation transact a deal over the Internet. Their contract does not mention the UETA. The UETA covers

none of the contract.

only the part of the contract that does not involve e-commerce.

only the part of the contract that involves e-signatures.

the entire contract.

Question 39. In winding up a limited partnership, non-partner creditors are paid before the partners receive their capital contributions.

True

False

Question 40. Jay tells Kim that he will buy her textbook from the last semester for $80. Kim agrees. Jay and Kim have

an express contract.

an implied-in-fact contract.

an implied-in-law contract.

a quasi-contract.

Question 41. EZ Products Company breaches its contract with For-Less Stores, Inc. For-Less files a suit to recover compensatory damages, which are normally assessed to

compensate a nonbreaching party for the loss of a bargain.

establish, in the absence of a loss, that a party acted wrongfully.

pay for harm caused by special circumstances beyond a contract.

penalize a breaching party.

Question 42. State securities laws apply only to interstate transactions.

True

False

Question 43. Biotech Investments, LP, is a limited partnership. The partners sign an agreement purporting to state how the firm's profits and losses are to be divided. The profits and losses of the firm will be divided

according to the agreement.

equally, despite the agreement.

in proportion to capital contributions, despite the agreement.

in proportion to the partners' participation in the firm's business, despite the agreement.

Question 44. Like the bylaws of other corporations, the bylaws of Retail Sales, Inc.

establish the operating name of the corporation.

establish the value and classes of corporate stock.

were adopted at its first organizational meeting.

were submitted for approval to the public official in charge.

Question 45. Damages awarded in a shareholder's derivative suit go to the shareholder personally.

True

False

Question 46. While a minor, Jason buys a car that he continues to use and keep in repair after reaching the age of majority. Jason has

disaffirmed the contract.

ratified the contract.

rejected the contract.

rescinded the contract.

Question 47. Ethics is the branch of philosophy that focuses on what constitutes right and wrong behavior.

True

False

Question 48. An offer must be communicated by mail or in person.

True

False

Question 49. The amount of damages on a breach of contract is the difference between the value of what was promised and the value of what was delivered.

True

False

Question 50. Musical Production Company and Nora enter into a contract that calls for Nora to write six songs for which Musical agrees to pay her. Nora transfers her right to payment under the contract to Omni Entertainment Agency. Nora is

a delegator.

an assignor.

a payor.

a righter.

Question 51. An employer must modify its job application process so that those with disabilities can compete for jobs with those who do not have disabilities.

True

False

Question 52. Shareholder approval is required when a corporation buys all of the assets of another company.

True

False

Question 53. The four broad types of damages in contract law are compensatory, consequential, punitive, and actual damages.

True

False

Question 54. Eastside Warehouse offers to sell a forklift to Forest Lumber Company, but it is stolen before Forest accepts. Eastside must obtain

a forklift for Forest, if Eastside's insurance covers the loss.

a forklift for Forest, if it wants one.

nothing for Forest, because that would extend the time of the offer.

nothing for Forest, because the theft terminated the offer.

Question 55. The four broad types of damages in contract law are compensatory, consequential, punitive, and actual damages.

True

False

Question 56. A limited liability company cannot be taxed as a corporation.

True

False

Question 57. To qualify as a professional corporation, Medical Clinic, P.C.

must be a corporation formed by professionals.

must grant all shareholders voting rights.

must have at least 35 shareholders.

must have less than 35 shareholders.

Question 58. The state governments retain all powers not specifically delegated to the federal government.

True

False

Question 59. Information concerning the stock of a corporation must be outlined in the articles of incorporation.

True

False

Question 60. Barb allows Candy to enter Barb's warehouse and take a DVD player. Charged with theft, Candy can successfully claim, as a defense,

consent.

duress.

entrapment.

self-defense.