BUS 415 Final Exam 1st Set 42 Questions with Answers
1) The doctrine of stare decisis concerns
A. staring at the facts of a case for a long time to make sure the correct decision is made.
B. making sure to do adequate research before making a legal decision
C. following precedents so that legal principles announced in a case are used to determine later cases
D. using constitutional law to render a decision
2) The form of alternative dispute resolution wherein the parties hire someone to review the evidence and make a decision that is binding upon the parties is called
B. settlement conference
3) A corporation is considered a citizen of what state?
A. The state where the president of the corporation lives
B. It is not a citizen because it is a business
C. The state where the majority of the employees live
D. The state where it filed its Articles of Incorporation
4) Which of the following statements is true regarding the relationship of law and ethics?
A. Depending on the circumstances, the law can require a higher, lower, or the same standard of conduct as ethics demands.
B. The legal requirements will almost always be the same as the ethical requirement because the law is based on ethical standards.
C. In some cases, ethics will require a higher standard of conduct than the law, but never vice versa.
D. In some cases, the law will require a high standard of conduct than ethics, but never vice versa.
5) Which of the following is correct with regard to the relationship between law and ethics?
A. Although much of law is based on ethical standards, not all ethical standards have been enacted as law.
B. The rule of law and the golden rule of ethics demand the same response.
C. The law may not permit something that would be ethically wrong.
D. Lawful conduct is always ethical conduct.
6) The Federal False Claims Act is also known as
A. The Statute of Limitations
B. The Sarbanes-Oxley Act
C. The Whistleblower Statute
D. The Statute of Frauds
7) Harry Hoosier, an Indiana resident, drives his family to Florida for spring vacation. When he is at a red light, Freddie Floridian, a Florida resident, is unable to stop in time and his vehicle impacts Harry’s car from the rear. No one is hurt and Harry’s vehicle suffers approximately $10,000 in damages. Which is correct?
A. Harry can sue Freddie in State but not Federal Court in Florida or Indiana.
B. Harry can sue Freddie in Federal Court in Florida but not in Indiana.
C. Harry can sue Freddie in State Court in Florida or Indiana.
D. Harry can sue Freddie in State but not Federal Court in Florida but not in Indiana.
8) A defendant fails to answer a civil lawsuit, what is likely to happen?
A. The court will order that the defendant go to jail until he or she agrees to answer.
B. A court will contact the defendant and ask him to answer the lawsuit.
C. The court will grant a default judgment against the defendant.
D. The court will dismiss the case.
9) If a defendant files a motion for summary judgment in a civil case, what is the defendant saying?
A. That even if what the plaintiff says is true, there is no basis for judgment against the defendant
B. That the plaintiff’s claims are false
C. That the court has no jurisdiction to decide the case
D. That the case is ready to go to the jury
10) Monica owed Bob $500, which was more than a year overdue. Bob got drunk at a party and told everyone that Monica had owed him $500 for over a year. Can Monica recover from Bob for defamation?
A. No, because Bob had been drinking
B. Yes, because Bob abused his conditional privilege
C. No, because Bob was telling the truth
D. Yes, because Bob communicated the statement to third persons
11) Persons who sell abnormally dangerous products such as poisons or power tools
A. are liable to persons they injure even if they are not negligent
B. are generally not liable for the injuries they cause because otherwise no one would undertake these activities
C. are liable only if all elements of negligence are proven against them
D. are liable only if they intended to cause a particular injury
12) Carlos is an investment broker, operating as a sole proprietor. William is his employee. Juanita, a new client, gives William $1,000,000 in cash to invest for her, and William gives her a receipt. Instead of investing the money, William takes the $1,000,000 and leaves the country. Carlos learns of the transaction for the first time when Juanita appears at the office a month later to discuss the allocation of her investments, and shows him the receipt signed by William. Juanita is upset to learn that Carlos does not have her money, and tells him she is going to sue. What will be the outcome of Juanita’s suit against Carlos?
A. Juanita will lose the case because she cannot find William to serve him with a lawsuit.
B. Juanita will recover a judgment against Carlos for the entire amount.
C. Juanita will lose the case because was not informed of the transaction.
D. Juanita will recover a judgment against Carlos for half the missing money.
13) Mary’s mother agrees to give her a new car if Mary maintains an A average for her senior year of college. Mary does in fact earn an A average, but when she asks for the car, Mary’s mother tells Mary that she just told Mary that to motivate her and she will not be getting a car. Mary sued her mother alleging a breach of contract. Who will win this suit?
A. Mary wins but only if she can prove that the fair market value of the time she spent studying was equal to the value of the car.
B. Mary wins because her actions in reliance upon her mother’s promise constitute consideration.
C. Mary’s mother wins because there was no consideration for her promise.
D. Mary’s mother wins because Mary had a preexisting obligation to do her best.
14) Where a contract calls for action that violates a statute, in a breach of contract case the court will
A. order payments so that the parties to the illegal contract share any losses equally
B. order both parties to return any consideration received
C. impose the appropriate criminal penalty
D. ignore the contract and leave the parties where they are
15) Ray and Nikki are in fifth grade together. Ray gets a new skateboard for his birthday and offers to sell Nikki his old one for $15. Nikki pays the money, and Ray gives her the old skateboard. Is this a valid contract?
A. This is an unenforceable contract because Ray and Nikki can not file a lawsuit.
B. This is a voidable contract because the parties to the contract were minors.
C. This is a valid contract. There was a fair consideration paid for the skateboard, and both parties got what they wanted.
D. This is a void contract because the parties to the contract were minors.restraint of trade.
16) A retailer ordered some inventory by phone from a manufacturer. The order was for 1,000 machines from the manufacturer’s inventory at $300 each. The manufacturer sent the retailer a fax a few moments later detailing the order. The retailer looked at the fax and was satisfied that it stated the terms of the contract, but never responded in any way. When the goods were delivered on time a month later, the retailer refused to accept them, asserting that the contract was unenforceable.
A. The contract is enforceable under the written confirmation rule.
B. The contract is enforceable because it would be unconscionable not to enforce it.
C. No writing is needed because of one of the exceptions to the Statute of Frauds.
D. The contract is unenforceable because the retailer has not signed it in writing.
17) Patty went to a used car lot and purchased a car. Two weeks later, the transmission fell out as she was driving to work. She contacted the dealer to complain, but the dealer told her the car had been sold “As Is”. The dealer advised her to check in the glove compartment of the car, where Patty found a notice that stated, “This vehicle is sold AS IS. The purchaser will bear the expense of any repairs that are necessary to this vehicle.” Does the notice mean that Patty has no rights against the dealer with respect to the condition of the vehicle?
A. No, the notice is there for subsequent purchasers of the car.
B. No, the notice was not conspicuously displayed on the vehicle.
C. Yes, the notice operates to void any warranty on the vehicle.
D. Yes, Patty should have inquired about the warranty when she bought the car.
18) Ted’s Gifts and Sweets enters into a written contract with Bannon Candies to supply Ted’s with 60 dozen boxes of coconut clusters each month for sale to the public. The agreement contained an integration clause. Before the first delivery under the contract, Ted and his warehouse manager called Debbie, the Bannon’s account representative, to request that the candies be delivered in special Valentine boxes. Debbie told Ted, “Don’t worry, I’ll tell the shipping department to take care of that.” When the candies were delivered, they were in standard cardboard boxes. Ted called Bannon and threatened to sue for breach of contract. Will Ted prevail in his suit?
A. No, Ted will not prevail because his attempt to modify the agreement was not effective.
B. No, Ted should have written a letter to change the type of boxes in the contract.
C. Yes, Ted will prevail because he has a witness to the telephone call.
D. Yes, Ted made a valid modification to the parties’ original agreement.
19) Mary and George are a husband and wife who reside in a community property state. For 30 years, George has been the sole provider while Mary cared for the children and home. George dies, leaving a will that leaves his estate to their three children, now adults. How is the ownership of the house affected?
A. Mary and the adult children each own a quarter interest in the house.
B. Mary owns half interest in the house, and the adult children own the other half.
C. Mary and the adult children become tenant in the entirety.
D. Mary owns the entire house, as the community survivor.
20) Jane and Bill are married. They purchase a house and lot as tenants by the entirety. Then Jane is killed in a car accident. Her will leaves everything to her sister, Ruth. What will happen to Jane’s interest in the property?
A. Bill will have to buy out Ruth’s interest in the property.
B. Ruth will own the property with Bill as joint tenants.
C. Bill will be the sole owner of the property.
D. Ruth will own the property with Bill as tenants by the entirety.
21) Melinda owns a rental property. She deeds the property to her son Jack, by warranty deed. Ten years later she sells the property to Brenda, her neighbor, and signs a quitclaim deed to the property in favor of Brenda. Who owns the property?
A. Melinda still owns the property, because neither deed was effective.
B. Jack owns the property.
C. Brenda owns the property.
D. Jack and Brenda each own half the property.
22) Which is true of a limited partnership?
A. A partnership is limited to doing business in the state of incorporation.
B. The liability of all owners is unlimited.
C. At least one of the partners must be a general partner with unlimited personal liability.
D. The liability of all owners is limited to the amount of their contribution to the business.
23) Which of the following is true when a general partnership is converted to an LLC?
A. The members will retain unlimited personal liability for obligations incurred while the business was a partnership.
B. The property must be sold to a third party who then immediately sells it to the LLC.
C. The profit and loss sharing terms must remain the same as they were in the partnership.
D. The conversion can be made retroactive for up to two years.
24) John and Jake are partners in a bowling alley. Business has been bad lately, and they need more operating capital, so they invite Lisa to become a partner. What liability does Lisa have for partnership debts?
A. Her liability is limited to the amount she invested.
B. She owes one third of all the partnership debts.
C. She owes an equal share of all partnership debts.
D. She owes an equal share in all debts incurred after she became a partner.
25) The alter ego doctrine provides as follows:
A. That protection from personal liability can be forfeited if corporate formalities are not observed
B. That a corporation becomes the alter ego of its owner
C. That the board of directors is the alter ego of a corporation
D. That the president is the decision maker of a corporation
26) Rita is the sole shareholder of an auto repair shop that is incorporated. She is at work one day when her sister comes in and tells her she needs $100 for schoolbooks. Rita looks in her wallet, and seeing that it contains no money, opens the cash register and takes out $100, which she hands to her sister. The sister looks worried, but Rita tells her, “Don’t worry; I take money out of the cash register all the time for my personal expenses. It’s my business, so I can take money out whenever I want.” Her customer, who is waiting to pick up his car, tells Rita that she is risking the piercing of the corporate veil. Is the customer correct?
A. Yes, Rita is co-mingling personal assets with corporate assets.
B. No, Rita is the only shareholder and can do what she wants.
C. No, the customer is wrong.
D. Yes, Rita is not the board of directors.
27) Fred wants to start an adult daycare business, but is worried about potential liability. He hires an attorney to incorporate his business, but does not want to keep paying the attorney, so he dismisses the attorney as soon as the incorporation is accomplished. What else must Fred do to make sure he holds on to his protection from personal liability?
A. He must hire an independent contractor to take over the care of the patients.
B. He must maintain the corporate formalities and records.
C. He must post a disclaimer, advising persons who visit the property that the management is not responsible for injuries to guests.
D. He must buy malpractice insurance.
28) The uniform law, issued in 1984 by the Committee on Corporate Laws of the American Bar Association, that regulates the formation, operation, and termination of corporations is
A. The Standard Incorporation Act
B. The Model Business Corporation Act
C. The Revised Model Business Commercial Code
D. The Uniform Commercial Code
29) The DEF Corporation is incorporated in Texas. It wishes to do business in Oklahoma. Before DEF can legally do businesses in Oklahoma, which of the following must it do?
A. DEF must domicile itself in Oklahoma.
B. Nothing; DEF automatically has constitutional rights to do business in Oklahoma.
C. DEF must qualify (register) to do business in Oklahoma.
D. DEF must incorporate in Oklahoma.
30) A particular issue of stock carries a stated dividend rate of 8 %; that if this dividend is not paid during a particular year, it will be paid in a subsequent year before common stock dividends are paid; and that upon liquidation of the corporation, the owner will receive $300 per share before the common stockholders get anything. This stock is
A. cumulative preferred stock with a liquidation preference
B. noncumulative preferred stock with a liquidation preference
C. preferred stock
D. common stock
31) Marie works as a receptionist for a plumbing company. She works from 9:00 a.m. to 6:00 p.m. on Monday through Friday. She earns $12 per hour, and is told how to do her job and what she should be working on at any particular time. Her boss does not withhold any taxes from her paycheck. Which of the following is true?
A. Marie would be treated as an independent contractor because she is paid hourly.
B. Marie would be treated as an independent contractor because the employer doesn’t take any taxes out of her check.
C. Marie would be treated as an employee because of the control exercised by the plumbing company over her work.
D. Marie would be treated as an employee because she is paid for the work that she does.
32) Which of the following people is protected from employment discrimination on the basis of age?
A. A 30-year-old person who wants a job as a waitress
B. A 10-year-old person who wants a job as a bartender
C. A 50-year-old person who wants a job as an accountant
D. A 90-year-old person who wants a job as an airline pilot
33) Which of the following rejected applicants may have a valid claim for discriminatory hiring practices?
A. A trucking company did not hire a truck driver because she was pregnant.
B. A university did not hire a 22-year-old woman to be a director of faculty because she was too young.
C. A Catholic school did not hire a teacher because he was not Catholic.
D. A public health service did not hire a registered nurse because his shaking hands prevented him from administering injections.
34) Under the employment at will doctrine, employment relationship can be terminated
A. only by mutual agreement of the employer and employee
B. by either the employer or the employee
C. by the employer only
D. by the employee only
35) Company employee handbooks have been found to amount to a(n) ______________ exception to the employment at will doctrine.
A. public policy
36) Which of the following statements best describes the workers’ compensation rules?
A. The employee will collect for all work-related injuries, and will not need to prove negligence on the part of the employer.
B. The employee has the choice to sue or proceed under the workers’ compensation statute.
C. The employer is liable for employment related injuries only if negligent.
D. The employer can avoid liability if the injured employee was contributory negligent.
37) The law gives the consumer what protection from aggressive tactics of door-to-door salespersons?
A. The customer may send the product back for a refund within 30 days.
B. The customer may keep the product without paying for it.
C. The customer may file a police report.
D. The customer may rescind the transaction within 3 days.
38) In general, trademark protection is granted based on whether the trademark is
A. understandable to the general public
B. the original creation of the trademark registrant
D. novel and useful
39) Brian visits an office supply store after reading an advertisement, which shows a computer for sale at an incredibly low price. He asks to see the advertised computer. The sales person tells him that, although the ad just came out, the store has already run out of that particular computer. The salesman gets a different computer, and tries to interest Brian in this computer. The salesman is guilty of the following deceptive trade practice:
A. False description of the product
B. Deceptive advertising
C. Selling unsafe products
D. Product recall
40) Peter has a bus company, and hires drivers to drive his buses. He does not take any taxes out of their paychecks. The bus drivers have to drive the buses according to a particular schedule, and must follow a certain route, and follow the driving rules that are listed in the Driver’s Manual that Peter has provided. What is the employment status of the drivers?
A. They are principals.
B. They are employees.
C. They are partially disclosed agents.
D. They are independent contractors.
41) Barbara owns a dairy farm. One of her pastures needs cutting, so she hires Jed to do the work for $150. While oiling his riding mower, Jed hurts his arm, so he hires Bill to cut the pasture for $130. Bill takes his own mowing machine to Barbara’s pasture. During the mowing, Bill damages the fence, and some of the dairy cattle are later able to pass directly to a neighbor’s corn field, where they eat some of the corn, and trample the crop, causing the crop to be almost a total loss. Who is responsible for the damages caused by the cattle?
A. Jed is responsible, because Bill is Jed’s employee.
B. Barbara is responsible, because Jed is an independent contractor.
C. Bill is responsible, because he is an independent contractor.
D. Barbara is responsible, because they are her cattle.
42) William owns his own business, performing document delivery for various clients. He is driving in his delivery van, taking some important documents to the courthouse for an attorney’s office, when he makes a wrong turn and causes an accident, damaging Ruth’s car. May Ruth recover a judgment against the attorney’s office?
A. Yes, because the attorney has more money than William, so Ruth will be able to collect
B. No, because William was on a dual-purpose mission
C. No, because William is an independent contractor
D. Yes, because William was on an errand for the attorney at the time he caused the accident