FINAL Flashcards by Kelsie Evans

Sid Corporation files suit against Tina Jones, Inc. Before going to trial, the parties, with their attorneys, meet to try to resolve their dispute. A third party helps them to reach an agreement. This is:

mediation.

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T/F With respect to a void agreement, no contract exists.

True

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T/F Reasons for a void agreement are the purpose of the contract is illegal and a party to the contract is at the time of entering into the contract declared by a court to be mentally incompetent.

True

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T/F Donald is the CEO and Kirk is the Senior Vice President of Marketing of Global Industries, Inc. Global Industries is required to file certain financial reports with the SEC. Under the Sarbanes-Oxley Act of 2002, Donald must certify that the financial reports are complete and accurate.

True

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Home Delivery Corporation and Interstate Transport, Inc. signed an agreement that provides for the payment of “$1,000 by whatever party commits a material breach of the contract that creates damages difficult to estimate but approximately $1,000.” This is

a liquidated damages clause.

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Midnight Power Products Corporation permits its directors to be elected by cumulative voting. This:

allows minority shareholders to be represented on the board

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Which of the following are functions of the board of directors of Custodial Care Corporation:

understanding the details of the governing documents, purposes and strategy of the corporation.

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Jill and Frank want to form and do business as Fun Festivals Corporation, and as such entity, Fun Festivals is a legal entity created and recognized under:

state law

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Dale, David, Daphane, and Deloris are members of the board of directors of Integral Corporation. What constitutes a quorum for the board of directors of Integral Corporation?

The minimum number of directors of Integral who must be present for the board to validly transact business.

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Piku files a suit against Quotient Accounting, Inc., under Title VII for intentional employment discrimination, based on its discharge of Piku. In these circum¬stances, possible relief under Title VII includes

damages and job reinstatement.

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Jonathan Neutral is a Senior Vice President of Marketing for Corporation Sensitive, who when interviewing job candidates for the VP of Marketing position treats all job candidates of a certain religion differently than any other job candidates. What is Jonathan’s actions?

disparate-treatment discrimination

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Jason is a member of Aqua Consulting, LLC. Jason is liable for Aqua’s debts:

to the extent of Jason’s capital investment in Aqua

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What type of contract is the following scenario? Producer says to Gloria, “I’ll pay you $2 million to star in my new romantic comedy, A Promise for a Promise, which we are shooting three months from now in Santa Fe.” Gloria says for her acceptance, “It’s a deal.”

bilateral, executory contract

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Michael wants to operate his business Michael’s Landscaping Service as the simplest form of business organization. What type of business organization would Michael’s Landscaping be?

a sole proprietorship.

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For which of the below situations is specific performance most likely to be awarded to the nonbreaching party?

contract breach for the sale of a unique stamp collection.

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Juli buys a new textbook for $100 and a bicycle for $450, and signs a one-year lease for an apartment for $1,000 monthly rent to start at the beginning of the next month. To be enforceable, there must be a writing that evidences

the apartment lease only.

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T/F Unconscionable agreements are valid contracts

False

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T/F An agreement against public policy is one that has inconspicuous print and thus determined to be a procedural unconscionable agreement.

True

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T/F An exculpatory clause means a clause that releases a contracting party from liability for monetary or physical injury despite fault.

True

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T/F An adhesion contract is an agreement against public policy.

True

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Sidney, a director at Tech Software Company, learns that a Tech Software engineer has developed a new and exciting video game which development is confidential to Tech Software. Sidney buys Tech Software stock and tells his friend Uri about the Tech Software engineer’s development, and Uri buys Tech Software stock. When the video game development is publicly disclosed three weeks later, Sidney and Uri both sell their stock for a big profit. Sidney and Uri would be liable for insider trading

if they purchased their Tech Software stock before the Tech Software video game development became public information.

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Michelle and Nicole do business as One World Realty, Inc. Michelle acts on the corporation’s behalf in a deal with Property Acquisition Company, but fails to account to One World for the profit received from the deal by taking the money for herself. To her firm, Michelle is:

liable for the breach of loyalty

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Company A files a suit against Company B. Before going to trial, the parties submit the dispute to a panel of disinterested third parties (other than a court) with expertise in the subject matter in dispute. This panel renders a decision, which decision is legally binding. This is

arbitration.

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Prospective Enterprises (PE) employs Quinn to buy property for a possible com¬mercial development. Quinn secretly, personally, buys some of the property and sells it to PE at a profit. Quinn has breached

the duty of loyalty

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Quality Aluminum Corporation files a suit against Rite Tool Company, claiming that the consideration for their contract is inadequate. The court will most likely not examine the adequacy of consideration if

something of value passes between the parties.

Earth Conserve, Inc. was formed in the State of Georgia, but given the expansion of its business, Earth Conserve wants to do business in Alabama. When Earth Conserve was formed in the State of Georgia what formation document did it file with the Georgia Secretary of State and what document does it need to file with the Alabama Secretary of State to conduct business in Alabama?

Articles of Incorporation and Certificate of Authority, respectively.

If you do not voluntarily consent to a contract, you may

rescind or cancel the contract

Machine Corporation requires its employees to have a high school diploma because it can demonstrate that there is a definite connection between a high school edu¬ca¬tion and job performance. In a suit against Machine Corporation under Title VII, this requirement is shown to have a discriminatory effect. The employer has

a business necessity defense.

Hu believes that he is a victim of a form of employment discrimination that falls under Title VII of the Civil Rights Act. Compliance with this statute is monitored by

the Equal Employment Opportunity Commission

Bright Lights Company files a suit against Key Lighting Corporation. Before going to trial, the parties meet, with their attorneys to represent them, to present their dispute to a group of third parties who are not judges. These parties collectively render a legally binding decision. This is:

arbitration.

Detailed Designs Company, an architectural firm, wants to hire Eduardo, a noncitizen. Under the Immigration Act of 1990, a temporary work visa is most likely to be set aside for a noncitizen who is

a “person of extraordinary ability.”

A definition of the term contractual capacity is:

the ability to enter into a contractual relationship.

During an evening of drinking where each person had two beers, the CEO of Movie House A says to David, who is twenty-two years old, “Movie House A will pay you $1000 to be the set photographer on next Saturday for Movie House A’s new thriller, Scared of the Dark.” David says nothing in response and the CEO, and David and the CEO engage in no further dialogue. On Saturday, David shows up to the set and starts taking photographs. What type of contract exists?

a unilateral contract

Gloria and the producer of a new reality TV show on MTV orally agree that Gloria will star in the new reality TV show. The producer enters into the contract on behalf of MTV. The new reality TV show starts filming in 18 months. The statute of frauds requires a written agreement for all arrangements that cannot be completed within one year. The producer signs up another actress for the new reality TV show on MTV two months later and calls Gloria to convey that her services are no longer needed. What type of contract exists between Gloria and the MTV, which explains why Gloria will not prevail on a breach of contract action in court?

Unenforceable contract.

Unity Production Company is suspected of employing illegal immigrants. The government conducts random compliance audits and other enforcement measures against those who might violate immigration laws through

U.S. Immigration and Customs Enforcement

After being declared by the appropriate court as mentally incompetent, Elle signs a contract to buy a horse and a saddle from Field Equine Ranch. Later, after taking possession of the horse and saddle but before paying for the two items, Elle disaffirms the deal. After Elle disaffirms the deal, Field Equine comes to pick up the two items from Elle, and Elle

must return both the horse and the saddle.

Where different sums for liquidated damages are to be paid in respect of separate breaches, these liquidated damages provisions should be set as separate sub-clauses in the contract and the parties should insert what into the contract

a severance clause

Internet Services, Inc., employs Joe as an agent. During the agency between Internet Services, Inc. and Joe, Joe acquires new skills. After the termination of the agency relationship, Joe uses those skills in a new job. Joe has breached

no duty

Disputes concerning e-contracts typically involve which of the following:

the contract terms. | whether the parties voluntarily agreed to the terms.

One of the purposes of contract law is:

to provide stability, predictability, and certainty for buyers and sellers and other contracting parties in the marketplace.

Some of the purposes of contract law are

to provide risk allocation; to function as an economic preservation and market economy device; and to ensure that certain types of promises made among private parties are enforceable.

Equity Company and Faye enter into a contract for Faye to cater a meeting of Equity’s shareholders. When Faye’s schedule conflicts, she asks Gudren to serve Faye’s coffee and pastries at the meeting. This transfer of duties is

a delegation.

Nikki owns O.K. Oil Corporation. Nikki uses O.K. Oil’s funds to pay her personal expenses; creates Pure Fuel Corporation to engage in the same business as O.K. Oil; transfers O.K. Oil’s assets to Pure Fuel; and petitions O.K. Oil for bankruptcy. From the below options Nikki’s actions most likely warrants

a pierce of O.K. Oil’s corporate veil

What types of remedies are available for employment discrimination?

reinstatement. compensatory damages back pay

Super Toolmakers, Inc., contracts to sell its business to True Hardware Corpo¬ration. Before either party has performed, rescission of this con¬tract requires

a mutual agreement to rescind

Brad is a general partner and Carlos and Dora are limited partners in Eastside Physicians, a medical clinic and limited partnership. Carlos and Dora have no desire to be a general partner, and Brad has no desire to be a limited partner in Eastside Physicians. The dissociation of Carlos and Dora from Eastside Physicians and Brad’s inability to obtain other limited partners results in

the termination of Eastside’s legal existence

Auto Body Repair Shop (“ABRS”) promises to pay Ben $1,000 a week to work for ABRS. Ben accepts and quits his job with Car Care Services. ABRS fails to provide a job for Ben. Ben has a cause of action based on

promissory estoppel.

Neighborly Insurance Company and Jonathan agree to their agency arrangement by oral contract, which that describes the rights and duties of both parties. Jonathan, as the agent, has

actual authority

QuickBooks LLC is a limited liability company. Like any other LLC, unless QuickBooks chooses otherwise, the LLC will be taxed as`

a partnership

Dolly is a businessperson acting as an agent for Evergreen Woods, Inc. In an ordinary business situation, Dolly

can contract on Evergreen’s behalf without further authority or ratification.

T/F When used as a noun, the term “fiduciary” refers to a person having a duty created by his/her undertaking to act primarily for another’s benefit in matters, and when used as an adjective such as “fiduciary relationship,” it means the relationship involves trust and confidence.

True

T/F An agency relationship can exist outside an employer-employee relationship.

True

T/F An agency relationship never exists between an employer and employee

False

T/F Independent contractors typically are not employees because those who hire them have no control over the details of the independent contractors’ physical performance.

True

The following are purposes of contract law:

to assist in transferring and allocating risk. | to function as an economic preservation and market economy device.

T/F A bilateral contract is one in which a promise is given in return for an act.

False

T/F The agreement component to form a contract must include a fair bargain and a fair price.

False

T/F A contract is a legally binding agreement between only two parties, who agree to perform or to refrain from performing some act now or in the future in exchange for consideration.

False

T/F Common law is a source of contract law, which governs all contracts except those that have been modified or replaced by statutory law or administrative agency regulations.

True

An employer who hires and fires workers according to the following may have a good defense to an employment discrimination suit.

seniority system or business necessity.

The mailbox rule states that:

an acceptance is effective upon dispatch by an authorized means of acceptance.

Which of the following is not one of the major responsibilities of the Securities and Exchange Commission?

selling stocks and bonds.

Greenleaf Corporation wants to make an offering of securities to the public. This offering is not exempt from registration under the Securities Act of 1933. Before Greenleaf can either offer or sell its securities to the public, Greenleaf must do what.

file a registration statement with the Securities and Exchange Commission which statement must contain how Greenleaf intends to use the proceeds of the sale.

What types of remedies are available for employment discrimination?

reinstatement. | punitive damages.

The Age Discrimination in Employment Act of 1967 prohibits employ¬ment discrimi¬nation on the basis of age against persons

forty years old and older.

Hu, Ivan, and Juana apply to work for King Meatpacking Company. These individuals’ identities and eligibility to work must be verified by

the employer

Donald is the CEO and Kirk is the Senior Vice President of Marketing of Global Industries, Inc. Global Industries is required to file certain financial reports with the SEC. Under the Sarbanes-Oxley Act of 2002, Donald must:

certify that the financial reports are complete and accurate.

Alicia is interested in buying a franchise from Wallace, Inc. This transaction, like other franchise deals, is regulated to protect:

prospective franchisees from dishonest franchisors.

William, Willie, and Wallace are officers of Let’s Make Some Money, Inc. Witty is not an officer of Let’s Make Some Money, Inc., but the CEO of Integrity Corporation. If William, Willie, Wallace, and Witty are on the board of directors of Let’s Make Some Money, which party is an outside director?

Witty.

Where the plaintiff can obtain different remedies in connection with a breach of contract action, the plaintiff must:

make an election of remedies

Equity Company and Faye enter into a contract for Faye to cater a meeting of Equity’s shareholders in exchange for Equity Company paying Faye $20,000. As permissible under the Equity Company and Faye agreement, Faye transfers her right to receive the $20,000 to her mother, Joanne. This transfer of is

an assignment

Which of the following is not a purpose of contract law:

to hedge bets and breach the less appealing contract.

Ira and Jay are the shareholders and directors of Custodial Care Corporation. Lisa and Mary are Custodial’s officers. As with other corporations, the responsibility of strategic management of Custodial rests with:

the board of directors.

How many parties are involved in a contract

two or more

All the elements of a contract are?

offer, acceptance, consideration, legal contractual capacity, and legality

Which of the below situations constitute a void agreement as opposed to a voidable contract?

the court has determined a contracting party to be mentally incompetent

The following is not an economic and public policy justification for employment discrimination protection?

allocate wealth from the shareholders and executives to the employees.

Reasons for understanding immigration law include:

U.S. citizen labor shortage, especially in certain industries and professions. U.S. employers face penalties if they hire illegal immigrants. the increase and importance of the global economy and flow of workers across borders.

Which of the following is not a goal of contract negotiation?

To win at all costs.

Which of the following are arguments against employment discrimination laws?

Discrimination laws are not needed because the free market will eliminate employment discrimination because in order to effectively compete companies must hire the best and the brightest regardless. Discrimination laws constitute social welfare.

The case of Lucy v. Zehmer involves an offer to sell property during an evening of casual drinking. If the decision turns on the element of legal contractual capacity, the court most likely will hold that:

despite the fact that the parties were drinking casually, there was a valid contract

Sam offers to Rhonda Sam’s collection of rare books. Before Rhonda even has a chance to accept Sam’s offer, Sam says “Sorry, I changed my mind, no deal.” This is an example of:

a revocation.

With respect to a potential offer, which of the below constitutes the current intention to make an offer?

a preliminary agreement with all essential and no disputed terms.

Yvonne asks Zach Thrift Store’s owner, “Do you want to buy one of my fishing rods?” This is

not a valid offer because the terms are not definite.