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BUS-391: Business Law > Final Exam > Flashcards

Final Exam Flashcards

1-30: FIRST EXAM; 31-60: SECOND EXAM

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1
Q

T/F: A court may hear a case if it has jurisdiction over either the subject matter of the dispute or the parties in the case.

A

False

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2
Q

T/F: Diversity jurisdiction must be shown to bring an appeal in a state’s highest court

A

False

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3
Q

What is a Grand Jury?

A

the jury that determines if criminal charges should go forward

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4
Q

T/F: All American taxpayers are allowed to bring any type of case in federal court at any time

A

False

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5
Q

T/F: Katina and Torin are filing for divorce….They may file in federal court to have their dispute adjudicated

A

False

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6
Q

Generally, a case must be filed in the federal district court where either the defendant resides or most of the events that led to the lawsuit took place. This concept is known as:

A

Proper venue

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7
Q

T/F: State long-term statues are sued to establish subject matter jurisdiction over out-of-state defendants

A

False

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8
Q

Pursuant to the doctrine of stare decisis:

A

A lower court must uphold decisions reached by higher courts of appeal or the Supreme Court

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9
Q

What is the distinction between the holding and the rule of a case?

A

the holding is the answer to the issue presented, and the rule is what judges and lawyers can take from a case to help guide future decisions and the future representation of clients

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10
Q

T/F: The common law is the law that all states follow to avoid confusion and to promote consistency from state to state

A

False

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11
Q

Julio is suing Sanchez for breach of contract. He wants to get some documents from Sanchez which he believes will help him prepare his case. What is the term for this procedure?

A

Request for production

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12
Q

What does a court decide on appeal?

A

whether the trial court committed errors of law

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13
Q

T/F: Questions asked by an attorney of witnesses whom he or she has called to testify are called cross-examination

A

False

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14
Q

A case is remanded when:

A

an appellate court sends a case back to the trial court so the case can be heard again taking into account the appellate court’s decision

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15
Q

T/F: Counterclaims are filed by the plaintiff in civil matters

A

False

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16
Q

T/F: A judge must be present during depositions to resolve disputes and ensure fairness

A

False

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17
Q

T/F: The primary difference between arbitration and other forms of ADR is that arbitration is quicker

A

False

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18
Q

T/F: The term litigation refers to the trial but does not include pretrial events as well

A

False

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19
Q

T/F: A motion for a summary judgement may be filed by either the plaintiff or the defendant

A

True

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20
Q

Chan wants to file a lawsuit. What will be the first stage of litigation for him?

A

Pleadings

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21
Q

What is the document that must be filed in order to form a LLC?

A

Articles of organization

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22
Q

Darla has been hired to paint a room in her neighbor’s house for $500…Was Jennifer Darla’s partner?

A

No, because there is no evidence of intent to be partners

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23
Q

Yan and Joel form an S Corporation

A

Yan and Joel will each have to pay taxes on $25,000, one-half of the profits

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24
Q

Which of the following statements is correct:

a. Corporations are governed by federal law and are created by filing with a federal agency

b. The most common type of corporation in the US is a publicly held corporation

c. The obligations of a corporation are distinct from the obligations of its principals

d. Corporations may not file lawsuits

A

C. The obligations of a corporation are distinct from the obligations of its principals

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25
Q

When is a LLC exempt from federal tax?

A

It is always exempt, unless the LLC elects to be taxed as a corporation

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26
Q

T/F: Corporate bylaws are public documents that must be filed with the appropriate state corporation office

A

False

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27
Q

T/F: To qualify for Subchapter S status, a supermajority of the shareholders must consent to the Subchapter S designation

A

False

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28
Q

T/F: Shareholder’s are the owners of the corporation, and part of their responsibility as such is to elect and remove corporate officers

A

False

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29
Q

An operating agreement in a LLC is a/an:

A

Agreement of the parties to the LLC that covers the internal rules for the actual operation of the entity

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30
Q

T/F: An advantage of operating a sole proprietorship is that personal liability for any business losses is limited to the owner’s investment in the business

A

False

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31
Q

Merv is a bulldozer operator. He was hired by Carla to fill in swampland on her property and they signed a contract for him to do it on March 1st. On February 28th, Merv is informed by a city official that the swampland Carla wanted filled in is protected wetlands and it would violate environmental law to do the job. If Merv then calls Carla telling her the deal is off and Carla threatens to sue for breach of contract, what result?

A

the contract is void, Carla loses

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32
Q

Precious, at a private party, agreed to sell LaStarshae her new Gucci purse for $2,000. LaStarshae asked Precious if she would hold the price open until the end of the month when LaStarshae received a quarterly bonus from her job. Precious agreed to do it for her as a favor. At the end of the month, LaStarshae approached Precious with $2,000 in hand, but Precious said “Sorry, LaStarshae, I just sold it to Celine, you’re too late.” What will be the result if LaStarshae sues for breach of contract?

A

Precious wins as there was no exchange of consideration

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33
Q

T/F: A unilateral contract is formed by an exchange of promises

A

False

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34
Q

Gargantuan Corporation is negotiating with Drumph Commercial Properties to purchase a skyscraper to house their world headquarters in New York City. Which of the following would govern the sale of this building?

A

State common law

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35
Q

Mae and Rocco make a verbal agreement for Mae to buy Rocco’s house for $250,000. Mae asks if Rocco can give her something in writing so she can apply for financing, and Rocco gives her a signed letter that says “I hereby agree to sell my house at 1164 Morning Glory Circle to Mae.” The next day, Rocco gets an offer from Charlie, who is willing to pay $300,000 for the house. If Rocco sells the house to Charlie instead of Mae, will he be breaching a contract?

A

No, because the written agreement,met does not satisfy the Statue of Frauds

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36
Q

T/F: The UCC permits terms to be added into a contract or filled in as gap fillers; however a contract between merchants cannot be enforced unless the parties have agreed to and specified a price in their agreement

A

False

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37
Q

Jake lost his wallet and put an ad in the online student newspaper saying “Lost wallet. Reward $100. Call Jake.” Melanie, a classmate of Jake’s, saw the ad, and spent two days looking for the wallet, missing three classes. Jake later found his wallet in the student parking lot. When Jake found out about all the work Melanie had done, he thanked her, but didn’t give her $100 or anything for her troubles. Which of the following is true of this situation?

A

Jake offered a unilateral contract, and Melanie is entitled to nothing because she did not perform

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38
Q

Hipster Bicycles ordered 10,000 bicycle wheels from Bicycle Wheels Incorporated (BWI) with delivery to be made on October 30. These wheels will be used by Hipster to meet the bicycle demand for the upcoming holiday season. Under which circumstance may Hipster claim that BWI has made an anticipatory repudiation of the contract?

A

Sole manufacturing plant burned down, but CEO says they will rebuild and honor contract.

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39
Q

Skip rented a car from Trusty Rentals for $50 a day for five days total. When he arrived at the Trusty, they were out of usable cars. Skip had to use the only other rental place in town, Super Rentals, and pay $90 per day for the five days. If Skip sues Trusty for damages and wins

A

$200 compensatory damages

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40
Q

Kirsten entered into a contract with Brando to remodel Brando’s kitchen by June 1st, as he was putting his house on the market. The contract specifically states that the job was to be completed by June 1st. Kirsten completed the remodeling on June 5th. Max has suffered no loss due to the delay, as no prospective buyers came out to see his house in the first week it was on the market. The job was otherwise done exactly to all contract requirements and specifications. If Brando sues Kirsten for breach of contract due to the missed completion date and if the courts were to award damages, what type of damages would most likely be awarded?

A

Nominal damages

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41
Q

An example of the perfection of a security interest is:

A

Community Credit Union (CCU) loaning money to Straightline Products and getting a collateral interest in their inventory which they file with the state.

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42
Q

Which of the following are exempt assets in a Chapter 7 bankruptcy?

A

Jessie declares personal bankruptcy and owns a diamon ring appraised at $1000.

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43
Q

T/F: Possession of collateral by a secured party is a valid method of perfecting a security interest

A

True

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44
Q

T/F: In Chapter 11, creditors create a reorganization plan for the debtor, which outlines a specific strategy and financial plan for emerging from financial distress

A

False

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45
Q

T/F: Patios R Us…

A

True

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46
Q

The primary distinctive for Chapter 11 bankruptcy is it:

A

is a reorganization

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47
Q

T/F: An automatic stay halts all creditors’ collection actions except for ones brought by government agencies

A

False

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48
Q

When can a lender take possession of mortgaged property after a foreclosure?

A

After the borrower’s time to redeem the property has expired

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49
Q

What is the bankruptcy estate?

A

All of the property of the debtor

50
Q

Wilhelm has taken out a private loan from Community Home Bank (CHB). Credit was extended to him based on the fact that he had paid his loans off in the past, made a high income and was considered a good credit risk. CHB required no collateral. CHB is known as a/an

A

Unsecured creditor

51
Q

T/F: Res ipsa loquitur does not require that the plaintiff prove the exact cause of negligence.

A

True

52
Q

Rachel ran a food truck business. Willow told several of Rachel;s customers that in her opinion, Rachel was the biggest jerk she knows. As a result, some of Rachel’s customers stopped buying food from her truck. Rachel is considering a lawsuit against Willow for defamation. Assuming you are Rachel’s legal council, what is the best and most accurate legal advice?

A

Rachel does not have a good case for defamation because Willow’s statement is pure opinion

53
Q

Cindy verbally told a number of lies about Beyhanna, a diva recording star. These lies included that she was regularly using illegal drugs. One of the people Cindy told the lies to, Ramone, worked for Beyhanna’s record label and Ramone went straight to the president of the record label and verbally told him about the drug use story that he had heard. While Cindy’s stories were lies, they sounded compelling to Ramone and would have convinced the average reasonable person of their truthfulness. Beyhanna was fired by the record label as a direct result of the lies and lost out on a recording contract worth $5 million. If Beyhanna sues Ramone for defamation, what result?

A

Beyhanna should not win because Ramone did not act with malice, an essential element of a defamation claim against a public figure.

54
Q

Strict liability applies to:

A

abnormally dangerous activities

55
Q

Sirius Motors designed a prototype of a new compact car, the Adhara. Tests of the prototype were disappointing, so an extensive redesign was done. While the redesign was going on, a disgruntled former employee of Sirius leaked a confidential report of the test results to Procyon Automotive, a competitor. The day after the new, redesigned Adhara was unveiled to the public, Procyon started an advertising campaign headed “Why would you buy this car?” The ad accurately listed all of the flaws in the prototype. Has Procyon committed product disparagement?

A

Yes, because the ad contained statements about the Adhara that were false

56
Q

Sharice was working on a scaffolding 20 feet above the ground when she carelessly tossed her power drill to a co-worker. It fell to the ground and landed on Gardner, a visitor to the construction site, injuring him. What category of Tory is this?

A

Negligence

57
Q

T/F: Negligence may result from either an intentional or unintentional act

A

False

58
Q

Jill was very angry at Axel. She summoned him to her office and told him that he was a terrible employee and had been stealing money from the company. There was no one else in the office at the time, but Axel was very offended as Jill was intentionally lying about him. Jill has committed:

A

no defamation tort

59
Q

Hillary took her motorcycle to a mechanic, Kenneth, to repair a leaking tire. She picked up the motorcycle and was riding home when the tire that had been repaired suddenly deflated and Hillary crashed into a parked car, suffering broken bones. Hillary cannot prove exactly what Kenneth may have done wrong, but the tire should not have deflated if he had installed it properly. Which of the following doctrines should Hillary base her claim upon?

A

res ipsa loquitur

60
Q

The state of Montana legislature passed a new law requiring that all visitors to factories wear safety glasses….

A

negligence per se

61
Q

Which of the following is not eligible for immediate trademark protection?

A

Descriptive trademarks

62
Q

Mike has written a novel. When, if ever, would Mike’s novel be copyright protected?

A

The novel is copyrighted automatically after completion

63
Q

Valentino patented a new and unique manufacturing process that his corporation used. This is known as a:

A

Utility patent

64
Q

The Excellent Toy Company has reached an agreement with a movie studio for a line of toys that ties in with the studio’s next film for children. Developing the toys mean that employees of Excellent have to see the movie long before it is released, and the advertising campaign associated with the toys is done secretly. All of the employees of Excellent who know about the campaign sign agreements that everything about the movie, the toys, and the advertising campaign is a trade secret. The movie is to be released on September 1, and the advertising campaign will start on August 1. How long will the information learned continue to be a trade secret?

A

Until August 1

65
Q

Cellupro, a company that designed and manufactured cell phones, had a unique design to their products and a particular color for their phones and packaging. This design and color is known as:

A

Trade dress

66
Q

Which of the following state types of trademark examples for 1) fanciful, 2) arbitrary, and 3) suggestive trademarks:

A

All of the above

67
Q

What is “trade dress?”

A

The total image of a product

68
Q

Boyd and Harry are claiming patent protection for the same invention that each independently created. The rights to protection will be awarded to:

A

the first to file an application for the patent

69
Q

Mike has been hired by a publishing company to write a companion book for a particular text sold to college students. In 2010, Mike completes the companion book, and he signs over his copyright to the publisher. The publisher actually publishes the book in 2013. When will the publisher’s copyright run out and expire?

A

2108

70
Q

A national discount chain has a well known name. A local department store opens with a name that has the same pronunciation as the name of the national discount chain and is spelled differently by only one letter. The local store derives its name from the name of its owner. The local store has most likely

A

infringed upon another business trademark

71
Q

T/F: A revocation of the agency relationship requires that the principal and the agent agree to terminate the agency

A

False

72
Q

Big Bib worked for Transfer Trucking (TT) as a driver and was an agent of TT. Big Bob drove a regular route, making deliveries along the way. One day Big Bob drove 60 miles out of his way and off the normal route to see the launch of a spaceship. While driving to see the launch, Big Bob was distracted and negligently smashed his truck into a car driven by Austin, injuring him. Austin is now suing both Big Bob and TT for personal injuries. under the circumstances:

A

TT is not liable because Big Bob was on a frolic on his own

73
Q

What is “implied authority?”

A

An agent’s authority to do what she has to do in order to do the task the agent is expressly authorized to do

74
Q

Marvin hires Angus to work as a pizza delivery-person. One particularly busy night, Angus has to speed to make all his deliveries within the time limit promised to the customers by Marvin. Angus is going so fast that he does not see a pedestrian crossing the street. Angus hits the pedestrian, injuring her severely. The next day, Marvin tells Angus “It was stupid for you to speed. I can’t afford to be involved in this. You’re on your own.” Can Marvin refuse to support Angus?

A

No, because Marvin is obligated to indemnify Angus

75
Q

Elizabeth works as a delivery driver for Big Box Hardware Store…

A

Elizabeth was on a detour, so BBHS is liable

76
Q

Which of the following best differentiates between a detour and a frolic in agency law?

A

A detour is a slight deviation from an agent’s assigned task, while a frolic is a significant departure from the assigned task

77
Q

Jordan has just fired Donnie, who was his agent in this stock brokerage firm, Wolfco. Jordan placed an ad in the Wall Street Journal stating: “Donnie no longer works for Wolfco or represents Wolfco in any way, shape, or form.” Jordan placed this ad to eliminate any possible liability resulting from:

A

Apparent Authority

78
Q

Quintin works as a telephone lineman for Shell Telephone

A

Shell will be required to reimburse Quintin for the cost of the fluid based on implied authority stemming from his express authority to drive the truck

79
Q

Shelby is a pizza delivery driver for Quick-E-Pizza. One day Shelby negligently failed to close her delivery truck’s passenger door while stacking up six pizzas for delivery in the passenger seat…

A

Both Shelby and Quick-E-Pizza are liable

80
Q

Which of the following best describes a case of negligent retention of an employee by an employer?

A

An employer receives a complaint of an employee’s pattern of sexual harassment, and the employee later sexually assaults a coworker

81
Q

Susan hires Tariq to work as a cashier in her cosmetics shop. She tells him that he can work for her as long as he wants, and that she will let him stay as long as he does nothing illegal or unethical. A few months later, Susan begins a relationship with Sandy. Sandy tells Susan she has always wanted to work in a shop like Susan’s. Susan fires Tariq, telling him that she decided her customers would feel more comfortable dealing with a woman, and hires Sandy to take his place. Is it unlawful for Susan to fire Tariq?

A

Yes, because it is a breach of an employment contract

82
Q

Jerome works in a sheet-metal shop. One day, he is trying to flatten a corner of a piece of metal. The corner will not flatten, so in frustration, Jerome hits the corner as hard as he can with a ball-peen hammer. The hammer breaks, and the head flies up and hits Jerome’s co-worker Musa in the eye. Can Musa collect worker’s compensation benefits for his injury?

A

Yes, because the injury arose out of Musa’s employment

83
Q

Stephanie applies for a job with Lookin’ Buff Fitness Supply store. Lookin’ Buff makes an effort to make sure all their 15 employees are trim and physically fit. Although Stephanie is in good shape, she is 47 and sometimes uses a cane to walk. Lookin’ Buff rejects her application, because between her use of a cane and her graying hair, Stephanie “projects the wrong image.” Is Lookin’ Buff discriminating against Stephanie?

A

Yes, because refusing to hire her was discrimination based on a disability

84
Q

The staff of Dandy Horse Books consists entirely of Daphne (the owner) and Jane. Daphne decides to have her store join a local trend and become dog-friendly: customers are welcome to bring in their leashed dogs, as long as they (dogs and customers) remain well-behaved. Jane has an intense fear of dogs. When she asks Daphne if she can be excused from the premises or not be scheduled to work on weekends (when dog traffic is highest), Daphne refuses. Daphne says Jane’s request would leave the store short-handed at busy times. Is Daphne’s refusal to accommodate Jane’s fear discrimination?

A

No, because Jane is not asking for reasonable accommodations

85
Q

T/F: Bella suspects that she was turned down for a job as a sever at Hooters because she is 40 pound overweight…

A

False

86
Q

Roddie is 30 years old. He was demoted from his job as a manager at Big Trucks, a company with 10,000 employees. He was replaced by Bambi, a 45-year-old. Roddie was told that he was a little too young for management. Under the Age Discrimination in Employment Act (ADEA), what are Roddie’s options?

A

Roddie has no options under the ADEA

87
Q

Marianne was a computer programmer making almost $170,000 a year at a rate of $80 an hour for Big Tech…how much overtime pay is she entitled to?

A

$0

88
Q

T/F: Under workers’ compensation laws, the workman gives up to right to sue her employer for intentional torts

A

False

89
Q

If employees are discharged because of their involvement in union activities, they may file a complaint against their employer under which of the following statues

A

The National Labor Relations Act

90
Q

Willard is injured while performing his duties for his employer. In most states, under which of the following are employers banned from using the contributory negligence defense?

A

Worker’s compensation

91
Q

The fundamental rationale behind securities regulation is to

A

protect investors and ensure public confidence in the integrity of the securities market

92
Q

Largeco sought to obtain a monopoly in the go kart market by acquiring a few competitors and merging with their biggest competition. This behavior will be prohibited by the:

A

Clayton Act

93
Q

Lupe receives a letter from someone claiming to be her second cousin, Alberto. Alberto’s letter says that Lupe’s name is listed as one of the possible owners of a piece of property that has been in the family for many years, but the ownership is very confused. Alberto asks if he can purchase Lupe’s interest in the property. Lupe has no interest in getting embroiled in this controversy, so she agrees. What document should Lupe give to Alberto?

A

A quitclaim deed

94
Q

The SEC-prescribed document that is intended to give investors a realistic view of the security issuer’s risk factors, financial position, financial statements, business and disclosures is known as the:

A

Prospectus

95
Q

The SEC’s powers include all of the following expect the power to

A

establish new federal agencies for the prosecution of securities law violations

96
Q

Jackson has a life estate in the ranch he has lived on for 20 years. Which of the following statements would not be true?

A

Jackson’s wife and children can continue to live on the ranch after he passes away

97
Q

Antitrust laws are

A

made up of a combination of state and federal statutes

98
Q

Large corporate mergers and acquisitions that may substantially lessen competition must obtain government approval because of the prohibition contained in:

A

The Clayton Act

99
Q

Marc has not paid the rent due under his apartment lease for several months and refuses to comply with the “no pets” restriction in his lease. Which of the following is correct about the landlord?

A

The landlord may bring an unlawful detainer action

100
Q

T/F: Rockefeller’s Standard Oil Trust is an example of a company that participated in antitrust behavior

A

True

101
Q

An ad for El Gordo Shaving Cream shows the famous model Melanie with her face all lathered up. The caption on the picture says “Tender skin deserves protection.” Is this an endorsement?

A

No, because a consumer is not likely to believe that Melanie is endorsing shaving cream

102
Q

Payne’s Appliances teams up with Locality Credit Union for appliance sales events…

A

Yes, the sale can be cancelled since it did not take place at Payne’s usual place of business

103
Q

The Administrative Procedures Act does all of the following except

A

establishing the number of senators who must vote to approve the nomination of a senior member of a federal agency

104
Q

T/F: Administrative agencies are not empowered to hear cases of alleged violations of their regulations and must depend on the courts for adjudication.

A

False

105
Q

Administrative law is:

A

The body of law that defines, regulates, and limits the exercise of authority of federal regulatory agencies

106
Q

Which of the following administrative agencies regulates unfair trade practices and the formation of monopolies that restrain competition?

A

The Federal Trade Commission

107
Q

If the U.S. Congress desires to establish an administrative agency, the correct method is for Congress to:

A

Pass an enabling statute

108
Q

T/F: Courts are highly critical of agency decisions involving how and when an agency enforces a regulation

A

False

109
Q

In general, an appeal of an administrative decision to the courts must show that:

A

Administrative remedies have been exhausted

110
Q

Yummy Soup Company broadcast a television commercial designed to show how thick…

A

Fail because the FTC has statutory authority to regulate deceptive advertising

111
Q

T/F: One of the major functions of criminal law in general is to compensate parties for damages caused by another’s conduct

A

False

112
Q

Baker stole $5,000 from Mindy, his ex-girlfriend. He was sued in court for the theft by Mindy. What is the classification of this case and what will be the standard of proof that will apply?

A

It is a civil case and the standard of proof is preponderance of the evidence

113
Q

Shirley, a policeman, was walking down a public sidewalk at night with her flashlight…

A

legal because it was a search of an area that was openly visible and authorities may use simple mechanical devices to aid searches without a warrant, and what she saw would support a subsequent search

114
Q

T/F: If a jury is deadlocked at the end of a trial, the prosecutor may not bring charges to retry the defendant due to the defendant’s double-jeopardy protection under the Constitution.

A

False

115
Q

A search warrant may not be issued unless there is:

A

Probable cause that a person has committed a crime or that evidence exists in the place to be searched, as determined by a neutral and detached official

116
Q

The legal process and safeguards given to individuals in the U.S. during criminal investigations, arrests, trials, and sentencing is known as:

A

criminal procedure

117
Q

Deputy Aldana stopped Lori, a college student, because he’d had experience with many college students in the past who had been in possession of drugs…

A

neither the marijuana nor the cocaine would be admissible at trial

118
Q

Charles set up a fraud scheme in which he promised investors huge returns that other investments could not match, but actually paid returns to investors from money paid by subsequent investors and pocketed the rest. Charles is:

A

running a Ponzi scheme

119
Q

Smith suddenly attacks Jones as Jones walks down the street. In this case, Smith has committed:

A

A criminal act and a tortious act

120
Q

Kenny and Gene planned to steal Dave’s custom car. They came up with a strategy to trick Dave into loaning them his keys while pretending to be valets at the restaurant Dave was planning to eat at. They put on fake valet uniforms and arrived at the restaurant, but just before carrying out their plans, Kenny and Gene changed their minds and left Dave and his car alone. What crime, if any, have Kenny and Gene committed?

A

They are guilty of conspiracy

BUS-391: Business Law (5 decks)

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