Quiz 4

Question 1

What is the Sarbanes-Oxley Act?

Answer 1

A law relating to financial reporting standards

Question 2

Brautigan Mayonnaise sells its product only in grocery stores and restaurants west of the Rockies. TFIA Mayonnaise is sold in the rest of the country and has only limited sales in Brautigan’s territory. Both companies dominate the mayonnaise markets in their respective regions. TFIA and Brautigan agree to merge, in order to take advantage of economies of scale in purchasing ingredients, as well as in marketing and advertising. Is the merger of these two companies a violation of antitrust law?

Answer 2

No, because the merger will not harm competition

Question 3

What is a general warranty deed?

Answer 3

A deed that promises that the grantor has good title to the property

Question 4

Nick has bought a house that comes with a small beachfront. Unfortunately, the beachfront is separated from the rest of Nick’s property by Jay’s property. Nick and Jay work out an agreement that allows Nick to cross Jay’s property to get to the beachfront. What is the correct term for this arrangement?

Answer 4

Easement

Question 5

The Dhyana Center has rented a space in a strip mall where it offers classes and lectures on meditation and zen practice. The lease is a standard commercial lease. A few months later, the owner of the strip mall leases the space next door to the Ewe Drumming Academy. While Ewe does not use amplification, the sounds of the drumming are loud and persistent enough to disturb the attendees at Dhyana. Attendance at Dhyana has fallen off since Ewe opened. Is there a violation of Dhyana’s right of quiet enjoyment?

Answer 5

No, because the right of quiet enjoyment limits actions by the landlord, no other tenants

Question 6

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?

Answer 6

A quitclaim deed

Question 7

What is the difference between a free trade area and a customs union?

Answer 7

A customs union’s member countries impose the same duties on imports from non-union countries

Question 8

If a sales contract says that goods are sold “F.O.B.,” what does that mean?

Answer 8

The price of the goods includes a set amount of the shipping cost, and the risk of loss of the goods in transit passes at a specific time

Question 9

Azhdaha, Inc., has just become a publicly traded corporation. Ernie, the general counsel, is advising the management of the company about how to comply with the legal requirements for publicly traded companies. The first financial report has just been prepared for filing with the SEC. It is prepared by Azhdaha’s internal accounting staff, and is signed by the company’s CEO and CFO. Ernie does not sign the document, although he has been closely involved in the preparation of the statement. Who certifies the accuracy of the report?

Answer 9

The CEO and CFO, because they are the officers who signed the document

Question 10

Frank’s Fine Family Footwear has been the only shoe store in town since 1975. A newcomer to town, Claudine, decides to open a competing shoe store, Chaussures de Distinction. Frank keeps operating as he always has, and largely ignores Claudine’s business. The people in town continue to shop almost exclusively at Frank’s, and Claudine goes out of business in a matter of months. Has Frank created an unlawful monopoly?

Answer 10

No, because Frank did not engage in deliberate action to create a monopoly

Question 11

No More Weeds Co. and No Weeds Forever, Inc., both sell environmentally friendly herbicides to hobby farmers in the same region. The companies offer very similar products and compete for the same customers. Their boards believe that a merger would result in a more efficient organization with greater name recognition. This is an example of a:

Answer 11

Horizontal merger

Question 12

Boomer Phone, Inc., manufactures and sells simple cellphones for the elderly. It purchases some of the batteries it uses in its phones from Fine Batteries Co. Boomer Phone would like to merge with Fine Batteries so it can get a better price on batteries and have better control over the manufacturing process. Fine Batteries would like to merge with Boomer Phone so it would have a more steady demand for its batteries. This is an example of a:

Answer 12

Vertical merger

Question 13

What are the two essential provisions of the Sherman Act?

Answer 13

Agreements to restrain trade are illegal, and certain monopolies are prohibited

Question 14

What is the Harmonized Tariff Schedule?

Answer 14

A schedule of numbered categories of possible imports with their applicable duty rates that allows U.S. customs officials to identify an import accurately

Question 15

The four freedoms of the European Union are:

Answer 15

Free movement of capital, goods, services, and people

Question 16

Blaine and Rosy own an apartment building together. Rosy wants to sell her share of the building. She can do this without Blaine’s permission only if the two own the building:

Answer 16

As tenants-in-common

Question 17

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

Answer 17

The Clayton Act

Question 18

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?

Answer 18

The landlord may bring an unlawful detainer action

Question 19

A lease that provides for a base rent plus a percentage of expenses is a:

Answer 19

Net lease

Question 20

Taylor has just signed a lease for a dance studio. Because he believes it may take him some time to obtain enough students to reach his income goals, he negotiated a lease that provides that he pays only 70 percent of the monthly rent in year one, 100 percent of the monthly rent in year two, and 130 percent of the monthly rent in year three. Taylor’s lease is:

Answer 20

A Step lease

Question 21

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

Answer 21

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

Question 22

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:

Answer 22

Clayton Act

Question 23

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:

Answer 23

Prospectus

Question 24

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

Answer 24

True

Question 25

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?

Answer 25

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

Question 26

Renowned actress Madison is appearing in an ad for a product that will help women avoid stretch marks after pregnancy. She applies the product as directed during her own pregnancy, and poses for pictures while she is pregnant, and after delivering her baby. For both pictures, some light make-up is applied to reduce the glare from the lighting used for the photo shoot, but there is no additional editing or retouching of the pictures. Is this ad deceptive?

Answer 26

Yes, unless there is a disclosure that make-up was applied

Question 27

Dave sells “the best blanket you will ever own” on his website. The website offers a “Buy One, Get One Free” promotion, letting customers get one blanket for free if they buy one at the regular price of $50 for one blanket. There is also a “special promotional offer” on the website that allows a customer who wants to buy only one blanket to purchase if for “$25—half off the regular price.” Is the website deceptive?

Answer 27

Yes, because the website would mislead a consumer as to the regular price of the blankets

Question 28

Under the Magnuson-Moss Warranty Act, what must a seller do if a defective product cannot be fixed after a reasonable number of attempts?

Answer 28

The seller must either return the purchase price or replace the product

Question 29

What are “Blue Sky Laws?”

Answer 29

State laws regulating securities

Question 30

What is “cooperative federalism?”

Answer 30

Cooperative interaction of state, local, and federal governments to solve common problems

Question 31

In the early 1980s. Raoul ran a business that sold stamps for collectors. On occasion, he applied carbon tetrachloride, a hazardous chemical, to stamps in order to reveal watermarks. Raoul closed his business in 1983. He did not know how dangerous carbon tetrachloride could be, so he just dumped the small amount he had left in back of the building his business was in. After he closed his business, Raoul sold the building to Julio, and recently, Julio has sold the business to a developer. The developer tested the soil, and found carbon tetrachloride. The developer is trying to find Raoul, to make him pay for at least part of the clean-up. Is Raoul responsible for any part of the clean-up costs?

Answer 31

Yes. CERCLA makes anyone who is potentially responsible for contamination liable for clean-up costs

Question 32

Catarina’s Appliances teams up with Locality Credit Union for appliance sales events. Every three or four months, Payne’s brings overstocked or discontinued model appliances to Locality. Customers can purchase an appliance on the spot, and Locality has employees on hand to arrange the financing. Duke has been thinking about replacing his family’s existing washing machine for some time when he sees the event at Locality. He picks out a machine, arranges the financing in his name, and brings it home. When he shows the appliance to his wife Patsy, she tells him that their youngest son needs orthodontia, and they can’t afford a washing machine right now. Patsy tells Duke to cancel the sale. Can Duke cancel the sale?

Answer 32

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

Question 33

The Environmental Protection Agency sets a primary air quality standard for carbon monoxide. What is a “primary standard?”

Answer 33

A standard that protects public health

Question 34

Mya lives next door to an auto body shop run by Danika. The work in the body shop is very loud, sometimes extending into the night. Danika also is careless about her handling of paints and solvents, with fumes and particles often drifting onto Mya’s property. Mya has investigated, and has concluded that Danika is violating state and federal pollution laws. She has contacted the authorities, but Mya wants to do something now. Can Mya bring a lawsuit against Danika?

Answer 34

Yes. Mya can potentially bring a lawsuit for trespass or nuisance

Question 35

Jorge is at Malplena Motors, looking at the used cars for sale. He is particularly interested in a car that is similar to one owned by a friend of his. Jorge has researched this model before coming in, and thinks it is one of several models that could meet his needs. A salesperson sees his interest and talks to him about the car. At one point, the salesperson says the car was well-maintained because “it was the personal car of the owner of the dealership.” Jorge likes the car and the price, so he buys it. When he gets the paperwork for the car, he learns that it was never owned by the owner of Malplena. Did the salesperson commit a deceptive trade practice when she told Jorge about the car?

Answer 35

No, because what the salesperson said was not a material misrepresentation.

Question 36

Al Rubin, a used car dealer, has a sports car for sale. A customer is interested in buying it. Al tells him, “It’s a super car.” Later, the customer discovers that his next-door neighbor’s car can outperform his and he visits his attorney saying, “I want to sue Al.” Which of the following would be the attorney’s best answer?

Answer 36

Al’s statement is probably considered an opinion; therefore he cannot be held accountable

Question 37

Which of the following is true of federal administrative agencies?

Answer 37

Their actions are subject to judicial review

Question 38

What is “judicial review,” in the context of administrative action?

Answer 38

A court’s review of an administrative agency’s factual or legal findings

Question 39

What case establishes the rule that courts must defer to administrative agencies’ interpretations of the law establishing the agency?

Answer 39

Chevron v. Natural Resources Defense Council

Question 40

Who regulates crowdfunding investment solicitations?

Answer 40

The Securities and Exchange Commission (SEC) is responsible for regulating crowdfunding.

Question 41

The Mortiga Toy Company markets a line of dolls as being suitable for children under three. Unfortunately, soon after the dolls are put on the market, there are reports that pieces of the dolls are coming off, potentially injuring children. Mortiga wants to avoid negative publicity, so management decides that the best course of action is to stop selling the dolls and to reach financial settlements with the parents of any children who have been injured. Is there anything else that Mortiga is legally obligated to do?

Answer 41

Yes. Mortiga must inform the Consumer Product Safety Commission (CPSC).

Question 42

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

Answer 42

False

Question 43

Administrative law is:

Answer 43

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

Question 44

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

Answer 44

Pass an enabling statute

Question 45

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

Answer 45

False

Question 46

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

Answer 46

Administrative remedies have been exhausted

Question 47

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

Answer 47

Fail because the FTC has statutory authority to regulate deceptive advertising

Question 48

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

Answer 48

The Federal Trade Commission

Question 49

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

Answer 49

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

Question 50

An actus reus refers to an offender’s:

Answer 50

Action that constitutes a crime when committed with the appropriate state of mind

Question 51

A strict liability crime does not require proof:

Answer 51

Of a mens rea

Question 52

In which of the following circumstances is a search performed without a warrant unreasonable?

Answer 52

The officer suspected the person had committed a violent crime.

Question 53

As a result of applying the exclusionary rule during a criminal trial:

Answer 53

Evidence found as the result of an unlawful search usually may not be introduced into evidence.

Question 54

Excessive fines and the infliction of cruel and unusual punishments are prohibited:

Answer 54

By the Eighth Amendment to the U.S. Constitution

Question 55

Joe notices an expensive laptop on the front seat of a luxury car in front of his friend Alana’s house. He tells Alana about his discovery, and Alana loans him a crowbar. Alana keeps watch while Joe tries to use the crowbar to open the car door. The car alarm goes off and both Joe and Alana run without gaining access to the laptop. Which of the following is true?

Answer 55

Both Alana and Joe have committed inchoate crimes—Alana as an accessory, Joe as attempting to commit a crime, and both as part of a conspiracy to commit a crime.

Question 56

The fraudulent taking of another person’s property by one who lawfully possesses that property is:

Answer 56

Embezzlement

Question 57

Insider trading is criminal:

Answer 57

When an insider trades on information not available to the public

Question 58

Under federal law, a corporate crime must be:

Answer 58

Committed, at least in part, to benefit the corporation

Question 59

Monetary restitution is:

Answer 59

The amount a guilty corporation must pay to the victims of a crime to compensate them for the losses they sustained

Question 60

A search warrant may not be issued unless there is:

Answer 60

Probable cause that a person has committed a crime or that evidence exists in…as determined by a neutral and detached official

Question 61

Nathan would like to rob a jewelry store at night, but he needs help obtaining access. He approaches the owner of a neighboring bakery and asks the baker to help by giving Nathan the keys to the bakery and moving a cabinet that blocks a cold air return to give Nathan access to a shared ventilation system. The baker refuses to help Nathan rob the jewelry store. Nathan is guilty of:

Answer 61

Solicitation

Question 62

Nathan would like to rob a jewelry store at night, but he needs help obtaining access. He approaches the owner of a neighboring bakery and asks the baker to help by giving Nathan the keys to the bakery and moving a cabinet that blocks a cold air return to give Nathan access to a shared ventilation system. The bakery store’s owner did not hear Nathan ask him to help because he was running a loud commercial mixer at the time of Nathan’s request. Nathan is guilty of:

Answer 62

Nothing

Question 63

Which of the following is not true of fraud?

Answer 63

An assertively stated opinion may be fraudulent

Question 64

Which of the following is false for both mail fraud and wire fraud:

Answer 64

Both require a victim to sustain a monetary loss as a result of the fraud.

Question 65

T/F: Officer Jones is a policeman on a foot patrol. When he passes a group of three students, he smells what he believes to be the odor of marijuana even though he does not see any of the three students actually possessing it. He may conduct a limited pat-down search of the three students to determine whether any have marijuana on their person.

Answer 65

True

Question 66

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.

Answer 66

False

Question 67

T/F: If the police fly over your home with a helicopter and observe your activities using binoculars or a telephoto lens, this would constitute an illegal search if done without a warrant.

Answer 67

False

Question 68

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

Answer 68

False

Question 69

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?

Answer 69

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

Question 70

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?

Answer 70

They are guilty of conspiracy

Question 71

Which of the following is an essential element of fraud?

Answer 71

Misrepresentation of material fact

Question 72

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

Answer 72

A criminal act and a tortious act

Question 73

Ms. Jones was leaving class in a hurry and in the process knocked her friend Ms. Smith down a flight of steps, causing serious injury to Smith. Smith wishes to recover for her injuries. Smith’s actions would be brought in:

Answer 73

tort law on the grounds of negligence