1. Like the bylaws of other corporations, the bylaws of Retail Sales, Inc.,
establish the operating name of the corporation.
establish the value and classes of corporate stock.
were adopted at its first organizational meeting.
were submitted for approval to the public official in charge.
2. A minor who affirmatively misrepresents himself or herself to be an adult will not be able to disaffirm a contract in most states.
True
False
3. The U.S. Congress enacts a new federal statute that sets different standards for the liability of businesses selling defective products. This statute applies
only to matters not covered by state law.
only to those states that adopt the statute.
to all of the states.
to none of the states.
4. Parties can form a contract without putting the terms in writing.
True
False
5. Mona asserts that a contract she entered into with Nate is unenforceable. Defenses to the enforcement of a contract include
a desire not to perform.
adverse economic consequences.
results that do not match expectations.
the lack of a party's genuine assent.
6. A service mark is used to distinguish products produced by the federal government from those produced by private corporations.
True
False
7. Gregor uses duress to force Honi to agree to pay him for protecting Honi's Coffee Shop against vandalism and destruction. Honi may
avoid the contract or choose to carry it out.
do nothing once she has agreed to pay.
recover from her insurer for a failure to direct her "protection."
recover from the local police for a failure to protect her "direction."
8. Sanitary Supplies Company requires its customers to pay by check. Tyla, a Sanitary driver, tells customers on her route that they can pay her with cash. When Sanitary learns of Tyla's collections, it takes no action to stop her. Tyla steals some of the cash. Sanitary may suffer the loss under the doctrine of
apparent authority.
equal authority.
express authority.
implied authority.
9. In studying the legal environment of business, Professor Dooley's students also review ethics in a business context. Ethics includes the study of what constitutes
fair or just behavior.
financially rewarding behavior.
legal behavior.
religious behavior.
10. State securities laws apply only to interstate transactions.
True
False
11. A business trust is somewhat similar to a corporation.
True
False
12. In 2009, Sara writes Terror at the Track, a novel about racecar driving. Sara does not register the work with the appropriate government office. Under federal copyright law, Sara's work is protected
for ten years.
for twenty years.
for the life of the author plus seventy years.
forever.
13. A Massachusetts state statute imposes a prison term, without a trial, on all street vendors who operate in certain areas. A court would likely hold this statute to be
constitutional.
unconstitutional under the commerce clause.
unconstitutional under the due process clause.
unconstitutional under the free exercise clause.
14. In making business decisions, Brian, personnel manager for Conservative Investments, Inc., applies his belief that all persons have fundamental rights. This is
a religious rule.
the categorical imperative.
the principle of rights.
utilitarianism.
15. Embezzlement can be committed only by physically taking property from the possession of another.
True
False
16. Aero Cola features Bubbly Cola's trademark without its owner's permission. Dana buys a bottle of Aero Cola. The mark has been infringed by
Aero.
Bubbly.
Dana.
none of the choices.
17. Eastside Warehouse offers to sell a forklift to Forest Lumber Company, but it is stolen before Forest accepts. Eastside must obtain
a forklift for Forest, if Eastside's insurance covers the loss.
a forklift for Forest, if it wants one.
nothing for Forest, because that would extend the time of the offer.
nothing for Forest, because the theft terminated the offer.
18. Pola and Quint want to form and do business as River Tours Corporation. A corporation can consist of
no natural persons.
one natural person but not more.
one or more natural persons.
only more than one natural person.
19. To have standing to sue, a party must have been harmed or have been threatened with harm by the action about which he or she complains.
True
False
20. Preemptive rights entitle shareholders to bring a derivative suit against the corporation.
True
False
21. Molly shoots Norm with Opal's pistol. The proximate cause of Norm being shot is most likely attributable to
Molly and Opal.
Molly only.
Opal only.
neither Molly nor Opal.
22. Recreational Pools, Inc., agrees to build a swimming pool for Sandy, but fails to build it according to the contract specifications. Sandy hires Total Fix-It Company to finish the project. Sandy may recover from Recreational Pools
the contract price less costs of materials and labor.
the contract price.
the costs needed to complete construction.
profits plus the costs incurred up to the time of the breach.
23. Cory enters into a contract with Dian to act as her personal sports trainer. If they later dispute the meaning, and the contract contains unclear terms, the rules of contract interpretation will give effect to
the parties' intent as expressed in their contract.
what the defendant claims was the parties' intent.
what the plaintiff claims was the parties' intent.
what the parties now agree they intended.
24. Joy induces Kelly to enter into a contract for the purchase of a condominium about which Joy knowingly misrepresents a number of material features. When Kelly discovers the truth, Kelly can
enforce the contract and seek damages.
enforce the contract but not seek damages.
neither enforce the contract nor seek damages.
seek damages but not enforce the contract.
25. Larceny relies on stealth while robbery relies on fear and force.
True
False
26. An offer to form a unilateral contract is accepted by a promise to perform.
True
False
27. Mit-E Clean 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 the firm sells its securities, it must provide investors with
a forward-looking financial forecast.
an investment contract.
a prospectus.
a road show.
28. The UETA provides that a document cannot be notarized electronically.
True
False
29. Browse-wrap terms are generally enforceable.
True
False
30. When a contract party alters a written contract, the other party must adapt his or her performance accordingly.
True
False
31. Jay tells Kim that he will buy her textbook from the last semester for $80. Kim agrees. Jay and Kim have
an express contract.
an implied-in-fact contract.
an implied-in-law contract.
a quasi contract.
32. Recovery under quasi contract may be used when one party partially performs under a contract that is unenforceable.
True
False
33. Don enters into a contract with Emma, who does not have contractual capacity. Don can enforce the contract only if Emma
elects not to avoid the contract.
is a minor.
is intoxicated or mentally incompetent.
is a minor, intoxicated, or mentally incompetent.
34. Owen, Paula, Quinn, and Rita combine to finance the building of Super Stores, a shopping mall. Their selected form of business organization is an investment group, or
a business trust.
a joint stock company.
a joint venture.
a syndicate.
35. Britney promises to deliver a certain couch to Dan, who promises to pay for the service. Britney does not perform. She may be required to
do nothing.
make another promise.
pay damages.
perform a different service.
36. Leo, a resident of Missouri, owns a warehouse in Nebraska. He becomes involved in a dispute over the ownership of the warehouse with Opal, a resident of Kansas. Opal files a suit against Leo in Nebraska. Regarding this suit, Nebraska has
diversity jurisdiction.
in personam jurisdiction.
in rem jurisdiction.
no jurisdiction.
37. Roc buys a farm from Steve, who claims that it would be a prime site for a housing subdivision. Roc later learns that the law does not permit the land to be used for housing. Roc may
not rescind the contract.
rescind the contract only if Roc did not know the law before the deal.
rescind the contract only if Steve knew about the law before the deal.
rescind the contract only if the law is not common knowledge.
38. A transaction that lacks a bargained-for exchange lacks an element of consideration.
True
False
39. A party seeking to recover compensatory damages may also be entitled to recover incidental damages.
True
False
40. Three elements-agreement, consideration, and contractual capacity-are sufficient to form a binding contract.
True
False
41. Quix Fix-It, Inc., offers Polly a job as a plumber. No time for acceptance is specified in the offer. The offer will terminate
after a reasonable period of time.
after a typical work week (five business days).
after a usual month (thirty calendar days).
never.
42. In theory, causation in fact is limitless.
True
False
43. Common law is a term for social manners and customs that are familiar to most of us.
True
False
44. Bess, an agent for Calm Harbor Marina, Inc., enters into an unauthorized contract with Dropt Anchor Worx, Inc., purportedly on behalf of Calm Harbor, which refuses to perform. Bess is liable to
Calm Harbor and Dropt Anchor for breach of contract.
Calm Harbor for misrepresentation.
Dropt Anchor for misrepresentation.
no one.
45. Dion, an accountant for Engineering Associates, Inc., attempts to apply the duty-based approach to ethical reasoning in conflicts that occur on the job. This approach is based on the idea that a person must
achieve the greatest good for the most people.
avoid unethical behavior regardless of the consequences.
conform to society's ethical standards.
place his or her employer's interest first.
46. The U.S. Constitution is the supreme law of the United States.
True
False
47. Lora files a suit in Michigan against Ned over the ownership of a boat docked in a Michigan harbor. Lora and Ned are residents of Ohio. Ned could ask for a change of venue on the ground that Ohio
has a sufficient stake in the matter.
has jurisdiction.
has sufficient minimum contacts with the parties.
is a more convenient location to hold the trial.
48. Begin Anew Enterprise, Inc., completes its registration process and begins advertising the availability of its new issue of securities. The firm places a tombstone ad in the financial papers. This ad tells prospective investors
about investing.
about the company.
where to buy the securities.
where to obtain a prospectus.
49. Under the UETA, a signature may be denied legal effect solely because it is in electronic form.
True
False
50. Safe-T Guard Services enters into a contract to secure Taylor's Business Park from vandalism and theft between 6 P.M. and 6 A.M. nightly for six months. At the end of the term, if there has been no vandalism or theft in the Park, Safe-T's performance will have been
absolute.
complete.
conditional.
substantial.
51. Cole is a shareholder of Donut Holes, Inc. Cole will be deemed to have a fiduciary duty to Donut Holes and its minority shareholders if he has
a restriction on the transferability of his shares.
a right of first refusal.
a sufficient number of shares to exercise de facto control.
watered stock.
52. Uri and Vicky orally agree on the sale of Uri's Nite Club to Vicky and note terms on a pair of the Club's napkins, which they both sign. A written memorandum evidencing an oral contract that would otherwise be unenforceable must contain
every term.
the essential terms.
the preliminary terms.
the qualitative terms.
53. Most courts are usually very concerned about the fairness of contracts.
True
False
54. Rural Development Corporation (RDC) and Sid enter into a contract for the clear-cutting of RDC's 50-acre tract for which RDC agrees to pay Sid. Sid transfers his duty to log the tract under the contract to Timber Logging Company. Timber is
a delegatee.
an assignee.
an obligee.
a prohibitee.
55. USA Transport Company uses a mark associated with its name to distinguish its services from those of other transport firms. The mark is
a certification mark.
a collective mark.
a service mark.
trade dress.
56. An offer must be communicated by mail or in person.
True
False
57. Bo and Clancy decide to do business as Dynamo Production Associates. To be a partnership, this association can result from an agreement that is
express, but not from an agreement that is implied.
implied, but not from an agreement that is express.
oral, written, or implied by conduct.
written, but not from an agreement that is oral or implied.
58. A zoning law that affects the lease will cause its termination. Union City's zoning board adopts a new zoning classification that affects the lease. This adoption satisfies
no condition.
the condition precedent.
the concurrent condition.
the condition subsequent.
59. Rory designs a new computer hard drive, which he names "Sci Phi." He also writes the operating manual to be included with each final product. Rory could obtain patent protection for
the hard drive only.
the name only.
the operating manual only.
the hard drive, the name, and the operating manual.
60. A state court can exercise jurisdiction over anyone within the boundaries of the state.
True
False
61. To be enforceable, any assignment must be in writing.
True
False
62. Ethical reasoning is the process through which an individual rationalizes whatever action he or she chooses to take.
True
False
63. Voir dire is a process for presenting evidence in a case.
True
False
64. Parents are required by law to provide necessaries for their minor children.
True
False
65. Criminal liability depends on the commission or omission of an act.
True
False
66. B2B, LLC, is a limited liability company. Among its members, a dispute arises that the operating agreement does not cover. The dispute is governed by
the applicable state LLC statute.
a federal Uniform LLC Law.
the principles of partnership law.
a state corporation statute.
67. Heavy Hauling, Inc., is a public company whose shares are traded in the public securities markets. Under the Sarbanes-Oxley Act of 2002, to ensure that Heavy Hauling's financial results are accurate and timely, the firm's senior officers must set up and maintain
internal "disclosure controls and procedures."
external "release and reveal timetables."
personal "peruse and review liability policies."
public "information and discussion forums."
68. Barb allows Candy to enter Barb's warehouse and take a DVD player. Charged with theft, Candy can successfully claim, as a defense,
consent.
duress.
entrapment.
self-defense.
69. An employer must modify its job-application process so that those with disabilities can compete for jobs with those who do not have disabilities.
True
False
70. On Tad's 18th birthday, he decides that he no longer wants to keep a car he bought from U-Pick Autos, Inc., when he was 17. His right to disaffirm the deal will depend on
the car's condition when Tad bought it.
the car's current condition.
whether Tad acts within a reasonable period of time.
whether U-Pick has the right to disaffirm.
71. Protective Finishes, Inc. (PFI), agrees to paint Quinn's house, using a particular brand of "discount" paint. PFI completes the job but uses a different brand of discounted paint. This is most likely
a complete excuse for Quinn's refusal to pay.
a material breach.
complete performance.
substantial performance.
72. Musical Production Company and Nora enter into a contract that calls for Nora to write six songs for which Musical agrees to pay her. Nora transfers her right to payment under the contract to Omni Entertainment Agency. Nora is
a delegator.
an assignor.
a payor.
a righter.
73. Wrongful termination of an agency relationship can subject the canceling party to a suit for damages.
True
False
74. An employer must verify documents establishing a prospective worker's identity and eligibility to work in the United States.
True
False
75. A battery occurs only if the victim suffers actual physical harm.
True
False
76. While a minor, Jason buys a car that he continues to use and keep in repair after reaching the age of majority. Jason has
disaffirmed the contract.
ratified the contract.
rejected the contract.
rescinded the contract.
77. Clay buys an MP3 player for $200 and a pair of stereo speakers for $600 from a Discount City store, and downloads $300 worth of digital music from E-Music.com. To be enforceable, the contract that must be in writing is the purchase of
the digital music, the MP3 player, and the speakers.
the MP3 player and the speakers only.
the MP3 player only.
the speakers only.
78. To recover workers' compensation, an employee must prove that an injury was not the fault of the employer.
True
False
79. A shareholder in a professional corporation can be liable for malpractice arising from the rendering of professional services.
True
False
80. The Uniform Commercial Code has been adopted, at least in part, in
all states.
45 states.
25 states.
no states.
81. Shareholder approval is required when a corporation buys all of the assets of another company.
True
False
82. A reference to "28 U.S.C. Section 1332" means that a federal court's decision can be found on Page 28 of Section 1332 of the United States Cases.
True
False
83. Nina is a director of Omega, Inc. Under the standard of due care owed by directors of a corporation, Nina's decisions must be
ambiguous and questionable.
arguable and defensible.
informed and reasonable.
perfect and unassailable.
84. A corporate officer is not expected to be informed on corporate matters.
True
False
85. Rescission is the substitution of one party to a contract for a third party, who agrees to assume the contractual duties.
True
False
86. Musicology Instrument Company and Noisemakers, Inc., enter into an e-contract. A dispute arises, and Musicology files a suit against Noisemakers. Like most courts to date, the court that hears this suit will probably apply
Article 2 of the Uniform Commercial Code.
Article 2B of the Uniform Commercial Code.
nontraditional e-commerce law principles.
traditional common law principles.
87. Callie, a lawyer on the staff of Droll International Ltd., applies the utilitarian theory of ethics in business contexts. Utilitarianism focuses on
moral values.
religious beliefs.
the consequences of an action.
the nature of an action.
88. Damages awarded in a shareholder's derivative suit go to the shareholder personally.
True
False
89. Hobie, the chief executive officer of Ideal Gamers, Inc. (IGI), intentionally understates the amount of IGI's debts in information provided to investors as part of an issue of IGI stock. Jaq buys the stock and suffers a loss. Hobie may be subject to
government prosecution and Jaq's suit.
neither government prosecution nor Jaq's suit.
only government prosecution.
only Jaq's suit.
90. Genetic Seed Company hires Howie to work in its shipping office, accepting deliveries and dealing with other companies' drivers. With respect to Genetic, Howie is most likely
an agent.
an independent contractor.
a principal.
a work for hire.
91. Gus is an employee of Harden Steel Company. Under federal labor law, Gus and other employees have the right to
bargain collectively with Harden through their representatives.
insist that Harden require union membership as a condition of work.
interfere with the efforts of others to form labor organizations.
refuse to bargain with Harden through their representatives.
92. High-Tech Services, Inc., and Internet Investments Corporation enter into a con¬tract that would otherwise be subject to the UETA but purports to "opt out." The UETA covers
none of the contract.
only the part of the contract that concerns computer information.
only the part of the contract that does not concern computer information.
the entire contract.
93. Oral evidence of the meaning of a contract with incomplete terms can be introduced at a trial.
True
False
94. Fruits & Vegetables, Inc., employs hundreds of seasonal and permanent workers, both skilled and unskilled, in seven states. Fruits & Vegetables can hire illegal immigrants
if either the employer or the immigrants file special forms.
only if the employer files a special form.
only if the immigrants file special forms.
under no circumstances.
95. If a price quotation contains a mistake in the adding of a number of figures, the contract may not be enforceable.
True
False
96. The state governments retain all powers not specifically delegated to the federal government.
True
False
97. After a merger, a disappearing corporation's preexisting rights disappear.
True
False
98. Joint ownership of property in and of itself creates a partnership.
True
False
99. Quality Steel 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 the consideration if
it is obvious that the consideration is adequate.
Rite Tool asserts that there is adequate consideration.
something of value passed between the parties.
the consideration is worth more than $100.
100. Household Furnishings, Inc., distributes its merchandise on an interstate basis. Under the commerce clause, Congress has the power to regulate
any commercial activity in the United States that substantially affects interstate commerce.
only activities that are in intrastate commerce.
only activities that are in local commerce.
only activities that are not in commerce.