Midterm
Examination,Business Law
Mr.
McNamee 80 points total
Question 1, part 1.
(30 points)
Ruth parks her car on
a steep hill, leaving the car in neutral and without
the parking brake being engaged. The car rolls down
the hill. It hits a utility pole knocking an electric
power line to the ground. Sparks from the broken line
ignite a grass fire. The fire spreads until it
reaches a barn one mile away. The barn, belonging to
Pete, houses dynamite. Because dynamite will burn
beautifully but will not explode if set afire,
another substance like gasoline fumes are present to
create a concussion, which causes the dynamite in the
building to explode. Part of the roof to falls on and
injures a passing motorist, Jim.
Can Jim recover from
damages from Ruth under a negligence theory? (
Include in your explanation the elements of
negligence and a discussion of how they apply.) What
role does Pete play in these facts? Can your
explanation be used as a defense or as another
negligence theory by a particular name? If it can,
define it. What if there is a state law forbidding
the storage of gasoline within 300 feet of dynamite?
Answer: a.) That
the defendant owed a duty of care to the plaintiff,
that is he or she must conduct him or herself in a
particular and reasonable manner at the risk that if
he or she does not do so he or she becomes subject to
liability for injury to the person to whom the duty
is owed. In torts involving negligence, the
tortfeasor neither wishes to bring about the
consequences of the act nor believes that they will
occur. b.) That the defendant breached that duty. The
actor's conduct merely creates a risk of injury by
the breach. If no risk is created (CAUSATION AND
PROXIMATE CAUSE), there is no negligence. Moreover,
the risk must be foreseeable; that is, it must be
such that a reasonable person engaging in the same
activity would anticipate the risk and guard against
it. c.) That the plaintiff suffered a legally
recognizable injury. This injury is measurable. 4.
That the defendant's breach caused the plaintiff's
injury. There is some type of link to the plaintiff.
If dynamite burns
and yet, will not explode, it indicates that there is
other negligence involving Pete, beyond the chain of
events that Ruth has set in motion. The owner of the
barn may be negligent under a Negligence Per Se
theory or Res Ipsa Loquitor theory.
In the absence of
the detonator (even gasoline fumes will do) placed
there by the owner of the barn (Pete) there would
have been no damage to Jim's car because the dynamite
would not have exploded. (did you use the 'but for'
test?). Could there have been a statute forbidding a
detonating substance stored with the dynamite, sure!
This would make Pete at least partially liable. The
chain of causation would never have resulted in an
explosion and injured Jim without Pete's negligence.
This could have
been contributory negligence (a complete defense )
that would sever the chain of liability or
comparative negligence between the owner of the barn
and Ruth. Each may have been liable in some percent
for the damage to Jim's car beginning with the chain
of events with Ruth carelessly parking her car.
The Theories:
1. Res Ipsa
Loquitor. A theory in which the injury would
not have occurred in the absence of negligence.
2. Negligence
per se. The violation of a statute by a
person causing another to be injured where the
statute states: conduct to be regulated; that the
victim was in the class of individuals to be
protected; that the injury sustained was the one the
statute was designed to protect against.
Pete is also
injured. Ruth also owed him the same duties that were
owed by Pete to Jim or Ruth to Jim in the chain of
causation. Pete would also sue Ruth because "but
for" Ruth's negligence his barn would not have
exploded at the time she parked her car.
Question 4. (15
points)
J. Smith, the owner of
Smith's Document Services, Inc., a commercial copy
shop, concluded that it was unnecessary to obtain the
copyright owners' permission to reproduce copyrighted
materials in coursepacks for State University. His
shop then publicized this conclusion and reproduced
coursepacks for students at the University, bound
them and sold them at his shop without obtaining the
copyright owners' permission. Three publishers sued
him over copyright infringement. Smith claims the
"fair use doctrine" covered him. What is
the "fair use doctrine", did it cover
Smith? Explain. If not, why?
Definition. Answer:
The "fair use doctrine" does not cover
Smith in this case. If a professor makes a few copies
for his students directly, in the educational
setting, and not for profit, it would. In this case
he advertised for business, a fallacy which he
thought would give him all of the University
business, and reproduced large quantities of material
for sale, ie profit. His was not a nonprofit
educational institution despite the fact that the
material would be used for teaching in a university,
eventually.
The "fair use doctrine" requires a
balancing process by which a complex of variables
detemine whether other interests should override the
rights of creators. The Copyright Act explicitly
identifies four interests: 1) the purpose and
character of the use, including commercial nature; 2)
the nature of the copyrighted work; 3) the proportion
that was "taken", and; the impact of the
"taking". 17 USCA § 107. The Court stated
that if copy shops across the nation were to start
doing what Smith was doing the revenue stream to the
rightful owner would shrivel and the potential value
of the copyrighted works of scholarship published by
the plaintiffs would be diminished accordingly. This
is precisely what the Copyright Act was written to
prevent. This case is reproduced in the text on page
149 as Princeton University Press v. Michigan
Document Services, Inc. 99 F.3d., 1381 (6th Cir.
1996).
Question 5. (35 points
total.)
The Seven-Up Co., as
part of a marketing scheme, placed two glass bottles
of "Like" cola at the front entrance of the
Gruenemeier residence. Russell Gruenemeier, a
nine-year-old boy, began playing while holding one of
the bottles. He tripped and fell, and the bottle
broke, severely cutting his right eye and causing him
to eventually lose the eye. Russell's mother brought
an action against the Seven-Up Co. for damages,
claiming that the cause of Russell's injury was
Seven-Up's negligence. She claimed that the company
had been negligent in placing potentially dangerous
instrumentalities—glass bottles—within the
reach of small children and that the firm should have
used unbreakable bottles for its marketing scheme. [
Gruenemeier v. Seven-Up Co., 229 Neb. 267, 426 N.W.2d
510 (1988)]
1. If you were the
judge, how would you decide this issue on ethics
alone, and from what does the judge draw his
decision? (10 pts)
2. Explain your
reasoning in terms of Kantian ethics theory. (5 pts)
3. Next, explain your
decision in light of Bentham's theories of ethics.
(14 pts)
4. Finally, address
business ethics; ie., how can a business decision
maker decide such ethics questions? (6 pts)
Answer: (Part One)
Your decision and its explanation constitutes
one-half of the answer. The judges in this case
decided that; glass bottles are not so inherently
dangerous that a manufacturer could be found
negligent for marketing its product in glass bottles.
Regardless of whether you held the Company liable you
must recognize that a decision based on ethics would
examine the balance between the legal, ethical, and
profitability of the company's and determine if the
balance constituted a fair, just and correct behavior
on the part of the company.
(Part Two) Ethics
is the study of what constitutes right or wrong
behavior. Ethics has to do with questions relating to
the fairness, justness, rightness, or wrongness of an
action. A judge would draw an ethical decision from
his own background and upbringing, education and
training; this training and background is applied to
the precedents of the law prior to this case in
similar cases; and statute law.
2. Explain your
reasoning in terms of Kantian ethics theory. (4 pts)
Answer: Ethical
standards based on a concept of duty may also be
derived solely from philosophical principles. A
central postulate in the ethics of Immanuel Kant, for
example, is that individuals should evaluate their
actions in light of the consequences that would
follow if everyone in society acted in the same way.
This categorical imperative can be applied to any
action. An answer explained in this light would be a
correct answer.
3. Next, explain
your decision in light of Bentham's theories of
ethics. (12 pts)
Answer:
Utilitarianism is a philosophical theory first
developed by Jeremy Bentham and advanced by John
Stuart Mill, It focuses on the consequences of an
action, not on the nature of the action itself or any
set of preestablished moral values or religious
beliefs. An action is morally correct,
"right," when, among the people it affects,
it produces the greatest amount of good for the great
number. Applying the utilitarian theory thus requires
(1) a determination of which individual will be
affected by the action in question; (2) a
cost-benefit analysis an assessment of the negative
five and positive effects of alternative actions on
these individuals; and (3) a choice among alternative
actions that will produce maximum societal utility
(the greatest positive benefits for the greatest
number of individuals).
4. Finally, address
business ethics; ie., how can a business decision
maker decide such ethics questions? (6 pts) The
business decision is couched in terms of : what is
legal, what is ethical and what is profitable. How
much profit is to be sacrificed for legality
and ethical behavior?
Midterm
Examination Number 2.
BA
258, The Legal Aspects of Business Management
Mr.
McNamee
Each situation
consists of facts about which you will be asked three
questions. You must have this examination to my
office 413 Calhoun not later than Friday, November
17th. This is a change from the original date of the
16th since everybody seems to be so busy. Answer all
of the questions thoughtfully and completely. The
examination is worth 80 points.
______________________________________________________________________________
**Rules
for Answers:**
1.
In each Situation Question 1 should have an answer of
no more than two words.
2. For Question 2,
the discussion of each situation must state:
a. the legal
problem in the first sentence (such as
"Respondeat Superior", etc.);
b. The remainder of
the first paragraph must explain the legal theory
with which you have chosen to work (elements, if
any);
c. The second
paragraph must include your analysis and conclusion.
You are limited to
six sentences in each paragraph. Less is more. You
will be rewarded for your conciseness.
3. In Question 3 of
each Situation your answer must be a single sentence.
It may be a compound sentence, but it should not be a
paragraph.
______________________________________________________________________________
Situation 1:
Sersahl, an accounting firm, required all employees
"to sign a Confidentiality and Non-Solicitation
Agreement which contained a non-solicitation covenant
that prohibited plaintiff's employees, first, from
soliciting business from its clients and, second,
from soliciting or encouraging its employees to
terminate their employment" for three years
after leaving the firm. Hugh, who had signed the
agreement and later left to work for another firm,
later told a former colleague about opportunities at
his new firm. That employee, who did not act on the
information, told Sersahl managers, who then sued
Hugh for damages for breach of the non-solicitation
agreement.
Question 1: What
area of law are we working with in this example? (1
point)
Answer: Employment
Law
Question 2: If the
trial court held for McHugh, ruling that the covenant
was too broad and could not be enforced. What will an
appeals court say? (7 points)
Answer: The
covenant not to solicit or to encourage former
co-workers to consider alternative employment is a
restrictive covenant in restraint of trade. It does
not protect trade secrets or customer contacts, and
so is unenforceable. Covenants that limit individuals
in the exercise or pursuit of their occupations are
in restraint of trade. The employer may protect trade
secrets and customer contacts, and the employee has a
duty to protect such proprietary property, but the
employer does not have a proprietary interest in its
employees at will or in their normal employment
skills.
Citation
Schmersahl, Treloar & Co., P.C., v. McHugh, 2000
WL 1051831 (Ct. App., Mo., 2000)
Question 3: In one
sentence sum up the major point of law that came from
this case. (2 points)
Answer: An employer
may not prohibit former employees from soliciting
current employees for work.
______________________________________________________________________
Situation 2:
Nichols, driving a pickup, and Gonzalez, driving a
truck, got into a dispute over the way Gonzalez was
driving. When they stopped at a light, Gonzalez
attacked Nichols, beat him, and stabbed him. Gonzalez
was convicted of assault. Nichols sued Land
Transport, Gonzale's employer, for personal injuries
he suffered in the attack by their employee,
contending that Land was vicariously liable since
Gonzalez was acting in the course of employment as a
driver. The district court dismissed the suit.
Nichols appealed.
Question 1: What
area of law are we working with in this example? (1
point)
Answer: Agency
Question 2: If the
trial court applies an employer to employee
relationship to this situation, what will an appeals
court say? (7 points)
Answer: In this
case the courts apply the test of the Restatement
(Second) of Agency to determine whether an employee's
conduct is within the scope of employment. According
to º 228 of the Restatement, "The fact that the
servant acts in an outrageous manner or inflicts a
punishment out of all proportion to the necessities
of his master's business is evidence indicating that
the servant has departed from the scope of employment
in performing the act." Therefore, "a
servant's tort is committed in the scope of
employment only if it is actuated, at least in part,
by a purpose to serve the master. It is not enough
that the tort arises out of an employment-related
dispute."
Citation Nichols v.
Land Transport Corp., 2000 WL 1141068 (1st Cir.,
2000)
Question 3: In one
sentence sum up the major point of law that came from
this case. (2 points)
Answer: Employment
is not enough to hold an employer liable for an
employees tort, the tort must arise by the employees
requirement to serve his employer.
______________________________________________________________________
Situation 3:
Almost half of the Domino's Pizza franchisees sued
Domino's for monopolizing the sale of pizza
ingredients to the franchisees. The franchisees made
multiple claims, including illegal tie-in sales
(purchase of ingredients tied to purchase of pizza
dough and purchase of ingredients tied to continuing
the franchise agreement), exclusive dealing
arrangements that restrained trade, and
monopolization of pizza supplies by excluding
competition (other pizza ingredient suppliers) from
selling to franchisees.
Lower Court Decision
District court dismissed the suit with prejudice.
Plaintiffs failed to allege a "relevant
market" as required by the Sherman Act. They
maintained that the market was the terms of the
franchise contract, which requires franchisees to buy
ingredients from the parent company as a part of the
agreement. Plaintiffs failed to define a market in
reference to product interchangeability or by
cross-elasticity of demand. They cannot assert that
the market is the contract.
Question 1: What
area of law are we working with in this example? (1
point)
Answer: Antitrust
Question 2: If the
trial court applies a theory which differentiates
market from franchise agreement, what will the court
say? Will the franchise contracts still be
relevant?(7 points)
Answer:
"[W]here the defendant's power to force
plaintiffs to purchase the alleged tying product
stems not from the market, but from plaintiffs'
contractual agreement to purchase the tying product,
no claim will lie." The franchise agreement
spelled out the requirements for buying pizza
ingredients, hence was a factor in the price in the
franchise arrangements. The fact that cheaper
ingredients of similar quality were available from
other sources did not create a monopoly on the part
of Domino's. If the plaintiffs were correct,
franchise contracts would be nearly irrelevant.
Citation Queen City
Pizza v. Domino's Pizza, ---F.3d--- (1997 WL 526215;
3rd Cir.)
or 124 F 3d 430
(3rd Cir., 1997)
Question 3: In one
sentence sum up the major point of law that came from
this case. (2 points)
Answer: Franchise
contracts allow tying the purchase of the materials
to be used for the products made in the franchise for
the receipt of the franchise and the use of its name.
______________________________________________________________________
Situation 4:
The Gutriches filed a legal malpractice claim against
a law partnership, associate Judd, and twenty unnamed
partners, none of which were named or served
individually. Before litigation was resolved, the
partnership was dissolved and funds were not
available to satisfy a possible judgment. When the
Gutriches attempted to amend their complaint to name
all partners individually, the statute of limitations
on the action had expired and the court would not
allow the amendment. The trial resulted in a verdict
for the Gutriches of about $400,000. They moved to
enforce the judgment against the unnamed partners,
but the trial court and appeals court denied the
motion. The Gutriches appealed.
Question 1: What
area of law are we working with in this example? (1
point)
Answer: Partnership
Question 2: If the
trial court applies a theory in which allows the suit
under the partnership name, what will happen to the
20 individual partners when the statute of
limitations runs out?(7 points)
Answer: Under the
"common name" statute, a plaintiff need not
sue the partners themselves in order to bind the
property of the partnership and the joint property of
the partners, but a judgement against the partnership
does not bind the separate property of an individual
partner unless the plaintiff named the individual
partner and the court had jurisdiction over that
individual. Since the complaint failed to name the
individual partners, which could have been done, the
right to do so was lost due to lapse of time.
Citation Gutrich v.
Cogswell & Wehrle, 961 P.2d 1115 (Sup. Ct.,
Colo., 1998)
Question 3: In one
sentence sum up the major point of law that came from
this case. (2 points)
Answer: You must
file within the statute of limitations to take
advantage of joint and several liability of the
partners in a general partnership.
______________________________________________________________________
Situation 5:
Facts Emerald operates a coal processing plant in
Pennsylvania. Refuse from the plant builds up until
disposed under Federal Mine Safety and Health
Administration (FMSHA) procedures. During bad
weather, the refuse would pile up more than usual
until it could be moved. After a pile of refuse had
slipped into a "slurry pond," an FMSHA
inspector charged Emerald with "significant and
substantial" violations of safety standards.
Emerald's appeal to the Federal Mine Safety and
Health Review Commission was rejected. Emerald
appealed to the Court of Appeals.
Question 1: What
area of law are we working with in this example? (1
point)
Answer:
Administrative Law
Question 2: If the
The Federal Mine Safety and Health Act authorizes a
"significant and substantial" finding only
for violations of mandatory health or safety
standards, and the regulation that Emerald violated
is not a mandatory standard, may violations fall in
the serious category of "significant and
substantial." And what kind of penalty can be
imposed?(7 points)
Answer: The Federal
Mine Safety and Health Act authorizes a
"significant and substantial" finding only
for violations of mandatory health or safety
standards. The regulation that Emerald violated is
not a mandatory standard, so violations may not fall
in the serious category of "significant and
substantial." The Commission may not expand the
clear words of the statute to impose this finding in
instances that do not involve mandatory health or
safety standards. For the violation cited in this
case, a lesser penalty may be imposed.
Citation Cyprus
Emerald Resources Corp. v. FMSHRC, 195 F.3d 42 (D.C.
Cir., 1999)
Question 3: In one
sentence sum up the major point of law that came from
this case. (2 points)
Answer: An Agency
may not expand penalties beyond what Congress
authorizes.
______________________________________________________________________
Situation 6:
Gaston operates a metal smelter located on a lake.
The metal smelter functions under a water pollution
permit that details what level of pollutants are
allowed to be emitted from the smelter into the lake.
Two environmental groups sued Gaston on behalf of
their members who live downstream of the lake,
claiming that Gaston was violating its discharge
permit and was subjecting downstream water users to
dangerous chemical exposure. District court dismissed
the suit, finding that the groups failed to establish
standing because there was no evidence of injury to
any party. Plaintiffs appealed.
Question 1: What
area of law are we working with in this example? (1
point)
Answer:
Environmental Law
Question 2: If
there is not "an invasion of a legally protected
interest which is (a) concrete and particularized and
(b) actual or imminent, not conjectural or
hypothetical," what will the court say ? (7
points)
Answer: Under the
law, an association "may have standing to sue in
federal court based either on an injury to the
organization or its own rights, or as the
representative of its members who have been
harmed." As the Supreme Court has held, for
there to be injury in fact, there must be "an
invasion of a legally protected interest which is (a)
concrete and particularized and (b) actual or
imminent, not conjectural or hypothetical."
Here, "concerns were based on mere speculation
as to the presence of pollution without any evidence
to support their fears or establish the presence of
pollutants in the allegedly affected waters."
Citation Friends of
the Earth, Inc. v. Gaston Copper Recycling, 179 F.3d
107 (4th Cir., 1999)
Question 3: In one
sentence sum up the major point of law that came from
this case. (2 points)
Answer: If there is
no evidence of environmental harm, there is no
standing to sue the alleged water polluter.
______________________________________________________________________
Situation 7:
Facts Development Co. leased a building for five
years. Lessee assumed all responsibility for repairs,
maintenance, and alterations. Lessee hired DCB to do
alterations to the building that cost about $300,000.
Development Co. notified DCB that it was not
responsible for any of the costs; the contract was
strictly with the lessee. Lessee quit paying rent, so
was evicted, and failed to pay DCB for the work done.
DCB sued Development Co. for unjust enrichment for
the work DCB had done to the building. The trial
court awarded DCB $280,000 for the work done plus
interest and costs. Development Co. appealed.
Question 1: What
area of law are we working with in this example? (1
point)
Answer: Contract
Law
Question 2: Absent
Fraud or Misake, is the mere fact that a benefit has
been bestowed on Development Co., and that it
appreciated the benefit, enough to give rise to a
claim for unjust enrichment. ? (7 points)
Answer: A claim
based on "contract implied in law" or
"unjust enrichment" is not based on any
contract; it is an obligation that arises not from
the consent of the parties, as in the case of
contracts that are express or implied in fact, but
from equity. To recover, the plaintiff must show
that: 1) a benefit was conferred upon the defendant;
2) defendant appreciated the benefit; and 3) the
benefit was accepted by defendant under such
circumstances that it would be inequitable for it to
be retained without payment of its value. The mere
fact that a benefit has been bestowed on Development
Co., and that it appreciated the benefit, is not
enough to give rise to a claim for unjust enrichment.
DCB did the work for the lessee and was notified by
Development Co. that it would not be held liable for
any such work. There was no fraud or mistake
involved. Claims in situations such as this one are
nearly uniformly rejected by the courts.
Question 3: In one
sentence sum up the major point of law that came from
this case. (2 points)
Answer: Absent
Fraud or Misake, the mere fact that a benefit has
been bestowed on Development Co., and that it
appreciated the benefit, is not enough to give rise
to a claim for unjust enrichment.
_____________________________________________________________________
Situation 8:
Barnes had worked for Goodyear for 20 years and had
an excellent record. The year before he was laid off,
he was diagnosed with Bell's Palsy, a disability,
that kept him from working for six weeks. Some
workers ridiculed his appearance, as some of his
facial muscles were paralyzed. Goodyear announced a
20 percent cutback in workers, based on seniority and
performance. Barnes was given a low performance
evaluation based on his work after he returned from
disability leave and was having some trouble with his
speech. Barnes was laid off and offered temporary
work at half his previous salary. He sued for
disability discrimination. The jury found for Barnes.
The appeals court reversed, holding that Goodyear did
not regard Barnes as disabled. He appealed.
Question 1: What
area of law are we working with in this example? (1
point)
Answer: Employment
or Discrimination Law
Question 2: Once a
claimant shows they have a disability and illustrates
that they can do the job with or without reasonable
accommodation and a claimant shows adverse job
action. Must evidence of discrimination be direct or
indirect? (7 points)
Answer: In
Tennessee, a claimant must show they have a
disability and must show that they can do the job
with or without reasonable accommodation. Then
claimant must show adverse job action. Evidence of
discrimination then can be direct or indirect. Here,
Barnes presented evidence of direct discrimination.
Goodyear's defense was that their layoff decision was
not based on an impermissible motive but was based on
performance and seniority. Such causation is for the
jury to determine, which it did in Barnes favor. An
employer cannot use a layoff as a way "to weed
out disabled workers."
Question 3: In one
sentence sum up the major point of law that came from
this case. (2 points)
Answer: Once a
claimant shows they have a disability and illustrates
that they can do the job with or without reasonable
accommodation and a claimant shows adverse job
action. Evidence of discrimination may be direct or
indirect.
BA
258 Business Law, Fall Session, 2000
Mr.
McNamee, Closed book final
1. Which of the
following is not an equitable maxim(s) under the
common law?
a. Whoever seeks
equity must do equity.
b. One seeking the aid
of an equity court must come to the court with clean
hands
c. Equity aids the
vigilant, not those who rest on their rights.
d. Whoever seeks
equity should do so not upon their limits under the
law of the king.
e. b and c
f. a and d
2. Ethical
reasoning is:
a. a Utilitarian
premise linked to its cost benefit analysis;
b. a Kantian duty
based principle;
c. a process for
application of ethics, law, and profit motives;
d. none of the above;
e. all of the
above.
3. Authority over
the person and thing in a court proceeding is known
as:
a. venue and in rem
jurisdiction;
b. venue and in
personam jurisdiction;
c. in rem and in
personam jurisdiction;
d. venue and the long
arm statute
e. none of the above
f. all but d.
4. In order to
bring a lawsuit before a court a party must have:
a. an attorney;
b. standing and a
controversy;
c. been through
mediation or arbitration
d. specified an award.
5. Waiving formal
service of process in a court proceeding means?
a. issuing a summons;
b. issuing a
complaint;
c. not having to
follow a and b;
d. following a and
b.
e. standing on the
corner and using your arm to say goodby to the judge!
6. Which of the
Amendments to the United States Constitution
guarantees the right to a speedy and public trial by
an impartial jury with counsel?
a. 6th
b. 4th
c. 1st
d. 8th
e. 7th
7. Defenses to
assault and battery include all of the following
except which?
a. consent,
b. intoxication,
c. defense of others
d. infancy,
e. self-defense,
f. a and d
g. b and d
8. To prove the
tort of Wrongful Interference With a Business
Relationship some sort of predatory behavior must be
established. All of the following must be proved by
the plaintiff except:
a. breach of
contract,
b. that there was an
established business relationship,
c. that the tortfeasor
intentionally caused this business relationship to
end, by predatory means,
d. that the plaintiff
suffered actual damages.
9. A statute of
repose is the same as which of the following?
a. a tort,
b. a criminal act,
c. a statute of
limitations,
d. a lesser included
offense.
10. Which of the
following types of intellectual property is used by
one or more persons other than the owner to certify a
region, materials or mode of manufacture, quality, or
accuracy of the owner's goods or services?
a. collective mark;
b. certification
mark;
c. servicemark;
d. trade name.
11. A domain name
can be treated as what?
a. an Internet
address;
b. a trademark;
c. a company location;
d. a contact for
purposes of the long-arm statute.
e. means of access to
a company.
f. all but d.
12. In criminal law
the common law term, "fruit of the poisonous
tree," refers to what principle in modern
Constitutional law?
a. the 5th Amendment
right against self incrimination;
b. the 4th Amendment
protection from unreasonable searches and seizures;
c. the exclusionary
rule under the 4th, 5th, and 6th, Amendments;
d. the 6th Amendment
guarantees of a speedy trial, trial by jury, a public
trial, the right to confront witnesses, and the right
to be represented by counsel.
13. Which of the
following contract types is a valid contract, but can
be nullified at the option of one or both of the
parties?
a. informal;
b. voidable;
c. void;
d. executed;
e. quasi-contract.
14. Which of the
following would terminate a contract by operation of
law?
a. a counteroffer by
the offeree;
b. a lapse of time;
c. rejection of the
offer by the offeree;
d. detrimental
reliance.
15. A minor may not
disaffirm a contract for which of the following
reasons?
a. the provision of
necessaries;
b. the minor affirmed
the contract on reaching the age of majority;
c. fraud or
misrepresentation;
d. all of the
above;
e. none of the above.
16. The first
element of proving contract fraud is to show that
misrepresentation of a material fact has occurred.
Misrepresentation may occur by:
a. conduct,
b. law,
c. silence,
d. none of the above;
e. all of the above.
17. A scheme
involving the distribution of property by chance
among persons who have paid a valuable consideration
for the opportunity to receive property is called
what?
a. usury;
b. insurance;
c. gambling;
d. parole.
18. In an illegal
contract, both parties are considered to be in
pari-delicto. This means what?
a. the contract is
discriminatory to one party;
b. both are
equally at fault;
c. like you know, the
contract is way illegal;
d. both parties are
incapable of performing.
19. An adhesion
contract:
a. exempts one of the
parties from all liability for property damage;
b. impedes a public
service;
c. was written by
and has one party of vastly superior bargaining
power;
d. was written by a
former English major.
20. An incidental
beneficiary of a contract is whom?
a. an intentional
beneficiary;
b. a fraudulent
beneficiary;
c. an accidental
beneficiary;
d. a vested
beneficiary.
21. Non-deceptive
advertising may consist of vague generalities and
obvious exggerations that do not obviously mislead.
This practice is called what?
a. bait and switch,
b.
counter-advertising;
c. puffing;
d. smoke and mirrors;
e. dressing for
success.
22. Coverage on an
insurance policy can begin when?
a. a binder is
written;
b. the policy is
issued;
c. the individual
insured dies;
d on the terms of the
contract;
e. specified time has
lapsed.
f. all but c.
23. In cases
involving administrative law and administrative
judicial proceedings under the enabling statute of an
agency, the 4th Amendment to the Constitution
regarding unreasonable searches and seizures may be
suspended when,
a. the industry is
highly regulated;
b. hazardous materials
are involved;
c. food or clothing is
involved;
d. reasonable
emergencies;
e. never.
24. Who may control
environmental pollution?
a. States and the
Federal Government;
b. Counties,
Municipalities and the Federal Government;
c. Counties,
Municipalities, States and the Federal Government;
d. Counties, States
and the Federal Government.
25. At the federal
level, the primary legislation for employee health
and safety protection is the Occupational Safety and
Health Act of 1970. Under OSHA the 4th Amendment to
the constitution is violated when:
a. a warrantless
inspection is conducted;
b. an employer
discharges an employee with due cause;
c. an employee files a
good faith complaint with the agency;
d. the employer fails
to report an on-site death within 48 hours.
26. A company may
discriminate in the hiring of an employee for reasons
such as age, handicap, gender, religion, or race when
discrimination is essential to a job, that is the
trait is essential. This is called what?
a. business necessity;
b. bona fide
occupational qualification;
c. seniority;
d. after acquired
evidence.
27. A company which
is created by an agreement of the owner-members; has
articles of organization; has a state issued charter;
is treated as a legal person by law in which
ownership interests are freely transferable is which
of the following?
a. Sole
proprietorship;
b. Partnership;
c. Limited
Partnership;
d. Limited
Liability Company;
e. Limited Liability
Partnership; or
f. Corporation.
28. A(n)
_______________ is a person who contracts with
another to do something for him but who is not
controlled by the other nor subject to the other's
right to control nor subject to the other's right to
control with respect to his physical conduct in the
performance of the undertaking.
a. employee,
b. independent
contractor,
c. employer,
d. politician.
29. For the
ratification of an agent's action to be effective as
to a principal the principal must be aware of what?
a. the agent's name
and whereabouts;
b. all material
facts in the contract;
c. any prior benefits
of a previous contract;
d. emergency powers
within the scope of the agent's authority.
30. Under what
doctrine is vicarious liability imposed?
a. quasi-contract;
b. constructive trust;
c. respondeat
superior;
d. scope of
employment.
31. If, under a
contract, two parties have a contract if they merely
conduct themselves as if they do, and it is called
contract by estoppel, then parties who are not
partners who hold themselves out as partners and make
representations that third parties rely on in dealing
with them may be what:
a. partners by
estoppel;
b. nothing;
c. co-workers;
d. agent and
principal.
32. A corporation
can be public or private. An example of a private
corporation would be Microsoft Corporation. An
example of a public corporation would be which of the
following?
a. Sun Microsystems;
b. Tennessee Valley
Authority;
c. Conseco Natural Gas
Company;
d. BellSouth
Telecommunications Corporation.
33. Articles of
Incorporation are to a Corporation as a Charter is to
a:
a. Limited Liability
Partnership,
b. General
Partnership,
c. Limited
Liability Company,
d. Sub Chapter
"S" Corporation.
34. Stocks of a
corporation are to a homeowner's title as corporate
bonds are to its:
a. mortgage,
b. title insurance,
c. homeowner's policy,
d. abstract of title.
35. Directors and
Officers of a corporation are
"fiduciaries". As fiduciaries their
absolute duty of trust and confidence extends to all
but the following:
a. shareholders;
b. the corporation;
c. employees;
d. minority
shareholders.
36. A majority
shareholder has a fiduciary duty to the corporation
if:
a. he/she holds
sufficient shares of stock to exercise defacto
control of the corporation,
b. he/she is the chief
operating officer and stockholder of the corporation,
c. he/she holds a
majority of the stock and indebtedness of the
corporation;
d. he/she has named
two or more directors of the corporation.
37. Upon merger and
consolidation of a corporation with another
corporation a dissenting shareholder cannot be forced
to become an unwilling shareholder in the new
corporation. The shareholder has the right to be paid
for the fair value of the number of shares he/she
holds on the date of the merger or consolidation.
This right is known as which of the following?
a. dissent right,
b. appraisal right,
c. valuation right,
d. repurchase right.
38. The corporate
takeover defense which does not allow holders of
convertible securities to convert the securities into
shares of common stock if the holders own or would
own after conversion, 10% or more of the voting
shares of stock is called what?
a. Crown Jewel,
b. Greenmail,
c. Lobster Trap,
d. Pac-Man,
e. Shark Repellent,
f. Scorched Earth.
39. A Tippee is to
a Tipper as:
a. a speaker is to an
eavesdropper,
b. the police are
to an informant,
c. a client is to his
lawyer,
d. a newspaper is to
its readers.
40. A violation of
anti-monopoly law in the United States requires which
of the following elements?
1. intent to
monopolize,
2. injury due to
monopoly,
3. predatory
activity,
4. monopoly power,
5. constructive
interference with the business of another.
a. 1 and 2.
b. 1, 2, and 3
c. 1, 3, 4 and 5
d. 1 and 4
41. An example of a
business which would be exempt from antitrust law in
the United States is:
a. State Farm
Insurance Company
b. Sun MicroSystems,
Inc.
c. E-bay
d. Imperial Dry
Cleaners
42.
A_______________merger occurs when a company at one
stage of production acquires a company at a higher or
lower stage of production.
a. horizontal,
b. verticle,
c. conglomerate,
d. market,
e. angular.
43. Which of the
following is a true statement?
a. In determining the
market concentration of a post merger corporation the
FTC and the DOJ employ what is known as the Heroditus
- Heffelfinger Index.
b. Before deciding
to challenge a merger FTC and DOJ look at many
factors such as the relevant market, economic
efficiency, the financial condition of the merging
firms, and the price of the products involved.
c. Mergers between
firms that compete with each other in the same market
are called "integrated mergers."
d. Market
concentration refers to the amount of ingredients
listed on the label of a product.
44. A sale of goods
is which of the following?
a. The passing of
goods for items of like value;
b. The barter or
conversion of goods for value;
c. Trade in a
commodity;
d. The passing of
title for value.
45.
Unconscionability of a contract is usually defined as
on which is so unfair and one sided that it would be
unreasonable to enforce. The Uniform Commercial Code
allows the court to evaluate a contract when?
a. At the time it
was made.
b. At the time the
goods were delivered.
c. At the time the
title was transferred on receipt of the bill of
lading.
d. At the time the
parties negotiated the contract.
46. The general
powers of a bankruptcy trustee are equivalent to the
rights of other parties such as a lien creditor. A
lien creditor:
a. May obtain a
judicial order against the property of the debtor
giving priority in repayment;
b. Maintains the
position of a bona fide purchaser in cases of real
property execution against the debtor;
c. Has power known as
the "strong-arm power";
d. a and b only
e. All of the above
except d.
47. Discharge of a
debt in bankruptcy can be denied for an of the
following except:
a. Claims for back
taxes accruing within three years prior to the
bankruptcy;
b. Alimony;
c. Child support;
d. Student Loans;
e. Judgment decrees
for punitive damages in tort.
48. Which of the
following countries has the highest number of lawyers
per 100,000 population?
a. Iceland;
b. United States;
c. Israel;
d. England;
e. None of the above.
49. If a nation
violates an international law, the most that other
countries can do when persuasive tactics fail is to:
a. resort to coercive
actions;
b. withdraw trade
initiatives;
c. go to war;
d. take the dispute to
the World Court;
e. boycott the nation;
f. sever diplomatic
relations.
50. An example of
an "international organization" is:
a. the International
Red Cross;
b. the North
Atlantic Treaty Organization;
c. Save the Children;
d. Greenpeace;
e. the International
Laborer's Union.
51. The United
Nations Commission on International Trade Law has
made considerable progress in establishing more
uniformity in international law. One of the most
significant creations of the Commission is the
Convention on Contracts for the International Sale of
Goods. This convention resembles:
a. Civil law contracts
provisions;
b. Common Law
contracts provisions;
c. The Uniform
International Commercial Code;
d. The Uniform
Commercial Code;
52. Alternative
dispute resolution may consist of all of the
following except:
a. summary court
martial;
b. mini-trial;
c. conciliation;
d. summary jury trial;
e. arbitration.
53. In the federal
system the Federal Rules of Civil Procedure are used
to:
a. insure the parties
have no further disputes at trial;
b. regulate the
conduct of parties at trial;
c. regulate the
process of the trial proceeding;
d. provide for speedy
trial under the Sixth Amendment to the U.S.
Constitution.
54. A Lien is best
described as:
a. a charge;
b. a liability;
c. a claim;
d. all of the
above;
e. none of the above.
55. An implied
warranty is one:
a. the law derives
from the nature of the transaction or the relative
situations or circumstances of the parties;
b. the law will infer
from the actions of the parties in the transaction
and occurrences of the lease or sale;
c. an unwritten
guarantee that is included in the transaction based
upon the transaction itself and the actions of the
parties and how the transaction was conducted.
d. all of the
above;
e. none of the above.
56. If overlapping
warranties are inconsistent the courts usually will
hold how?
a. All of the
opinions that follow.
b. None of the
opinions that follow.
c. Express warranties
displace inconsistent implied warranties, except
implied warranties of fitness for a particular
purpose.
d. Samples take
precedence over inconsistent general descriptions.
e. Technical
specifications displace inconsistent samples or
general descriptions.
f. c and e only.
57. After a
bankruptcy repayment plan is filed, the court holds a
confirmation hearing, at which interested parties may
object to the plan. The court will confirm a plan
with respect to each claim of a secured creditor
under any of the following circumstances, except:
a. If the secured
creditors have accepted the plan;
b. If the plan
provides that creditors retain their liens and if the
value of the property to be distributed to them under
the plan is not less than the secured portion of
their claims;
c. If all of the
debtor's projected disposable income to be received
during the three-year plan period will be applied to
making payments;
d. If the debtor
surrenders the property securing the claims to the
creditors.
58. In which
countries are women likely to encounter blatant or
subtle cultural bias in business?
a. Italy and Spain;
b. Brazil and Japan;
c. Korea and Syria;
d. United States and
Panama;
e. All of the
above.
59. Under the
principle of "comity":
a. comparisons of law
of two nations are made and provisions not consistent
are preempted by international treaty;
b. treaties take
precedence over trade usage and custom in
international legal practice;
c. one country
defers to the law of another nation as long as the
laws are consistent with the accommodating country;
d. international
telecommunications signals may be transported by any
stationary satellite available.
60. The doctrine or
directive which provides that the judiciary of one
nation will not attempt to obtain jurisdiction or
interfere with the sovereign acts of another
government within its own territory is known as the:
a. Parity Doctrine;
b. Act of Dominion
Doctrine;
c. Act of State
Doctrine;
d. Sovereignty
Doctrine;
e. Prime Directive.
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