BUS 415 FINAL EXAM (SET-05) - 31312

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1) The doctrine of stare decisis concerns 


A.   making sure to do adequate research before making a legal decision


B.   using constitutional law to render a decision


C.   following precedents so that legal principles announced in a case are used to determine later cases

D.   staring at the facts of a case for a long time to make sure the correct decision is made.



2) The form of alternative dispute resolution wherein the parties hire someone to review the evidence and make a decision that is binding upon the parties is called 


A.   settlement conference

B.   negotiation


C.   conciliation


D.   arbitration




3) A corporation is considered a citizen of what state? 


A.   It is not a citizen because it is a business


B.   The state where the majority of the employees live


C.   The state where it filed its Articles of Incorporation


D.   The state where the president of the corporation lives




4) Which of the following statements is true regarding the relationship of law and ethics? 


A.   In some cases, ethics will require a higher standard of conduct than the law, but never vice versa.

B.   The legal requirements will almost always be the same as the ethical requirement because the law is based on ethical standards.

C.   In some cases, the law will require a high standard of conduct than ethics, but never vice versa.

D.   Depending on the circumstances, the law can require a higher, lower, or the same standard of conduct as ethics demands.



5) Utilitarianism is a moral theory, which states 


A.   ethics requires following the Golden Rule (do unto others as you would have them do unto you)

B.   ethics requires a decision-maker to take actions which result in the greatest good to society

C.   ethics requires actions which use the most efficient tools


D.   ethics requires acting according to the Bible or some outside source




6) Which of the following statements is true? 


A.   Practices that are legal in the United States are legal everywhere in the world.


B.   If something is legal, it is always ethical.


C.   Practices that are ethical in the United States are considered ethical everywhere else in the world.

D.   A course of action can be legal but not ethical.




7) A defendant fails to answer a civil lawsuit, what is likely to happen? 


A.   The court will grant a default judgment against the defendant.


B.   A court will contact the defendant and ask him to answer the lawsuit.


C.   The court will dismiss the case.


D.   The court will order that the defendant go to jail until he or she agrees to answer.



8) The legal authority of a court to make orders that are binding upon the parties is called 


A.   Personal jurisdiction


B.   In Rem jurisdiction


C.   Quasi-in-Rem jurisdiction


D.   Enumerated jurisdiction




9) If a defendant files a motion for summary judgment in a civil case, what is the defendant saying? 


A.   That the plaintiff’s claims are false


B.   That even if what the plaintiff says is true, there is no basis for judgment against the defendant

C.   That the court has no jurisdiction to decide the case


D.   That the case is ready to go to the jury






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10) Persons who sell abnormally dangerous products such as poisons or power tools 


A.   are liable only if all elements of negligence are proven against them


B.   are liable to persons they injure even if they are not negligent


C.   are liable only if they intended to cause a particular injury


D.   are generally not liable for the injuries they cause because otherwise no one would undertake these activities



11) Denise, a small-town doctor, is sued for medical malpractice because she did not correctly diagnose a rare tropical disease, from which her patient died. The standard of care that will be applied by the court is: 


A.   Denise will be judged by the highest medical standards


B.   Denise will be judged by the reasonable person standard


C.   Denise will be judged against the standard applied to tropical disease specialists

D.   Denise will be judged by the standards applicable to small-town doctors




12) Monica owed Bob $500, which was more than a year overdue. Bob got drunk at a party and told everyone that Monica had owed him $500 for over a year. Can Monica recover from Bob for defamation? 


A.   Yes, because Bob abused his conditional privilege


B.   No, because Bob had been drinking


C.   No, because Bob was telling the truth


D.   Yes, because Bob communicated the statement to third persons







13) Mary’s mother agrees to give her a new car if Mary maintains an A average for her senior year of college. Mary does in fact earn an A average, but when she asks for the car, Mary’s mother tells Mary that she just told Mary that to motivate her and she will not be getting a car. Mary sued her mother alleging a breach of contract. Who will win this suit? 


A.   Mary’s mother wins because there was no consideration for her promise.


B.   Mary wins but only if she can prove that the fair market value of the time she spent studying was equal to the value of the car.

C.   Mary’s mother wins because Mary had a preexisting obligation to do her best.


D.   Mary wins because her actions in reliance upon her mother’s promise constitute consideration.



14) Marvin, a PhD in economics, is recruited by a University to be Dean of the Economics department. Marvin agrees to accept the job at the salary of $100,000 annually, on the condition that his daughter, Mimi, who is presently 8 years old, also receive a free undergraduate education at the same university. The university agrees to Marvin’s conditions and Marvin takes the job. Ten years later, while teaching an economics class, Marvin has a fatal heart attack. May Mimi sue the university if it refuses to give her a free education when she graduates from high school? 


A.   No, because Mimi was not party to the contract


B.   Yes, because she was a minor when the contract was made


C.   Yes, because Mimi is a third-party beneficiary of the contract


D.   No, because Marvin is not alive to file suit to enforce the contract



15) Where a contract calls for action that violates a statute, in a breach of contract case the court will 


A.   impose the appropriate criminal penalty


B.   order payments so that the parties to the illegal contract share any losses equally 

C.   ignore the contract and leave the parties where they are 


D.   order both parties to return any consideration received 




16) Patty went to a used car lot and purchased a car. Two weeks later, the transmission fell out as she was driving to work. She contacted the dealer to complain, but the dealer told her the car had been sold “As Is”. The dealer advised her to check in the glove compartment of the car, where Patty found a notice that stated, “This vehicle is sold AS IS. The purchaser will bear the expense of any repairs that are necessary to this vehicle.” Does the notice mean that Patty has no rights against the dealer with respect to the condition of the vehicle? 


A.   Yes, Patty should have inquired about the warranty when she bought the car.


B.   Yes, the notice operates to void any warranty on the vehicle.


C.   No, the notice is there for subsequent purchasers of the car.


D.   No, the notice was not conspicuously displayed on the vehicle.




17) Articles 2 and 2(A) of the UCC cover which types of transactions? 


A.   Sales of goods and sales of real property 


B.   Sales of goods and contracts for the providing of services 

C.   Sales of goods and leases of goods 


D.   Sales of goods and leases of goods and real property 




18) Ted’s Gifts and Sweets enters into a written contract with Bannon Candies to supply Ted’s with 60 dozen boxes of coconut clusters each month for sale to the public. The agreement contained an integration clause. Before the first delivery under the contract, Ted and his warehouse manager called Debbie, the Bannon’s account representative, to request that the candies be delivered in special Valentine boxes. Debbie told Ted, “Don’t worry, I’ll tell the shipping department to take care of that.” When the candies were delivered, they were in standard cardboard boxes. Ted called Bannon and threatened to sue for breach of contract. Will Ted prevail in his suit? 


A.   Yes, Ted made a valid modification to the parties’ original agreement.


B.   Yes, Ted will prevail because he has a witness to the telephone call.


C.   No, Ted will not prevail because his attempt to modify the agreement was not effective.

D.   No, Ted should have written a letter to change the type of boxes in the contract.




19) Jane and Bill are married. They purchase a house and lot as tenants by the entirety. Then Jane is killed in a car accident. Her will leaves everything to her sister, Ruth. What will happen to Jane’s interest in the property? 


A.   Ruth will own the property with Bill as tenants by the entirety.

B.   Bill will be the sole owner of the property.


C.   Bill will have to buy out Ruth’s interest in the property.


D.   Ruth will own the property with Bill as joint tenants.




20) An easement can be defined as 


A.   a limited right to use another person’s land for a particular purpose


B.   a life estate in the property of another


C.   an option to purchase the land of another


D.   a relaxation of the borderlines between two parcels of land




21) Bruce and Diane are ranchers. Bruce owns the property next to Diane’s property. Bruce needs more pasture for his cattle, so he rents five acres of Diane’s ranch for pasture land. This arrangement continues for more than 20 years. Then Diane sells her ranch, and the new owner tells Bruce to stop using the pasture land. Bruce claims ownership of the land by adverse possession. Will his claim succeed if the case goes to court? 


A.   Yes, Bruce has had actual possession of the land for more than 20 years, so he owns the land under the doctrine of adverse possession.

B.   Yes, Bruce will own the pasture land, but he will have to pay rent to Diane’s purchaser.


C.   No, Bruce has failed to show that the value of the land was equal to the rent.


D.   No, Bruce failed to show that he claimed the land adversely to Diane’s interest.










22) Which of the following is true of a limited liability company? 


A.   Limited liability companies are managed by members or managers.


B.   Documents do not have to be filed with the state to create one.


C.   Limited liability companies are automatically taxed like corporations.


D.   Limited liability companies have limited duration.




23) John and Jake are partners in a bowling alley. Business has been bad lately, and they need more operating capital, so they invite Lisa to become a partner. What liability does Lisa have for partnership debts? 


A.   She owes one third of all the partnership debts.


B.   She owes an equal share in all debts incurred after she became a partner.


C.   Her liability is limited to the amount she invested.


D.   She owes an equal share of all partnership debts.




24) Which is true of a limited partnership? 


A.   The liability of all owners is limited to the amount of their contribution to the business.


B.   The liability of all owners is unlimited.


C.   A partnership is limited to doing business in the state of incorporation.


D.   At least one of the partners must be a general partner with unlimited personal liability.



25) A corporation is required to maintain a separate identity because 


A.   corporations are entities created by statute to limit the personal liability of investors

B.   corporations can act only through officers


C.   if they do not maintain the separate identity, they become alien corporations


D.   corporations have perpetual existence




26) The alter ego doctrine provides as follows: 


A.   That a corporation becomes the alter ego of its owner


B.   That the president is the decision maker of a corporation


C.   That protection from personal liability can be forfeited if corporate formalities are not observed

D.   That the board of directors is the alter ego of a corporation




27) If a creditor is owed money by an insolvent corporation, its best bet to collect is to try to 


A.   persuade a court that the corporation has hidden assets against which the creditor may levy

B.   persuade a court that the corporation is inadequately capitalized, in hopes the court will lift the corporate veil

C.   force the corporation to refinance its debts


D.   force the corporation to raise its prices to increase income




28) The DEF Corporation is incorporated in Texas. It wishes to do business in Oklahoma. Before DEF can legally do businesses in Oklahoma, which of the following must it do? 


A.   Nothing; DEF automatically has constitutional rights to do business in Oklahoma.

B.   DEF must incorporate in Oklahoma.


C.   DEF must domicile itself in Oklahoma.


D.   DEF must qualify (register) to do business in Oklahoma.




29) The uniform law, issued in 1984 by the Committee on Corporate Laws of the American Bar Association, that regulates the formation, operation, and termination of corporations is 


A.   The Model Business Corporation Act 


B.   The Uniform Commercial Code 


C.   The Standard Incorporation Act 


D.   The Revised Model Business Commercial Code




30) Rover Corporation is a regular corporation that has not elected S corporation status. In 1992, Rover earned $100,000; in 1993, Rover distributes $50,000 to its shareholders. Which of the following best describes the tax consequences to rover and its shareholders? 


A.   The shareholders are taxed on $100,000 in 1992; Rover is not subject to tax.


B.   Rover is taxed on $100,000 in 1992; the shareholders are taxed on $50,000 in 1993.


C.   Rover is taxed on $100,000 in 1992; the shareholders are taxed on $50,000 in 1992.


D.   Rover is taxed on $100,000 in 1992; the shareholders are not subject to tax







31) Which of the following best describes the status of the employment at will doctrine in the United States today? 


A.   It applies in most states to most employment relationships, but there are many exceptions that limit its application.

B.   It still applies today, but only to employees who are expressly told that they are an at-will employee when they are hired.

C.   It today applies only to the employer, although in the past it applied to both the employee and employer.

D.   It applies more today than in the last century, and the quantity of corporate layoffs is evidence of this.



32) What is the primary purpose of the Occupational Safety and Health Act? 


A.   Its purpose is to protect the safety of workers and the safety of those who purchase the employer’s products or services.

B.   Its purpose is to promote the provision of healthcare benefits by employers having more than 15 employees.

C.   Its purpose is to compel employers to provide a work environment that is free from recognized hazards that could cause death or serious injury.

D.   Its purpose is to reduce the application of industry standards to workplace conditions.




33) Marie works as a receptionist for a plumbing company. She works from 9:00 a.m. to 6:00 p.m. on Monday through Friday. She earns $12 per hour, and is told how to do her job and what she should be working on at any particular time. Her boss does not withhold any taxes from her paycheck. Which of the following is true? 


A.   Marie would be treated as an employee because she is paid for the work that she does. 

B.   Marie would be treated as an independent contractor because the employer doesn’t take any taxes out of her check.

C.   Marie would be treated as an independent contractor because she is paid hourly.


D.   Marie would be treated as an employee because of the control exercised by the plumbing company over her work. 



34) What is generally the effect when an exception to the employment at will doctrine applies? 


A.   The employer is required to hire a certain employee.


B.   Employees can be prohibited from quitting a job.


C.   The Fair Labor Standards Act will set the terms, such as pay, for the employment relationship.

D.   There is some sort of limitation on at least one party’s ability to terminate the employment relationship.



35) Which of the following is a correct statement of the requirements for a bona fide occupational qualification? 


A.   Job related and cost effective 


B.   Rationally based and evenly applied 


C.   Job related and a business necessity 


D.   Job related and nondiscriminatory 




36) Which of the following best describes the employment at will doctrine? 


A.   Employees remain employed only if the employer wants them to be employed.


B.   Whether an employment relationship continues is based on the will of the government.


C.   Employees remain employed only if both the employer and the employee want the employment relationship to continue.

D.   Employees remain employed only if the employee wants to be employed.




37) The law gives the consumer what protection from aggressive tactics of door-to-door salespersons? 


A.   The customer may rescind the transaction within 3 days.


B.   The customer may send the product back for a refund within 30 days.

C.   The customer may file a police report.


D.   The customer may keep the product without paying for it.




38) The Biosafety Protocol provides as follows: 


A.   Genetically engineered food must state that it may contain modifications.


B.   Vaccinations must contain live virus.


C.   Employees must wash hands when preparing food.


D.   Medical waste must be safely disposed.




39) What federal legal protection is there with respect to trade secrets? 


A.   Trade secrets are protected under the federal patent laws.


B.   Trade secrets are protected under the Trade Secret Protection Act of 1952.


C.   Trade secrets are protected under the Economic Espionage Act of 1996.


D.   Trade secrets are protected under the federal copyright laws.




40) Patricia owns a Mexican restaurant, famous for home-made tortillas. The tortillas are made by several women, who make the tortillas in their homes and sell them to the restaurant. Some of the women have been making tortillas for Patricia for years, while others have just started. Patricia pays for the tortillas by the dozen. What is the nature of the employment relationship between the women and Patricia? 


A.   The women are employees of the restaurant.


B.   The women are independent contractors.


C.   The women are agents of the restaurant.


D.   The women are part-time employees of the restaurant.




41) The primary factor that determines whether someone is an independent contractor or an employee is 


A.   whether the worker clocks in and out of the job


B.   whether the employer controls the details of the job performance


C.   whether the employer withholds taxes or not


D.   whether the worker has other clients




42) William owns his own business, performing document delivery for various clients. He is driving in his delivery van, taking some important documents to the courthouse for an attorney’s office, when he makes a wrong turn and causes an accident, damaging Ruth’s car. May Ruth recover a judgment against the attorney’s office? 


A.   Yes, because William was on an errand for the attorney at the time he caused the accident

B.   Yes, because the attorney has more money than William, so Ruth will be able to collect

C.   No, because William is an independent contractor


D.   No, because William was on a dual-purpose mission




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William owns his own business, performing document delivery for various clients. He is driving in his delivery van, taking some important documents t

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