LAW/531 Final Exam - 17969

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A policy provision that requires an insured to carry a certain minimum level of insurance covering property in order to be able to recover the full policy amount is:

A) an exclusion clause.
B) an indemnity clause.
C) a coinsurance clause.
D) a reinsurance clause.
E) a deductible clause.


Which of the following statutes amended the National Labor Relations Act?

A) The Norris-LaGuardia Act
B) The Labor-Management Relations Act
C) The Worker Adjustment and Retraining Notification Act
D) The Labor-Management Reporting and Disclosure Act


Which of the following is not a basis for an unfair competition claim under Section 5 of the Fair Trade Commission Act?

A) The action allows the party to earn excessive profits
B) The action violates the spirit of the antitrust laws
C) The action violates a provision of the Sherman Act
D) The action violates public policy
E) The action is oppressive or unscrupulous


Edward's Warehouse stores a variety of generic goods for several distributors in Anytown. Which of the following describes Edward's liability for the bailed goods should something happen to them?

A) Strict liability
B) Comparative liability
C) Ordinary negligence
D) Ordinary negligence


Where a landowner seeks permission to build a structure that does not comply with the current zoning regulations applicable to the land in question, the landowner would seek an:

A) Variance.
B) Nuisance permit.
C) Covenant exemption.
D) Nonconforming use permit.
E) Taking compensation.


What is a master limited partnership?

A) A limited partnership where all the partners have expressly agreed to not be bound by the provisions of the Revised Uniform Limited Partnership Act.
B) A limited partnership with at least 10 general and 10 limited partners.
C) A limited partnership that is taxed as a corporation.
D) A limited partnership that has been in existence for at least 20 years.
E) A limited partnership whose partnership interests are traded on a stockexchange.


Judy just bought a new business with many employees. She has heard about the requirements of OSHA. What is the employer's general duty under OSHA?

A) To obey the regulations announced by OSHA
B) To provide a perfectly safe workplace
C) To provide a work environment free from known hazards


Bob and Mary are husband and wife, respectively. They co-own their home as tenants by the entirety. In early 1997, Bob, without Marys knowledge, sells his share of the home to Alice, a ski instructor at Aspen Ski Area. Bobs will leaves all his property to Edith, a ski instructor at Sun Valley Ski Area. Bob unexpectedly dies on December 16, 1997. Who will own the home following his death?

A) Alice will have total ownership.
B) Mary will have total ownership.
C) Edith and Mary will each own half.
D) Edith will have total ownership.
E) Alice and Mary will each own half.


In an agency for a fixed term, such as 1 year, prior to the end of the stated period,the agent has:

A) the right, but not the power, to terminate the arrangement.
B) the power, but not the right, to terminate the arrangement.
C) both the power and the right to terminate the arrangement.
D) neither the power nor the right to terminate the arrangement.


Someone who believes that moral decisions should be made such that the greatest amount of good in total results from the actions believes in which moral theory?

A) Rawlss distributive justice theory
B) Utilitarianism
C) Ethical fundamentalism
D) Kantian ethics
E) Ethical relativism


The statute that covers the operations of federal agencies is the:

A) The Delegated Powers Administration Act.
B) The Administrative Agency Execution Act.
C) The Administrative Procedure Act.
D) The Federal Agency Conduct Act.
E) Agency Enforcement Act.


A bailment where money is paid from one party to the other is usually described as:

A) solely for the benefit of the bailee.
B) for the mutual benefit of the bailor and the bailee.
C) solely for the benefit of the bailor or bailee, depending on which received the money that changed hands.
D) solely for the benefit of the bailor.


A gift of real property made in a will is known as a:

A) Legacy.
B) Corpus.
C) Devise.
D) Bequest.


A principal gives an agent express authority to get his car running right. The authority that the agent has to enter into contracts for the purchase of auto parts is:

A) Inherent authority.
B) Express authority.
C) Apparent authority.
D) Implied authority.
E) Authority by estoppel.


If an auditor determines that the financial statements do not fairly present the financial results and position of the client, the auditor would issue an:

A) Unqualified opinion.
B) Qualified opinion.
C) Adverse opinion.
D) Disclaimer of opinion.


Under what doctrine are both the employer and employee free to terminate an employment relationship at any time?

A) The employment at-will doctrine
B) The independent contracting employment doctrine
C) The mutual employment doctrine
D) The free dissociation doctrine
E) The employment freedom of termination doctrine


A private corporation is one which:

A) has a small number of owners who are often members of the same family.
B) does not make public disclosure of information.
C) does not prepare financial statements.
D) is owned by private entities.


Eric is a member of a manager-managed LLC but is not a manager. This LLC invests in real estate and manages it as rental property in a college town. Eric has made several recommendations to the managers regarding property that he considers to be a good buy. Eric, however, seldom performed even the slightest investigation of the property before recommending it to the managing members. Eric also purchased a couple of rental properties on his own account, taking very careful and sneaky steps to ensure that the other members of the LLC did not learn of these purchases. Which duties has Eric violated?

A) Loyalty and care
B) Good faith and fair dealing
C) Loyalty, care, and good faith and fair dealing
D) Loyalty
E) None of these


Aaron, after a long and distinguished career at a nuclear weapons plant in the plutonium storage department, is hired by a local company to work in its warehouse. Aarons skin has turned bright green from his years around the plutonium, but he is otherwise healthy and is not, himself, radioactive in any way. All scientific and health experts have determined that this condition is permanent,but harmless. After working in the warehouse, Aaron is not promoted, and Aaron believes it is because of his green skin. Which of the following, if it is true and is the reason that Aaron was not promoted, would give Aaron the best chance of prevailing if Aaron sues his employer because he was not promoted.

A) Supervisors need to understand the computerized inventory system and Aaron did not, despite his attempts to understand it.
B) A black worker was promoted because the black worker has worked longer for the employer, and promotions were made on the basis of seniority.
C) Aaron had told his boss that he was gay and this was the reason he was not promoted.
D) A white worker was promoted because the white worker was simply a better warehouseman.
E) Despite the opinion of experts, some of the people Aaron would be supervising thought he had some kind of disability and therefore did not want to work for him.


Nicole is president of the Blue Valley Credit Card Company. Nicole is concerned with the liability of the company for any use of the Blue Valley cards it has issued. Which of the following statements regarding credit cards is false?

A) If a credit card is stolen, and the cardholder notifies the company of the theft before any unauthorized charges are made, the holder is not liable for any unauthorized charges.
B) A credit cardholder is liable only for up to $50 of unauthorized charges if his card is stolen.
C) A customer must apply for a credit card before Blue Valley may issue a card.
D) If a purchaser buys a faulty product with a credit card, the purchaser may withhold payment to the credit card company until the dispute is settled.


Betty starts up a business selling party supplies from a retail store. This business is very successful. She opens several other stores in the same city. She eventually has six similar stores in her city. She has a manager for each store who is paid a fixed annual salary. All her other employees are paid on an hourly basis. She has never chosen any particular form of business organization for this business. This business is most likely:

A) a franchise.
B) a corporation.
C) a sole proprietorship.
D) a partnership.
E) a joint venture.


Franchises account for approximately what percent of total retail sales in the United States?

A) 40
B) 25
C) 15
D) 65
E) 50


Lynda is a member of a manager-managed LLC but is not a manager. However, Lynda has considerable expertise in the business of the LLC. Lynda assisted the managers for the first couple of years of the LLCs existence without any difficulties. During the third year, Lynda began to challenge some of the decisions made by the managers who had begun to shut Lynda out of most decisions. Lynda demands that as a member of the LLC she be allowed to participate in its management and that she be compensated for the services she is providing. In this case:

A) Lynda will be allowed to participate, but is not entitled to any compensation.
B) Lynda cannot demand a continued management role, but is entitled to compensation for the services already delivered.
C) Lynda is not entitled to participate in management, nor is she entitled to compensation.
D) Lynda will be allowed to participate in management and is entitled to compensation.


One of the requirements for a factory assembly job at Spruce Industries is that the worker be less than 6-feet tall. Aaron applies for the job, but is not hired. Which is true?

A) Spruce Industries is in violation of Title VII only if Aaron can show that he is over 6-feet tall and he was not hired because he was too tall.
B) Spruce Industries is in violation of Title VII only if Aaron is over 6-feet tall.
C) Spruce Industries is in violation of Title VII only if Aaron is less than 6-feet tall.
D) Spruce Industries is in violation of Title VII if the height requirement has the result of discriminating against men and does not relate to fitness for the particular job.


Recording statutes for real property:

A) guarantee that buildings meet certain minimum standards as far as condition goes.
B) allow potential buyers to check whether there are any liens or mortgages on a piece of property.
C) eliminate the need to acquire title insurance because the chain of title can be traced.
D) are optional in most parts of the country.


The board of directors of Sunny Corporations votes 9-2 to require all future actions by the shareholders to be approved by a two-thirds majority. This action is:

A) valid, and would have been valid also with a vote of 6-5.
B) valid, as long as the two dissenting directors properly registered their dissent.
C) invalid because the board of directors does not have the power to decide this.
D) valid, but would not have been valid if the vote had been 6-5.
E) invalid because supramajority requirements are not permissible.


The Hart-Scott-Rodino Antitrust Improvement Act led to rules requiring:

A) that certain activities are classified as per se violations.
B) that mergers be allowed if United States competitiveness in world markets is improved.
C) that violators of antitrust laws be liable for treble damages.
D) that failing companies be rescued through mergers whenever possible.
E) that the Federal Trade Commission and the Justice Department be notified in advance of any merger involving certain firms.


Robert was the president of JKL, Inc. JKL intended to purchase Target Co. JKLs intent was not public information, and when it became public, Targets stock would increase significantly in value. Robert individually bought 1,000 shares of Target Co. Ten months later, when the merger was publicly announced, Robert sold Targets stock and made a large profit. Assuming that Robert is guilty of a violation under the 1934 Securities and Exchange Act, what are the possible consequences?

A) The government could charge Robert with criminal violations, leading to fines and/or imprisonment.
B) The persons who sold Robert the stock could sue Robert for damages.
C) The persons who sold Robert the stock could rescind the sale and recover their stock.

  D) A, B and C


The person empowered by the corporation to receive notice of lawsuits against it, is called the:

A) President.
B) Promoter.
C) Director du jour.
D) Incorporator.
E) Registered agent.


The Resource Conservation and Recovery Act addresses:

A) the transportation, storage, and disposal of hazardous wastes.
B) export limitations on products that cause significant pollution in their manufacture.
C) energy efficiency standards for specified products.
D) mandatory recycling programs for certain specified substances.
E) the cleanup of hazardous waste sites.


Under which types of tenancy can the tenancy be terminated by the landlord without prior notice to the tenant?

A) Tenancy at will and tenancy at sufferance only
B) Tenancy at sufferance only
C) Tenancy at will, tenancy at sufferance, and periodic tenancy
D) Tenancy at will and periodic tenancy only
E) Tenancy at will only


What does the veil of ignorance require under Rawlss distributive justice theory?

A) That ethical obligations be determined by persons who do not know their place in society.
B) That persons who have suffered an injustice not be able to learn the identity of the person causing the injustice, at least when it is practical to keep this information from the person who was harmed.
C) That ethical obligations in society not be made public, because if they were,individuals would strive to merely do the minimum.
D) That ethical obligations are decided by less intelligent members of society so that they can be understood by all.


When the management of the target corporation of a tender offer opposes the tender offer, it can:

A) petition the board of directors to adopt a resolution prohibiting sale by the shareholders to the entity who made the tender offer.
B) petition the Securities and Exchange Commission to have the offer voided.
C) exercise its appraisal rights.
D) purchase the shares of its shareholders as treasury stock, but little more.
E) none of the answers are correct.


When is an agent liable for a tort committed by the principal?

A) When the tort was committed with the scope of the agency
B) When the agent ratifies the action
C) When the agency is undisclosed
D) When the agent has aided or abetted the principals tortious conduct


35     to    47


Which of the following forms of business combinations is seldom used today because of the advantages of other forms?

A) Hostile takeover
B) Purchase of assets
C) Consolidation
D) Merger
E) Share exchange


Which of the following situations generally does not create a bailment?

A) Loaning your lawn mower to a neighbor
B) A conditional sales contract
C) Parking your car in a commercial parking lot, if you keep your keys
D) Renting a safety deposit box
E) Keeping your neighbors cat while she is away


Why is the agent able to be held liable on a contract when the existence of the agency arrangement was not disclosed?

A) To ensure that the principal fulfills its obligations under contracts negotiated by authorized agents.
B) To offset the fraud frequently present in this situation.
C) Because the third party could rely on the reputation of only the agent when entering into the contract.
D) So that the outcome in a contract situation is the same as that for a tort.
E) To discourage the use of undisclosed agency arrangements.

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