40 MUTIPLE CHOICE WORDS
Question 1
- Connie, the president of a company that makes paper, has a new interest in the environment. She recently went to a seminar on environmental dangers and has decided to take steps to clean things up. She started at home and was also committed to change things at work. Connie had to face the fact that her company has been cheating and is not in compliance with applicable environmental regulations due to dumping in a nearby river. Her company has never been cited, however, because it employs a very large number of people in the community, including the mayor’s wife and the chief-of-police’s brother.
On her mission to clean things up, Connie has decided to go even further than the law requires and install the very latest environmental protections. When she announced her plan, the chair of the company’s board of directors, Brooke, had a meeting with Connie. Brooke told Connie to analyze the situation carefully because the cost of the additional equipment would mean no dividend to shareholders and no raise for employees. Furthermore, Brooke told Connie that installing all of the new equipment would result in higher prices for the company’s paper products and could bankrupt the company because of foreign competition. Brooke hinted that Connie could be fired if she persisted. Brooke suggested that Connie just be concerned with a minimal standard of ethics. Which of the following would be a stakeholder in the company?
The community only
The shareholders only
Future generations only
The community and shareholders only
The community, shareholders, and future generations
2 points
Question 2
- Which of the following is TRUE regarding the liability in tort of employers for the actions of employees and independent contractors?
Employers are generally liable in tort for the actions of their employees, while they are generally not liable for the actions of independent contractors.
Employers are generally liable in tort for the actions of independent contractors, while they are generally not liable for the actions of employees.
Employers are not generally liable in tort for the actions of independent contractors or for the actions of employees.
Employers are generally liable in tort for the actions of independent contractors and also for the actions of employees.
Employers are generally liable in tort for the actions of independent contractors and the actions of employees, but only if the employer has agreed to be liable in a written contract with the employee or independent contractor.
2 points
Question 3
- Which of the following was the result on appeal in the case of Webster v. Blue Ship Tea Room Inc.—the case in which the plaintiff sued after getting a bone caught in her throat while eating clam chowder?
That the plaintiff could recover based upon the implied warranty of merchantability
That the plaintiff could recover based upon the implied warranty of fitness for a particular purpose
That the plaintiff could recover based on an express warranty
That the plaintiff could not recover because she waited too long in which to sue and also because she was not the direct purchaser of the fish
That the plaintiff could not recover for reasons including that the bone should not have been unexpected
2 points
Question 4
- A partnership in which the partners divide profits and management responsibilities and share unlimited personal liability for the partnership’s debt is called a __________.
general partnership
limited partnership
limited liability partnership
corporation
limited liability company
2 points
Question 5
- A person who contracts with another to do something for him or her but who is not controlled by the other nor subject to the other’s right to control with respect to his or her physical conduct in the performance of the undertaking is a(n) __________.
employee
independent contractor
authorized contractor
task-specific contractor
partial contractor
2 points
Question 6
- Which of the following occurs when a party to a contract transfers his or her rights to a contract to a third party?
Assignment
Referral
Disgorgement
Privity
Transfer
2 points
Question 7
- Penny is investigating what she needs to do to legally to open a dog grooming business in her city. Which of the following would govern the business?
State statutes
City ordinances
Model laws
State statutes, city ordinances, and model laws
State statutes and city ordinances, but not model laws
2 points
Question 8
- Sally agrees to mow Paul’s yard for $300 for the summer. Paul wishes to assign the contract to his grandmother. Sally objects because Paul’s yard is very small while the grandmother’s yard is over an acre. Which of the following is the correct legal outcome for the dispute between Sally and Paul?
Sally will win because Paul’s attempted assignment would increase the duties to which she agreed.
Sally will win because all assignments are invalid without the obligor’s consent.
Sally will win unless Paul paid her the $300 in advance in which case Paul will win.
Paul will win because he may validly assign the contract without Sally’s consent.
Paul will win so long as he tells Sally about the assignment prior to the time she begins any performance whatsoever.
2 points
Question 9
- Which of the following is FALSE regarding a sole proprietorship?
A sole proprietorship requires few legal formalities.
A sole proprietor has complete control of the management of the business.
The sole proprietor keeps all the profits from the business.
Profits are taxed as the personal income of the sole proprietor.
A sole proprietor is not personally liable for obligations of the business.
2 points
Question 10
- If the plaintiff wants a court order that requires the defendant to fulfill the terms of the contract, the plaintiff is seeking __________.
specific performance
directive
instructional edict
demand
injunction
2 points
Question 11
- Gretchen offers $100 to anyone who can return her lost dog, Sparky. Haley returns the dog and requests the money. Gretchen says that there is no binding contract. Which of the following is TRUE regarding Gretchen’s statement?
Gretchen is incorrect because there is a binding bilateral contract.
Gretchen is incorrect because there is a binding unilateral contract that Haley accepted by performing.
Gretchen is correct because there is no binding bilateral contract.
Gretchen is correct because there is no binding unilateral contract.
Gretchen is correct because Haley acted incorrectly by her manner of attempted acceptance.
2 points
Question 12
- Stewart, the owner of ABC Construction, agreed with Joan, the owner of XYZ Hotel, that he would complete renovations on her upscale hotel on the beach in Florida by October 1. The amount due to Stewart under the contract was $250,000. The contract contained a clause by which Stewart would pay Joan $50,000 for each day he was late on completing the project. Unfortunately, a strong earthquake shook the area, and while the earthquake did not damage the hotel itself, Stewart encountered significant difficulty in getting supplies due to the high demand for building material following the earthquake. Because he believed that traveling, himself, to other states to obtain supplies would be prohibitively expensive, he delayed the project for two weeks while waiting for local stores to have sufficient supplies available. Stewart finished renovations six days late. Joan told Stewart that she owed him nothing but that he owed her $50,000. Stewart told Joan that he was suing for the entire $250,000 because it was not his fault the earthquake delayed matters. Which of the following is the appropriate term for the agreement that Stewart would pay Joan $50,000 for each day he was late in completion?
Mitigated damages term
Liquidated damages clause
Stipulated damages
Acknowledged damages clause
Approved and acknowledged damages clause
2 points
Question 13
- Which of the following are the two primary kinds of performance?
Partial and significant
Partial and complete
Partial and substantial
Complete and substantial
Complete and significant
2 points
Question 14
- The “public disclosure” test is also known as the __________ test.
television
Powell
self-conscious
golden
primary
2 points
Question 15
- Which of the following is FALSE regarding a limited liability partnership?
A limited liability partnership is considered a separate legal entity.
Limited liability partnerships are fairly new.
The business name must include “Limited Liability Partnership” or an abbreviation in the name.
The parties must file a form with the secretary of the state to create a limited liability partnership.
Each partner pays taxes on his or her share of the income of the business.
2 points
Question 16
- Positive abstractions that capture our sense of what is good or desirable are __________.
ethical ideas
values
conscience demands
desirable principles
action goals
2 points
Question 17
- Which of the following is TRUE regarding the mirror-image rule and the…
