Business Law Exam
Short Answer 41) Sally operates a large manufacturing firm near a federal land preserve known for its waterfowl and fauna. The federal government has just filed suit against Sally and her corporation, charging them with criminal violations of various environmental protection statutes. What rights do Sally and her corporation have that are guaranteed under the United States Constitution?
42) John was driving his car in a careless way, failing to drive as a reasonably prudent person would under the driving conditions. Ramona was crossing the street in a careless way, failing to cross as a reasonably prudent person would. John struck and injured Ramona with the car John was driving. At trial, it was determined that John was 80 percent at fault and that Ramona was 20 percent at fault. The injuries sustained amounted to $100,000. Explain how much, if any, recovery Ramona would receive in a state that applies the contributory negligence rule. Do the same thing for a state that applies the comparative negligence rule.
43) Herman Corporation is engaged in preparing a marketing campaign consisting of electronic and print images. Drawings and photographs for the campaign are coming from a variety of sources, including popular magazines, international newspapers, and web sources. The marketing vice president asserts that the company may use the images under the fair use doctrine. What factors should be considered in the application of the fair use doctrine?
44) Louise owned a house next to Robert’s house. Robert made a contract with Midcity Painters to paint his house. The painters arrived to paint Robert’s house, but mistakenly painted Louise’s house. She saw the painters at work and made no comment. Later, Midcity Painters sent Louise a bill for painting her house. She claimed that she was not liable because she had not made any contract with them. Is this a valid defense?
45) Mary offered to sell Mike several pieces of rare Chinese art at a very good price because they were duplicates in her own collection. Mike could not accept the offer at that time, but he did give Mary $500 in return for her promise to keep her offer open for three (3) weeks. Mike returned with the agreed-upon balance two weeks later to find that Mary already had sold the pieces she had offered to sell to him. Mary explained that she had been able to get a better price from another buyer. She offered to return Mike’s $500 and insisted that this was all she was obligated to do. Is Mary right?
46) John received a promotion at work and felt new clothes would be necessary in the new position. John went to a local store and charged three ties on his charge account at a cost of $60 each. Bill, a friend of John’s, saw a sidewalk vendor selling ties at a cost of three for $10 and bought three at that price. The friends compared purchases that night and found that they had purchased identical ties. John became enraged and said that he would not pay the charge-account bill because the ties were clearly not worth $60 each. Bill indicated that he would testify on John’s behalf if litigation ensued. What would be the probable outcome of the lawsuit?
47) Kentucky Lumber and MillWork Company contracted to supply Rommell Company millwork for use in the construction of a school building. While the work was in progress, the Kentucky mill was destroyed by fire. For two months thereafter, Kentucky Lumber and MillWork Company supplied Rommell with mill work purchased by it from a third party. The Kentucky mill did not wish to continue this plan and declared that the contract was ended. Rommell brought an action against Kentucky Company to enforce the contract. How will the court decide?
48) Sam Student had borrowed $1,000 from his cousin. Sam and the cousin became involved in a heated disagreement when the cousin began to press Sam for repayment of the loan. Finally, Sam wrote a check for $190 to the cousin and conspicuously wrote on the check in big letters that it was full and final payment of the $1,000 loan. In need of money, the cousin cashed the check and demanded the remaining $810 from Sam. Sam refused to pay, claiming that they had entered into an accord and satisfaction that discharged Sam’s obligation to pay anything more. The cousin sued Sam. Discuss the probable outcome.
49) Kentucky Lumber and MillWork Company contracted to supply Rommell Company millwork for use in the construction of a school building. While the work was in progress, the Kentucky mill was destroyed by fire. For two months thereafter, Kentucky Lumber and MillWork Company supplied Rommell with mill work purchased by it from a third party. The Kentucky mill did not wish to continue this plan and declared that the contract was ended. Rommell brought an action against Kentucky Company to enforce the contract. How will the court decide?
50) Sam Student had borrowed $1,000 from his cousin. Sam and the cousin became involved in a heated disagreement when the cousin began to press Sam for repayment of the loan. Finally, Sam wrote a check for $190 to the cousin and conspicuously wrote on the check in big letters that it was full and final payment of the $1,000 loan. In need of money, the cousin cashed the check and demanded the remaining $810 from Sam. Sam refused to pay, claiming that they had entered into an accord and satisfaction that discharged Sam’s obligation to pay anything more. The cousin sued Sam. Discuss the probable outcome.
1: The criminal law of all states is the same because all states have adopted a uniform criminal code.
a. True b. False
2: Larceny is best defined as the taking of personal property from the presence of the victim by the use of force or fear.
a. True b. False
3: Due process includes the right to be heard, question witnesses, and present evidence.
a. True b. False
4: A tort is a wrong arising from a violation of a private duty.
a. True b. False
5: The tort of intentional infliction of emotional distress requires proof of outrageous conduct and resulting emotional distress in the victim.
a. True b. False
6: Libel is the printed equivalent of the spoken form of defamation known as slander.
a. True b. False
7: Once a mark is registered in accordance with federal law, the holder of the mark has the exclusive right to use the mark in perpetuity.
a. True b. False
8: An owner of a copyright may license some of his or her rights to another in exchange for statutorily-prescribed royalty payments.
a. True b. False
9: Courts will likely protect important customer lists under trade secret laws even if customer identities are determinable from other sources.
a. True b. False
10: Negotiable instruments are examples of formal contracts.
a. True b. False
11: An option contract gives one of the parties an absolute right to enter into a second contract at a later date.
a. True b. False
12: An otherwise vague contract may be clarified by references in the contract to other documents or agreements.
a. True b. False
13: An offer gives the offeror the power to bind the offeree by contract.
a. True b. False
14: The fact that the consideration supplied by one party is slight when compared with the burden undertaken by the other party is immaterial.
a. True b. False
15: Ordinarily, doing or promising to do what one is already under a legal obligation to do is not consideration.
a. True b. False
16: Unless a contract so provides, time is ordinarily not of the essence, and performance within a reasonable time is sufficient.
a. True b. False
17: The parties may agree that the adequacy of performance under a contract is to be determined by a third party.
a. True b. False
18: If there is a breach of contract, the law requires that the other party terminate the contract and bring a lawsuit.
a. True b. False
19: The measure of monetary damages when there has been a breach of contract is the sum of money that will place the injured party in the same position that would have been attained if the contract had been performed.
a. True b. False
20: Only direct losses from a breach of contract may be recovered by an injured party.
a. True b. False
21: Which of the following statements is true?
a. Felonies are less serious than misdemeanors. b. Felonies involve white-collar crimes only. c. Felonies are more serious than misdemeanors. d. Felonies are federal crimes only.
22: White-collar crimes:
a. always involve the threat or use of force or violence. b. generally involve the threat or use of force or violence. c. sometimes involve the threat or use of force or violence. d. do not involve the threat or use of force or violence.
23: The unauthorized use of a computer belonging to someone else is:
a. a crime in all states. b. a crime in some states. c. not a crime in any state. d. a crime under federal law only.
24: Torts arise from a violation of a ____ duty.
a. public b. private c. contractual d. criminal
25: Trespass applies to:
a. personal property only. b. land only. c. both personal property and land. d. only government-owned property.
26: It is important to protect trade dress against adoption by a competitor because such adoption can:
a. deceive purchasers into believing they have obtained a comparable product. b. dilute the originator’s resource investment in its product appearance. c. usurp the business goodwill of the developer of the trade dress. d. all of the above.
27: To analyze a copyright infringement claim in the context of computer programs, courts will primarily examine:
a. the total number of program steps that are substantially similar. b. the number of significant program steps that are substantially similar. c. whether the programs appear substantially similar in ordinary language. d. whether the programs appear substantially similar in machine language.
28: A contract of record is also referred to as a:
a. recognizance. b. reconnaissance. c. recording contract. d. none of the above.
29: An offer of a reward for the arrest and conviction of a criminal is an example of a:
a. unilateral contract. b. bilateral contract. c. quasi contract. d. formal contract.
30: The plaintiff in a quasi-contractual action can recover:
a. lost profits. b. damages for mental distress. c. the reasonable value of the benefit conferred upon the defendant. d. for all the damages sustained.
31: An agreement that consists of two or more parts and calls for corresponding performances of each part by the parties is called a:
a. partial contract. b. divisible contract. c. performance contract. d. divided contract.
32: If an offer requires that acceptance be communicated by a specific date and the acceptance is properly dispatched by the offeree on the final date,
a. no contract is formed, since the offeror will undoubtedly receive the dispatched acceptance after the deadline for acceptance. b.a contract is formed, but the contract is voidable at the election of the offeror. c. the acceptance is timely and a contract is formed, even though the offeror actually receives the acceptance well after the specified date has passed. d. the acceptance is timely and a contract is formed, but only if the offeror actually receives the acceptance by the deadline specified for acceptance.
33: When there is no consideration for a promise, the agreement is:
a.a quasi contract. b. equitable. c. not binding. d. unethical.
34: Ordinarily, a promise to perform an existing legal obligation is:
a. not consideration. b. binding if the promisor promises to perform with extra care. c. binding if the promisor promises to perform to suit the personal satisfaction of the promisee. d. binding if the promisee would experience substantial loss due to breach of the promise.
35: If no time period for performance is specified in a contract:
a. the contract is unenforceable. b. time shall be of the essence. c. a reasonable time for performance will be implied. d. the time for performance will be ignored by the courts.
36: The death or disability of a party to a contract discharges the contract when:
a. personal services requiring peculiar skill are involved. b. the payment of money is involved. c. a house is to be painted. d. none of the above.
37: Bankruptcy results in a discharge of contractual obligations by __________.
a. default b. equity c. operation of law d. oath or affirmation
38: When a party expressly declares that performance will not be made when required, this declaration is a(n):
a. anticipatory repudiation. b. injunction. c. negotiating technique. d. waiver of breach.
39: A contractual provision which states that a waiver of rights will not constitute a modification to the contract is:
a. not enforceable as being in bad faith. b. not enforceable as a violation of law. c. enforceable by one party only. d. enforceable.
40: A provision stipulating the amount of money damages to be paid in the event of default or breach of contract is known as a __________ damages clause.
a. nominal b. contract c. liquidated d. breach