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BUS 415 test

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									1) When statutes are passed only after considerable study, debate, and public input, this is an
                           example of which function of the law?

                                     A.      Shaping moral standards

                                     B.      Facilitating orderly change

                                     C.      Maintaining the status quo

                                     D.      Keeping the peace

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

                       A.      The state where the president of the corporation lives

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

                       C.      The state where the majority of the employees live

                       D.      The state where it filed its Articles of Incorporation

                               3) The doctrine of stare decisis concerns

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

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

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

D.        using constitutional law to render a decision

                            4) Utilitarianism is a moral theory, which states

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

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

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

D.        ethics requires actions which use the most efficient tools

     5) Which of the following is correct with regard to the relationship between law and ethics?

A.        The rule of law and the golden rule of ethics demand the same response.
B.     Although much of law is based on ethical standards, not all ethical standards have been
enacted as law.

C.        The law may not permit something that would be ethically wrong.

D.        Lawful conduct is always ethical conduct.

                           6) The Federal False Claims Act is also known as

                                      A.      The Sarbanes-Oxley Act

                                      B.      The Statute of Limitations

                                      C.      The Whistleblower Statute

                                      D.      The Statute of Frauds

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

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

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

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

         D.      The court will dismiss the case.

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

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

                9) An appellate court reviews what information to decide on appeal?

A.        All witnesses have come to court to testify again like they did at the trial.

B.        Only briefs provided by the lawyers plus the documentary evidence admitted at trial.

C.        Documentary evidence that was admitted at trial, plus a transcript of the witnesses’ testimony.
  D.         Only a transcript of the trial testimony plus briefs of the lawyers.

10) Damages intended to punish a defendant and deter the defendant and others from engaging in
                       the same tortious conduct in the future are called

                                           A.       penalty damages

                                           B.       nominal damages

                                           C.       retribution damages

                                           D.       punitive damages

  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) Carlos is an investment broker, operating as a sole proprietor. William is his employee.
  Juanita, a new client, gives William $1,000,000 in cash to invest for her, and William gives her a
   receipt. Instead of investing the money, William takes the $1,000,000 and leaves the country.
 Carlos learns of the transaction for the first time when Juanita appears at the office a month later
to discuss the allocation of her investments, and shows him the receipt signed by William. Juanita
is upset to learn that Carlos does not have her money, and tells him she is going to sue. What will
                          be the outcome of Juanita’s suit against Carlos?

       A.        Juanita will lose the case because was not informed of the transaction.

       B.        Juanita will lose the case because she cannot find William to serve him with a lawsuit.

       C.        Juanita will recover a judgment against Carlos for half the missing money.

       D.        Juanita will recover a judgment against Carlos for the entire amount.

 13) Pete and Vicky make the following agreement. Pete promises he will go into a store and buy
 something for $5 and pay for it with a $100 bill on which he has written “Happy Birthday Vicky!”
Vicky promises that after Pete collects his change and leaves the store, she will go into the same
store and buy something that costs $5 and pay with a $10 bill. When the clerk attempts to give her
 change for $10, Vicky will claim that the $100 bill that is in the cash register was money she just
 got for her birthday, and will demand change from a $100 bill. Then Pete and Vicky will split the
           extra money they think Vicky will receive in change. Is this a valid contract?
  A.       This is a valid contract. There was a promise in exchange for a promise, and both parties got
                                             what they wanted.

 B.       This is a voidable contract because Vicky can change her mind.

 C.       This is not an enforceable contract because the agreement is not in writing.

 D.       This is a void contract, because the parties agreed to commit fraud.

14) Ray and Nikki are in fifth grade together. Ray gets a new skateboard for his birthday and offers
 to sell Nikki his old one for $15. Nikki pays the money, and Ray gives her the old skateboard. Is
                                         this a valid contract?

 A.       This is a valid contract. There was a fair consideration paid for the skateboard, and both parties
                                            got what they wanted.

 B.       This is a voidable contract because the parties to the contract were minors.

 C.       This is an unenforceable contract because Ray and Nikki can not file a lawsuit.

 D.       This is a void contract because the parties to the contract were minors.restraint of trade.

      15) Which of the following best describes how e-mail contracts are viewed under the law?

 A.       E-mail contracts for goods can be valid, but not email contracts for services.

 B.       E-mail contracts are valid so long as both parties sign a written copy printed out from the e-

 C.       E-mail contracts are generally treated similarly to contracts negotiated by other means.

 D.       E-mail contract are valid only for contract less than $500.

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) Melinda is home one afternoon, when a PaverSaver truck pulls up outside her house. Several
    workers exit the truck and proceed to dig up her driveway. They completely remove her old
driveway and pour a new concrete driveway. She observes the entire process, but says nothing to
the workers. Later, Melinda’s next door neighbor complains that the workers who were supposed
to come and replace her driveway failed to arrive. How much will PaverSaver be able to recover in
               court if Melinda refuses to pay the bill they send her for the driveway?

  A.      Nothing—Melinda did not order a driveway replacement.

  B.      Paver Saver will be able to recover the reasonable value of the driveway.

  C.      PaverSave will not recover anything, and will have to pay Melinda for destroying her driveway.

  D.      PaverSaver will be able to recover its regular fee for a new driveway.

18) In February, Bradley stole a motorcycle from John’s driveway, and then sold it to a motorcycle
parts dealer as a source of used motorcycle parts. In March, Jean bought the motorcycle from the
parts dealer. In May, the police came to Jean and advised her that the motorcycle she bought had
 been stolen. According to the Uniform Commercial Code, must Jean give the motorcycle back to

            A.         Yes, because it was stolen and John did not intend for it to be sold to her

            B.         Yes, because John filed a police report

            C.         No, because it was John’s fault for leaving the motorcycle in his driveway

            D.         No, because Jean is a good faith purchaser for value

  19) Melinda owns a rental property. She deeds the property to her son Jack, by warranty deed.
 Ten years later she sells the property to Brenda, her neighbor, and signs a quitclaim deed to the
                       property in favor of Brenda. Who owns the property?

                 A.        Jack and Brenda each own half the property.

                 B.        Brenda owns the property.

                 C.        Melinda still owns the property, because neither deed was effective.

                 D.        Jack owns the property.

20) 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.

 21) Huey, Dewey, and Louie own a building as tenants in common. Huey lives in the building.
Without consulting the other two owners, Dewey deeds his interest in the building to Joe. What
                             will be the outcome of this situation?

A.        Huey will own the property as tenants in common with Joe and Louie.

B.        The transfer of the interest to Joe will be ineffective because the other two did not consent.

C.        Joe will make Huey pay rent.

D.      Huey and Louie will still own the property as tenants in common, but Joe will have a
reversionary interest.

22) 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 of all partnership debts.

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

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

     23) Which of the following is true when a general partnership is converted to an LLC?

A.        The property must be sold to a third party who then immediately sells it to the LLC.

B.        The profit and loss sharing terms must remain the same as they were in the partnership.

C.     The members will retain unlimited personal liability for obligations incurred while the business
was a partnership.

D.        The conversion can be made retroactive for up to two years.

                                 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.          At least one of the partners must be a general partner with unlimited personal liability.
       C.        A partnership is limited to doing business in the state of incorporation.

       D.        The liability of all owners is unlimited.

25) Rita is the sole shareholder of an auto repair shop that is incorporated. She is at work one day
 when her sister comes in and tells her she needs $100 for schoolbooks. Rita looks in her wallet,
  and seeing that it contains no money, opens the cash register and takes out $100, which she
 hands to her sister. The sister looks worried, but Rita tells her, “Don’t worry; I take money out of
the cash register all the time for my personal expenses. It’s my business, so I can take money out
whenever I want.” Her customer, who is waiting to pick up his car, tells Rita that she is risking the
                       piercing of the corporate veil. Is the customer correct?

                    A.       No, Rita is the only shareholder and can do what she wants.

                    B.       Yes, Rita is co-mingling personal assets with corporate assets.

                    C.       No, the customer is wrong.

                    D.       Yes, Rita is not the board of directors.

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

        C.        corporations have perpetual existence

        D.        corporations can act only through officers

   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.         force the corporation to refinance its debts

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

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

  28) If a corporation is properly incorporated in one state and wants to do business in second
                                        state, the corporation

 A.         must incorporate in the second state
 B.          may be required to obtain a certificate of authority from the second state

 C.          must register with the Interstate Commerce Commission

 D.     must do nothing because being incorporated in one state entitles the corporation to do
 business in all states

29) 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.

30) A particular issue of stock carries a stated dividend rate of 8 %; that if this dividend is not paid
 during a particular year, it will be paid in a subsequent year before common stock dividends are
paid; and that upon liquidation of the corporation, the owner will receive $300 per share before the
                          common stockholders get anything. This stock is

                       A.      common stock

                       B.      noncumulative preferred stock with a liquidation preference

                       C.      cumulative preferred stock with a liquidation preference

                       D.      preferred stock

      31) Which is true about the two kinds of discrimination that are actionable under Title VII?

 A.      Disparate impact and disparate treatment are both based on how an employer treats a specific

 B.          Disparate impact refers to individuals and disparate treatment refers to protected classes.

 C.          Disparate treatment refers to individuals and disparate impact refers to protected classes.

 D.      Disparate impact and disparate treatment are both based on how an employer treats a
 protected class.

  32) Which of the following rejected applicants may have a valid claim for discriminatory hiring
 A.      A public health service did not hire a registered nurse because his shaking hands prevented
 him from administering injections.

 B.     A university did not hire a 22-year-old woman to be a director of faculty because she was too

 C.      A trucking company did not hire a truck driver because she was pregnant.

 D.      A Catholic school did not hire a teacher because he was not Catholic.

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) Under the employment at will doctrine, employment relationship can be terminated

                    A.      by the employee only

                    B.      by either the employer or the employee

                    C.      only by mutual agreement of the employer and employee

                    D.      by the employer only

       35) Which of the following employers have been expressly excluded from Title VII?

                                  A.      Labor unions

                                  B.      Indian tribes

                                  C.      Most federal agencies

                                  D.      State and local governments

36) Company employee handbooks have been found to amount to a(n) ______________ exception
                                  to the employment at will doctrine.

                                           A.      apparent

                                           B.      contract

                                           C.      public policy

                                           D.      tort

                           37) The Biosafety Protocol provides as follows:

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

            B.       Employees must wash hands when preparing food.

            C.       Vaccinations must contain live virus.

            D.       Medical waste must be safely disposed.

     38) The law gives the consumer what protection from aggressive tactics of door-to-door

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

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

               C.      The customer may file a police report.

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

               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 federal copyright laws.

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

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

40) Peter has a bus company, and hires drivers to drive his buses. He does not take any taxes out
  of their paychecks. The bus drivers have to drive the buses according to a particular schedule,
 and must follow a certain route, and follow the driving rules that are listed in the Driver’s Manual
               that Peter has provided. What is the employment status of the drivers?

                                A.      They are independent contractors.
                              B.      They are employees.

                              C.      They are partially disclosed agents.

                              D.      They are principals.

41) Rachel and Roy are married. Phillip is a private investigator, who is following Rachel at Roy’s
 request, to see if she is involved in another relationship. At one point, Rachel enters a “women
  only” gym, where Phillip cannot follow. Phillip calls his friend Sue and tells her that if she will
enter the gym and observe Rachel, Roy will pay her $25 an hour for her services. Sue goes to the
gym and observes Rachel for 3 hours, after which she bills Roy for $75. Must Roy pay Sue’s bill?

              A.      Yes, because Phillip was acting as Roy’s agent when he hired Sue

              B.      No, because Roy is not liable for contracts entered into by Phillip

              C.      No, because Sue is not a licensed private investigator

              D.      Yes, because Sue is entitled to collect on a quasi-contract basis

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

   C.      No, because William is an independent contractor

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

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