Business Law (14 Questions Were Answered Correctly)

1 A new and useful idea __________. cannot itself be patented can be patented if it is completely original can be patented without any other qualifications can be patented if it holds potential commercial value CONCEPT 2 Arbitration is a __________ form of alternative dispute resolution. sometimes involuntary, binding sometimes involuntary, non-binding voluntary, binding voluntary, non-binding CONCEPT 3 A landlord sues a tenant for destruction of property. During the trial, the judge issues instructions to the jury to clarify what facts it must determine to issue a verdict. When in the trial process does this occur? Before the opening statements During cross-examination After the closing arguments Following jury selection CONCEPT 4 Alongside the states, the federal government increasingly governs which area of law? Domestic matters Contract law Property law Environmental law CONCEPT 5 The purpose of contracts is __________. to bring order to medieval societies to facilitate economic transactions between individuals to eliminate any disagreement in economic exchanges to limit personal freedom CONCEPT 6 Select the example that is inconsistent with the provisions of the UCC for contract remedies for a seller's breach of contract. In its sales contract, a maker of musical instruments gives buyers a maximum of two years to raise any concerns relating to breach of contract. The sales contract for a consumer electronics company excludes specific performance as a remedy for non-delivery of items ordered by the buyer, but it allows for refunds. The sales contract for a swimming pool supply store allows for a single remedy for any contract breaches. The sales contract for a lumber mill that sells building materials includes a liquidated damages clause for the amount of $50 million in the event of a breach of contract. 7 Select the true statement about the relationship between law, ethics, and business. Ethical business practices and conduct have value only to the owners and managers of a business. Ethical business practices and conduct increase employee and customer satisfaction, but do not affect a business' bottom line. Ethical business practices and conduct are more important to the short-term success of a business than the long-term. Ethical business practices and conduct generate goodwill that can be measured in the monetary value of a business. 8 Which of the following is an important purpose of intellectual property rights? To promote capitalism and make inventors rich To prevent others from ever copying an inventor's product To advance the public good by encouraging invention To encourage inventors to form monopolies 9 Which level of state court would most likely decide a case related to running a red traffic light? General jurisdiction court Supreme court Limited jurisdiction court Intermediate appellate court 10 Which of the following most clearly represents an illegal termination of employment? A test prep tutor is fired by the company that hired her because its revenue is falling. The employee has performed well since she was hired. A janitor misses work for three days to serve on a jury and is fired by his employer for exceeding his vacation time. The owner of a small greeting card company suddenly files for bankruptcy and closes the business, letting go all of his employees. A store clerk is fired after violating several provisions of the employee handbook. The clerk has no formal employment contract, but she is only given two weeks' notice. 11 As part of its strategic planning, a fast food corporation considers the societal effects of using poultry treated with high levels of antibiotics in its supply chain. The Board of Directors ultimately instructs the officers to continue using the corporation's current poultry suppliers since the levels of antibiotics they use, while high, comply with the law and are very cheap. According to stakeholder theory, did the corporation fulfill its duty? No, because the officers of the corporation are failing to fulfill their fiduciary duty to the Board and the corporate shareholders. Yes, because the corporation is not violating any laws. Yes, because the corporation has a social contract to fulfill and must consider the impact of its actions on public health. No, because the company is prioritizing profits over other social responsibilities. 12 Priyanka is a branch manager at a bank in town. She hires Hudson, who comes with strong references and several years' experience, as a bank teller. Several months later, Priyanka is surprised to be personally named in a lawsuit alleging that Hudson misrepresented the bank's products by promising new account holders $1,000 for starting a savings account. Is Priyanka, as Hudson's manager, personally liable for the tort? No, because agents are almost never responsible for torts that are committed within the scope of their employment. Yes, because Priyanka was responsible for hiring Hudson. No, because as an agent, Priyanka is not responsible for torts committed by other agents for which she is not at fault. Yes, because Priyanka is Hudson's manager and so his liability extends to her. 13 Lisa is the CEO of a corporation. As such, she is authorized to make daily operating decisions for the company on behalf of shareholders. Which type of agent relationship does this represent? Independent contractor Subagent Special agent General agent 14 A manufacturer of a disposable butane lighter is sued for the wrongful death of two adults and a child under strict products liability law when the family's house burned down as a result of the six-year-old child setting bed clothes on fire using the manufacturer’s butane lighter. The allegation against the manufacturer is based on the theory that the lighter was defective because it did not have a childproof device to prevent children from igniting the lighter. This butane lighter had the words: “Keep Out of Reach of Children” written on the outside of the lighter body. How strong of a case does the family's estate have in its strict product liability lawsuit against the manufacturer based on the lighter being a defective product? Strong, because the product only contained a warning to keep the lighter away from children, but did not provide a childproofing mechanism. Weak, because there was no evidence that the product was unreasonably dangerous in normal use. Weak, because it would be difficult to prove with certainty that the lighter was the cause of the fire. Strong, because lighters are unavoidably unsafe. 15 Regarding fault, tort law is different from criminal law in that __________. under tort law, a tortfeasor may only be held liable if he or she did not observe all possible precautions under tort law, a plaintiff may recover only if the defendant had a deliberate desire to do harm under tort law, a plaintiff may recover even if the tortfeasor is not involved in intentionally wrongful conduct under tort law, a plaintiff may only recover if a wrongful act has been committed by the defendant 16 Which of the following accurately characterizes the function of the U.S. Supreme Court? In some years, the Court does not hear any cases whatsoever. The Court is required to hear all of the cases that are sent to it by the U.S. Circuit Courts. The Court selects only a small number of cases to hear on an annual basis. The Court only hears cases sent to it by the District Courts. 17 Select the true statement regarding adverse possession of real property. A possessor must occupy real property at the owner's invitation in order to qualify for adverse possession. Adverse possession is a common method of acquiring real property because its requirements are easily met. A possessor may acquire real property through adverse possession only if his or her possession has been continuous. Adverse possession is more difficult to attain if the possessor's possession is openly visible to others. 18 A manufacturer of an electric meter that included surge protectors to prevent damage to the meter from overloads is sued exclusively for strict product liability by an electric company after the surge protectors failed and damaged the electric meters. The manufacturer defends the claim of strict product liability on the basis that the defect in the product only damaged the product itself and there were no personal injuries. How strong is this defense by the manufacturer? Strong, unless the electric company can provide a reasonable alternative design to the meter that would have mitigated the risk of the surge protectors failing. Strong, because strict product liability does not allow for economic loss occasioned from a defect in a product that only causes damage to the product itself. Weak, because there is no indication that the electric company was aware of the product's defective surge protectors and elected to use the meters anyway. Weak, because strict product liability applies to defective products even when they do not cause personal injuries or damage a company's property. 19 An energy corporation is worried about its exposure to criminal liability after a rival company is indicted for violating environmental laws. Select the strategy that would be least effective in reducing the company's criminal liability. It could cooperate with authorities in their investigation of the rival company. It could develop an anonymous internal reporting system for employees who suspect illegal or unauthorized behavior. It could hold annual training seminars on the current state of environmental law, using the investigation as an example. Its leadership could establish a culture of respect for legal compliance through example. 20 Who can own property in the United States today? People and animals Only people All people, animals, and nonhuman legal persons All people and some nonhuman legal persons 21 Select the statement that is true of consumer law prior to the 20th century. It relied primarily on the threat of litigation to ensure product safety. It essentially functioned in the same way as current products liability law. Its central tenet was "seller beware." It was rooted in the fact that consumers had much more direct contact with producers than they do now. 22 Which of the following conditions always renders a contract unenforceable? If a party to the contract is deemed incapacitated by intoxication or mental state If a party to the contract is unable to fulfill the terms of the contract If the contract is deemed to be unfair to one party If the contract is informal (i.e., verbal rather than written) 23 A whistleblower informs a VP at an online retail company about the widespread practice of warehouse workers being asked to work extra hours without pay. The VP raises the issue with the CEO, who responds that the company can’t compete in the industry without its workers putting in some extra hours, and that paying them for these hours would negatively affect earnings. The CEO assures the VP that the company’s workforce is happy to work these extra hours, since no warehouse workers have complained directly to him. Consider what you have learned about the factors that impact corporate culture. What is the ethical strength of the corporation in the example? Strong, because the CEO is protecting the financial strength of the company. Strong, because the CEO is willing to meet with people in the organization who have ethical concerns. Weak, because the CEO is failing to provide top-down ethical leadership. Weak, because the CEO is taking credit for the work of others. 24 In which scenario would strict liability most likely apply? A car's radio sometimes stops working. A lightbulb burns out prematurely. A dishwasher fails to fully clean the dishes. An airplane's brakes fail in freezing weather. 25 Select the true statement about the Convention on Contracts for the International Sale of Goods (CISG). Parties to the Convention must re-approve the treaty every five years. It governs the international sale of services in addition to goods. It governs international sales contracts for all countries in the world. Its purpose is to unify contract law among countries to facilitate international trade.