Business Law Final Test Questions – Flashcards
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T/F Law Includes enforceable rules governing relationships between individuals and their society
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True
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T/F Tortfeasor is the term for a person who is the victim of a tort
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False
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T/F Some promises are legally binding contracts
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True
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T/F Resolving whether a promise should be enforced is the essence of contract law
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True
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T/F A state law that conflicts with the U.S. constitution will be deemed unconstitutional
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True
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T/F One of the requirements to form a valid contract is an offer
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True
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T/F Federal Agency regulations take precedence over conflicting state agency regulations
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True
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T/F A court can exercise jurisdiction over an out-of-state defendant who has only done business in the state over the internet
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True
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T/F Defamation occurs when a person is restrained by another intentionally and without justification
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False
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T/F A contract entered into under physical duress is enforceable
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False
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T/F The most common way to discharge a contract is by performance
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True
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T/F Anything less than substantial performance is a material breach of contract
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True
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T/F Overestimating the value of an object is a mistake for which a court will normally provide relief
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False
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T/F Fraud occurs only when there is reliance on a statement of fact
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True
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T/F Venue is the term for the subject matter of a case
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False
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MC The legislature of the state of Missouri enacts a new statute that sets standards for the liability of businesses selling defective products. This statute applies where?
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only in Missouri
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MC Edie files a suit against Frank. If this suit is like most cases, it will be
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dismissed or settled before trial
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MC COle drives into Dino's Service Station and asks Erin, the attendant, to fill the tank in Cole's hybrid vehicle. After Erin fills the tank, but before Cole pays for the gas, any contract between Cole and Dino's is
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executory
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MC Jim is an appliance salesperson. To make a sale, he assets that a certain model of a Kitchen Helper refrigerator is the "best one ever made." This is
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Not fraud
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MC Jim files a suit against Kay. Before going to trial, the parties meet, with their attorneys to represent them, to present their dispute to a third party who is not a judge, but who refers a legally binding decision. This is
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arbitration
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MC Network Corporation files a suit against Omega Inc., alleging that Omega breached a contract to sell Network a computer system. Network is
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the plaintiff
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MC In a suit against Sandy, Taylor obtains a remedy. In the U.S. legal system, this remedy will most likely be
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compensatory damages
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MC Hua, a resident of Illinois, owns a warehouse in Indiana. A dispute arises over the ownership of the warehouse with Jac, a resident of Kentucky. Jac files a suit against Hua in Indiana. Regarding this suit, Indiana has
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in rem jurisdiction
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MC Home Delivery Corporation and Interstate Transport, Inc., sign an agreement that provides for the patent of "$1,000 by whichever party commits a material breach of the contract that creates damages difficult to estimate but approximately $1,000." This is
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a liquidated damages clause
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MC Intoxicated but fully aware of the consequences, Uri agrees to a two-year cell-phone service contract with Wander Talk Inc., at more than the average market price. This contract is
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enforceable
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MC On Tom's eighteenths birthday, he decides that he no longer wants to keep a car he bought from Select Autos, when he was seventeen. His right to disaffirm the deal will depend on
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whether Tom acts within a reasonable period of time
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MC Bette backs out of City Parking Garage, colliding Dill's car. Dill may recover $7,500 to cover the cost of the repairs if Bette failed to act as
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a reasonable person
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MC Quality Steel Corporation files a suit against Rite Tool Company, claiming that the consideration for their contract is inadequate. The court will most likely not examine the adequacy of the consideration if
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something of value passed between the parties
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MC Webline Retail Sales, Inc., promises its salaried employees a bonus at the end of the year if management thinks it is warranted. This promise is
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unenforceable because it is not supported by consideration
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MC Mica, a minor, signs a contract to pay Natural Health Club a monthly fee for twenty-four months to use its facilities. Six months later, after reaching the age of majority, Mica continues to use the club. This act is
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ratification
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T/F An individual is always liable for any amount of unauthorized charges on his or her credit card
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False
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T/F To be negotiable, an instrument must be signed
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True
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T/F Any security Interest can be perfected by the filing of a financing statement
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False
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T/F A principal is authorized to act on behalf of an agent in doing business with third parties
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False
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T/F A conditional promise to pay is not a negotiable instrument
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True
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T/F A seller need not provide a written warranty for consumer goods
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True
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T/F If a contract for a sale of goods does not include a price term, the contract is void
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False
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T/F The term tender refers to the right of the seller to reject, adjust, or replace nonconforming goods
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False
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T/F a lessor is a party who transfers a right to the possession and use of goods under a lease
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True
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T/F A security agreement must be filed in person to be valid and enforceable
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False
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T/F In sales law, a covenant is an assurance by one party of the existence of a fact on which the other party can rely
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False
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T/F Employees who deal with third parties are agents of their employers
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True
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T/F An independent contractor's physical conduct is not controlled, or subject to control, by his or her employer
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True
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T/F Article 2A of the UCC governs contracts of sales of goods
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False
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T/F A seller can terminate a contract of the basis of commercial impracticability if increases in the seller's costs threaten to undercut its profits
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False
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MC Olga, a salesperson for Pre-owned cars tells Quincey "This is the best car I've ever seen." This statement is
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not a warranty, but puffery
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MC Silky Material Corporation in NJ sells fifty tons of fabric to Tattered Clothing Inc., in Ohio, "F.O.B. New Jersey." The cost of transporting the fabric to Ohio will be paid by
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Tattered clothing
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MC To finance the purchase of a car from Giant Auto Sales, Hoppy signs an instrument promising to pay to "Ideal Credit Union" $18,000 with interest in installments with the final payment due May 15, 2014. To be negotiable, this instrument must include on its face
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no conditions
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MC The payment of Hu's set to Ian is guaranteed by Hu's equipment. To give public notice of his interest in Hu's property, Ian is most likely to
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file a financing statement with the appropriate authorities
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MC Bubbly Soda Company hires Carlo to work on Bubbly's shipping dock, checking outgoing loads and dispatching Bubbly's drivers. With respect to Carlo, Bubbly is most likely
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a principal
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MC Jody is an agent for Insta Cross Country Trucking Inc. In the course of Jody's performance for the firm, Jody pays Heck for certain vehicle maintenance and repair services. Jody's right to obtain the amount of those payments from Insta arises under the principal's duty of
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reimbursement
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MC Lena borrows from Mac and Nicol, using the same collateral for both loans. Only Nicol has a perfected security interest. Lena defaults on both loans. The party with the first rights to the collateral is
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Nicol only
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MC Opal signs a promissory note payable to order of Payday Loan Company. The note states that it is payable "with interest at 6%." This note is
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negotiable
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MC Genuine Seed company and Hillside Farmers Cooperative enter into a contract for a sale of hybrid seeds. Under the perfect tender rule, Genuine Seed must ship or tender seeds to Hillside that
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exactly conform to the contract in every detail
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MC Aromatic Tea Company (seller) and Savory Stores Inc., (buyer) enter into a contract for a sale of tea. The contract includes the term "F.O.B. Upriver City" which is Savory's location. This means that the contract is
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a destination contract
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MC Tyrone draws a check payable to "Cash" and presents it to United Bank for payment. This instrument is
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a bearer instrument
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MC Prime Property Investments Inc., files a financing statement to provide notice of its security interest in the property of Qwik Breakfast Restaurant. The initial effective term of a financing statement is a period of
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five years
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MC Alaskan salmon that fill the hold of BIll and Carla's fishing boar are fungible if the salmon are
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identical, mutually interchangeable
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MC Elegant carpets Inc., and Fantastic Floors Stores enter into a contract for a sale of carpeting. Under a shipment contract, the seller must
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place the goods into the hands of a carrier
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MC Craft Engineering Inc., contracts for a sale of technical instruments to Detail Design Company. Before the date on which performance is due, Craft notifies Detal that it will not perform. This is
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anticipatory repudiation
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T/F Disparate-impact discrimination occurs when an employer intentionally discriminates against an employee who is a member of a protected class
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False
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T/F Gender can always be a determining factor in an employer's decision to hire or fire or promote an employee
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False
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T/F Under the Equal Pay Act of 1963 , all of the women on an employer's staff must be paid the same as all of the men
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False
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T/F An employer is not liable for the sexual harassment of an employee by the employee's supervisor
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False
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T/F It is unlawful for an employer to retaliate against an employee who has opposed a discriminatory employment practice
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True
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MC Hoppy, who works as an employee for imperial power corporation, suffers an injury in an accident. Hoppy will be compensated under state workers' compensation laws
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only if the injury occurred on the job
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MC Over a forty-year period, Ewa worked in a variety of jobs. She was also occasionally unemployed, briefly hospitalized, and suffered a temporary disability. She retired last year. The key law on all of these subjects is
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the Social Security Act
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MC Fruits and Vegetables Inc., employs hundreds of seasonal and permanent workers both skilled and unskilled in seven states. Under the Immigration Act of 1990, Fruits and veggies can hire illegal immigrants
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under no circumstances
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MC Detailed Designs, an architectural firm, wants to hire Eduardo, a noncitizen. A temporary work visa is most likely to be set aside for a noncitizen who is
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a person of extraordinary ability
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Research statistics corporation uses a merit sustem to pay its employees according to their job performance. Suki, a female and Troy, a male, are research employees with comparable jobs. Due to superior performance, Suki is paid more than troy. this is
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not discrimination
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T/F A business that holds itself out as being a corporation may not be able to deny corporate status, even if it makes not attempt to incorporate
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True
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T/F "Piercing the corporate veil" means revealing to shareholders the internal rules of corporate management
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False
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T/F A director usually serves on a corporation's board for a life term
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False
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T/F A board of directors can never conduct business outside a formal meeting
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False
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T/F A director may not sit on the board of more than one corporation at a time
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False
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MC Inez and Jason are the shareholders and directors of Kleen Kustodial Co. Lily and Moe are Kleen's officers. As in other corporations, the responsibility for the overall management of Kleen rests with
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The board of directors
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MC Finn and Glenda want to form and do business as Hobby Crafts Corp. A corporation is a legal entity created and recognized by
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State law
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MC The board of directors of Integral Components Corporation consists of Frida, Gayla and Hart. a quorum is the minimum number of these directors
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who must be present to validly transact business
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MC Frawsty Corp distributes beverages in the greater Northwest. Frawsty's board of directors can delegate some of its functions to
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Frawsty's officers
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MC Chip is a director of Diners restaurants Inc. Chip would breach his duty of loyalty if he
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buys a controlling interest in Picnic Parlors Co., a competing firm
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T/F Insurance coverage is never effective until a formal written policy is issued
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False
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T/F A person can insure something in which he or she has an insurable interest
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True
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T/F All bailments include a bailee's right to use the bailed property
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False
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T/F Property voluntarily discarded by its owner with no intention of reclaiming it is abandoned property
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True
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T/F A person who holds all rights in property owns the property in fee simple
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True
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MC Gr8 Stores Inc. hires Haul-Way Company, a common carrier, to transport fifty large screen TVs from San Diego to Phoenix. En rout a pothole causes the truck to crash, damaging the goods. Liability for the damage most likely rests with
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Haul-way only
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MC Uri borrows Vera's boat to enjoy for a weekend. Uri negligently runs the boat aground near Water's Edge beach, damaging the hull. Liable for the cost of repairing the boat is
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Vera Only
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MC Roy leaves his Honda sport utility vehicle at Sam's Auto Service for an oil change. This is a bailment for
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the parties' mutual benefit
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MC Ner Olav each buy certain quantities of oil to sell to Petro Refinery and agree to share storage costs until Petro can take delivery. The oil is commingled so that Nero's oil cannot be distinguished from Olav's. This is
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confusion
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MC Lauren owns a 1976 Ford Mustang, which Mike customizes and details to Lauren's specifications. The car earns several awards at regional vehicle customizing competition shows. The result of Mike's efforts is
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accession
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T/F In most states the seller of a new house warrants that it is fit for habitation
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True
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T/F A quitclaim deed warrants more than any other deed
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False
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T/F For a party to take by adverse possession, the party's possession must not be hostile to the true owner's rights
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False
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T/F Taking private property for public use requires the payment of "just compensation"
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True
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T/F A tenant cannot withhold rent for any reason
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False
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MC Region Construction Company has a right to drive its trucks across Staple Business, Inc.'s property, which is adjacent to Region's office. This right is
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An easement
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MC Jamal signs a lease with Kelvin to occupy a house on Leech Lake in Minnesota for the summer. Jamal's tenancy is
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a fixed term tenancy
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MC Oak Grover Residences Inc owns apartment buildings. Pedro lease one of Oak Grove's apartments. Pedro's transfer of his interest in the lease to Quito for a period shorter than the lease term is
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a sublease
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MC Rita believes that Shady Grove Apartments Inc her landlord, has violated the law in a way that entitles her to withhold the rent. This remedy is generally associated with a way that entitles her to withhold the rent. This remedy is generally associated with
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breach of implied warranty of habitability
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MC The environmental Protection Agency has the authority to regulate "any air pollutant." Fresher Air Group, a private organization that supports cleaner air, can file a suit against the EPA to
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compel the EPA to act or prevent it from acting
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T/F Confiscation occurs when a government seizes a private property for a proper public purpose and awards just compensation
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False
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T/F The act of state doctrine provides that only a head of state can make treaties with another nation
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False
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T/F The chief aim of the EU and other trade organizations is to minimize trade barriers among their members
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True
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T/F Under the principle of comity, a foreign business that deals with a US business may be subject to US law
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True
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T/F Restrictions on exports may include tariffs
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False
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MC The US is a member of the WTO, which, among its members
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Minimizes trade barriers
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MC A clause in contract between Timber Corporation, a US company and Wang LTD, a Japanese business, specifies that disputes over the contract will be adjudicated in the US. This is
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a choice of forum clause
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MC Chiang Ltd., a Chinese firm, imports its goods into the US and offers those goods for sale at "less than fair value." This is
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dumping
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MC The government of the US and the governments of other nations have the power to enforce their respective national laws within their borders. The power to enforce international law within the borders of all nations rests with
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no court or international organization
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MC The government of Iran violates an international law. Persuasive tactics to remedy the situation fail. The ply recourse of other nations is to
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take coercive action- sever relations, impose boycotts, go to war.
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T/F Ethics is concerned with the fairness or justness of an action.
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True
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T/F An action may be legal and ethical.
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True
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T/F Business ethics applies only to the owners, operators and employees of corporations
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False
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T/F Corporations can be perceived as owing ethical duties to groups other than their shareholders
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True
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T/F The most common reason that ethical problems occur in business is an overemphasis on long-run profit
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False
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MC John is sales manager for Kleen 'n Brite Products, Inc. Compared to John's personal activities, his business activities most likely involve
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More complex ethical issues
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MC Kennedy Capital Corporation provides other firms with funds to expand operations. If Kenney strictly complies with existing laws, the firm will
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fulfill some business ethics obligations
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MC Peak & Vale Accountants provides other firms with accounting services. Questions of what is ethical involve the extent to which Peak & Vale has
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an ethical duty beyond those duties mandated by law
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MC Any decision by the management of Fast-Food Franchise Corporation may significantly affect its
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operators, owners, suppliers, the community, or society as a whole
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MC Lyle, VP of sales for Mi-T Electric Inc., adheres to Judeo-Christian religious ethical standards. With respect to their application, these standards are
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absolute
