QUESTION 1
- Home Interiors, Inc. (HII), tells Jan, whose business is purchasing for others, to select and buy $200 worth of certain goods and ship them to HII’s office. Jan buys the goods from Brand Name Products Store and ships them as di¬rected, keeping an account for the expense in HII’s name. HII and Jan
a-do not have an agency relationship, because Jan’s business is buying for others.
b-do not have an agency relationship, because Jan did not indicate that she was acting for Baron.
c-do not have an agency relationship, because their agreement is not in writing.
d- have an agency relationship.
0.5 points
QUESTION 2
- Big Oil Company wants to adopt an English-only policy for its employees working on its oil rigs. The policy applies only when the employees are actually working on the rig, and not while they are on break or otherwise on their own personal time. This policy is:
A-Legal if the company can demonstrate a legitimate business reason for the policy, such as safety concerns.
B-Legal if the employer gives it employees a reasonable amount of time to adopt and to conform to the new policy.
C-Legal if the employer teaches any of its non-English speaking employees to speak English.
D-All of the above.
0.5 points
QUESTION 3
- Kay acts within the scope of her authority to enter into a con¬tract with First National Bank on behalf of Kay’s undisclosed principal, Digital Engineering, Inc. Digital is
A- liable on the contract only if Digital ratifies the contract.
B-liable on the contract only if Digital’s identity is later disclosed.
C-liable on the contract under the stated circumstances.
D- not liable on the contract.
0.5 points
QUESTION 4
- Paul hires Janice, a college student, as a cash register employee at his sporting goods store. A vendor, Vinnie, comes in to sell Paul some office supplies. Yet Paul is very busy dealing with a unhappy customer. The vendor is insistent, however. So Paul turns to the vendor, and, pointing to Janice, says: “See my agent. She will take care of the order.” Whereupon, Janice deals with Vinnie, and then Janice in a writing commits to buy a large amount of office supplies from Vinnie Vendor for Paul. Paul claims that he is not liable for the order because Janice was not his agent and “just a college kid.” The likely result of any lawsuit between Paul and Vinnie will be:
A- Paul will prevail since Janice was merely an employee who had no express authority to act as an agent.
B- Vinnie will prevail if he can convince a jury that Paul granted apparent agency authority to Janice by his words and conduct toward Vinnie and that Vinnie reasonably believed that Janice was Paul’s agent.
C-Paul will prevail if Janice was a minor.
D- Paul will prevail if he can convince a jury that Vinnie’s grandfather was once a member of the Gambino Organized Crime Family of NYC.
0.5 points
QUESTION 5
- McDonalds, Burger King, and Wendy’s agree to divide up the Florida Keys into three exclusive territories with McDonalds having Key Largo and the northern Keys, with Burger King having Marathon the middle Keys, and with Wendy’s having Key West and the lower Keys. They agree not to compete with each other in the others’ territories. This agreement is;
A-Illegal per se horizontal territorial division pursuant to the sherman Act
b.Illegal per se vertical territorial division pursuant to the Sherman Act
c.Legal if the three fast-food chains can convince the court that by means of the agreement they will be able to compete more forcefully in their respective territories against KFC, Subway, Pizza Hut, and Taco Bell, and thereby benefit consumers.
d.Legal if approved by the Florida Keys Chamber of Commerce and Better Business Bureau.
0.5 points
QUESTION 6
- Eric, a supervisor at X Corporation, sexually harasses a subordinate employee by constantly asking her for dates, when she repeatedly and firmly has said “no.” The supervisor also makes jokes of a sexual nature around this employee. She becomes so stressed out one day that she had to “clock out” early and go home to compose herself, thereby losing four hours of work. X Corporation learns of the misconduct, and promptly fires the supervisor for violating its sexual harassment policies, and then the company also apologizes to the employee; but she sues the company for sexual harassment nonetheless. Assuming sufficient evidence, the likely result of such a lawsuit would be:
A-The employer would not be liable since it has policies to combat sexual harassment which it enforced by firing the supervisor.
B-The employer would be liable but only if the employee could demonstrate that the employer knew or should have known that its supervisor was sexually harassing employees.
C-The employer would be absolutely liable for the sexual harassment regardless of knowledge or intent.
D-The employer would not be liable since workplace romance is common in the office today, and the employee was probably too sensitive about it.
0.5 points
QUESTION 7
- Bob and Carol work for Delta Company. Bob is Carol’s super¬visor. During work, Bob touches Carol in ways that she perceives as sexually offensive. Carol resists the advances. Bob cuts her pay. Delta is
A-liable, because Bob’s conduct constituted sexual harassment.
B-liable, because Carol resisted Bob’s advances.
C-not liable, because Bob’s conduct was not job-related.
D-not liable, because Carol resisted Bob’s advances.
0.5 points
QUESTION 8
- Pat is a director of Quik Buy, Inc. Without informing Quik Buy, Pat goes into business with Fast Sales, Inc., to compete with Quik Buy. This violates
A-the business judgment rule.
B-the duty of care.
C-the duty of loyalty.
D-None of the above
0.5 points
QUESTION 9
- Dan assigns to Evan a contract to buy a used car from Fran. To be valid, the assignment must
A-be in writing and be signed to Dan.
B-be supported by adequate consideration from Evan.
C-not be revocable by Dan.
D-not materially increase Fran’s risk or duty.
0.5 points
QUESTION 10
- Pursuant to the commercial speech doctrine under U.S. constitutional law:
A-commercial speech is not constitutionally protected since the motive is for business to make money
B-commercial speech is will not protect legal, adult-like activities and products like tobacco, alcohol, and gambling since they are regarded as “vices” and thus should be prohibited
C-commercial speech is not constitutionally protected since most commercials on television, especially around dinner-time, are loud, annoying, and gross
D-commercial speech must be true and non-deceptive and involve a legal product or service to gain constitutional protection.
0.5 points
QUESTION 11
- Rita calls Sam on the phone and agrees to buy his laptop computer for $400. This is
A-an express contract.
B-an implied-in-fact contract.
C-an implied-in-law contract.
D-a quasi contract.
0.5 points
QUESTION 12
- Daniel is the owner of a chain of “high end” shoe stores. He hires Martino as a manager of a new store, which is to be open in Inverness, Florida. Daniel, pursuant to a written contract, agrees to pay Martino a monthly salary. In addition, Daniel and Martino have agreed to an 80-20% split in profits. Without Daniel’s knowledge, Martino represents himself to Cathy as Daniel’s partner, telling Cathy about the agreement to share profits. Cathy extends credit to Martino, who defaults. Cathy now seeks to hold Daniel liable as a partner. Which is the most accurate statement about Cathy’s lawsuit against Daniel?
A.Cathy prevails since Martino represented himself as a partner.
B.Cathy prevails since Martino got part of the profits of the business which automatically makes him a partner.
C.Daniel prevails since being the manager of a store is the legal equivalent of being a partner.
D.Daniel prevails since Martino was merely an employee and not a partner.
0.5 points
QUESTION 13
- Fast Eddie, a minor, who looks older, buys a used car on credit when he is 16 for “cruisin'” and “girl pick-up” purposes. He pays a small down payment and agrees to pay a monthly payment. When he turns 18 he continues to use the car and to make payments to the used car dealership. He does this for several months after turning 18 years of age. However, he then attempts to “drag race” with a friend to impress a girl, but crashes the car. He is not badly injured, but the car is seriously damaged. Fast Eddie then has the car towed back to the used car dealership, and says: “Yo, I was only 16 when I bought this car. I was a minor and I want all my money back. You can have what’s left of the car. Yo!” What is the likely legal result of this situation?
a.Fast Eddie can disaffirm the contract with the car dealership since he was a minor when he purchased it.
b.Fast Eddie cannot disaffirm the contract since the car was a “necessity.”
c.Fast Eddie cannot disaffirm since he impliedly ratified the contract he made when he was a minor.
d.Fast Eddie can disaffirm since the used car dealer should have asked Fast Eddie his age regardless of his appearance.
0.5 points
QUESTION 14
- Superb Auto Sales sells cars, trucks, and other motor vehicles. A Superb salesperson tells potential customers, “This is the finest car ever made.” This statement likely is
A-an express warranty.
B-an implied warranty.
C-a warranty of title.
D-puffing.
0.5 points
QUESTION 15
- The Board of Directors of Sun Energy Corporation made a major policy decision for the company to develop cylindrical solar panels, which are more efficient then flat panels. However, Chinese manufacturers, with the strong support of the Chinese government, enter the solar panel market, thereby causing the price of all solar panels to drop significantly, thus causing Sun Energy to lose a great deal of money. The shareholders of Sun Energy are very angry at the Board of Directors for making this “bad” business decision. The shareholders likely:
a.Can successfully sue the Board of Directors because they made a poor business decision which cost the company money.
b.Cannot successfully sue the Board of Directors for the decision due to the Business Judgment Rule.
c.Can successfully sue the Board of Directors because the decision was an unethical one.
d.Cannot successfully sue the Board of Directors because the board members are protected by the Corporate Veil theory from any personal liability.
0.5 points
QUESTION 16
- Jay and Kim enter into a contract for Jay’s sale to Kim of ten computers for $500 each. After Kim takes possession, but before she makes payment, this contract is enforceable
A-only if it is in writing.
B-only if it is oral.
C-whether it is oral or in writing.
D-under no circumstances.
0.5 points
QUESTION 17
- Margaret worked as a licensed real estate agent in the state of Michigan for Price, Inc., which subsequently became Xavier, Inc. Based on the representation of the president of Price that Margaret did not need a Texas real estate license, she agreed to relocate to San Antonio, Texas, and to become sales manager of Bexar House, an apartment house that was being converted into a condominium complex. A letter agreement was ultimately given to her by Price, confirming that she was to act as a sales manager and receive as her compensation 3% of the sales price of each unit sold. She was also provided with a rent free apartment at Bexar House, but was on-call 24 hours a day to show units to prospective buyers. During the period from 1998 to 2001, she successfully sold and received commissions on more than 140 units. Sometime in the latter half of 2002, she sold the remaining units to Williston Clover. However, she was denied her commissions on these remaining units on the grounds that she was not licensed in Texas to sell real estate. Margaret then filed a lawsuit to recover her commissions. Which of the following is the most accurate statement regarding the lawsuit.
A.Margaret wins if the license is deemed to be a revenue-raising one.
B.Margaret wins due to the doctrine of duress since she needed a job.
C.Margaret wins based on the unilateral mistake doctrine.
D.Margaret wins based on the doctrine of fraud (deceit).
0.5 points
QUESTION 18
- Elin learns that her employer has been monitoring her computer at work to make sure that her emails and website interaction are related to her job functions. She brings a lawsuit against her employer for the tort of intentional invasion of privacy. The likely result of this lawsuit would be:
A-She will prevail since her privacy was invaded.
B-She will lose since the old common law intentional torts do not apply to modern day employment relationships.
C-She will prevail if she was in fact using the computer for her work functions.
D-She will lose if the employer notified her and her co-workers that their computer use would be monitored.
0.5 points
QUESTION 19
- Lou and Paula enter into a contract. Lou later tells Paula that if she does not perform her part of the deal, he will sue her. Paula can
A-avoid the contract on the basis of duress.
B-avoid the contract on the basis of fraudulent misrepresentation.
C-avoid the contract on the basis undue influence.
D-not avoid the contract.
0.5 points
QUESTION 20
- The Board of Directors of Sun Energy Corporation made a major policy decision for the company to develop cylindrical solar panels, which are more efficient then flat panels. However, Chinese manufacturers, with the strong support of the Chinese government, enter the solar panel market, thereby causing the price of all solar panels to drop significantly, thus causing Sun Energy to lose a great deal of money. The shareholders of Sun Energy are very angry at the Board of Directors for making this “bad” business decision. The shareholders likely:
a.Can successfully sue the Board of Directors because they made a poor business decision which cost the company money.
b.Cannot successfully sue the Board of Directors for the decision due to the Business Judgment Rule.
c.Can successfully sue the Board of Directors because the decision was an unethical one.
d.Cannot successfully sue the Board of Directors because the board members are protected by the Corporate Veil theory from any personal liability.
