BE 325 Practice Exam 2

In his article “Is business bluffing ethical?,” Albert Carr makes a distinction between an “unethical” poker player and a “crook.”
True
According to Albert Carr in the article “Is business bluffing ethical?,” a businessperson who cultivates a reputation for integrity, honesty, and decency will have a better chance of success in the long run.
True
Defamation is one person’s use of another’s name without permission.
False
Dru is an Excel Company employee. He falsely accuses Fiona, Excel’s office manager, of stealing from their employer. The statement is defamatory
if a coworker overhears it.
False imprisonment occurs when a person restrains another intentionally and without justification.
True
Lew angrily accuses Mandy, a broker with New Financial Services, of fraudulently inducing him to invest in Open Pit Oil Company, whose wells are dry. The reliance that gives rise to liability for fraud is normally based on a statement of
fact.
Ralph, a van driver for Speedy Delivery Company, causes a multi-vehicle accident on a city street. Ralph and Speedy are liable to
only those whose injuries could have been reasonably foreseen.
Good intention is a complete defense to conversion.
False
Proximate cause exists when the connection between an act and an injury is strong enough to justify imposing liability.
True
Drake pushes Evon into the path of an oncoming car driven by Flip. Gina tries to rescue Evon. Drake is liable for any injuries to
Evon, Flip, and Gina.
Ira signs Jill’s name, without her authorization, on the back of a check made out to her. This is
forgery.
Domino causes a disturbance at El Nino Cafe. He is arrested and charged with disorderly conduct, a misdemeanor. A misdemeanor is a crime punishable by
imprisonment up to one year.
Thinking about killing someone constitutes the crime of attempted murder.
False
Mariah takes off her ring and places it on her desk while she works. Without her knowledge or consent, her coworker Nita picks up the ring, puts it on, and walks away. Nita has likely committed
larceny.
Rick manages an illegal gambling operation in his Sushi Bar & Grill. Rick reports the profits of the gambling operation as income from Sushi’s legitimate activities on its tax returns. This is
money laundering.
Riley, a State Bank employee, deposits into his account checks that are given to him by bank customers to deposit into their accounts. This is
embezzlement.
Under the Fourth Amendment, a general search warrant and a general search through a person’s belongings are permitted.
False
Cyber fraud is fraud committed over the Internet.
True
Home Products Company and House & Yard, Inc., use the mark “Good Housekeeping Seal of Approval” to certify the quality of their products. Home Products and House & Yard are not in business together and do not own this mark. This mark is
a certification mark.
Paula develops a new espresso machine, which she names “Quik Shot.” She also writes the operating manual. Paula can obtain trademark protection for
the name.
Modern Clothing, Inc., and National Denim Corporation use the mark “Made by Members of the U.S. Textile Workers Union” on the tags of their products to indicate the participation of the union in the manufacture. Modern and National are not in business together and do not own this mark. This mark is
a collective mark.
Li’l Canine Company (LCC) uses a trademark that neither LCC nor anyone else has registered with the government. Under federal trademark law, LCC
can register the mark for protection.
Trade dress has the same legal protection as trademarks.
True
Ric designs a new computer hard drive, which he names “Sci Phi.” He also writes the operating manual to be included with each final product. Ric could obtain patent protection for
the hard drive.
A service mark distinguishes products used, or “put into service,” by the government.
False
Patent infringement occurs only if an invention is copied in its entirety.
False
Vernon claims that his contract with Ulani is voidable. If their contract is avoided
both parties are released from it.
The intention to enter into a contract is judged by objective facts as interpreted by a reasonable person.
True
An implied contract is implied from the conduct of the parties.
True
An informal contract requires a special form to bind the parties to it.
False
An online offer should include provisions relating to dispute settlement.
True
Business Properties, Inc. (BPI), offers to sell a warehouse to Corporate Investments. Transport Storage Company is aware of the offer and is interested in buying the warehouse. This offer can be accepted by
only Corporate Investments.
Renee, a product designer for Supersize Cosmetics Company, agrees not to work for Supersize’s competitors or start a competing business for a specified period of time after termination of employment. This agreement is legal in most states
if the specified period of time is reasonable.
Under a contract with Bucolic Farms, Agro Excavation, Inc., begins digging an agricultural pond. In mid-project, Agro asks for $15,000 over the contract price, claiming an increase in the “cost of doing business.” Bucolic agrees but later refuses to pay. Their agreement is
unenforceable because Agro’s performance was a preexisting duty.
Loren and Kendra enter into a contract for the distribution of Loren’s produce to local restaurants for which he agrees to pay Kendra. Kendra transfers her right to payment under the contract to County Bank. This transfer is
an assignment.
aya is a stockbroker. Nora believes that the price of OK Goods, Inc. (OKGI), a widely traded stock, is going to increase substantially. Through Maya, Nora buys 500 shares of OKGI at $10 per share, but the price soon drops to $2. Nora can successfully recover from Maya
nothing.
Only a mistake in value will make a contract voidable.
False
An incidental beneficiary cannot sue the promisor directly for breach of the contract.
True
Lava Excavators, Inc., needs a drill to continue its operations and orders one for $3,000 from Mining Supplies Company. Lava tells Mining that it must receive the drill by Tuesday or it will lose $10,000. Mining ships the drill late. Lava can recover
$10,000.
To qualify as substantial performance, the performance must not vary greatly from the performance promised in the contract.
True
Liquidated damages provisions are usually not enforceable.
False
Real Cheap Painters, Inc., agrees to paint Quint’s house, using a particular brand of “discount” paint. Real Cheap completes the job but uses a different brand of discounted paint. This is most likely
substantial performance.
According to Albert Carr in the article “Is business bluffing ethical?,” a poker player who, while abiding with the rules of the game, finds ways to put other players at an unfair disadvantage is unethical.
True
To commit an intentional tort, one person must intend to harm a certain other person.
False
The use by one person of another person’s likeness without permission and for the benefit of the user constitutes the tort of appropriation.
True
Toni files a suit against Universal Media Corporation for defamation. Actual malice must be shown for recovery of damages if Toni is
a public figure.
Kelly is injured when she slips and falls on Layla’s sidewalk. To determine whether Layla owed a duty of care to Kelly, Layla is subject to the standard of
a reasonable person.
Jean is playing a computer game on a bad disk that melts in her drive, starting a fire that injures her hands. Jean files a suit against K-Tech, Inc., the game’s manufacturer. K-Tech is held liable under the doctrine of strict liability. A significant application of this doctrine is in the area of
product liability.
Due care must be exercised in designing a product.
True
Misrepresentation on a label is not enough to show an intent to induce the reliance of anyone who may use the product.
False
A crime can be committed only against persons.
False
On the orders of their corporate employer, Della and Efron, employees of Fabulous Fashionista, a clothing store, switch trademarks on clothing that comes into the store to be sold to consumers. This is
forgery.
The crime of theft requires the taking of property, without regard to whether the perpetrator knew that it belonged to another.
False
Jean sends e-mail to Irwin promising a percentage of the amount in a foreign bank account for assistance in transferring the funds to a U.S. bank account. Irwin forwards his account number, but the funds are never sent. Instead, Jean quickly withdraws the funds in Irwin’s account. This is
cyber fraud.
It may be a crime to take another’s property, but it is not a crime to receive stolen goods.
False
Briana, an employee of Cotillion Bank, is charged with embezzlement, which requires
fraudulently appropriating another’s property.
Jeri is indicted. Before she is arrested, she confesses to the crime in a conversation with Kelly, the arresting officer. Kelly then arrests Jeri and advises her of the right to counsel. Later, Jeri claims that her statement should be excluded as evidence from her trial. The statement will most likely be
excluded because it was elicited before Jeri was advised of her rights.
In Case 8.1, Coca-Cola Co. v. Koke Co. of America, the United States Supreme Court upheld an injunction prohibiting competing beverage companies from calling their products “Koke.”
True
Trek Transport Company uses a mark associated with its name to distinguish its services from those of other trucking firms. This mark is
a service mark.
Trademark dilution requires proof that consumers are likely to be confused by the unauthorized use of the mark.
False
A famous trademark may be diluted only by the unauthorized use of an identical mark.
False
In the United States, a patent is given to the first person to invent a product or process.
False (first person to file)
A license permits the use of intellectual property for certain limited purposes.
True
Sights Unseen, Inc., (SUI) sells scopes with distinctively designed and made lenses and mirrors to scientists. Telescopes, Etc. Corporation later begins to sell scopes with identical set-ups of lenses and mirrors, without SUI’s permission, to consumers. This is most likely
patent infringement
When Jeff’s car breaks down, he asks Kwik Tow, Inc., to tow it from its location to Loyal Repair Shop. There is no discussion of a price, and Jeff and Kwik do not sign any documents. After the tow, Kwik sends Jeff a bill. With respect to Jeff’s obligation to pay the bill, this is
an implied contract
Bobbie claims that Carl breached their contract. Carl responds that he never intended to enter into a contract with Bobbie. The intent to enter into a contract is determined with reference to
the objective theory of contracts.
A letter of credit is a formal contract.
True
Digital Architecture, Inc., enters into a contract to design robotic software for Chassis Assembly Corporation. Digital agrees to perform for a deeply discounted price. Under the doctrine of freedom of contract, these parties
are free to bargain as they wish.
Demi promises to buy a house from Caleb, who promises to vacate the property on June 1. If these promises are in writing, they are most likely
enforceable
Shelby offers to make digital copies of Relay Company’s business conference videotapes, CDs, DVDs, and other media for $500. Under the mailbox rule, Relay’s acceptance by e-mail will be considered effective when
sent
Urban City and Thru-way Construction Company enter into a contract that includes calculations. Urban, whose engineer, Sergei, compiled the figures, discovers later that some numbers were added incorrectly, but Thru-way refuses to make changes. Urban can
rescind the contract on the basis of mistake.
Genie.com initiates an online dating service. To attract subscribers and encourage participation, Genie.com creates and posts profiles of fictitious persons and exaggerated profiles of actual users. Fooled by the false profiles, Ham buys a subscription. He is most likely a victim of
fraud
Misrepresentation of a material fact can occur by actions alone.
True
SealCoat Paving enters into a contract with Royal Golf & Tennis Club to provide surface material for Royal’s tennis courts by April 1 for a tournament to begin May 1. The contract specifies an amount to be paid if the contract is breached. This is a liquidated damages clause if the amount is
a reasonable estimate of the loss on a breach.
Intentionally failing to comply with the terms of a contract is a breach.
True
The duty owed under the mitigation of damages doctrine depends on the nature of the contract.
True
On April 1, KO Contractors, Inc., contracts to build a store for Lo-Cost Housewares at a specific location in Metro City. On May 1, Metro changes its zoning law to prohibit the construction of a commercial building at that location. Lo-Cost files a suit against KO. In this situation
the contract is discharged.
Jaqy distributes a handbill among her neighbors accusing one of them-Ked-of being a convicted sex offender. The statement is defamatory only if
the statement is false.
Fraud occurs only when there is reliance on a statement of opinion.
False
Self-defense is a defense to negligence.
False
Publishing false information about another’s product is conversion.
False
Publishing false information about another’s product is libel.
True
Under the doctrine of strict liability, liability is imposed strictly according to fault.
False
Corporations, unlike persons, cannot be liable for crimes.
False
Jake is charged with embezzlement. Embezzlement is not robbery because embezzlement may be committed without
the use of force or fear.
Leah gains access to government records and alters certain dates and amounts in her favor. This is
forgery.
A misdemeanor is a crime punishable only by a fine.
False
A grant of immunity from prosecution may be part of a plea bargain.
True
Yvon is charged with the crime of theft for taking Zach’s backpack, which Yvon mistakenly thought was hers. A mistake of fact is a defense
if the mistake negates the mental state necessary to commit a crime.
A defendant may be relieved of liability by showing that a criminal act was necessary to prevent an even greater harm.
True
In 2013, Online Marketing Corporation registers its trademark as provided by federal law. After the first renewal, this registration
is renewable every ten years.
A party who unintentionally uses the trademark of another is not liable for trademark infringement.
False
Standard Corporation can not claim a trademark in the phrase “Quality Is Standard” if the phrase
is generic.
Ernie’s Good Eatin’ Cafe uses a distinctive decor, layout, menu, and style of service. This restaurant’s image and overall appearance is
trade dress.
Downloading software or music into a computer’s random access memory without authorization is copyright infringement.
True
It is possible to copyright an idea.
False
GR8 Marketing Company and Hot Tunes, Inc., sign a document that states GR8 agrees to create a marketing campaign for Hot and Hot agrees to pay GR8 for the service. GR8 and Hot have
an express contract.
Scot and Tiffany enter into an implied contract. The parties’ conduct
defines the contract’s terms.
An e-contract must meet the same basic requirements as a paper contract.
True
An offer to form a bilateral contract is accepted only by completing the contract performance.
False
If a voidable contract is avoided, the parties to it are released from it.
True
An effective offer requires reasonably certain terms.
True
As a general rule, any contract duty can be delegated.
True
A contract between Drill-Bit Sharpeners, Inc., and East Oil Mining Corporation contains a clause stating that rights under the contract cannot be assigned. This ordinarily prohibits
any assignment
Beau sells a car to Cody without disclosing that the odometer, which reads 40,000 miles, was disconnected 80,000 miles ago. Beau is liable for
fraud
Fresh Air Filter & Purification Company and Big Box Commercial Storage Company enter into a contract. To be enforceable, the contract must be in writing if it involves
an interest in land
Jane and Kelly want Lucy to replace Kelly as a party to their contract. They can best accomplish this by
a novation
In most contracts, promises of performance are absolute promises.
True
OK Dry-Cleaning advertises so effectively that the regular customers of its competitor Purity Cleaners patronize OK instead of Purity. This is
none of the above
Ike pushes Joan, who falls and breaks her arm. Ike is liable for the injury
if Ike intended to push Joan.
Tortfeasor is the term for a person who commits a tort.
True
The purpose of tort law is to provide remedies when various protected interests have been invaded.
True