Final Examination Study Guide - University of Phoenix



LAW/421 Final Examination Study Guide

This study guide will prepare you for the Final Examination you will complete in Week Five. It contains practice questions, which are related to each week’s objectives. In addition, refer to each week’s readings and your student guide as study references for the Final Examination.

Week One: Introduction to Law

Objective: Define the functions of law in society.

1. Precedent evolves from

a. state and federal constitutions

b. state and federal statutes

c. the common law

d. a combination of both state and federal statutes and common law

Objective: Define the functions of law in society.

2. Once stare decisis and case precedent is established,

a. it may be disregarded and overturned by a court if they deem such action appropriate

b. it may not be disregarded by a court but may be overturned by state statute

c. it may not be disregarded by a court or be overturned by state statute but may only be changed by amendment to the state's constitution

d. it may not be disregarded or overturned once established and must be followed without exception

Objective: Define the role of law in business.

3. In the cases of Heart of Atlanta Motel v. U.S. and Katzenbach v. McClung, the Supreme Court found illegal discrimination under the Civil Rights Act of 1964 by applying

a. the Commerce Clause

b. the Supremacy Clause

c. the Necessary and Proper Clause

d. the Equal Protection Clause

Objective: Define the role of law in business.

4. In Cavel International, Inc. v. Madigan, when Illinois passed the statute barring the slaughter of horses primarily for human consumption, Cavel presented each of the following arguments EXCEPT

a. that they would suffer $20M in losses

b. that dozens of jobs would be lost in the local economy

c. that they were a foreign corporation not subject to U.S. commerce laws

d. that the act effectively banned the export of horsemeat to Europe affecting foreign commerce

Objective: Compare and contrast means for resolving domestic and foreign legal disputes.

5. When the American Arbitration Association receives an application for appointment of an arbitrator, it

a. meets with a local trial judge to determine whether litigation or arbitration will be most efficient and advantageous based on the parties and the nature of the dispute

b. meets with attorneys from both sides to determine whether litigation or arbitration will be most efficient and advantageous based on the parties and the nature of the dispute

c. receives a list of suggested arbitrators from both parties and then selects the arbitrator who then informs the parties of the procedures and rules of arbitration

d. appoints a tribunal administrator who then informs the parties of the procedures and rules of arbitration

Objective: Compare and contrast means for resolving domestic and foreign legal disputes.

6. Which of these is not a prominent group that administers arbitrations?

a. International Chamber of Commerce's International Court of Arbitration (ICC)

b. World Arbitration Organization (WAO)

c. London Court of International Arbitration (LCIA)

d. American Arbitration Association (AAA)

Week Two: Torts

Objective: Classify the types of torts.

7. Which of the following is not true of strict liability?

a. Intent to injure does not have to be proven.

b. It primarily applies in defective product and abnormally dangerous situations.

c. Injury need not occur or be proven.

d. It is based on state law.

Objective: Classify the types of torts.

8. The highest and most comprehensive duty owed by a landowner to a person on their property is to a/an

a. invitee

b. licensee

c. accidental trespasser

d. intentional trespasser

Objective: Assess the different types of and legal protections for intellectual property.

9. A design patent will last for

a. 14 years from the date of the filing of the application with the United States Patent and Trademark Office

b. 14 years from the date of the approval of the application granted by the United States Patent and Trademark Office

c. 20 years from the date of the filing of the application with the United States Patent and Trademark Office

d. 20 years from the date of the approval of the application granted by the United States Patent and Trademark Office

Objective: Assess the different types of and legal protections for intellectual property.

10. Which of the following would generally not be patentable?

a. A mathematical formula that allows one to calculate the gross national product

b. A new business method that streamlines and improves production

c. A business process that changes water into wine

d. An engine that runs on water

Objective: Analyze the legal issues of e-business to include intellectual property, privacy, ethics, and security.

11. Mike has written a novel.

a. The novel is copyrighted automatically after completion.

b. The novel does not receive copyright protection unless it is registered with the United States Copyright Office

c. Mike may sue in court to enforce his rights whether the novel is registered or not.

d. The novel must be published before it can be eligible for copyright protections.

Objective: Analyze the legal issues of e-business to include intellectual property, privacy, ethics, and security.

12. Which of the following is not an example of a trademark lost, or in danger of losing protection, due to its becoming a generic term?

a. Kleenex

b. Band-Aid

c. Ford

d. Aspirin

Week Three: Contracts

Objective: Analyze the elements necessary to form valid contracts.

13. Mike is walking through a parking lot and finds Kathy lying unconscious. He puts her in his car and takes her to the hospital. The hospital saves her life and, when she becomes conscious, they present her with a bill.

a. Kathy has to pay based on a unilateral contract.

b. Kathy has to pay based on an implied contract.

c. Kathy has to pay based on a quasi contract.

d. Mike has to pay because he brought her to the hospital.

Objective: Analyze the elements necessary to form valid contracts.

14. Jonathan's Soccer Mart (JSM) advertises a pair of boots on sale. The normal price is $150.00 and the sale price should have read $135.00 but the advertisement says $15.00. Josh walks into the store, picks up a pair of the boots, and puts $15.00 on the counter demanding to purchase the boots at the advertised price. Which of the following is correct?

a. JSM must sell the boots at the advertised price.

b. Josh has accepted JSM's offer to sell.

c. JSM has made an ambiguous offer.

d. Josh has made an offer.

Objective: Summarize the legal defenses to contract formation.

15. Young has just fired Kathy who was her agent. Young places an ad in the classified section of the various local newspapers stating that, "Kathy no longer works for or represents Young in any way". Young would place this ad

a. to eliminate any possible liability resulting from actual authority

b. to eliminate any possible liability resulting from apparent authority

c. to eliminate any possible liability resulting from ratification

d. to eliminate any possible liability resulting from respondeat superior

Objective: Summarize the legal defenses to contract formation.

16. Which of the following will not allow for an anticipatory repudiation to occur?

a. Tom calls Dick and says that he cannot find the raw materials to complete performance, and doubts he can meet the contract's performance deadline.

b. Sally is buying Jane's car with the money and car to be exchanged in a week; however, Sally sees Betty who tells her she just bought Jane's car.

c. Mary Beth is scheduled for knee surgery next month with Dr. Slice but reads in the paper that Dr. Slice has lost his license to practice medicine.

d. Manny calls Moe and tells him that the sculpture he is creating for him is coming along slower than anticipated but he is sure he will be done by the contract deadline.

Objective: Evaluate the remedies for breach of contract.

17. In which of the following scenarios would enforcement of specific performance be appropriate?

a. Your bookstore agrees to order a textbook for you but breaches their contract with you by canceling the order the next day.

b. You order three gallons of white ceiling paint from a local store and they breach by not delivering or making the three gallons available to you.

c. You order a current model name brand television from a department store and, a few days later, they breach by not ordering it from the manufacturer.

d. You own the pistol used by Hamilton and contract to buy the pistol used by Burr in the Hamilton-Burr duel to complete your set, but, despite the contract, the Burr pistol owner refuses to sell at the last minute.

Objective: Evaluate the remedies for breach of contract.

18. Oscar is speeding and driving inattentively when he runs into Felix who is driving very cautiously. As a result of the accident, Felix's car needs $2,500 worth of repairs and Felix loses a week’s salary because he had to take off from work to recover from injuries sustained during the crash.

a. Both the repairs and the lost wages are compensatory damages.

b. The repairs are compensatory damages and the lost wages are consequential damages.

c. The repairs are consequential damages and the lost wages are compensatory damages.

d. Both the repairs and the lost wages are consequential damages.

Week Four: Uniform Commercial Code (UCC): Sales

Objective: Compare and contrast common law contracts and the UCC Article 2.

19. UCC rules regarding acceptance of goods and payment regarding installment contracts mandate that

a. acceptance is not made until all shipments are received and then payment is made

b. acceptance is made separately for each shipment; however, payment is not due until the final shipment is received

c. payment must be made in advance and acceptance occurs after all shipments are received

d. acceptance is made separately for each shipment and payment for each shipment is due upon delivery of that shipment

Objective: Analyze the gap filling provisions of UCC Article 2 as they pertain to the essential terms of a contract.

20. If Continental Tires agreed to purchase all of the rubber that a particular Brazilian rubber plantation could produce, this would be

a. an output contract

b. an input contract

c. a requirements contract

d. a necessities contract

Objective: Analyze the gap filling provisions of UCC Article 2 as they pertain to the essential terms of a contract.

21. Which of the following is not true regarding a firm offer?

a. Firm offers automatically occur when an offer or promise is made by one merchant to another.

b. Firm offers do not require consideration for the offer to remain open.

c. Firm offers only occur between merchants.

d. Firm offers must be in writing.

Objective: Analyze the scope and limitations of remedies for contract breaches.

22. If a party has been delivered nonconforming goods and has rejected them, if they are forced to cover in order to maintain business operations, they may sue the seller for

a. the difference in price plus consequential damages

b. only the difference in price

c. the difference in price and only attorneys’ fees

d. nothing; that is the risk of doing business

Objective: Differentiate between implied and express warranties under the UCC Article 2.

23. A manufacturer of cars advertises that the windshield is shatterproof and would not break even when hit with a strong impact. While an owner was driving home one day, a small rock hit the windshield and the windshield broke, cutting the driver. What type of warranty was breached?

a. An implied warranty

b. An express warranty

c. Magnuson-Moss warranty

d. The warranty of fitness for a particular purpose

Objective: Differentiate between implied and express warranties under the UCC Article 2.

24. The source of warranty law is

a. the UCC

b. FTC regulations

c. the Consumer Protection Act (2010)

d. the TILA

Week Five: Ethics

Objective: Discuss ethical decision making and the challenges to business ethics in today’s business environment.

25. That corporations have a social responsibility and that profitability should be secondary reflects

a. the narrow view also known as invisible hand theory

b. the moderate view also known as government's hand theory

c. the hybrid view also known as citizen's hand theory

d. the broad view also known as management's hand theory

Objective: Discuss ethical decision making and the challenges to business ethics in today’s business environment.

26. Harry seeks to implement a policy of enhanced values management in his office. Which of the following is not a direct outcome of values management in the workplace that Harry can directly expect?

a. Managing values in Harry's workplace will legitimize managerial actions.

b. Managing values in Harry's workplace will strengthen the cohesiveness and balance of his organization's culture.

c. Managing values in Harry's workplace will enhance profit and profitability.

d. Managing values in Harry's workplace will cultivate greater sensitivity to the impact of the company's values and messages.

Objective: Identify business activities that may result in criminal liability.

27. Brenda is the CEO of a large corporation. While presenting a proposal to a commercial bank for a corporate loan, she offers the bank's commercial loan manager a $10,000 "gift" for favorable treatment.

a. Brenda is guilty of bribery whether the manager accepts or not because the offer constitutes the crime.

b. Brenda is guilty of bribery only if the manager accepts because the crime has not occurred without acceptance by the other party.

c. Brenda is guilty of bribery because she is dealing with a commercial bank in the normal course of business.

d. Brenda is not guilty of bribery.

Objective: Identify business activities that may result in criminal liability.

28. In U.S. v. LaGrou Distribution Systems, the defendant company suffered from an extremely serious rat infestation. Stewart, the president of LaGrou defended saying he had no specific knowledge of meat contamination, so he was not culpable.

a. Stewart was found guilty because he knew of the rat problem and did not do all that could be done to control the problem.

b. Stewart was found not guilty because he recognized the problem and instructed employees to work daily to control the problem.

c. Stewart was found guilty because even though his subordinates hid the problem from him, they did so in the normal course of business making senior management liable.

d. Stewart was found not guilty because the court recognized that when 20 million pounds of meat are stored in a facility, it is impossible to control rats that target the meat.

Objective: Analyze the implications of the Sarbanes-Oxley Act (2002).

29. Under Sarbanes-Oxley, requiring the payback of corporate bonuses that were awarded and later found to be based on false disclosures is called a __________ provision.

a. whistle-blower

b. blue sky

c. TARP

d. clawback

Objective: Analyze the implications of the Sarbanes-Oxley Act (2002).

30. With regard to financial reporting and corporate governance, which of the following is not required of public companies under the Sarbanes-Oxley Act?

a. With regard to financial reporting, SOX requires that the Chief Executive Officer and Chief Financial Officer personally certify the accuracy of all SEC filings.

b. Certifications by the CEO and CFO must be based on reliable and accurate information through the maintenance of internal fraud detection controls.

c. Corporate governance mandates under SOX require the creation of an independent audit committee of independent directors.

d. An internal audit committee is all that is required under SOX as to corporate governance mandates but use of an independent audit committee is highly recommended.

Answer Key:

1. C

2. A

3. A

4. C

5. D

6. B

7. C

8. A

9. A

10. A

11. A

12. C

13. C

14. D

15. B

16. D

17. D

18. B

19. D

20. A

21. A

22. A

23. B

24. A

25. D

26. C

27. D

28. A

29. D

30. D

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