Liberty BMAL 590 Academic Leveling Course – Legal Environment of Business (2015)
Question Section 1 Forms of Business Organizations 1. A ________ is created when two or more persons agree to place their money, labor, or skills in a business and to share the profits and losses. 2. A __________ corporation is owned by a limited number of shareholders. 3. A member of the board who also serves as an officer is a (n) ________ director. 4. The rules that govern the internal operation of a corporation are called the ______ 5. Small corporations can avoid double taxation by electing to be treated as a (n) _____ 6. A ______ is a public officer to all shareholders of a corporation to buy their shares at a stated price, usually higher than the market price. 7. In a ____ merger, the shares in the disappearing corporation are automatically converted into shares in the surviving corporation. 8. In a ______, a stock purchase is financed by debt. 9. A partnership is not automatically dissolved upon a partner’s _____, and the partners holding a majority of the partnership interests may elect to continue the general partnership. 10. The _____ doctrine prevents a third party who acts as if it were doing business with a corporation from later claiming that the corporation is not really a corporation. 11. Which of the following statements is NOT true regarding the advantages and disadvantages of a sole proprietorship? 12. Which of the following statements is NOT true regarding limited partnerships? 13. Which of the following requirements is NOT required by a corporation to qualify for S corporation status? 14. A ______ combines the tax advantages of a pass-through entity with the limited liability advantages of a corporation. 15. The ____ set forth the steps that must be taken to establish a corporation in that state. 16. If incorporators cannot show substantial compliance with statutes regarding incorporation but can show that they were unaware of any defect and acted in good faith, a court may treat the entity as a (n) ______ Section 2 International Laws and Transactions 17. ______ law legal systems primarily rely on case law and precedents. 18. The Seventh Amendment to the U.S. Constitution guarantees the right to a jury trial _____. 19. _______ avoids renegotiation of treaties by allowing the president to negotiate trade agreements and then submit them for an up or down vote by Congress with no amendments permitted. 20. Through the process of _______, a nation that was NOT an original party to a treaty can elect to participate in a treaty at a later time. 21. _____ is the process by which a country asserts a right to regulate activities that occur beyond its borders. 22. _____ Tariffs require the importer to pay a percentage of the value of the imported merchandise. 23. Exports are controlled by means of export _____ 24. A product is _____ when it is sold abroad below the current selling price in the exporter’s home market or below the exporter’s cost of production. 25. _____ is the principal U.S. statute addressing unfair foreign practices affecting U.S. exports of goods or services. 26. The North American Free Trade Agreement provides for elimination of barriers to trade between what countries? 27. A _____ is created when a group of states reduce or eliminate tariffs between themselves but maintain their own individual tariffs as to other states. 28. Courts apply the principles of _____ to determine which country’s laws should be used to interpret an international contract. 29. A contract dispute which is heard by a court without reference to a prior arbitration is known as a (n) ____ review. 30. Under the principle of _____, a court will enforce another country’s judgments under certain conditions. 31. _____ is a process used mainly in the area of public international law whereby a third party, often a disinterested government brings the parties together by establishing communication and providing a site where the parties can meet, often in secret. Section 3 Contracts 32. _____ damages compensate a party for losses that occur as a foreseeable result of the breach. 33. Contract law comes from which of the following? 34. Which of the following is not one of the basic elements for formation of a valid contract? 35. Which of the following is true regarding acceptance? 36. A _____ contract is a promise given in exchange for another promise. 37. A third-party beneficiary is someone who is not. 38. An agreement between two parties that provides that the seller will sell all of a product that he produces to the buyer is called a (n) 39. Under traditional common law, the acceptance must be the _____ of the offer. 40. Under the doctrine of _____, a court may invalidate an agreement if one party had sufficient influence and power over the other as to make genuine assent impossible. 41. Which of the following does not generally make a contract voidable? 42. A (n) _____ is any agreement to accept performance that is different from what is called for in the contract 43. Which of the following is true regarding a mistake of judgment? 44. Which of the following is a doctrine that may excuse the government from performance on a contract due to legislative or executive acts? 45. Under the doctrine of _____, a court may order restitution if one party has received a benefit for which it has not paid when there was not contract between the parties. Section 4 Sales, Licensing, and E-Commerce 46. To which of the following does article 2 of the UCC apply? 47. What are items of personal property that are attached to real property and cannot be removed without substantial damage called? 48. Under the UCC, which statement is not true regarding a buyer’s right to reject nonconforming goods? 49. Under the UCC, a failure to perform is excused under the doctrine of 50. Under the Convention on Contracts for thee International Sale of Goods (CISG), an offer becomes effective when 51. Under the UCC statute of frauds, which of the following terms must be in a writing order to satisfy the statute? 52. Which of the following statements best describes an offer under the UCC? 53. Which of the following is governed by Article 2 of the UCC? 54. UCC Section 2-319 expressly authorizes the buyer and seller to allocate the risk of ___ between them as they see fit. 55. When the seller provides the buyer with a document enabling it to pick up goods held at an independent warehouse, the risk of loss passes to the buyer 56. A contract is _____ if its terms are unduly harsh or oppressive or unreasonable favorable to one side. 57. Which of the following is an example of a statement made by a salesperson that would be considered “puffing”? 58. If all parties are merchants, additional provisions in an acceptance automatically become part of the contract unless 59. Which of the following will not allow a consumer to recover under a breach of warranty? 60. If a buyer wrongfully cancels a contract under the UCC, the seller may not recover 61. ______do not relieve a contracting party from their responsibilities under the UCC doctrine of commercial impracticability. 62. A (n) _____ contract occurs when one party is induced to enter a contract on a “take it or leave it” basis. 63. Which of the following is not true under Magnuson-Moss Warranty Act? Section 5 Product Liability 64. Which of the following is not a rationale of strict product liability? 65. Which of the following is true regarding the Restatement (Third) of Torts?. 66. A product that was sold without a component part properly fastened to the product is an example of a ______ defect. 67. If a product is unavoidably unsafe, the _____ determines whether the dangerous product is also defective. 68. Which of the following restricts the statute of limitations as a defense in a product liability lawsuit? 69. Which of the following is true regarding defenses in a products liability action? 70. Under the doctrine of _____, when a person voluntarily and unreasonably assumes the risk of a known danger, the manufacturer is not liable for any resulting injury. 71. Under the doctrine of ______, the plaintiff’s damages in a strict liability action may be reduced by the degree to which his or her own negligence contributed to the injury. 72. Under the rule applied in most states, which of the following justifies holding an acquiring corporation liable to a party injured by a defect in a product sold by the acquired corporation? 73. To prove ____ in a product liability case, the injured party must show that the defendant did not use reasonable care in the design or manufacture of its product. 74. The preemption of defense involves certain _____, which set minimum safety standards for products. 75. A statute of _____ prevents recovery for product injuries by limiting the time period for recovery from the date when the injury occurred. 76. On a failure to warn claim, adequate warnings and instructions for a product’s safe use can shield a manufacturer from liability for a 77. When multiple manufacturers of identical products are sued in product liability, some courts apportion liability under the ______ doctrine. 78. Which of the following members of the chain of distribution cannot be strictly liable in a products lawsuit? 79. The _____ defense shields a manufacturer from liability for a detective design if no safer product design is generally recognized as being possible. 80. The government-contractor defense to product liability will not apply if the