ETH321Week 3 Chapter QuestionsStudent _______________________.docx
- 1. ETH/321 Week 3 Chapter Questions Student ______________________________ Chapter 8 1. Contracts are: ___A. legally enforceable promises. ___B. always required to be written. ___C. a form of a circular. ___D. enforceable only in the supreme court. ___E. informal agreements. 2. A(n) _____ is an agreement containing mutual promises. ___A. unilateral contract ___B. quasi-contract ___C. express-in-fact contract ___D.
- 2. bilateral contract ___E. implied-in-fact contract 3. The courts enforce the concept of _____ to remedy situations of unjust enrichment. ___A. illusory contracts ___B. implied-in-law (quasi) contracts ( ___C. divisible contracts ___D. bilateral contracts ___E. unilateral contracts 4. The ultimate purpose of a contract is the creation of an agreement that courts will order parties to perform or to pay consequences for the failure of performance. When courts uphold the validity of such promises, the resulting agreement is a(n) "_____ contract." ___A. absolute ___B. differentiated ___C.
- 3. void ___D. relative ___E. enforceable 5. A(n) _____ contract is an agreement when one party has the right to withdraw from the promise made without incurring any legal liability. ___A. executory ___B. voidable ___C. void ___D. implied-in-fact ___E. reciprocal 6. According to the mirror image rule, _____. ___A. the acceptance must exactly match the offer ___B. to be enforceable, a contract must be accepted in writing by both the parties involved
- 4. ___C. the acceptance of an offer involves changing the terms of offer or adding new terms ___D. terms of contract must be definite to be clear and enforceable ___E. the contract becomes enforceable by performing a requested act, not by making a promise 7. Valid consideration can include any promise to do something one has no obligation to do, refrain from doing something one has the right to do, or in the case of a unilateral contract, a performance when there is no obligation to do so. This is called as a(n) _____. ___A. accord ___B. legal detriment ___C. release ___D. negotiation ___E. promissory estoppel
- 5. 8. An important exception to the rule requiring consideration to support a promise is the doctrine of _____. This doctrine arises when a promisee justifiably relies on a promisor's promise to his or her economic injury. ___A. firm offer ___B. consideration ___C. termination ___D. promissory estoppel ___E. accord and satisfaction 9. Which of the following terms refers to a person's ability to be bound by a contract? ___A. Legality ___B. Capacity ___C.
- 6. Usability ___D. Negotiability ___E. Measurability 10. Which of the following involves an intentional misstatement of a material fact that induces one to rely justifiably to his or her injury? ___A. Duress ___B. Misrepresentation ___C. Undue influence ___D. Mutual mistake ___E. Fraud Chapter 9 11. Which of the following is true in cases where only one party drafts the contracts, which contain terms that appear vague and ambiguous to the other party? ___A. The court will give the terms the meaning as per trade usage. ___B.
- 7. The court will reject the non-drafting party's attempt to reinterpret the terms after the contract has been signed. ___C. The court will declare the drafting party's behavior as a tort due to intentional ambiguity of terms. ___D. The court will interpret the terms as they mean in the common language. ___E. The court will interpret the ambiguous and vague terms against the party that drafts them. 12. Which of the following states that parties to a written contract may not introduce oral evidence to change written terms? ___A. The statute of frauds ___B. Concurrent conditions ___C. The parol evidence rule ___D. Conditions subsequent ___E. Conditions precedent 13. Most of our everyday purchases involve:
- 8. ___A. implied concurrent conditions. ___B. express conditions precedent. ___C. express conditions subsequent. ___D. implied conditions precedent. ___E. implied conditions subsequent 14. _____ are court-awarded damages to put the plaintiff in the same position as if the contract had been performed. ___A. Nominal damages ___B. Consequential damages ___C. Liquidated damages ___D. Compensatory damages ___E. Specific damages 15. Which of the following is true of liquidated damages? ___A.
- 9. A small amount is awarded by the court to the plaintiff for a breach of contract which causes no financial injury to the plaintiff. ___B. Damages awarded by the court arising from unusual losses, which the parties knew would result from breach of contract. ___C. Damages awarded by the court to put the plaintiff in the same position as if the contract had been performed. ___D. Damages specified in the contract, where real damages for breach of contract are likely to be uncertain. ___E. Courts will enforce these "liquidated" damages to penalize the defendant. 16. The purposeful reduction of damages, usually the responsibility of the nonbreaching party, is known as _____. ___A. mitigation ___B. negotiation ___C. waiver ___D. release ___E.
- 10. novation 17. Principals hire _____ to do tasks and represent them in transactions. ___A. contractors ___B. agents ___C. third parties ___D. organizations ___E. suppliers 18. _____ can be inferred from the acts of an agent who holds a position of authority or who had actual authority in the previous situation. ___A. Principal authority ___B. Legal authority ___C. Situational authority
- 11. ___D. Implied authority ___E. Apparent authority 19. _____ occurs when a principal voluntarily decides to honor an agreement, which otherwise would not be binding due to an agent's lack of authority. ___A. Novation ___B. Ratification ___C. Negotiation ___D. Release ___E. Waiver 20. An agent who causes harm to a third party may create legal liability owed by the principal to the third party. This liability is known as: ___A. product liability ___B. contractual liability ___C.
- 12. principal liability ___D. professional liability ___E. vicarious liability Chapter 14 21. "Creation" means: ___A. the legal steps required to form a particular business organization. ___B. the concept of a business. ___C. the intent to create a business. ___D. a paradigm shift in a business. ___E. the relation of the organization's existence to its owners. 22. In a(n) _____, the shareholders are taxed only on income distributed. ___A. limited partnership ___B.
- 13. corporation ___C. Limited liability company ___D. sole proprietorship ___E. S corporation 23. When one person, or a very few persons, own all the shares of stock in a corporation, it is considered a _____ organization. ___A. publicly held ___B. narrowly held ___C. closely held ___D. tightly held ___E. minority held 24. When a court finds that the shareholders of a corporation are using the corporate structure to shield themselves from liability when acting for purely personal purposes, the court may disregard the corporate structure and impose personal liability on the shareholders treating them like partners. This is called:
- 14. ___A. cracking the corporate shell. ___B. piercing the corporate veil. ___C. breaking the corporate shield. ___D. breaching the corporate defense. ___E. rupturing the corporate law. 25. If a corporate entity is disregarded by officers or directors so that there is such a unity of ownership and interest that separateness of the corporation has ceased to exist, the corporate veil may be pierced based on the: ___A. alter-ego theory. ___B. negligent conduct theory. ___C. corporate confusion theory. ___D. corporate envelopment theory.
- 15. ___E. corporate doppelganger theory. 26. Which of the following is a taxable entity? ___A. A partnership ___B. An S corporation ___C. A limited liability company ___D. A corporation ___E. A sole proprietorship 27. Which of the following is an activity that a limited partner may NOT engage in? ___A. Acting as an agent of the partnership ___B. Approving an amendment to the partnerships' certificate ___C. Participating in management ___D. Inspecting any of the partnership's financial records
- 16. ___E. Advising or consulting with a general partner 28. Which of the following is true about an S corporation? ___A. It has the same legal characteristics as any other corporation except for the issue of taxation. ___B. It is the official designation for a corporation with 500 or less employees. ___C. It is the same as any other corporation except for management participation by stockholders. ___D. It is exactly the same as any other corporation. ___E. It need not file an information return with the IRS since it does not pay any taxes. 29. An LLC is created through filing the _____ with a state official, usually the secretary of state. ___A. articles of confederation ___B. articles of incorporation
- 17. ___C. articles of organization ___D. articles of association ___E. articles of integration 30. The owners of LLCs are called: ___A. shareholders. ___B. partners. ___C. proprietors. ___D. members. ___E. directors. 8 ETH/321 Instructions for Week 3 Learning Team Paper Due Date/Time: Monday June 13, 2016 at 6:00 p.m. Facts: Mary Victim and her husband, Joe Victim, were going on vacation and decided to take Mary’s younger sister, Patty Plaintiff, along with them. Patty is legally blind and was
- 18. accompanied by her seeing-eye dog, Fido. They were all registered guests at the Big Chain Hotel (BCH) in Vacationville USA. Vacationville USA has a leash law that prohibited dogs from roaming unleashed. When they checked in, they informed the desk clerk that they were accompanied by Patty's dog. The BCH advertised in its brochure that pets were welcome. Donnie Defendant was also registered at the hotel as a guest when they checked in. Donnie was accompanied by his two dogs, a mixed- breed shepherd and a mixed-breed pit bull. Shortly after they checked in, Mary took her sister's dog for a walk in a designated area on the BCH grounds. At the same time, Donnie approached the walking area with his two dogs, neither of which was leashed. Donnie's pit bull attacked Fido, who lay passive on the ground during the attack in accordance with her training. Mary attempted to separate the dogs but was unsuccessful and was bitten by the pit bull for her efforts. Patty heard the attack, opened the hotel room door, and, upon realizing what was happening, called to Joe. Joe then rushed from the hotel room to help his wife and was also bitten by Donnie's dog. Joe was able to drag his wife and Fido to safety after an unknown patron from an adjacent room threw water on the dogs. In the process of the attack, Patty was slammed against the door jamb of the room and was injured. Animal control and 911 were summoned. Mary, Joe, and Patty were taken to the hospital, where they were treated, while Fido was treated by a local veterinarian. In addition to their injuries, the attack also destroyed Fido's utility as a seeing-eye dog due to her newly-developed fear of other dogs. BCH did not take any action or precautions to lessen the risk, or protect it guests from the risk, that dogs that are unaccustomed to each other, if unrestrained, could attack other dogs. BCH did not establish any rules that would require its guests to control their animals. It made no inquiry of its guests as to the propensity of the animals. It had no requirement that animals
- 19. walked on the premises be leashed nor did it post notices in the rooms advising guests of the danger that animals might be running around loose on the premises. Questions: 1. What damages, if any, may Mary, Joe, and/or Patty recover from BCH? 2. What damages, if any, may Mary, Joe, and/or Patty recover from Donnie? 1