1) The form of alternative dispute resolution wherein the parties hire someone to review the evidence and make a decision that is binding upon the
parties is called
A. negotiation
B. settlement conference
C. conciliation
D. arbitration
2) The Federal Trade Commission is an example of
A. a federal agency created by the federal government
B. a corporation subsidized by the federal government
C. a branch of the U.S. Supreme Court
D. a temporary commission created by executive order that has become permanent
3) A corporation is considered a citizen of what state?
A. The state where the majority of the employees live
B. It is not a citizen because it is a business
C. The state where it filed its Articles of Incorporation
D. The state where the president of the corporation lives
4) The Federal False Claims Act is also known as
A. the Sarbanes-Oxley Act
B. the Whistleblower Statute
C. the Statute of Frauds
D. the Statute of Limitations
5) Utilitarianism is a moral theory, which states
A. ethics requires a decision-maker to take actions which result in the greatest good to society
B. ethics requires following the Golden Rule (do unto others as you would have them do unto you)
C. ethics requires actions which use the most efficient tools
D. ethics requires acting according to the Bible or some outside source
6) Which of the following statements is true?
A. If something is legal, it is always ethical.
B. Practices that are legal in the United States are legal everywhere in the world.
C. Practices that are ethical in the United States are considered ethical everywhere else in the world.
D. A course of action can be legal but not ethical.
7) If a defendant files a motion for summary judgment in a civil case, what is the defendant saying?
A. That the plaintiff’s claims are false
B. That the court has no jurisdiction to decide the case
C. That the case is ready to go to the jury
D. That even if what the plaintiff says is true, there is no basis for judgment against the defendant
8) A defendant fails to answer a civil lawsuit, what is likely to happen?
A. A court will contact the defendant and ask him to answer the lawsuit.
B. The court will grant a default judgment against the defendant.
C. The case will be appealed before the court makes a ruling.
D. The court will order that the defendant go to jail until he or she agrees to answer.
9) The legal authority of a court to make orders that are binding upon the parties is called
A. in rem jurisdiction
B. personal jurisdiction
C. quasi in rem jurisdiction
D. enumerated jurisdiction
10) Harry Hoosier, an Indiana resident, drives his family to Florida for spring vacation. When he is at a red light, Freddie Floridian, a Florida
resident, is unable to stop in time and his vehicle impacts Harry’s car from the rear. No one is hurt and Harry’s vehicle suffers approximately
$10,000 in damages. Which is correct?
A. Harry can sue Freddie in federal court in Florida but not in Indiana.
B. Harry can sue Freddie in state court in Florida or Indiana.
C. Harry can sue Freddie in state court but not federal court in Florida but not in Indiana.
D. Harry can sue Freddie in state court but not federal court in Florida or Indiana.
11) Monica owed Bob $500 for a business investment, which was more than a year overdue. Bob got drunk at a party and told everyone that Monica
had owed him $500 for over a year. Can Monica recover from Bob for defamation?
A. Yes, because Bob abused his conditional privilege.
B. No, because Bob was telling the truth.
C. Yes, because Bob communicated the statement to third persons.
D. No, because Bob had been drinking.
12) What is the definition of a tort?
A. Any violation of an ethical duty
B. Any crime or misdemeanor
C. Any action done in violation of a prior agreement, which allows the victim to recover damages
D. Any civil wrong that allows the injured person to recover damages
13) Pete and Vicky make the following agreement: Pete promises he will go into a store, buy something for $5, and pay for it with a $100 bill on
which he has written “Happy Birthday Vicky!” Vicky promises that after Pete collects his change and leaves the store, she will go into the same
store, buy something that costs $5, and pay with a $10 bill. When the clerk attempts to give her change for $10, Vicky will claim that the $100 bill
that is in the cash register was money she just received for her birthday, and will demand change from a $100 bill. Then Pete and Vicky will split the
extra money they think Vicky will receive in change. Is this a valid contract?
A. This is a valid contract. There was a promise in exchange for a promise, and both parties got what they wanted.
B. This is a void contract, because the parties agreed to commit fraud.
C. This is a voidable contract because Vicky can change her mind.
D. This is not an enforceable contract because the agreement is not in writing.
14) An easement can be defined as
A. a limited right to use another person’s land for a specified purpose
B. a relaxation of the borderlines between two parcels of land
C. a life estate in the property of another
D. an option to purchase the land of another
15) Huey, Dewey, and Louie own a building as tenants in common. Huey lives in the building. Without consulting the other two owners, Dewey deeds
his interest in the building to Joe. What will be the outcome of this situation?
A. Huey, Louie, and now Joe will own the property as tenants in common.
B. Huey and Louie will still own the property as tenants in common, but Joe will have a reversionary interest.
C. The transfer of the interest to Joe will be ineffective because the other two did not consent.
D. Joe will make Huey pay rent.
16) Which of the following best describes the benefits of a limited liability company (LLC)?
A. LLC managers are not personally liable for debts, obligations, and liabilities of the LLC.
B. LLCs have limited duration.
C. Documents do not have to be filed with the state to create an LLC.
D. LLCs are automatically taxed like corporations.
17) Which of the following is true when a general partnership is converted to an LLC?
A. The property must be sold to a third party who then immediately sells it to the LLC.
B. The conversion can be made retroactive for up to 2 years.
C. The profit and loss sharing terms must remain the same as they were in the partnership.
D. The general partners will retain unlimited personal liability for obligations incurred while the business was a partnership.
18) In the Northeast Ethanol, LLC case, the court pierced the defendant's corporate veil after determining that
A. the plaintiffs could not find financing to build the ethanol plant
B. the defendant's shareholder used the corporation to perpetrate fraud
C. the ethanol plant was an unwise investment, against the best interest of the parties
D. the plaintiff's corporate directors were engaging in ultra vires activities
19) Which comment best describes the alter-ego doctrine in corporate law?
A. A corporation automatically becomes the alter ego of its shareholders
B. The president is the sole decision maker of a corporation
C. The board of directors is the alter ego of a corporation
D. Protection from personal shareholder liability can be forfeited if corporate formalities are not observed
20) If a corporation is properly incorporated in one state and wants authority to do business in second state, the corporation typically must
A. re-incorporate in the second state
B. do nothing because being incorporated in one state automatically entitles the corporation to do business in all states
C. register with the Interstate Commerce Commission as an alien corporation
D. obtain a certificate of authority from the second state
21) The DEF Corporation is incorporated in Texas. It wishes to do business in Oklahoma. Before DEF can legally do businesses in Oklahoma, which
of the following must it do?
A. Nothing; DEF automatically has constitutional rights to do business in Oklahoma.
B. DEF must incorporate in Oklahoma.
C. DEF must qualify (register) to do business in Oklahoma.
D. DEF must domicile itself in Oklahoma.
22) What types of business can be converted to an LLC?
A. General partnerships only
B. General partnerships and limited partnerships only
C. Corporations and limited partnerships only
D. Corporations, general partnerships, and limited partnerships
23) Which of the following best describes the status of the employment at-will doctrine in the United States today?
A. It applies in most states to most employment relationships, but there are many exceptions that limit its application.
B. It applies more today than in the last century, and the quantity of corporate layoffs is evidence of this.
C. It today applies only to the employer, although in the past it applied to both the employee and employer.
D. It still applies today, but only to employees who are expressly told that they are an at-will employee when they are hired.
24) Which of the following rejected applicants may have a valid claim for discriminatory hiring practices?
A. A public health service did not hire a registered nurse because his shaking hands prevented him from administering injections.
B. A Catholic school did not hire a teacher because he was not Catholic.
C. A trucking company did not hire a truck driver because she was pregnant.
D. A university did not hire a 22-year-old woman to be a director of faculty because she was too young.
25) Which of the following people is protected from employment discrimination on the basis of age?
A. A 90-year-old person who wants a job as an airline pilot
B. A 50-year-old person who wants a job as an accountant
C. A 30-year-old person who wants a job as a waitress
D. A 10-year-old person who wants a job as a bartender
26) Marie works as a receptionist for a plumbing company. She works from 9 a.m. to 6 p.m. Monday through Friday. She earns $12 per hour, and is
told how to do her job and what she should be working on at any particular time. Her boss does not withhold any taxes from her paycheck. Which of
the following is true?
A. Marie would be treated as an employee because she is paid for the work that she does.
B. Marie would be treated as an employee because of the control exercised by the plumbing company over her work.
C. Marie would be treated as an independent contractor because she is paid hourly.
D. Marie would be treated as an independent contractor because the employer doesn’t take any taxes out of her check.
27) Company employee handbooks have been found in some cases to amount to a(n) ______________ exception to the employment at will doctrine.
A. apparent
B. tort
C. public policy
D. implied contract
28) Which of the following is a correct statement of the requirements for a Bona Fide Occupational Qualification (BFOQ)?
A. The occupational qualification is job-related and cost-effective.
B. The occupational qualification is job-related and nondiscriminatory.
C. The occupational qualification is job-related and is a business necessity.
D. The occupational qualification is rationally based and evenly applied.
29) What federal legal protection is there with respect to trade secrets?
A. Trade secrets are protected under the federal patent laws.
B. Trade secrets are protected under the federal copyright laws.
C. Trade secrets are protected under the Trade Secret Protection Act of 1952.
D. Trade secrets are protected under the Economic Espionage Act of 1996.
30) Which of the following is true about misappropriation of trade secrets?
A. Although it is not necessary that the trade secret be patented, the secret must be such that it could be patented.
B. Trade secrets are always protected regardless of the actions of the trade secret owner.
C. The plaintiff can recover damages from theft of a trade secret only if the defendant acquired the trade secret through unlawful means.
D. Injunctions are generally not available to protect trade secrets.