MGT 325 chapter end questions

The source of law that is foundational in the US legal system is

Constitutional law

“Law is the command of a sovereign” represents what school of legal thought

Positive law

Which of the following kinds of law are most often found in state law rather than federal law?

Torts and contracts

Where was natural law discovered?

In the exercise of human reason

Moore is a state court judge in Colorado. In the case of Cassidy v. Seawell, a contract dispute, there is no Colorado Supreme Court or court of appeals decision that sets forth a rule that could be applied. However, the California case of Zhu v. Patel Enterprises, Inc. is “very close” on the facts and sets forth a rule of law that could be applied to the Cassidy case. What process must Moore follow in considering whether to use the Zhu case as precedent?

Moore may follow the California case if he believes that it offers the best reasoning for a similar case

Milton Friedman would have been most likely to agree to which of the following statements?

The CEO and the board should have a single-minded focus on delivering maximum value to the shareholders of the business

Milton Friedman meant (using the material quoted in this chapter) that companies should

Maximize shareholder wealth by engaging in open competition without fraud or deceit

What are some key drawbacks to utilitarian thinking at the corporate level?

all of the above

Which ethical perspective would allow that under certain circumstances, it might be ethical to lie to a liar

Utilitarianism

Under conscious capitalism

Maximizing profits comes from a focus on higher purposes and harmonizing the interests of various stakeholders.

Which court is most likely to listen to live witnesses

A trial court

Which best describes the role of a mediator?

Helps the parties come together to reach a settlement

Which part of the civil procedure process typically comes first?

Discovery

What illustrates when someone likely does not have standing to sue?

Your neighbor trespasses on another neighbor’s property, you sue

Which is the correct term for the document filed to begin a lawsuit?

Complaint

Peron and Quinn formed P and Q Limited Partnership. Peron made a capital contribution of $20,000 and became a general partner. Quinn made a capital contribution of $10,000 and became a limited partner. At the end of the first year of operation, a third party sued the partnership and both partners in a tort action. What is the potential liability of Peron and Quinn, respectively?

Unlimited and $10,000

A lImited partnershipc

Two of these

Puentes is a limited partner of ABC, LP. He paid $30,000 for his interest and he also loaned the firm $20,000. The firm failed. Upon dissolution and liquidation,

if Puentes holds partnership property as collateral, he can resort to it to satisfy his claim if partnership assets are insufficient to meet creditors’ claims.

One of the advantages to the LLC form over the sub-S form is

the LLC form requires fewer formalities in its operation (minutes, annual meetings, etc.)

The primary means for banning stock offerings that inadequately disclose risks is

the registration requirement

To enforce its prohibition under insider trading, the SEC requires reimbursement to the company of any profits made from selling and buying stock during any six-month period by directors owing

10 percent or more of company stock

Under Rule 10b-5, insiders include

All company employees

The principle that mistakes made by directors on the basis of good-faith judgment can be forgiven

involves both of the above

A director of a corporation owes

Both a duty of loyalty and a duty of care

A corporation in which stock is widely held or available through a national or regional stock exchange is called

a publicly held corporation

Which of the following cannot be protected under patent, copyright, or trademark law?

a one-line book title

Which of the following does not expire by law?

a closely guarded trade secret not released to the public

A sculptor casts a marble statue of a three-winged bird. To protect against copying, the sculptor can obtain which of the following?

A copyright

A stock analyst discovers a new system for increasing the value of a stock portfolio. He may protect against use of his system by other people by securing

None of the above

A company prints up its customer list for use by its sales staff. The cover page carries a notice that says “confidential.” A rival salesman gets a copy of the list. The company can sue to recover the list because the list is

A trade secret

An implied contract

is one inferred from the actions of the parties

The Convention on Contracts for the International Sale of Goods is

a kind of treaty setting out international contract law, to which the United States is a party

Consideration

is a bargained-for act, forbearance, or promise from the promisee

An example of valid consideration is a promise

False

In order for a Court to hear a case, it must have BOTH: (i) Personal Jurisdiction and (ii) Subject Matter Jurisdiction?

True

Which court is most likely to listen to live witnesses?

Trial court

Bellamy, Carlisle, and Davidson formed a general partnership. They each contributed capital in the amounts of $100,000, $100,000, and $200,000, respectively, but then could not agree on a profit-sharing formula.

At the end of the first year, how should they divide their profits?

Bellamy 33.33%; Carlisle 33.33%; and Davidson 33.33%

Bellamy, Carlisle, and Davidson formed a limited partnership. Bellamy and Carlisle were the general partners and Davidson the limited partner. They contributed capital in the amounts of $100,000, $100,000, and $200,000, respectively, but then could not agree on a profit-sharing formula.

At the end of the first year, how should they divide their profits?

Bellamy 25%; Carlisle 25%; and Davidson 50%

Yolanda and Zachary decided to restructure their small bookstore as a limited partnership, called “Y to Z’s Books, LP.”

Under their new arrangement, Yolanda contributed a new infusion of $300; she was named the general partner.

Zachary contributed $300 also, and he was named the limited partner:

Yolanda was to manage the store on Monday, Wednesday, and Friday, and Zachary to manage it on Tuesday, Thursday, and Saturday.

Y to Z Books, LP failed to pay $800 owing to Vendor. Moreover, within a few weeks, Y to Z’s Books became insolvent.

Who is liable for the damages to Vendor?

Both Yolanda and Zachary for 800 debt

Yolanda and Zachary decided to restructure their small bookstore as a Limited Liability Company, called “Y to Z’s Books, LLC”

Under their new arrangement, Yolanda contributed a new infusion of $300; she was named a manager. Zachary contributed $300 also, and he was named a manager: Yolanda was to manage the store on Monday, Wednesday, and Friday, and Zachary to manage it on Tuesday, Thursday, and Saturday.

Y to Z Books, LP failed to pay $800 owing to Vendor. Moreover, within a few weeks, Y to Z’s Books became insolvent.

Who is liable for the damages to Vendor?

Neither are personally liable

A _________________ is a grant from government that gives an inventor the exclusive right to make, use, and sell an invention for a period of twenty years from the date of filing the application

patent

A _________________ is the right to prevent others from using a company’s product name, slogan, or identifying design.

trademark

Google is an example of what type of trademark

fanciful

Advertisements can never constitute legally binding offers?

False

Which of the following identifies the three essential elements generally required to form an enforceable contract?

offer, acceptance, and consideration

Under Article 2 of the Uniform Commercial Code (UCC), which of the following types of contracts are primarily governed by the UCC?

Contracts involving the sale of goodsContracts involving the sale of goods

John hires a landscaping company to install a new lawn in his backyard. Due to a clerical error, the landscaping crew mistakenly installs the lawn in his neighbor Sarah's yard instead.

Sarah, who did not request or agree to pay for the landscaping services, watches the crew install the lawn but says nothing. After the work is completed, Sarah enjoys her new lawn and refuses to pay the landscaping company.

Question: If a court requires Sarah to compensate the landscaping company to prevent unjust enrichment, what legal principle would the court be applying?

Quasi-Contract

Which of the following is not a way to mitigate and manage legal risks, as set forth in Chapter 1 of the reading?

Striving to comply with industry standards

A [______________] school of thought emphasizes that law should be based on a universal moral order.

Natural law

Which school of jurisprudence focuses most heavily on what the law actually says and whether it was properly enacted?

Legal Positivism

[Blank] emphasizes not rules but results.

Deontology

Milton Friedman is often quoted as having said that the only moral duty a corporation has is to make the most possible money, or to maximize profits, for its shareholders.

True

The question of personal jurisdiction is a question of:

fairness and due process to nonresidents