The Legal Environment of Business: Quiz 3 (2014 Fall D Term 6)

The Legal Environment of Business: A Managerial Approach: Theory to PracticeMelvin, 2nd ed.Quiz 3 (2014 Fall D Term 6)1.Bill is a technician at a university chemistry lab and is in charge of safety inspections and prevention of injury due to faulty equipment. One morning, as a result of his inspection, Bill discovers a gas burner with a broken valve. Bill gets distracted and fails to put an “OUT OF ORDER/DO NOT USE” sign on the faulty burner. When the morning class arrives, Halle uses the faulty burner and is burned when it catches fire. Bill’s negligence is based on: nonfeasance.misfeasance.negligence per se.res ipsa loquitur.2.A person cannot be guilty of negligence if he or she has no duty owed to the plaintiff. TrueFalse3.Jessica was caught shoplifting at a department store both by employees who witnessed the act and by cameras in the store. The store’s management may hold her as long as it takes to get her to confess.True False4.The highest and most comprehensive duty owed by a landowner to a person on the owner’s property is owed to:an invitee. a licensee.an accidental trespasser.an intentional trespasser.5.The point at which liability for negligence stops is called: proximate cause.negligence per se.res ipsa loquitur.negligence interruptus.6.The Happy Days Day Care is hiring a child care worker. On the employment application Happy Days specifically asks if the applicant has ever been arrested. Tina applies for a job at Happy Days and answers no to that question. She also answers no to the question that asks if there is any reason that she would not be qualified to work with children. Soon after Tina is hired, she severely shakes a baby to stop it from crying, causing the baby injuries. It is discovered at trial that Tina has been fired from numerous day cares for baby shaking and various other offenses. If the baby’s parents sue Happy Days:Happy Days is not liable because it made a good faith effort to screen applicants and because it specifically asked about past indiscretions.Happy Days is liable because Tina was dealing not with the public but only with children. Happy Days is liable for negligent hiring.Happy Days is liable for negligent retention.7.Your professor is a partially disclosed agent representing your school.True False8.The centerpiece of a fiduciary relationship is the agent’s duty to act with due care when performing the responsibilities of the agency.True False9.Jethro is having a sweet-16 birthday party for his daughter Kate in his backyard. To make the party special, he hires Tony to put on a fireworks display. He found Tony through a classified ad in the local newspaper. In the written contract, Jethro simply instructs Tony to begin the display at 8 p.m., make it last 16 minutes, and make it spectacular; no safety parameters are mentioned or discussed. During the finale, one of the rockets malfunctions and explodes amid the party guests, injuring eight people. Jethro has no liability because Tony was an independent contractor.True False10.An agent may work for two principals at the same time if the agent deals fairly with both.True False11.Once the union organizers obtain authorization cards from at least ________ of the members of a bargaining unit, an election will be scheduled by the NLRB.20 percent25 percent 30 percent35 percent12.Employees making complaints to the Occupational Safety and Health Administration are protected under the Occupational Safety and Health Act’s whistle-blowing provisions. TrueFalse13.Employers are not required to offer their employees health care benefits. TrueFalse14.Under the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act, individuals not covered under a health care plan by 2014 are required to purchase a plan through a health care exchange. TrueFalse15.Leah is a first-year elementary school teacher at a private religious school. The parents and kids love her, and she gets along with everyone. One month after starting, she’s called into the headmaster’s office and handed an envelope containing spring-break college photos of her topless, guzzling beer and alcohol, while sitting in various men’s laps. The headmaster informs her that she is terminated immediately and that she must clean out her desk and remove all personal belongings by the end of the day. She demands to know where the headmaster got these photos, and he tells her that the school monitors social networking sites. These pictures had been posted to a site she no longer uses and had forgotten about. She will be successful if she sues for wrongful termination based on invasion of privacy.True False16.In PGA Tour Inc., v. Martin, Martin was a golfer who sought accommodation, under the Americans with Disabilities Act, for a recognized disability that caused pain due to restricted blood flow between his legs and heart. He asked to use a cart, which would permit him to play full rounds of golf. The PGA responded that its rules prohibited carts during tournament play and that allowing cart use would fundamentally change the game. The court determined that: Martin should be allowed to use the cart because it provides him with little or no advantage under the circumstances and such an accommodation is not unreasonable and does not fundamentally change the game.Martin should be allowed to use the cart because carts are used at country clubs where strict rules of golf are required, so the PGA ban is arbitrary and discriminatory.Martin should not be allowed to use the cart because having one player using a cart and banning all others discriminates against the other players.Martin should not be allowed to use the cart because there are other accommodations offered by the PGA that are reasonable and Martin has no right to reject them.17.Jon and Amy work for Dover Farm and Home Company. Jon and Amy are caught one day stealing a tractor. The next day, Jon was given a verbal warning and Amy was terminated. Amy has a claim for discrimination based on gender discrimination.If the company has a written policy providing for termination for theft, Amy does not have a claim for discrimination based on gender discrimination.Amy does not have a claim for discrimination based on gender discrimination if Jon has more seniority.Amy does not have a claim for gender discrimination if she is paid more than Jon.18.The Equal Pay Act was written to prohibit racial discrimination in pay.True False19.An employee has filed a claim of discrimination with the EEOC. If the EEOC investigates and determines that it will not follow through with a lawsuit representing the employee, the employee has no recourse and cannot file a private lawsuit.True False20.Your school’s football coach has just been fired. When the athletic director informs him of the termination, he tells the coach that although he has had recent winning seasons, the inability to make it into postseason play and his inability to groom players for the pros has weighed prominently in the decision. The coach is also told that his recruiting has not been effective and that his fund-raising has been disappointing. The AD then tells him that his pretty-boy image makes him look too effeminate, he dresses like a nerd, and he doesn’t portray the proper image of a head football coach desired by the school. The coach’s best theory for pursuing a discrimination lawsuit is: disparate treatment discrimination.mixed motives discrimination.disparate impact discrimination.pretextual discrimination.21.Lisa and Tara are operating a business as a general partnership without an express partnership agreement. Should a dispute arise, the courts will look to ________ to resolve the issue regarding operation of the partnership.common lawstate contract law the Revised Uniform Partnership Actfederal contract law22.Mike is a limited partner in Big Blue, LP. The partnership agreement permits him to have a say in the removal of general partners and the blocking of new partners. This agreement will jeopardize his limited partner status.True False23.Which of the following does not require the filing of a form with a government agency to come into existence? a general partnershipa limited liability companya corporationa limited partnership24.Frank and Jesse are operating as a general partnership. A question has arisen that is not covered under their partnership agreement and also not addressed by the Revised Uniform Partnership Act. What will the courts do to resolve the situation?dissolve the partnership and allow them to reformlook to foreign partnership laws because the RUPA encompasses all U.S. partnership law look to common lawlook to the UCC for a gap filler25.Principals generally have no personal liability for the business entity’s debts regarding:limited partnerships.limited liability partnerships. corporations.limited liability companies.26.Some states recognize LLCs but do not permit partnership taxation at the state level. TrueFalse27.LLPs are formed with the filing of ________ with the proper public official.a statement of qualification a certificate of formation: LLPa record of business creationarticles of organization28.The ability to distribute earnings without incurring double-level taxation is an advantage of a:pass-through entity.corporate tax structure. member-managed LLC.manager-managed LLC.29.An LLC is required to name a member as its registered agent and may not use a commercial registered office provider.True False30.The origins of LLPs were rooted in protection of:private service firm partnerships.private service firm sole proprietorships. professional service firm partnerships.professional service firm sole proprietorships.31.An insurance company cannot qualify for Subchapter S corporate status. TrueFalse32.A corporation exists as an independent person separate from its principals. TrueFalse33.A new start-up corporation has gone to a bank for a commercial loan. Recognizing the start-up status of the business and the limited assets the corporation currently possesses, the bank, to protect its interests, may require that either collateral be pledged or a personal guarantee be signed by shareholders but may not require both.True False34.The Revised Model Business Corporation Act provides that a self-dealing transaction is not a breach of the duty of loyalty if a majority of disinterested parties approve the transaction after disclosure of the conflict. TrueFalse35.Corporate bondholders are creditors of the corporation but are not shareholders. TrueFalse36.Assumption of risk by the investor is a defense available for allegations of 33 Act violations. TrueFalse37.The primary market consists of securities sales in public markets, while the secondary market consists of security sales in private placements.True False38.One form of private placement exemption involves sales of securities:in limited dollar amounts to nonaccredited investors.only to employees, officers, and board members of the issuing corporation. to accredited investors.to other corporations, with no sales to individuals permitted.39.Public corporation disclosures and filings are made available to the general public. TrueFalse40.The SEC maintains ________ regional offices, throughout the United States, where much of its day-to-day work is done.8 111321