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Which of the following is not true regarding common law?

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Which of the following is not true regarding common law?

a)The common law of the United States originally came from England.

b) Judges must strictly follow precedent in all cases.

c) A drawback of common law is that legal decisions may be followed after they have become outdated or no longer relevant.

d) Common law is called common law because judges in England were intended to apply laws similarly is all jurisdictions, thereby making the law common to all.

Which of the following is a false statement?

a) Essentially, corporate income is taxed twice when it is distributed to shareholders as dividends under U.S. tax and business laws.

b) A limited liability company (LLC) limits the liability of its members in the United States for business debts.

c) A general partnership for liability purposes is not usually considered a legal entity apart from its owners under U.S. laws.

d) Agreements to form a partnership always must be written under U.S. laws since there could be disagreements between partners otherwise.

What is a FALSE statement regarding monopolization analysis pursuant to Section 2 of the Sherman Act?

a. One generally cannot be guilty of or liable for monopolization without having a monopoly first.
b. One can have a monopoly but not have monopoly power and thus not be a monopolizing company.
c. All monopolies are illegal since they are inherently unfair to consumers.
d. Wrongful conduct by a monopoly to establish the legal wrong of monopolization includes illegal AND unethical, predatory, or abusive conduct (which is not necessarily illegal).

Excel Corporation agrees to sell the latest version of its Go! computer game to National Retail Company. Excel delivers an outdated version of Go! (nonconforming goods). National's possible remedies may include

a) recovering damages only.
b) rejecting part or all of the goods, or revoking acceptance only.
c) recovering damages, rejecting goods, or revoking acceptance.
d) none of the above.

The Uniform Commercial Code is

a) A state law governing commerce
b) A federal law governing commerce
c) An international law governing commerce
d) A model act

Which of the following best describes the overall scheme of pollution regulation in the United States?

Exclusively federal law.

Exclusively state law with minimal federal oversight.

Exclusively state law, but with considerable federal oversight.

Primarily federal law, but considerable state law as well.

If an important contract term is ambiguous, the contract under the common law is

Probably illegal as against public policy

Probably enforceable

Probably unconscionable

Probably unenforceable

335. Which of the following statements is not correct?

Generally, a state court can exercise jurisdiction over a nonresident by showing that he or she had sufficient contacts with the state.

A lawsuit involving a federal question can originate in a federal court in the United States.

The United States Supreme Court has automatic appellate authority over all cases decided in the state courts.

An answer to a lawsuit can admit to allegations made in a complaint in the U.S. civil law system.

Which is FALSE regarding a traditional business partnership pursuant to the Uniform Partnership Act?

a. Absent an agreement partnership profits are shared equally by the partners regardless of any individual's partner contribution, knowledge, skills, and/or efforts.
b. Absent an agreement partners are not entitled to any salary or remuneration for acting in the partnership business.
c. Partners are regarded as agents of the partnership when acting in the partnership business.
d. The dissolution of a partnership will always lead to a winding-up, liquidation, and termination of the partnership.

The requirement(s) of a valid offer in contract law is(are) the following:

a. The manifestation of a definite intent to enter into a contract by the offeror and the communication of this intent to the offeree
b. Reasonable definitiveness in the terms of the offer
c. Serious intent on the part of the offeror as determined by the "reasonable person" test
d. All of the above.

Which of the following is a true statement?

Building contractors and subcontractors are usually not independent contractors.

An agency relationship can be formed only in a witnessed and signed writing since it is a high-level business relationship.

There generally does not need to be a written agreement between the principal and agent in order to create an agency relationship.

An agent does not owe to his or her principal a duty to act in good faith.

Pat and Don submit their dispute to binding arbitration. A court can set aside the arbitrator's award if

Don is not satisfied with the award.

Pat is not satisfied with the award.

the award involves at least $75,000.

the award violates public policy or if bad faith was involved.

Gamma Company and Omega Corporation enter into an oral contract for the sale of a warehouse. Before Omega takes possession, this contract is enforceable by

Gamma only.

Gamma or Omega.

neither Gamma nor Omega.

Omega only.

Alpha Inc., a U.S. firm, signs a contract with Beta, Ltd., a Russian company, to give Beta the right to sell Alpha's products in Russia. This is usually known as:

a distribution agreement.

a joint venture.

direct exporting.

licensing.

Which is NOT a violation of U.S. anti-trust law?

a. Horizontal price-fixing by competitors
b. Vertical price-fixing that is not supported by the Rule of Reason
c. A group boycott of manufacturers against retailers motivated by economic reasons
d. A unilateral refusal to deal by a manufacturer against a retailer who disregards the manufacturer's MSRP (manufacturer's suggested retail price).

Which is TRUE regarding the employment at-will doctrine in the United States?

a. It can result in a legal but immoral discharge of an employee.
b. It cannot be changed by a contract between the employer and the employee.
c. It is operable in the U.S. and can result in a discharge without notice or cause or good cause but the employer based on federal law has to pay severance to the discharged employee based on the number of years he or she has worked for the firm.
d. It supersedes and prevails over Title VII of the Civil Rights Act.

Which of the following is a false statement?

A person who does not know of a reward offer can never claim it since how can one accept what one does not know of.

For common law consideration to be legally sufficient, it does not necessarily have to consist of the payment of money or transfer of goods.

A promise by one party to pay another for refraining from performing a legal act is generally enforceable under the common law.

Normally, a court in the U.S. applying the common law of contract will be able to question the adequacy of consideration to see if the contract is a fair one.

Which of the following statements is false?

Only the government may enforce antitrust law.

Private parties, including injured consumers, may enforce the antitrust laws.

The antitrust laws provide for both criminal and civil sanctions.

Successful anti-trust plaintiffs can recover three times their actual damages.

A contractual clause establishing an amount of prospective damages for breach is best described legally as

Mitigation of damages

Liquidated damages

Against the law

Limitation of damages

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Solution Preview

Which of the following is not true regarding common law?

a)The common law of the United States originally came from England.

b) Judges must strictly follow precedent in all cases.

c) A drawback of common law is that legal decisions may be followed after they have become outdated or no longer relevant. <-- correct answer

d) Common law is called common law because judges in England were intended to apply laws similarly is all jurisdictions, thereby making the law common to all.

Which of the following is a false statement?

a) Essentially, corporate income is taxed twice when it is distributed to shareholders as dividends under U.S. tax and business laws.

b) A limited liability company (LLC) limits the liability of its members in the United States for business debts.

c) A general partnership for liability purposes is not usually considered a legal entity apart from its owners under U.S. laws. <-- correct answer, this is a legal entity.

d) Agreements to form a partnership always must be written under U.S. laws since there could be disagreements between partners otherwise.

What is a FALSE statement regarding monopolization analysis pursuant to Section 2 of the Sherman Act?

a. One generally cannot be guilty of or liable for monopolization without having a monopoly first.
b. One can have a monopoly but not have monopoly power and thus not be a monopolizing company.
c. All monopolies are illegal since they are inherently unfair to consumers.<-- correct answer, not all monopolies are damaging.
d. Wrongful conduct by a monopoly to establish the legal wrong of monopolization includes illegal AND unethical, predatory, or abusive conduct (which is not necessarily illegal).

Excel Corporation agrees to sell the latest version of its Go! computer game to National Retail Company. Excel delivers an outdated version of Go! (nonconforming goods). National's possible remedies may include

a) recovering damages only.

b) rejecting part or all of the goods, or revoking acceptance only.<-- correct answer under contract law.

c) recovering damages, rejecting goods, or revoking acceptance.

d) none of the above.

The Uniform Commercial Code is

a) A state law governing commerce

b) A federal law governing commerce <-- ...

Solution Summary

Which of the following is not true regarding common law?

a)The common law of the United States originally came from England.

b) Judges must strictly follow precedent in all cases.

c) A drawback of common law is that legal decisions may be followed after they have become outdated or no longer relevant.

d) Common law is called common law because judges in England were intended to apply laws similarly is all jurisdictions, thereby making the law common to all.

Which of the following is a false statement?

a) Essentially, corporate income is taxed twice when it is distributed to shareholders as dividends under U.S. tax and business laws.

b) A limited liability company (LLC) limits the liability of its members in the United States for business debts.

c) A general partnership for liability purposes is not usually considered a legal entity apart from its owners under U.S. laws.

d) Agreements to form a partnership always must be written under U.S. laws since there could be disagreements between partners otherwise.

What is a FALSE statement regarding monopolization analysis pursuant to Section 2 of the Sherman Act?

a. One generally cannot be guilty of or liable for monopolization without having a monopoly first.
b. One can have a monopoly but not have monopoly power and thus not be a monopolizing company.
c. All monopolies are illegal since they are inherently unfair to consumers.
d. Wrongful conduct by a monopoly to establish the legal wrong of monopolization includes illegal AND unethical, predatory, or abusive conduct (which is not necessarily illegal).

Excel Corporation agrees to sell the latest version of its Go! computer game to National Retail Company. Excel delivers an outdated version of Go! (nonconforming goods). National's possible remedies may include

a) recovering damages only.
b) rejecting part or all of the goods, or revoking acceptance only.
c) recovering damages, rejecting goods, or revoking acceptance.
d) none of the above.

The Uniform Commercial Code is

a) A state law governing commerce
b) A federal law governing commerce
c) An international law governing commerce
d) A model act

Which of the following best describes the overall scheme of pollution regulation in the United States?

Exclusively federal law.

Exclusively state law with minimal federal oversight.

Exclusively state law, but with considerable federal oversight.

Primarily federal law, but considerable state law as well.

If an important contract term is ambiguous, the contract under the common law is

Probably illegal as against public policy

Probably enforceable

Probably unconscionable

Probably unenforceable

335. Which of the following statements is not correct?

Generally, a state court can exercise jurisdiction over a nonresident by showing that he or she had sufficient contacts with the state.

A lawsuit involving a federal question can originate in a federal court in the United States.

The United States Supreme Court has automatic appellate authority over all cases decided in the state courts.

An answer to a lawsuit can admit to allegations made in a complaint in the U.S. civil law system.

Which is FALSE regarding a traditional business partnership pursuant to the Uniform Partnership Act?

a. Absent an agreement partnership profits are shared equally by the partners regardless of any individual's partner contribution, knowledge, skills, and/or efforts.
b. Absent an agreement partners are not entitled to any salary or remuneration for acting in the partnership business.
c. Partners are regarded as agents of the partnership when acting in the partnership business.
d. The dissolution of a partnership will always lead to a winding-up, liquidation, and termination of the partnership.

The requirement(s) of a valid offer in contract law is(are) the following:

a. The manifestation of a definite intent to enter into a contract by the offeror and the communication of this intent to the offeree
b. Reasonable definitiveness in the terms of the offer
c. Serious intent on the part of the offeror as determined by the "reasonable person" test
d. All of the above.

Which of the following is a true statement?

Building contractors and subcontractors are usually not independent contractors.

An agency relationship can be formed only in a witnessed and signed writing since it is a high-level business relationship.

There generally does not need to be a written agreement between the principal and agent in order to create an agency relationship.

An agent does not owe to his or her principal a duty to act in good faith.

Pat and Don submit their dispute to binding arbitration. A court can set aside the arbitrator's award if

Don is not satisfied with the award.

Pat is not satisfied with the award.

the award involves at least $75,000.

the award violates public policy or if bad faith was involved.

Gamma Company and Omega Corporation enter into an oral contract for the sale of a warehouse. Before Omega takes possession, this contract is enforceable by

Gamma only.

Gamma or Omega.

neither Gamma nor Omega.

Omega only.

Alpha Inc., a U.S. firm, signs a contract with Beta, Ltd., a Russian company, to give Beta the right to sell Alpha's products in Russia. This is usually known as:

a distribution agreement.

a joint venture.

direct exporting.

licensing.

Which is NOT a violation of U.S. anti-trust law?

a. Horizontal price-fixing by competitors
b. Vertical price-fixing that is not supported by the Rule of Reason
c. A group boycott of manufacturers against retailers motivated by economic reasons
d. A unilateral refusal to deal by a manufacturer against a retailer who disregards the manufacturer's MSRP (manufacturer's suggested retail price).

Which is TRUE regarding the employment at-will doctrine in the United States?

a. It can result in a legal but immoral discharge of an employee.
b. It cannot be changed by a contract between the employer and the employee.
c. It is operable in the U.S. and can result in a discharge without notice or cause or good cause but the employer based on federal law has to pay severance to the discharged employee based on the number of years he or she has worked for the firm.
d. It supersedes and prevails over Title VII of the Civil Rights Act.

Which of the following is a false statement?

A person who does not know of a reward offer can never claim it since how can one accept what one does not know of.

For common law consideration to be legally sufficient, it does not necessarily have to consist of the payment of money or transfer of goods.

A promise by one party to pay another for refraining from performing a legal act is generally enforceable under the common law.

Normally, a court in the U.S. applying the common law of contract will be able to question the adequacy of consideration to see if the contract is a fair one.

Which of the following statements is false?

Only the government may enforce antitrust law.

Private parties, including injured consumers, may enforce the antitrust laws.

The antitrust laws provide for both criminal and civil sanctions.

Successful anti-trust plaintiffs can recover three times their actual damages.

A contractual clause establishing an amount of prospective damages for breach is best described legally as

Mitigation of damages

Liquidated damages

Against the law

Limitation of damages

$2.19
See Also This Related BrainMass Solution

Multiple Choice: Capital, IRR, Relevant cash flows, Financial risk, Dividend irrelevance, Sale of new stock, Preferred stock, Cash Management, Risk Management, Bankruptcy law

Capital
1. Capital can be defined as the funds supplied by investors.

a. True
b. False

IRR
2. The internal rate of return is that discount rate which equates the present value of the cash outflows (or costs) with the present value of the cash inflows.

a. True
b. False

Relevant cash flows
3. When calculating the cash flows for a project, you should include interest payments.

a. True
b. False

Financial risk
4. Financial risk refers to the extra risk stockholders bear as a result of the use of debt as compared with the risk they would bear if no debt were used.

a. True
b. False

Dividend irrelevance
5. MM's dividend irrelevance theory says that dividend policy does not affect a firm's value but can affect its cost of capital.

a. True
b. False

Sale of new stock

6. When new common stock is offered for sale to the public through investment bankers, the investment bankers may provide potential investors with informa¬tion contained in a statement called the

a. Indenture.
b. Trust agreement.
c. "Red herring" prospectus.
d. Proxy.
e. Security agreement.

Preferred stock
7. Which of the following statements concerning preferred stock is most correct?

a. Preferred stock generally has a higher component cost to the firm than does common stock.
b. By law in most states, all preferred stock issues must be cumulative, meaning that the cumulative, compounded total of all unpaid preferred dividends must be paid before dividends can be paid on the firm's common stock.
c. From the issuer's point of view, preferred stock is less risky than bonds.
d. Preferred stock, because of the current tax treatment of dividends, is bought mostly by individuals in high tax brackets.

Cash management
8. Which of the following statements is most correct?

a. A good cash management system would minimize disbursement float and maximize collections float.
b. If a firm begins to use a well-designed lockbox system, this will reduce its customers' net float.
c. In the early 1980's, the prime interest rate hit a high of 21 percent. In 1995 the prime rate was considerably lower. That sharp interest rate decline has increased firms' concerns about the efficiency of their cash management programs.
d. If a firm can get its customers to permit it to pay by wire transfers rather than having to write checks, this will increase its net float and thus reduce its required cash balances.
e. A firm which has such an efficient cash management system that it has positive net float can have a negative checkbook balance at most times and still not have its checks bounce.

Risk management
9. Which of the following are not ways in which risk management can increase the value of a company?

a. Risk management can increase debt capacity.
b. Risk management can help a firm maintain its optimal capital budget.
c. Risk management can reduce the expected costs of financial distress.
d. Risk management can help firms minimize taxes.
e. Risk management can allow managers to maximize their bonuses

Bankruptcy law

10. Which of the following statements is most correct?

a. Our bankruptcy laws were enacted in the 1800s, revised in the 1930s, and have remained unaltered since that time.
b. Federal bankruptcy law deals only with corporate bankruptcies. Municipal and personal bankruptcy are governed solely by state laws.
c. All bankruptcy petitions are filed by creditors seeking to protect their claims on firms in financial distress. Thus, all bankruptcy petitions are involuntary as viewed from the perspective of the firm's management.
d. Chapters 11 and 7 are the most important bankruptcy chapters for financial management purposes. If a reorganization plan cannot be worked out under Chapter 11, then the company will be liquidated as prescribed in Chapter 7 of the Act.
e. "Restructuring" a firm's debt can involve forgiving a certain portion of the debt
but does not involve changing the debt's maturity or its contractual interest rate.

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