This document contains 40 multiple choice questions covering various topics in business law, including contracts, torts, employment law, business organizations, and intellectual property. The questions test understanding of legal concepts and ability to identify true/false statements. Correct answers are provided for self-assessment. The questions cover a wide range of difficulty and detail, as would be expected on a law school final exam.

1. Question 1
1. The seller can recover the purchase price for the goods only
under certain circumstances, including when:
The buyer accepts, but fails to pay for the goods.
The goods are destroyed after risk of loss passes to the buyer.
The buyer rejects specially manufactured goods that cannot be
resold.
A, B and C.
0.5 points
Question 2
1. Which of the following is a true statement?
It is unlawful for an employer in the U.S. to hire illegal
immigrants unless the employer is based in a border region with
very high employment.
As a general rule, it is illegal in the U.S. for private sector
employers to use polygraph tests on their employees.
The WARN Act in the U.S. prohibits a company from closing a
major plant unless it gets the permission of the Department of
Labor.

2. A closed shop which requires union membership as a condition
of hiring is legal pursuant to federal labor laws in the United
States.
0.5 points
Question 3
1. Which of the following best describes a shareholder's
preemptive rights?
The right to purchase shares of another shareholder pursuant to
a buy-and-sell agreement.
The right to purchase a pro-rata portion of any additional shares
issued by the corporation.
The right of shareholders to override actions of the board of
directors.
The right of shareholders to remove members of the board of
directors without cause.
0.5 points
Question 4
1. Under the implied warranty of merchantability:
A.
Both merchants and non-merchants generally are liable.
B.
The warranty includes a requirement that the goods be
adequately packaged and labeled.
C.

3. The warranty applies even if a product is misused and
instructions are disregarded.
D.
The warranty is based on a reasonable consumer expectations
test as to what a high quality of a good should be.
0.5 points
Question 5
1. Under the UCC a merchant is best described as a
A salesman or saleswoman
A retailer
An inventor
A Venetian
0.5 points
Question 6
1. Common law consists of:
Laws which all nations have in common.
Laws which affect everyone, including ordinary persons.
Rulings and opinions which have been issued by judges when
deciding previous cases.

4. Laws which more people are aware of.
0.5 points
Question 7
1. Under the common law, a tort can best be defined as:
A.
Any violation of an ethical or moral duty.
B.
Another term for a crime or misdemeanor.
C.
An action done in breach of an agreement that allows the
aggrieved party to recover damages.
D.
A civil wrong that allows an injured person to recover damages.
0.5 points
Question 8
1. A sues B in a state trial court for negligence. A loses the suit.
If A wants to appeal, the most appropriate court in which to file
the appeal is
the state appellate court.
the nearest federal district court.
the nearest federal court of appeals.
the United States Supreme Court.
0.5 points
Question 9

5. 1. Which of the following is a FALSE statement:
A.
Comity is a international law principle which holds that
countries should comply with international treaties and other
sources of international law due to the mutual respect that
countries should have for one another.
B.
U.S. courts typically will review the laws, acts, and judicial
decisions of foreign countries and interfere with foreign
government legal and judicial proceedings which are taking
place in foreign countries.
C.
The Act of State doctrine holds that the judicial system in one
country does not have the power or authority to challenge or
overrule the acts of another country within that country.
D.
The doctrine of Sovereign Immunity is based on the premise
that the jurisdiction of a country within its own territory is
exclusive and absolute.
0.5 points
Question 10
1. Which of the following factors is not required to qualify as a
partnership?
Equal investments of effort and capital.
An association of two or more persons sharing profits.
The carrying on of a business.

6. Co-ownership of the business.
0.5 points
Question 11
1. A court creating a contract as a legal fiction in order to
prevent unjust enrichment is an example of
Quasi-contract
Unconstitutional “judicial activism”
Legal remedies
Promissory estoppel
0.5 points
Question 12
1. Which of the following damages must be foreseeable in order
to be collected?
Consequential.
Nominal and liquidated.
Compensatory, consequential and punitive.
Consequential and compensatory.
0.5 points

7. Question 13
1. X accuses Y of fraud. Normally, the reliance element that
gives rise to fraud is based on a statement of
delusion.
fact.
opinion.
puffery.
0.5 points
Question 14
1. Which of the following is a false statement?
A franchisor can impose certain quality standards on a
franchisee.
Some business forms and organizations in the U.S. offer limited
liability to their owners and investors.
Many states in the U.S. now permit business persons to operate
as a limited liability company (LLC).
No capital can be raised through an offering of stock in the U.S.
without the principals first registering the shares with the
Securities and Exchange Commission and obtaining the
agency’s approval.

8. 0.5 points
Question 15
1. A claims that she and B entered into a contract. The intent to
enter into a contract is determined with reference to
the conscious theory of contracts.
the objective theory of contracts.
the personal theory of contracts.
the subjective theory of contracts.
0.5 points
Question 16
1. Which of the following best describes how a corporation,
which has not made any special tax elections, and its
shareholders, are taxed?
The corporation is not taxed, but the shareholders are taxed on
their dividends.
The corporation is taxed, but the shareholders are not taxed on
their dividends.
The corporation is taxed, and the shareholders are taxed on their
dividends.
Neither the corporation nor its shareholders are taxed.

9. 0.5 points
Question 17
1. An oral contract in which Sally agrees to work for Jane for
the rest of Jane's life is:
A guaranty contract.
Unenforceable under the Statue of Frauds because it cannot
possibly be performed within one year.
Enforceable under the Statute of Frauds.
A and C only.
0.5 points
Question 18
1. Under the UCC, firm offers can be made:
Orally or in writing by merchants.
Orally or in writing by merchants, but only in writing by
nonmerchants.
In writing by either merchants or nonmerchants.
In writing by merchants.
0.5 points
Question 19
1. Which of the following is a true statement?

10. A legitimate business reason for a neutral employment practice
that has a disproportionate effect or adverse impact on
minorities may allow the employer in the U.S. to avoid legal
liability for discrimination.
Under the U.S. Americans with Disabilities Act of 1990,
disabled job applicants are not entitled to “reasonable
accommodation” in employment since that surely would cost
employers some money.
Title VII of the Civil Rights Act does not cover or reach
employees’ conduct in the online or “virtual” worlds.
An employer is not liable for Title VII Civil Rights Acts
violations committed by its lower level employees, only by its
managers and supervisors since the latter “should know better.”
0.5 points
Question 20
1. The concept that case decisions become a basis for decisions
in later similar cases is known as:
Chancery law.
Murphy’s law.
Common law.

11. Statutory law.
0.5 points
Question 21
1. Which form of real property ownership includes the greatest
degree of ownership?
Fee simple subject to condition subsequent.
Fee simple determinable.
Fee simple absolute.
Absolute life estate.
0.5 points
Question 22
1. Unless specifically agreed upon by the partners, which of the
following rights do partners not have?
Participation in management.
Sharing in partnership profits.
Salaries or other compensations.
The return of capital.
0.5 points
Question 23
1. Which of the following is true about intentional infliction of

12. emotional distress?
Recovery is allowed any time there is a measurable amount of
mental distress.
There must be some physical contact with the plaintiff.
The defendant's conduct must go beyond all possible bounds of
decency and be regarded as atrocious and utterly intolerable in a
civilized society.
The plaintiff must have witnessed severe physical injury to a
relative or other significant person in the plaintiff s life.
0.5 points
Question 24
1. Which of the following is a TRUE statement?
A.
A contract made by a duly authorized agent acting within the
scope of employment is not binding on the principal unless the
principal approves the contract in a signed writing.
B.
The CEO of a corporation has the implied authority to enter into
any and all contracts on behalf of the corporation.
C.
An employer is responsible for all the torts committed by his or
her independent contractor committed while working for the
employer.
D.

13. Independent contractors are not entitled to federal overtime pay
requirements.
0.5 points
Question 25
1. Dina is a partner in Eagle Technical Group. Dina’s
dissociation from the partnership likely will cause
the automatic termination of the firm’s legal existence.
the immediate maturity of all partnership debts.
the dissolution of the partnership and the partnership’s buyout
of Dina’s interest in the firm.
the temporary suspension of all partnership business.
0.5 points
Question 26
1. Which of the following is NOT an Equitable remedy under
the common law:
a.
Injunction
b.
Money Damages
c.
Rescission
d.
Specific Performance
0.5 points

14. Question 27
1. Which of the following is a FALSE statement?
A.
Federal copyright law in the U.S. holds that the copyright to any
work created by an employee during the course and scope of his
or her employment belongs to the employer, even if the
employee has not signed any assignment agreement.
B.
The U.S. Safe Web Act gives the Federal Trade Commission the
power to share information and cooperate with foreign
government agencies to investigate and prosecute spamming,
spyware, and other instances of fraud and deception on the
Internet.
C.
An employee who intends to leave a company to start his or her
own business is never allowed to tell his or her co-workers
about the employee's entrepreneurial plans due to federal anti-
piracy laws.
D.
In California, covenants-not-to-compete are illegal and
unenforceable in employment contracts.
0.5 points
Question 28
1. Which of the following is true regarding contract validity?
A void contract is one where a party has the option to avoid her
contractual liability.
A voidable contract is one in which a party may avoid his or her
obligation under that contract.

15. A voidable contract is one that has no legal effect because one
of the essential elements is missing.
An executory contract is also unenforceable.
0.5 points
Question 29
1. Which of the following is FALSE about damages for a breach
of contract?
a.
Money damages can consist of compensatory and consequential
damages.
b.
Consequential damages must be reasonably foreseeable by the
parties as likely damages stemming from a breach.
c.
Liquidated damages must be a reasonable amount and not an
excessive "penalty."
d.
The Mitigation of Damage rule does not apply when an
employer breaches a contract with an employee since the
employer is usually the dominant entity, and thus the
wrongfully discharged employee does not have any obligation to
look for other employment.
0.5 points
Question 30
1. A partnership typically is created:
If the managing partner files appropriate papers with the

16. secretary of state.
If one or more persons or entities engage in an ongoing business
activity for profit.
Upon the issuance of stock to the partners.
Once there is a valid written partnership agreement.
0.5 points
Question 31
1. A plaintiff in a fraudulent misrepresentation case must prove
all of the following except:
A.
Reasonable and justifiable reliance
B.
False statement of material fact
C.
Intent to deceive
D.
Physical injury.
0.5 points
Question 32
1. A patent allows the patent holder to do all of the following
except:
Profit from having exclusive rights to sell the patented device,
but only during the life of the patent.

17. Keep others from profiting from the patent without the patent
holder's permission.
Profit from having exclusive rights to sell the patented device
indefinitely.
Allow others to profit from selling the patented device.
0.5 points
Question 33
1. Which of the following is not true?
The plaintiff s required level of proof to win a civil trial is
greater than in a criminal trial.
The victim of a crime may be able to bring a civil lawsuit
against the alleged criminal.
After a criminal defendant has been found not guilty, the victim
may still bring a civil suit for damages against the same
defendant if the victim has not already done so.
Procedural protections for defendants are greater in criminal
cases than in civil cases.
0.5 points
Question 34
1. A supervening illegality (that is, legality after the contract
was entered into) is best described as

18. Voiding the contract
Resulting in a discharge of contract duties
Having no effect on the contract
Making the contract voidable
0.5 points
Question 35
1. Which of the following statements is false?
Notice-and-comment rulemaking is the most common
rulemaking procedure used by administrative agencies in the
United States to make law.
Tort law provides legal remedies for both personal injury and
property damage.
To commit an intentional tort, a person must intend the
consequences of his or her act or know with substantial
certainty that certain consequences will occur.
To commit an intentional tort, a person always must act with an
evil motive to commit physical harm.
0.5 points
Question 36
1. The Statute of Frauds:

19. Makes certain contracts illegal if they are not in writing.
Makes contracts covered by it voidable.
Is designed to protect minors from being taken advantage of.
Makes certain contracts unenforceable if they are not in writing.
0.5 points
Question 37
1. Specific performance is generally awarded:
In cases where nominal damages are also awarded.
Where the contract involves the sale of property or goods that
are unique.
Only under the U.C.C.
When the non-breaching party requests it.
0.5 points
Question 38
1. Absent any agreement to the contrary, who is liable for the
debts of a limited liability company?
Members personally

20. Managers personally
Both the members and the managers
None of the above
0.5 points
Question 39
1. Martha is a minority shareholder in the ABC Corporation.
Which method of voting would give Martha the best chance to
elect someone to the board of directors?
Cumulative.
Noncumulative.
Proxy.
Supermajority.
0.5 points
Question 40
1. Which of the following facts is the best evidence of the
existence of a partnership relationship?
Joint or common ownership of property
Sharing of gross returns of a business

21. Sharing of net profits of a business
Joint participation in a business activity
MGT 304:
Organizational management
Final Exam
The setup
Have you ever heard of Richard Feynmann? He was the subject
of a
biography a few years back called “Genius.” And apparently
that’s what he was. Doctorate from MIT in physics, spent his
career at Caltech, and became eminently well-known from his
contributions to the Los Alamos project. Not long before his
death in 1988, he was the guy who gave the compelling
testimony before the Congressional committee investigating the
Challenger disaster. It was Feynmann who, in a few simple
words, persuaded the scientific community to look at the O-
rings, which were ultimately found to have contributed directly
to the tragedy. If you have a chance to read anything about
him, or by him (you can still get audiotapes and transcripts of
his lectures, packaged as “Five Easy Pieces”), you should give
it a try because you’ll probably enjoy it. He was a real hoot and
he lived life to the fullest, shall we say. I was a little surprised
that he wasn't referenced in "A Beautiful Mind." Remember
that? Same caliber of intellect.
Feynmann was awarded the Nobel Prize in 1965. The story is
told that a reporter from Time magazine approached Feynmann
and said, “Dr. Feynmann, can you explain to our readers in five
minutes what it is that you did that earned the Nobel Prize?”
Feynmann supposedly said, “Well, if I could tell you in five
minutes, it wouldn’t be worth the Nobel Prize, now would it?”

22. Let’s consider the same for organization theory and
management behavior. Your authors this semester have tried
the same thing. Of management theory and management
behavior, one of your journal authors wrote:
An organization is a group of people who work together to
pursue a goal. They do so by attaining resources from their
environment. They seek to transform those resources by
accomplishing tasks and applying technologies to achieve
effective performance of their goal, thereby attaining additional
resources. They deal with the many uncertainties and vagaries
associated with these processes by organizing their activities.
Organizing involves leadership processes, through which
leaders guide the development of strategies for achieving goals
and the establishment of structures and processes to support
those strategies.
The same author then spent a book explaining that point of
view.
Morgan also tried to define organization theory and
management behavior in this way:
All organization theory and management practice is based on
images, or metaphors, that lead us to understand situations in
powerful yet partial ways…. To achieve greater effectiveness,
managers must become skilled in identifying and using different
approaches to organization and management.
Then the rest of his book explored different metaphors and how
managers could best lead organizations based on those terms.
So--you can think of your final exam in the same light. I’m
going to regard you as one who’s conversant in organizational
behavior. I’m going to ask you an impossibly detailed question
and you’re going to have to answer in a ridiculously short

23. timeframe.
The Question
We will have spent this entire semester discussing various
topics
associated with organization theory and management behavior.
We’ve looked at issues, theories, and motivation. We’ve
fabricated a product in an organization of sorts. Together,
we’ve focused on the conflict, communications, change, and
organizational effectiveness. So now, after all this time, all our
class meetings, presentations, readings, articles, questioning
and answering, and your own thinking, we come to this one
final question, drawn from the course objectives:
What is your understanding of organizational behavior?
The Process
In a well-constructed essay, please address the above question.
By “well-constructed,” your essay should contain a key opinion
or a thesis statement. You may choose to defend one of the
authors’ opinions cited above, or attack it, or disagree with it,
or generate your own characterization.
The balance of your response should support your opinion by
bringing in any resource at your disposal. You may use the
readings, the texts, your class notes, or any other reference you
think is useful. The key idea is to express what you think and
then support your opinion. This approach will require you to
not just cite references, but to analyze across them.
There are no requirements or suggestions regarding the length
of the final exam, as long as you’re satisfied that you’ve

24. addressed the question.
You should take no more than three hours to complete your
exam, just as if we were in the classroom. But it will probably
take more than five minutes.