Business Law Final

Question 1

A breach of contract occurs only when a party fails to perform all of his or her duties under a contract.

Answer 1

False

Question 2

A contract that stipulates one party must perform in a manner that will personally satisfy the other party need only be performed to the satisfaction of a reasonable person.

Answer 2

False

Question 3

Anything less than complete performance is a material breach of contract.

Answer 3

False

Question 4

A novation occurs when a contract is canceled and the parties are returned to the positions they occupied before the contract.

Answer 4

False

Question 5

A breach of contract entitles the innocent party to sue for damages.

Answer 5

True

Question 6

Compensatory damages compensate the nonbreaching party for injuries or damages sustained by that party.

Answer 6

True

Question 7

Liquidated damages clauses typically require that the party who breaches a contract must pay a certain amount of money to the nonbreaching party

Answer 7

True

Question 8

A shrink-wrap agreement is normally not enforced.

Answer 8

False

Question 9

State e-signature laws are uniform.

Answer 9

False

Question 10

A sale of software generally involves a license.

Answer 10

False

Question 11

Drug testing by private employers is not permissible.

Answer 11

False

Question 12

Under federal law, employers can monitor all employees’ personal communications.

Answer 12

False

Question 13

Whistleblower statutes protect employers from workers’ disclosure of the employer’s wrongdoing.

Answer 13

False

Question 14

There are no exceptions to the employment-at-will doctrine.

Answer 14

False

Question 15

The Occupational Safety and Health Administration has the power to enforce health and safety standards.

Answer 15

True

Question 16

Employers are required to keep workplaces free from recognized hazards.

Answer 16

True

Question 17

Employers are required to establish retirement plans for their employees.

Answer 17

False

Question 18

The Fair Labor Standards Act of 1938 regulates overtime pay.

Answer 18

True

Question 19

Bankruptcy proceedings are held in federal bankruptcy courts.

Answer 19

True

Question 20

Concealing assets from a bankruptcy court is not a crime.

Answer 20

False

Question 21

A discharge in bankruptcy will prevent a debtor from ever obtaining another discharge in bankruptcy.

Answer 21

False

Question 22

The filing of a petition for bankruptcy will automatically stay most legal actions against the debtor.

Answer 22

True

Question 23

The principal duty of a trustee is to liquidate and close up a debtor’s estate as quickly as possible.

Answer 23

True

Question 24

Whistleblower statutes protect employees who report their employers’ wrongdoing from retaliation on the part of employers.

Answer 24

True

Question 25

A click-on agreement is an agreement whose terms are expressed inside a box in which the goods are packaged.

Answer 25

False

Question 26

A+ Autos contracts to sell a customized car to Ben. A+ installs a slightly used engine in the car. Ben demands that A+ replace it, but A+ refuses, arguing that would be too costly. Ben sues A+. The court will most likely rule in favor of

Answer 26

A+, if the difference between the used engine and a new engine is trivial.

Question 27

General Contractors, Inc., contracts to build an office building for RP Properties Company. If General substantially performs, RP is entitled to

Answer 27

damages

Question 28

Max works for MegaCorp. In most circumstances, with exceptions, the law prohibits MegaCorp subjecting Max to

Answer 28

a drug test.

Question 29

Bob owes money to Carol. Carol has a valid security interest in Bob’s bicycle, but is uneasy about Bob’s ability to pay the debt. Bob files for bankruptcy on Monday, Carol, who does not know about the bankruptcy, tries to repossess the bicycle on Tuesday. Carol can

Answer 29

not repossess the bicycle nor file suit for payment of the debt.

Question 30

Jay and Kim enter into a contract by which Jay agrees to sell Kim his laptop computer for $500. The contract will be fully discharged when

Answer 30

Jay gives possession of the computer to Kim and Kim pays Jay $500.

Question 31

Satisfactory Performance

Answer 31

A contract may contain a “personal satisfaction clause” stating that the party receiving the performance must be satisfied with that performance in order for the contract to be discharged.
Objective Standard - When determining if the promisor has acted in good faith the standard of satisfaction will be that of a reasonable person.
Subjective Standard

Question 32

Substantial Performance

Answer 32

The failure to comply strictly with the terms of a condition will not prevent recovery if there has been substantial performance of the contractual obligation. Courts created this doctrine in order to prevent forfeitures and to ensure justice. Where recovery is permitted for substantial performance, it is offset by damages for injuries caused by failure to render complete performance. Courts determine whether there has been a breach or a substantial performance of a contract by evaluating the purpose to be served; the excuse for deviation from the letter of the contract; and the cruelty of enforced adherence to the contract. If the deviation from the contract were accidental and resulted in only a trivial difference between what was required by the contract and what was performed, the plaintiff will receive only nominal damages.

Question 33

Whistleblowing

Answer 33

The disclosure by a person, usually an employee in a government agency or private enterprise, to the public or to those in authority, of mismanagement, corruption, illegality, or some other wrongdoing.

Question 34

Worker’s Compensation

Answer 34

Workers’ compensation laws protect people who are injured on the job. They are designed to ensure that employees who are injured or disabled on the job are provided with fixed monetary awards, eliminating the need for litigation.

Question 35

Damages

Answer 35

Monetary compensation that is awarded by a court in a civil action to an individual who has been injured through the wrongful conduct of another party.