Business Law True/ False Questions

| February 25, 2017

True or False

____ 1. The theory of strict product liability primarily functions to limit a manufacturer’s liability to an injured party.

____ 2. A promise to do something that one has a prior legal duty to do isa valid form of consideration.

____ 3. An easement arises when the owner of one piece of land occupies the real property of a neighbor and eventually acquires title to it.

____ 4. The rights established under a contract in one state are honored by other states pursuant to the Full Faith and Credit Clause.

____ 5. Article 2 of the UCC never governs a contract in which goods and services are combined.

____ 6. Temporal limits on product liability actions are established by statutes of repose.

____ 7. An instrument promising to pay in goodscanconstitute a negotiable instrument.

____ 8. If a party under an obligation to perform delegates that obligation to another, the original party is relieved of the obligation to perform.

____ 9. Partner are agents both of the other partners and of the partnerships.

____ 10. An employer can dismiss an employee because the employee’s wages are being garnished without running afoul of federal law.

____ 11. Strict liability applies only upon the basis of fault.

____ 12. An executory contract is one that has been fully performed.

____ 13. A person who takes a negotiable instrument from a thief may never become an HDC.

____ 14. Job discrimination on the basis of intelligence is expressly prohibited by the Civil Rights Act of 1964.

____ 15. State LLC (limited liability company) statutes govern the outcome of topics under dispute if there is no agreement covering that topic.

____ 16. Risks ordinarily assumed in business may not constitute consideration for the modification of a contract.

____ 17. A business that invites persons to come onto its premises is charged with a duty to exercise reasonable care to protect those invitees.

____ 18. A full warranty does not require free repair or replacement of any defective part.

____ 19. Pursuant to the statute of frauds, a written contract that cannot, by its own terms, be performed within one year from the day after its formation is unenforceable.

____ 20. An adult may avoid any contract with a minor.

____ 21. One benefit of limited liability companies (LLCs) is that members of the LLC are not personally liable for the wrongful acts or omissions of the LLC.

____ 22. Without informing Deep Sea Research (DSR), Michael, one of DSR’s directors, starts up Treasure Hunters, Inc. to compete with DSR. Michael is liable for breach of the business judgment rule.

____23.Corky Corporation is not engaged in discriminatory employment practices when, utilizing a merit-pay system with respect to its employeespaysAnne, a female, more thanNick, a male, due to her Anne’s superior performance.

____24. An officer of a company is considered a fiduciary in relation to that company.

____25.Before completing the purchase and downloading the song All Bets Are Off”from Internet Music, an online music seller, Nina is asked to review a warning not to make and sell a copy of the song, but is not required to click “I agree.” This warning is known as a click-on agreement.

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