STRATFORD UNIVERSITY BUS405 Business Law: Legal Environment of Business 2014 Q2 Instructor: Joseph D.

Grandinetti The Answers to the Mid-Term Exam are due no later than 11:55 PM, Sunday, April 20, 2014. Your Answer must be submitted in the Moodle Shell. Instructions
Here is your Mid-Term worth a possible 150 Points. There are two parts. The first consists of 20 Questions each is worth 3 Points (60 Total Possible Points). The second part is an Essay Portion which consists of three questions worth 30 Points each (90 Total Possible Points). There is also a

Bonus Question worth 10 Possible Points. NOTE THAT THE MAXIMUM SCORE IS 150 Points the Bonus Question can replace points lost in the Multiple Choice & Essay Questions.
This Mid-Term covers materials of Chapters 1, 2, 4, 26 and 9 through 11.

READ THE QUESTIONS CAREFULLY, THEN THINK ABOUT YOUR ANSWER. Part 1: Multiple Choice Questions 1. Eve wants to file a suit against Fred. For a court to hear the case a. b. c. d. 2. Fred must agree. the court must have jurisdiction. the court must issue a deposition. the parties must own property.

Karen is a judge hearing the case of Local Dispatch Co. v. National Transport Corp. Applying the relevant rule of law to the facts of the case requires Karen to find previously decided cases that, in relation to the case under consideration, are a. b. c. d. as different as possible. as similar as possible. at odds. exactly identical.

3.

Which of the following is NOT a branch of the US Government: a. b. c. d. The President The Senate National Archives The US District Court Mid-Term Page 1 of 5

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4.

Under the Commerce Clause, the authority to regulate foreign commerce is given to: a. b. c. d. Congress. the executive branch. the individual states. only the Senate.

5.

Under private law: a. persons may create legally-binding agreements through their power to contract. b. persons may enter into contracts, but the contracts will not be upheld in court. c. persons may create their own rules when there is no prior statute. d. persons may make their own rules only after studying practice of similar precedents. Mr. Burns filed a case against Mr. Johnson in the court at Ohio. However, Mr. Johnson had never visited Ohio, nor had any personal ties with anyone in Ohio. Mr. Johnson could defend the case on the basis that the court: a. lacked personal jurisdiction. b. was not in proximity to the place where Mr. Johnson resides. c. was limited by subject matter jurisdiction. d. did not have judges that would understand the language spoken by him.

6.

7.

The "dormant" Commerce Clause limits the authority of the states to interfere with the flow of interstate commerce by: a. limiting the states from furthering only state interests. b. limiting a state's ability to tax vendors. c. prohibiting state legislation that unduly burdens intrastate commerce. d. prohibiting state laws that openly discriminate against interstate commerce.

8.

Harry, a resident of Indiana, has an accident involving Jane, a resident of Kentucky, while driving through that state. Jane files a suit against Harry in Kentucky. Regarding Harry, Kentucky has a. b. c. d. diversity jurisdiction. in personam jurisdiction. in rem jurisdiction. no jurisdiction.

9.

The primary way a case can be appealed to the Supreme Court is through a: a. writ of habeas corpus. b. writ of quo warranto. c. writ of certiorari. d. writ of mandamus.

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10.

Under the Equal Protection Clause: a. the government must treat all cases alike. b. states are prohibited from arbitrarily discriminating against persons. c. states are prohibited from discriminating only on the basis of nationality. d. the government can uphold restrictions on property.

11.

One of the factors considered in determining the state statute to be constitutional and allow the states to regulate aspects of interstate commerce that have not been preempted by the federal government is that the state statute must: a. not further a legitimate local interest. b. not discriminate in favor of local interests and against out-of-state interests. c. allow only direct, not incidental, regulation of interstate commerce. d. impose costs on interstate commerce that are more excessive than necessary to bring about the state interests.

12.

A ______ provides the greatest ease of management. a. close corporation b. sole proprietorship c. general partnership d. limited partnership

13.

Which of the following run the risk of unlimited personal liability? a. Partners in a general partnership b. Partners in a limited partnership c. Corporate shareholders d. Shareholders in S Corporations

14.

Which of the following is a taxable entity? a. A corporation b. A sole proprietorship c. A partnership d. An S Corporation

15.

If a business involves high risk, a single factor such as _____ will be so important as to outweigh other factors. a. limited liability b. taxation c. formalities d. financing

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16.

Which form of business organization most limits personal liability for its shareholders? a. Sole proprietorship b. General partnership c. Corporation d. They all share this attribute equally

17.

May tries to start her new car with no success. She yells that she will sell the car to anyone for $10. Nick, a passerby who owns Nicks Pre-owned Autos, hands May $10. This is a. b. c. d. a valid acceptance because May is seriously frustrated. a valid acceptance because Nick is a car dealer. not a valid acceptance because May does not seriously intend to sell. not a valid acceptance because Nick is a car dealer.

18.

Signe offers to sell Thomas her textbook but conditions the sale on Thomas accepting the offer by March 1. Signe may revoke the offer a. b. c. d. before Thomas accepts the offer. before March 1, whether or not Thomas has accepted the offer. only after Thomas accepts the offer. only after March 1.

19.

Barney offers to sell his Call Marketing Center to Domino for $100,000. Domino replies, The price is too high. I will offer to buy it for $90,000. Domino has a. b. c. d. accepted the offer. made a counteroffer without rejecting the offer. rejected the offer and made a counteroffer. rejected the offer without making a counteroffer.

20.

On October 25, 1989, Mina Loy sent a letter to Carl Van Vechten which said, "I hereby offer to hire you to paint my house for $4,000 during Thanksgiving break. Your acceptance of this offer must be by first-class mail and must reach me no later than noon on November 1, 1989." Vechten was so excited when he received her letter that he telephoned Loy on October 26 and said "I accept." Which of the following is a true statement? a. b. c. d. There is a valid acceptance and a binding contract because the telephone call was an authorized means of acceptance. There is a valid acceptance and a binding contract because the telephone call was a reasonable means of acceptance. There is a valid acceptance and a binding contract because the telephone call was a faster means of acceptance than the mail. There is no acceptance and no contract in this situation as it is clearly mentioned by the offeror that the acceptance must be by mail.

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Part 2: Essay Questions 1. 2. List and Describe two differences between civil law and criminal law. Myra owns a house, which she advertises for sale for $200,000. On May 1, Nicole offers Myra $180,000 for the house. On May 5, Myra delivers to Nicole a form that includes additional terms but does not state a price. At 9 A.M. on May 6, Nicole signs the form and gives it to Odell, her administrative assistant, with instructions to mail it. At 10 A.M., Myra calls to tell Nicole that the deal is off. The next day, Odell mails the signed form to Myra. When Myra refuses to sell the house, Nicole files a suit against her, alleging breach of contract. Myra claims that there was no contract. Answer the following questions - explain your answer fully. What are arguments supporting Nicoles position? What are arguments supporting Myras position? What is the court likely to rule?

3.

Wyoming passed a statute restricting the length of vehicles that could use its highways. The length chosen was 55 feet. Semi trailers are generally 55 feet long; double or twin tracks (one cab pulling two trailers) are 65 feet long. Other states in the West have adopted the 65-foot standard. Republic Trucking brought suit, challenging the Wyoming statute as an unconstitutional burden on interstate commerce. The Wyoming statute meant Republic Trucking could not use its twins in Iowa. The Wyoming legislature claims the 65-foot doubles are more dangerous than the 55-foot singles. However, the statute did provide a border exception: Towns and cities along Wyoming borders could make an exception to the length requirements to allow trucks to use their city and town roads. Can Wyomings statute survive a constitutional challenge? (15 points) Is the statute an impermissible burden on interstate commerce? (15 points)

BONUS QUESTION (10 Possible Points): List the factors one should consider in choosing a form of business organization. The Answers to the Mid-Term Exam are due no later than 11:55 PM, Sunday, April 20, 2014. Your Answer must be submitted in the Moodle Shell.

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