BUS 121 – Test #3 Study Guide
Chapters 6, 19, 25, 7
Chapter 6
1. Good Samaritan statutes impose liability upon people for refusing to stop at accident scenes.
False
2. Which of the following occurs when a plaintiff implicitly assumes a known risk?
Implied assumption of the risk
3. Which is the most difficult part of establishing the defense of assumption of the risk?
Showing that the plaintiff assumed the risk of the actual harm suffered.
4. Which of the following is an unforeseeable event which interrupts the causal chain between the
defendant's breach of duty and the damages the plaintiff suffered?
A superseding cause
5. Which of the following occurs when a plaintiff expressly agrees, usually in a written contract, to
assume the risk posed by the defendant's behavior?
Express assumption of the risk
6. The Communications Decency Act gives immunity to providers of interactive computer services
for liability they might otherwise incur on account of material disseminated by them but created
by others.
True
7. While crossing the street, Bobby does not go to a crosswalk but proceeds to illegally cross the
street without even checking to see if any vehicles are coming. Slick sees Bobby in the street,
notices that he is not in the crosswalk, and proceeds to hit Bobby with his vehicle because he
believes that Bobby should be taught a lesson about how to cross the street. Slick does slow down
somewhat and only causes Bobby some significant bruising, but Bobby is angry and sues. Which
of the following is most likely to happen in a contributory negligence jurisdiction?
Bobby will be able to recover despite proof of contributory negligence on his part because Slick had a
final clear opportunity to avoid the action that injured Bobby
8. Under which of the following does the court determine the percentage of the fault of the
defendant with the defendant then being liable for that percentage of the plaintiff's damages, with
no requirement that the defendant be more than 50% at fault?
Pure comparative negligence
9. Strict liability is a liability without fault.
True
10. Which of the following is true regarding the intent needed for an intentional tort?
The intent at issue is not intent to harm but, rather, is intent to engage in a specific act, which
ultimately results in an injury, physical or economic, to another.
11. When negligence per se applies, the plaintiff is required to show that a reasonable person would
exercise a certain duty of care toward the plaintiff.
False
12. Which of the following may a person accused of defamation raise as a defense?
Truth and privilege
13. What does the term "negligence per se" mean literally?
Negligence in or of itself
14. ______ torts occur when the defendant takes an action that is inherently dangerous and cannot
ever be undertaken safely, no matter what precautions the defendant takes.
Strict-liability
15. A false statement of a material fact regarding ownership of business property that results in a loss
of sales is referred to as ______.
Slander of title
16. Which of the following applies to cases in which the defendant has violated a statute enacted to
prevent a certain type of harm from befalling a specific group to which the plaintiff belongs?
Negligence per se
17. Assumption of the risk is a doctrine which makes it easier for a plaintiff to prevail in a lawsuit.
False
18. Which of the following is a tort?
A wrong or injury to another, other than a breach of contract
19. Which of the following are common classifications of torts?
Intentional, negligent, and strict-liability
20. A person who commits a tort is often referred to as a ______.
Tortfeasor
Chapter 19
1. In an express agency relationship, the agent has ______ authority.
Express
2. Which of the following holds the principal-employer liable for any harm caused by the agentemployee during the time that the agent-employee is working for the principal?
Vicarious liability
3. Which of the following is generally defined as a relationship between a principal and an agent?
Agency
4. Agency law is primarily federal law.
False
5. Which of the following is a term used to describe the duty of an agent to communicate any
information to the principal that the agent thinks could be important to the principal?
Duty of notification
6. The equal dignity rule requires that all agency agreements be in writing.
False
7. In order to properly provide notice of the termination of an agency relationship, actual notice of
agency termination must be given to third parties who have had business interactions with the
agent.
True
8. Which of the following is true regarding liability of a principal to an agent based on a contract an
agent makes with a third party that expressly excludes the principal from the contract?
The principal is not liable to the agent.
9. In which types of agency relationships is the agency relationship inferred from the conduct of the
parties?
Implied agency
10. If a manager has business transactions in one of the European Union countries and wants to
terminate an agency relationship, he or she would want to have access to knowledge about which
of the following?
Chapter IV of the Agency Relationship Law
11. Singapore outlawed the use of electronic contracts.
False
12. Which of the following is a document that gives an agent authority to sign legal documents on
behalf of the principal?
Power of attorney
13. Which of the following is true under the UCC regarding liability of a principal to an agent if the
agent enters into a contract that is a negotiable instrument?
The principal cannot be held liable unless the principal's name is on the instrument or the agent's
signature indicates that it was made in a representative capacity.
14. To which of the following is the employer-employee relationship subject?
All of these
15. All employees are agents of their employers, and all agents are employees.
False
16. Which of the following is a form of authority upon which an agency relationship may be based?
All of these
17. Which of the following are types of business relationships to which agency laws are relevant?
Principal-agent, employer-employee, and employer-independent contractor
18. Whenever an employer hires an employee to perform some sort of physical service, the parties
have created a[n] ______ relationship.
Employer-employee relationship
19. Which of the following is true regarding the liability in tort of employers for the actions of
employees and independent contractors?
Employers are generally liable in tort for the actions of their employees, while they are generally not
liable for the actions of independent contractors.
20. Which of the following refers to the right of a principal to sue an agent to recover any amount
assessed against the principal for a breach of contract caused by the agent's negligence?
Indemnification
Chapter 25
1. By federal law, major credit reporting agencies are now required to provide consumers with a
free copy of their credit report every ______.
12 months
2. Which of the following does the Federal Trade Commission require if a company wishes to
claim that its products are "Made in the U.S.A."?
That the claim not be used unless all, or virtually all, of the product's components and labor are
of U.S. origin.
3. Which of the following is required by the Federal Trade Commission Cooling-Off Rule in
regard to door-to-door sales?
That consumers have three days in which to cancel purchases made from salespeople who come
to their homes; that the salesperson notify the consumer, both verbally and in writing that the
sales transaction may be cancelled; and that the consumer be notified in writing in the same
language in which the oral negotiations were conducted.
4. Which of the following is true regarding federal regulation of used-car sales?
Odometer fraud is prohibited and there are requirements regarding notification that a car is
being sold "as is," but the dealer is not allowed to indicate that no further inspection is needed.
5. If a person notifies the credit card company of a stolen card before unauthorized charges are
made, for how much can the person be held liable to the credit card company for later
unauthorized charges?
0
6. Which of the following must credit card applications include under the Truth-in-LendingAct?
The APR, annual fees, and the grace period for paying without a finance charge.
7. Which of the following was the result on appeal in Richard D. Kennedy and Sally S. Kennedy
v. Chase Manhattan Bank, USA, N.A., the case in the text involving whether a bank may
obtain an individual's credit report to determine whether to extend credit after providing a
prequalified offer for a credit card?
The court ruled in favor of the bank on the basis that the prequalification offer revealed that
credit could be denied if, after the application was returned, the bank obtained credit reports
and determined that the complainants did not meet the bank's standards.
8. Which of the following is a statement in which a company agrees with the Federal Trade
Commission to stop disputed behavior but does not admit it broke the law?
Consent order
9. State laws in regard to protection of purchasers of used-cars are preempted by federal law.
False
10. The Equal Credit Opportunity Act makes it illegal for creditors to deny credit to individuals
on the basis of ______.
Race, religion, national origin, color, sex, marital status, or age
11. Which of the following are prohibited by the Fair Debt Collection Practices Act?
Contacting a debtor at work if the debtor's employer objects, misrepresenting the collection
agency as a lawyer or police officer, and contacting a debtor who has notified the collection
agency that he or she wants no contact with the agency.
12. If a credit card company sends a person an unsolicited card in the mail and the card is stolen,
for how much can the person be held liable to the credit card company?
0
13. The Consumer Product Safety Commission lacks the authority to issue product recalls on its
own.
False
14. Which of the following is the term used when an advertisement is true but incomplete?
Half-truth
15. Which of the following are federal laws regulating the credit industry?
The Truth-in-Lending Act, the Fair Credit Reporting Act, and the Fair Debt Collection Practices
Act
16. Which of the following must be true in order for a loan to come within the protection of the
Truth-in-Lending Act?
The credit or loan must be subject to a finance charge or have repayments of more than four
installments, but there is no requirement regarding the loan having an interest rate of over 5%.
17. What type of agency is the Federal Trade Commission?
Independent
18. The existence of deceptive advertisements is enough alone to prove damages for recovery
when individual civil suits are filed for deceptive practices.
False
19. Congress repealed the law prohibiting the sale of highly flammable clothing.
False
20. Under the Equal Credit Opportunity Act, creditors may require that a spouse co-sign a loan
application regardless of the credit worthiness of the applicant.
False
Chapter 7
1. A license is a right to use another's property that is temporary but not revocable.
False
2. Which of the following is property that the true owner has unknowingly or accidentally dropped
or left somewhere?
Lost
3. A[n] _____________ is the right to go onto someone's land and take part of the land or a product
of it away from the land.
Profit
4. With which of the following does a government website address end?
.gov
5. Which of the following is true regarding lost property?
In most states the finder of lost property has title to the lost good against all except the person who
lost the property.
6. To be protected in ______ use, a trademark must be registered with the U.S. Patent Office under
the Lanham Act of 1947.
Interstate
7. Subleasing of leased property by the tenant to another party is permissible unless specifically
prohibited by the lease.
True
8. If a trademark is unregistered, which of the following may the holder recover when an infringer
uses the mark to pass off goods as being those of the mark owner?
An injunction prohibiting the infringer from using the mark.
9. A ______ estate is granted for the lifetime of an individual with the right to possess the property
terminating at the individual's death.
Life estate
10. When a patent is issued for an object, it gives its holder the exclusive right to produce, sell, and
use the object of the patent for _________________ years from the date of application.
Twenty
11. In Kelo v. City of New London, the U.S. Supreme Court ruled that as a matter of law, the
government violates the Fifth Amendment by taking private property and selling it for private
development.
False
12. Trade dress is entitled to the same protection as a trademark.
True
13. A registrant may lose registration of a domain name for Internet usage by not using it for more
than ______ days.
90
14. Which of the following is the legal process by which a transfer of property is made by a
governmental entity against the protest of the property owner?
Condemnation
15. Tying arrangements are illegal.
True
16. Which of the following is property that the true owner has intentionally placed somewhere but
has forgotten its location?
Mislaid
17. Property that the original owner has discarded is ______ property.
Abandoned
18. Which of the following is land and everything permanently attached to it?
Real property
19. The duration of one's ownership interest and the power one has over using the land depends on
the type of ______ one is said to hold.
Estate
20. Which of the following are estates that do not include the right to possess the property?
Easements, profits, and licenses