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Business Law Unit 3 Challenges Sophia
Unit no #3
Challenge no 1
Which of the following is the fundamental definition of property ownership?
·       a.)
The right to control property
·       b.)
The possession of property
·       c.)
The right to exclude others from property
·       d.)
The right to acquire property
Which of the following is true of property ownership in the United States?
·       a.)
Nonhuman legal persons, such as corporations, may own property.
·       b.)
Property ownership has always been available to everyone in the United States.
·       c.)
The legal system still recognizes ownership of a human body as long as it is your own.
·       d.)
Property rights have remained static over time.
Why are laws to protect property ownership important to society?
·       a.)
They defend the rights of the powerful.
·       b.)
They are fundamental to peace and stability.
·       c.)
They allow wealth to accrue.
·       d.)
They define tangible versus intangible property.
An ice cream cone is __________.
·       a.)
intangible private property
·       b.)
tangible private property
·       c.)
tangible public property
·       d.)
fungible private property
The copyright for a book is __________.
·       a.)
tangible private property
·       b.)
intangible public property
·       c.)
fungible private property
·       d.)
intangible private property
A roll of $100 bills lying on the street in front of you is __________.
·       a.)
tangible fungible private property
·       b.)
tangible fungible public property
·       c.)
tangible public property
·       d.)
intangible private property
If a bailment is involuntary, what sort of responsibility does the bailee owe the bailor?
·       a.)
The bailee has no duty in an involuntary bailment.
·       b.)
An extraordinary duty of care is always owed in this case.
·       c.)
A reasonable duty of care is always owed in this case.
·       d.)
It differs, but at a minimum, the bailee must not destroy the property.
When does a bailee owe a bailor an extraordinary duty of care?
·       a.)
When the bailment only benefits the bailee
·       b.)
When the bailee and bailor both benefit from the bailment
·       c.)
A bailee always owes a bailor an extraordinary duty of care.
·       d.)
When the bailment only benefits the bailor
When does a bailee owe a bailor only a minimum duty of care?
·       a.)
A bailee always owes a bailor more than a minimum duty of care.
·       b.)
When the bailment only benefits the bailee
·       c.)
When the bailee and bailor both benefit from the bailment
·       d.)
When the bailment only benefits the bailor
Select the true statement regarding inherited or gifted real property.
·       a.)
If an owner of real property dies without a will, the property automatically escheats to the state.
·       b.)
A gift of real property must include the deliverance of a deed in order for title to be conveyed.
·       c.)
Ownership of real estate may not be transferred by gift.
·       d.)
Real property may only be willed to a next of kin.
Select the true statement regarding adverse possession of real property.
·       a.)
To successfully acquire real property through adverse possession, the possessor's possession must be observable.
·       b.)
All states have the same requirements regarding the adverse possession of real property.
·       c.)
Adverse possession usually involves compensation given by the possessor to the former owner.
·       d.)
A possessor may acquire real property through adverse possession even if his or her possession has been sporadic.
Select the true statement regarding real property purchases.
·       a.)
All real estate transfers must involve a quitclaim deed.
·       b.)
A written contract is required by law.
·       c.)
A recorded deed is necessary for ownership.
·       d.)
A title is not necessary for most real estate purchases.
A deed transferring land to you to own and possess during your natural lifetime would be __________.
·       a.)
a reversionary interest
·       b.)
a fee simple absolute interest
·       c.)
a leasehold interest
·       d.)
a life estate interest
A deed transferring ownership of a house to you once your mother chooses to move out of the house and into a nursing home would be __________.
·       a.)
a possessory interest
·       b.)
a leasehold interest
·       c.)
a fee simple absolute interest
·       d.)
a reversionary interest
A deed transferring complete ownership of a two-acre plot of land to you with no limitations or restrictions would be __________.
·       a.)
a fee simple defeasible interest
·       b.)
a life estate interest
·       c.)
a fee simple absolute interest
·       d.)
a joint tenancy interest
The Constitution allows Congress to protect intellectual property rights in order to __________.
·       a.)
generate income for the government
·       b.)
defend the freedoms of speech and expression
·       c.)
promote the advancement of science and the arts
·       d.)
prevent the formation of monopolies
The purpose of intellectual property law is __________.
·       a.)
to recognize and protect intellectual rights for a period of time sufficient to encourage innovation
·       b.)
to grant an inventor the exclusive right to his or her invention forever
·       c.)
to enrich corporations and concentrate financial power in society
·       d.)
to ensure that new inventions enter the public domain right away
According to the Copyright Clause, intellectual property rights are important because they __________.
·       a.)
encourage creativity and the invention of new products
·       b.)
generate competition and place downward pressure on pricing
·       c.)
encourage the sharing of ideas among companies
·       d.)
promote equality within society
challenge no 2
Which of the following is a patentable item?
·       a.)
A memoir about surviving cancer
·       b.)
A new pharmaceutical drug to treat cancer
·       c.)
A naturally occurring gene sequence that predisposes a person to cancer
·       d.)
The discovery of a new type of cancer
Which of the following is a patentable item?
·       a.)
A previously patented tool for drilling into the earth
·       b.)
A film documentary about the planet Earth
·       c.)
A scientific discovery about the planet Earth
·       d.)
A process for testing the mineral composition of a layer of earth
Which of the following is a patentable item?
·       a.)
A discovery about rat behavior
·       b.)
A genetically modified lab rat
·       c.)
A television ad protesting animal testing
·       d.)
An existing species of rat
Marie wants to discover the chemical formulation of a popular cleaning solution whose ingredients are a trade secret. She experiments with different combinations of chemicals until she is able to reproduce the cleaning solution exactly. Marie then produces and markets her own version of the cleaning solution.
Does Marie's conduct violate trade secret law?
·       a.)
No, because the method by which Marie discovered the trade secret is legal according to trade secret law.
·       b.)
No, because the ingredients of a cleaning solution are not something that trade secret law protects.
·       c.)
Yes, because reverse engineering a trade secret is illegal.
·       d.)
Yes, because it would be illegal for Marie to market a product whose formulation is a trade secret regardless of how she discovered the secret.
Tina, a newspaper reporter, is having lunch at a restaurant and finds a piece of paper on the floor. The paper turns out to be the secret recipe used by a local, highly successful BBQ catering company. Tina publishes the recipe in the paper the next day.
Does Tina's conduct violate trade secret law?
·       a.)
No, because the company did not do all reasonable and necessary things to maintain the recipe's secrecy.
·       b.)
Yes, because it was illegal for Tina to publish a secret recipe regardless of how she discovered it.
·       c.)
Yes, because Tina did not have the BBQ company's permission to publish the recipe.
·       d.)
No, because recipes are not protected by intellectual property law.
Ted wants to discover the secret algorithm developed by a successful software company to pair local dog owners with potential playmates for their dogs. Ted offers an employee at the company $20,000 to show him each step of the algorithm so that he can create a similar app.
Does Ted's conduct violate trade secret law?
·       a.)
No, because computer algorithms are not something that trade secret law protects.
·       b.)
Yes, because Ted misappropriated the software company's trade secret.
·       c.)
No, because the software company was unable to keep the algorithm a secret.
·       d.)
Yes, because the amount of money Ted paid was less than the potential value of the secret.
Select the answer that best applies to the Google logo.
·       a.)
This logo is an example of a service mark.
·       b.)
This logo is an example of trade dress.
·       c.)
This logo likely cannot be trademarked.
·       d.)
This logo is an example of a certification mark.
Select the statement that best applies to the phrase "Hawaiian pineapple."
·       a.)
This phrase is an example of a collective mark for a pineapple product.
·       b.)
This phrase likely cannot be trademarked for a pineapple product.
·       c.)
This phrase is an example of a service mark for a pineapple product.
·       d.)
This phrase is an example of a certification mark for a pineapple product.
Select the statement that best applies to the shape of the Coca-Cola bottle.
·       a.)
This shape likely cannot be trademarked.
·       b.)
This shape is an example of a service mark.
·       c.)
This shape is an example of a certification mark.
·       d.)
This shape is an example of trade dress.
Gertrude, a literature professor, copies and distributes the full text of a copyrighted novel she's teaching without permission from the copyright owner. She does this in order to help out some of her students who can't afford to buy the book.
Select the correct classification for this example.
·       a.)
Direct copyright infringement
·       b.)
Fair use
·       c.)
Legal use of a copyright license
·       d.)
Contributory infringement
Cara builds a software program that allows users to download copyrighted movies without permission from the copyright owners.
Select the correct classification for this example.
·       a.)
Legal use of a copyright license
·       b.)
Direct copyright infringement
·       c.)
Contributory infringement
·       d.)
Fair use
Harvey, a blogger, quotes several lines of dialogue from a copyrighted movie in his latest blog post. His blog post is a review of the film, and he does not obtain permission from the copyright owners.
Select the correct classification for this example.
·       a.)
Direct copyright infringement
·       b.)
Contributory infringement
·       c.)
Fair use
·       d.)
Legal use of a copyright license
                                    Challenge no 3
Which of the following is true of how agency relationships are created?
·       a.)
Once created, they are permanent.
·       b.)
They are expensive to create.
·       c.)
They are typically categorized as durable and non-durable.
·       d.)
They can be created orally.
Which of the following is true of how agency relationships are created?
·       a.)
Agency relationships can be express or implied.
·       b.)
They must involve legal consideration between parties.
·       c.)
Any agency relationship can be voided at will.
·       d.)
They must be in writing.
Which of the following is true of how agency relationships are created?
·       a.)
They are typically classified as formal or informal.
·       b.)
They are rarely created in the modern economy.
·       c.)
They can be created by contract or by agreement.
·       d.)
They must be created by lawyers.
Jonathan is a real estate agent. A builder tasks him with finding a suitable piece of land for a new condo development. Once the condos are complete, John has the exclusive right to list them.
Which type of agent relationship does this represent?
·       a.)
Employee
·       b.)
Special agent coupled with an interest
·       c.)
General agent
·       d.)
General agent coupled with an interest
Max and Maura, a retired couple, decide to travel around the world for a year. They need someone to manage their financial affairs while they're gone, so they sign a written document authorizing their daughter to act on their behalf in any financial matters.
Which type of agent relationship does this represent?
·       a.)
Power of attorney agency
·       b.)
Special agent
·       c.)
Agency coupled with an interest
·       d.)
Subagent
Phinneas asks a travel agent to reserve a flight and hotel for his upcoming vacation to Mexico.
Which type of agent relationship does this represent?
·       a.)
Agency coupled with an interest
·       b.)
Independent contractor
·       c.)
General agent
·       d.)
Special agent
Which of the following is true of an agent's duty to a principal?
·       a.)
An agent has a fiduciary duty to a principal.
·       b.)
An agent must obey all directions given by a principal.
·       c.)
An agent has a duty to warn a principal of any anticipated risk of physical harm.
·       d.)
An agent must preserve a principal's confidential information, but only until the end of his or her agency.
Which of the following is true of a principal's duty to an agent?
·       a.)
A principal's duty includes honoring an agent's best interests at all times.
·       b.)
A principal owes a duty of competitive compensation to an agent.
·       c.)
A principal's duty includes submitting payments to an agent.
·       d.)
A principal owes a duty to prevent any harm from coming to an agent.
Which of the following is true of an agent's duty to a principal?
·       a.)
An agent owes a duty to ensure that a principal is not hurt by the agent's actions.
·       b.)
An agent owes a principal the disclosure of any confidential information about the agent.
·       c.)
An agent owes a duty to perform with allegiance to a principal's interests.
·       d.)
An agent owes a principal his or her best effort to complete all tasks no matter how difficult.
Which of the following most clearly represents an illegal termination of employment?
·       a.)
A business start up chooses not to offer a new contract to an IT consultant after his old contract expires.
·       b.)
An accountant quits her job on her 60th birthday because she's saved up enough money to retire.
·       c.)
A corporation that is downsizing fires its five most recently hired employees, two of whom are disabled.
·       d.)
A hospital CEO fires an administrator who recently filed for bankruptcy, because she's concerned that other employees will lose confidence in him.
Which of the following most clearly represents a lawful termination of employment?
·       a.)
A pizza restaurant fires a driver for delivering pizzas later than promised, after finding out that his lateness was due to helping a woman who had just gone into labor.
·       b.)
A physician signs an employment contract in which she agrees to give her employer three months' notice before quitting her job. She quits with only one month's notice because she is very unhappy.
·       c.)
A law firm extends a job offer to third-year law student, who verbally accepts the offer and turns down other firms. The law firm rescinds the job offer before the student starts, because it suffers a large financial hit.
·       d.)
A lifeguard quits her job in the middle of the summer even though the pool will not be able to find a replacement for her on such short notice.
Which of the following most clearly represents a lawful termination of employment?
·       a.)
An employee quits her job when she's pregnant with her first child, because her boss has made it clear that he wants her to.
·       b.)
A school district fires a second grade teacher in the middle of the school year. The teacher is part of a union that has a collective bargaining agreement with the district.
·       c.)
A store owner lays off three employees to balance her budget. The employees she chooses to let go are all over the age of 60.
·       d.)
A restaurant manager lays off a waitress because he no longer needs as many staff members. The manager doesn't ask the waitress if she has another source of income before letting her go.
Samantha signs a contract with a lawyer to help her with her divorce. The lawyer uses a courier on a regular basis to deliver court documents. The courier sends Samantha a bill for the services ordered by the lawyer after checking the terms of the contract.
Is Samantha liable for the courier's bill?
·       a.)
No, Samantha is not liable.
·       b.)
Yes, due to express authority.
·       c.)
Yes, due to apparent authority.
·       d.)
Yes, due to implied authority.
Greg finds a checkbook on the street that belongs to a local business. He writes a check to himself, signs it, and cashes it at a bank across town. The owner of the local business sues the bank to recover the money.
Is the business owner liable for the money paid to Greg?
·       a.)
Yes, due to express authority.
·       b.)
Yes, due to apparent authority.
·       c.)
Yes, due to implied authority.
·       d.)
No, the business owner is not liable.
In April, Ursula quits her job as the manager of a local branch of a restaurant chain. In May, she orders five cases of wine from the restaurant's usual liquor supplier. The liquor supplier charges the restaurant, since the restaurant has not notified it of Ursula's departure.
Is the restaurant liable for the charges?
·       a.)
Yes, due to express authority.
·       b.)
No, the restaurant is not liable.
·       c.)
Yes, due to apparent authority.
·       d.)
Yes, due to implied authority.
Charlotte wants to put a pool in her backyard, but she does not want to pay for a pool contractor. Instead, she hires a friend who has no experience in construction or in installing pools, but who feels confident about his ability. While the pool is being dug, her friend disrupts an electrical line and the whole neighborhood loses power, causing injury to a neighbor who later sues.
Is Charlotte liable for the tort?
·       a.)
Yes, Charlotte is vicariously liable according to the "scope of employment" standard.
·       b.)
Yes, Charlotte is vicariously liable according to the "zone of risk" test.
·       c.)
No, Charlotte is not liable for her friend's mistake.
·       d.)
Yes, Charlotte is directly liable.
A delivery driver is speeding to his next stop and hits a pedestrian, causing injury. The driver is in violation of the company's policy that drivers must adhere to the speed limit. The injured pedestrian sues.
Is the delivery driver's employer liable for the tort?
·       a.)
No, the employer is not liable for the driver's actions in this case.
·       b.)
Yes, the employer is directly liable.
·       c.)
Yes, the employer is vicariously liable according to the "zone of risk" test.
·       d.)
Yes, the employer is directly liable for the tort and for the employee's criminal act of speeding.
Pacey, an insurance agent, is told by his employer at his annual review meeting that he needs to "boost his sales of insurance policies in the next quarter by 50%." To meet this goal, Pacey decides to blackmail several people that he knows. He threatens to expose their secrets unless they purchase an insurance policy from him. Someone reports Pacey to the police and he's arrested and charged with blackmail.
Is Pacey's employer liable for his criminal act?
·       a.)
Yes, the employer is directly liable.
·       b.)
Yes, the employer is vicariously liable according to the "zone of risk" test.
·       c.)
Yes, the employer is vicariously liable for the crime and for any tort suits related to the crime.
·       d.)
No, the employer is not liable because it did not authorize a criminal act.
Gina is a floor manager at a toy factory, responsible for monitoring product quality assurance. As the holiday season begins and production speeds up, her employer instructs her to ignore a batch of faulty products that have the potential for harm. When a child suffers injuries while playing with a toy from this batch, the parents sue Gina personally for negligence alongside the company.
Is Gina personally liable for the tort?
·       a.)
No, because Gina's principal instructed her to commit the negligent act.
·       b.)
Yes, because agents are almost always liable for torts they commit.
·       c.)
Yes, because Gina was acting in a personal capacity when she chose to follow her employer's instructions.
·       d.)
No, because the parents are also suing the company.
Randy, an agent for Retail Empire Inc., has been authorized to purchase parcels of land to further the company's real estate development business. Randy closes a deal with a seller on a two-acre lot in town. He signs a contract with his name and the notation "agent for Retail Empire Inc." The company later directs Randy to pull out of the deal and breach the contract.
Is Randy personally liable for the contract?
·       a.)
Yes, because agents are always liable for contracts they sign.
·       b.)
Yes, because the principal was undisclosed.
·       c.)
No, because it was clear that he was signing the contract as an agent.
·       d.)
No, because the company directed him to breach the contract.
Hillary is a real estate agent working with a buyer to find a new home in town. She is authorized to assist the buyer in identifying a suitable home to purchase and negotiating a contract. Hillary finds a house that the buyer loves, so she quickly decides to sign a purchase and sale contract to prevent anyone else from doing so first.
Is Hillary personally liable for the contract when the buyer refuses to pay the price agreed upon by Hillary and the seller?
·       a.)
Yes, because agents are almost always liable for contracts they sign on behalf of principals.
·       b.)
No, because it would be unreasonable to hold Hillary accountable for the cost of a home.
·       c.)
Yes, because Hillary exceeded her authority as an agent when she signed the contract.
·       d.)
No, because the seller was aware that Hillary was an agent.
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