Questions and Answers on Social Policies - Paper Example

Which of the following would be considered a misrepresentation of a material fact, and therefore subject to a finding of fraud?

Yogurt claiming to be 99% fat free was found to have a fat level of 1.4%.

You buy a new Chevrolet Corvette with a gas mileage rating of 23 MPG in the city. Your actual experience is 21 MPG.

A used automobile listed for sale with 75,000 miles shows 75,252 miles on the odometer.

You bought a diamond ring advertised as having a solitaire stone of 1.5 carats weight. You have the ring appraised and find that the stone is .60 carats.

ANSWER= D

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Scienter means:

An intent or knowledge of wrongdoing

A mistake due to lack of scientific knowledge

Ignorance based on a lack of study skills in college

Non-guilty knowledge

ANSWER= ABottom of Form

While on vacation you are stricken with a severe illness requiring a hospital stay several hundred miles from home. While you are heavily sedated your spouse has you sign papers so the hospital bill can be covered. The truth is you have adequate insurance to pay the bill and the document you signed allows your spouse to sell your cabin on the lake, and your spouse uses the proceeds from the sale to buy a new Lexus GS SUV. This is an example of (choose the best answer):

Unconscionability

Innocent misrepresentation

Undue influence

Duress

ANSWER = A

A contract made while being threatened with blackmail is voidable.

True

False

ANSWER = A

Term capacity relates to the ability of one mind to meet another mind. How does this term apply to a minor?

Minors are never responsible for their actions, no matter how developed their minds are.

A minor may have not developed the ability to have a meeting of the mind and fully understand the requirements of a contract.

A minor is assumed to be looking for dishonest gain.

Minors cannot be released from a contract unless the other party agrees to do so.

ANSWER = BTop of Form

Some contracts are contrary to public policy, and are therefore illegal. As examples, these are contracts that:

Allow gambling in certain geographic areas

Set too low of speed limits and limit rates of usury

Corrupt public officials and discriminate because of race or religion

Require identification in order to vote in a national election

ANSWER = A

The Statute of Frauds requires there be written evidence (called a memorandum) for certain kinds of contracts. Which type of contract does not meet this requirement:

A promise made in consideration of marriage

A promise to pay the debt of another

An agreement that will be executed 18 months from now

An agreement to mow someones lawn each week for the next 4 weeks at $50 per week

ANSWER = DBottom of Form

ESIGN:

Is a federal law that regulates the use of electronic contracts and signatures for interstate commerce

Stands for Electronic SIgnatures for the Government Nationally

Requires all paper contracts to have an electronic counterpart

Requires all electronic contracts to have a paper counterpart

ANSWER = ATop of Form

What is the meaning of the statement, The assignee stands in the shoes of the assignor?

The assignor has the same rights as the assignee

The assignee has exactly the same rights as the assignor

Parties to the contract have to wear the same size shoes

Contracts often end in toe to toe conflicts

ANSWER = BBottom of Form

An agreement to work for a person for the lifetime of that person is subject to the Statute of Frauds.

True

False

ANSWER=B

Ted Nugent has been contracted to perform at the presidential inauguration. He decides hed rather go fishing that day. He can delegate his duties to Madonna without a change in contract.

True both are well-known entertainers and can easily fill in for each other

False because Ted Nugent is a male and Madonna is a female

False because Ted Nugent has a different style of music and was originally selected for his specific talents

True Ted Nugent is willing to pay Madonna the full amount of the original contract

ANSWER = CBottom of FormTop of Form

Gerald has agreed to purchase Retas home for $50,000. As part of the agreement, he must put down a deposit of $5,000. Both parties agree that if either of them does not follow the terms of the contract, the other person gets the $5,000 deposit. Gerald fails to follow through with the purchase; Reta keeps the $5,000. This is an example of:

Compensatory damages

Consequential damages

Liquidated damages

Punitive damages

ANSWER = CBottom of Form

Refer to this information for both questions 22 & 23:

A company that manufactures and distributes dietary supplements assures customers that their weight loss formula is a safe and effective way to lose weight, advertising the supplement as an all natural, and completely safe supplement. Amanda, who believed the companys claims, took the supplement for 30 days before becoming violently ill. Her doctors determined that at least one of the substances contained in the supplement reacts with a number of prescription medications, one of which Amanda was taking, and thus caused her serious illness. Amandas medical bills amounted to nearly $5,000, prompting her to file a civil lawsuit against the company to recoup her medical expenses, as well as lost wages for the two weeks she was off work. Amanda claims in her lawsuit that the company knew, or should have known, that the contents of the weight loss formula were likely to react badly with certain prescription medications, and that they should warn consumers. At trial, the company insists it has not broken any laws or regulations, and makes it clear it has no plans to pull the product off shelves, or to alter its advertising campaign. In the end, the judge rules in Amandas favor, awarding her damages for medical expenses and loss of income in the amount of $7,000. The court also admonishes the company, making it clear that the courts opinion is that the company has negligently and recklessly risked peoples health. The judge then awards Amanda damages in the amount of $100,000, with the hope that a large hit to its bank account will convince the supplement company to change its ways, to be more serious about the safety of the supplements it manufactures.

The damages of $7,000 can be classified as:

Compensatory damages

Consequential damages

Liquidated damages

Punitive damages

ANSWER = A

Refer to this information for both questions 22 & 23:

A company that manufactures and distributes dietary supplements assures customers that their weight loss formula is a safe and effective way to lose weight, advertising the supplement as an all natural, and completely safe supplement. Amanda, who believed the companys claims, took the supplement for 30 days before becoming violently ill. Her doctors determined that at least one of the substances contained in the supplement reacts with a number of prescription medications, one of which Amanda was taking, and thus caused her serious illness. Amandas medical bills amounted to nearly $5,000, prompting her to file a civil lawsuit against the company to recoup her medical expenses, as well as lost wages for the two weeks she was off work. Amanda claims in her lawsuit that the company knew, or should have known, that the contents of the weight loss formula were likely to react badly with certain prescription medications, and that they should warn consumers. At trial, the company insists it has not broken any laws or regulations, and makes it clear it has no plans to pull the product off shelves, or to alter its advertising campaign. In the end, the judge rules in Amandas favor, awarding her damages for medical expenses and loss of income in the amount of $7,000. The court also admonishes the company, making it clear that the courts opinion is that the company has negligently and recklessly risked peoples health. The judge then awards Amanda damages in the amount of $100,000, with the hope that a large hit to its bank account will convince the supplement company to change its ways, to be more serious about the safety of the supplements it manufactures.

The damages of $100,000 can be classified as:Bottom of Form

Compensatory damages

Consequential damages

Liquidated damages

Punitive damages

ANSWER=D

Name the purpose(s) of commercial paper (as a negotiable instrument).

Allows companies with strong credit ratings to raise funds to pay debts or meet working capital needs.

Helps to promote marketing plans and increase sales revenue.

Serves as a way to extend credit and a substitution for money.

Allows issuers to float funds and show greater levels of current asset

ANSWER=A and C

Indorsing (endorsing) a negotiable instrument:

Allows the title and the holders interest to be transferred to a new holder

Is a way of promoting the instrument when offering it for sale

Prevents the instrument from ever being transferred again

Only happens when an allonge is attached to the instrument itself

ANSWER= A

A blank indorsement specifies the specific person to whom the negotiable instrument is payable.

True

False

ANSWER=B

A defense prevents the enforcement of a negotiable instrument. Examples of real defenses include all the following except:

Forgery

The obligors infancy

Acquisition of lost or stolen bearer instruments

Duress at the time of making the instrument

ANSWER=C

An example of a personal defense, which cannot protect the maker against the claims by an HIDC, is:

Forgery

The obligors infancy

Acquisition of lost or stolen bearer instruments

Duress at the time of making the instrument

ANSWER=C

Various parties can find themselves either primarily or secondarily liable to meet the requirements of the instrument. Which of the following is an example of a party secondarily liable?

The party must pay on an instrument as it existed when drafted by the drawer.

The party must pay on an instrument as it existed when drafted by the maker.

The party must pay on an instrument as it existed when accepted by the drawee.

The party has an obligation to pay when the person seeking payment first demanded payment from the primary party, and the party in question received notice that the primary party refused to pay the instrument.

ANSWER=D

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To discharge means that a party no longer has the liability to pay on a negotiable instrument. Which of the following events can result in discharging that obligation?

The instrument has been paid.

The instrument has been fraudulently altered.

The instrument was missing for 5 days and was found.

Items a and b are true.

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ANSWER=D

The Pow Chemical Company operates a large manufacturing facility in Memphis, TN. Billy, the plant manager, has knowingly caused sulfuric acid from the facility to be dumped into the Mississippi River for several years. Which statement is the best response?

The Pow Chemical Company is liable for Billys criminal acts.

Billy is solely liable for the dumping of sulfuric acid into the river.

The Environmental Protection Agency (EPA) is responsible since the dumping happened over an extended period of time and they should have...