Question

Question 61

Cal plans to open a small business marketing consulting firm operating as a
corporation. He signed an office lease with landlord as Marketing Priorities,
Inc. prior to incorporating the business. Shortly thereafter, he gave up the consulting
idea and took a job teaching. Is Cal personally liable on the lease?

? Question 62

The principal of a company co-mingled his business expenses and personal
expenses. That is, he used business profits to pay his ex-wife’s alimony. When the
business profits fell, the principal used his personal funds to pay business
expenses. If the business is unable to pay debts, can business creditors ask a court
to pierce the corporate veil and reach the principal’s personal assets?

? Question 63

The Environmental Protection Agency (EPA) enacted a new rule to reduce air
pollution emitted by coal-fired power plants. It set the standard of certain chemical
pollutants at a level its staff thought sounded effective. In other words, the rule
was not based on any studies or research. Coal plants can challenge the rule in
court as being _______________ instead of a reasoned consideration of all
relevant factors.

? Question 64

The Environmental Protection Agency (EPA) proposed a new rule to reduce water
pollution emitted by nuclear power plants. The agency did not allow a comment
period, so it did not hear any feedback or comments from affected power plants. If it
enacts a final rule, that rule will likely be overturned in a court challenge for
___________ .

? Question 65

Congress passed a law giving the Environmental Protection Agency (EPA) authority
to regulate air pollution. The EPA passed a regulation prohibiting the use of

genetically modified food in products sold to children. This rule is likely void
because ____________ .

? Question 66

Bob purchased an old warehouse in East Houston to develop as lofts. He later
discovered the property had hazardous waste buried on it. Under the federal
Superfund legislation known as CERCLA and its amendments, who could be
responsible for cleaning up the waste? That is, who is a principally responsible party
(PRP)?

? Question 67

Ty purchased a vacant tract of land to develop as apartments. Ty later discovered
hazardous waste buried on the site; the containers are leaking into the soil. He also
discovered that the site had been operated as a dump 25 years ago. Ty located the
company that operated the dump. Site cleanup costs one million dollars. Who must
pay?

? Question 68

The purpose of antitrust law is _____________.

? Question 69

The CEOs of Hospital A and Hospital B agree on the price of key services in an
effort to capture market share from Hospital C. (Hospitals A,B,C are competitors in
the same geographic and product/services market). Their agreement fails to have
any impact on each hospital’s market share. Under the Sherman Act Section 1,
which statement is correct?

? Question 70

Big Electronics, Inc. (BE) is a retailer selling electronics. Chips & More, Inc. (CM) is
a manufacturer of electronics who sells to BE. If BE and CM agree collude on the
price of a product, this would be an example of ___________.

? Question 71

A car manufacturer advertised in a marketing brochure a car with a ‘windshield of

shatterproof glass.’A person who bought the car was injured when a pebble hit the
windshield and the class shattered. The injured car owner can sue the manufacturer
for ___________ .

? Question 72

A sailboat merchant advertised a sail to last your lifetime. The new sail is made of
carbon fiber materials and is the first of its kind. The merchant displayed a sample
sail for customers to inspect. Under Article 2 of the UCC, this sample creates
______________ .

? Question 73

Beth consulted a salesperson at The Great Outdoors when shopping for a pair of
hiking boots. She specifically needs boots that are waterproof as the hike involves
crossing creeks. The salesperson recommended brand A boots for Beth’s hike, and
she purchased them. During her hike, she crossed a stream, the boots got wet, and
within 30 minutes fell totally to pieces. Beth can sue the merchant for __________ .

? Question 74

The District Attorney charged Tom with assault and battery. This lawsuit resulted
from Tom’s attack on his ex-employer when he was fired. To prove Tom guilty of
this criminal conduct, the District Attorney’s burden of proof is __________ .

? Question 75

Ralph needed a loan from the bank for his small business. He was in bad financial

shape, so he gave the bank his brother’s tax returns, altering the social security
number to his own. (The brother did not know of Ralph’s behavior). The bank relied
on the brother’s tax return and made the loan to Ralph. This is an example of
_________ .

? Question 76

Hal was fired from his computer programming job at hospital A. Furious over his
firing, he hacked into the patient files data base and threatened to wipe all the
records unless hospital A paid him $80,000 (his annual salary). What crime has Hal
committed here?

? Question 77

Famous chef Cal, the Cookin’ Cowboy, invented a BBQ sauce with ingredients he
would not disclose to anyone but his brother Sal. They operated several restaurants
and the Cowboy Burger was the No. 1 seller. How can Cal and Sal get trade secret
protection for the BBQ sauce recipe?

? Question 78

Usnick copied an article from the Wall Street Journal and distributed it in her legal
environment class of 20 students. the one page article analyzed several
government enforcement actions under the Foreign Corrupt Practices Act, a topic
the class is studying. Usnick did not ask the WSJ for permission to use the article. Is
this an infringement of WSJ’s copyright protects?

? Question 79

Hank is a merchant selling cowboy boots in his store in Houston. He entered into a
contract to sell boots to Pete, a merchant in Paris, France. The contract is silent on

which law applies to the contract, the UCC Article 2 of Texas or the consumer law
applicable in Paris, France. Both the United States and France have signed the
U.N. Convention on Contracts for the International Sale of Goods (CISG). Which
law most likely applies to this boot sales contract?

? Question 80

The CEO of ABC, Inc., a publicly traded company, directs the Accounting Division
vice president to list certain payments as ‘incidental expenses’ when in fact both
know the payments were made to a foreign official in an effort to secure a contract
for business in the foreign location. Recording these payments as ‘incidental
expenses’ ______________ .

Answer 1

Q1. Yes, the Cal is personally liable for the lease . since he made an lease agreement with the Landlord for the required amount and time Period.

Q2. Yes, business creditors ask a court to pierce the corporate veil and reach the principal’s personal assets because by comingling the personal and corporate assets you may lose the liability protection which the corporates provide by maintaining the legal requirements of having a separate corporation.

Q3. Being Defended

Q4.The rule will likely be overturned in a court challenge for procedural fairness to which nuclear power plant companies to put the suggestion before the EPA .