Q&A Hero

Q: Quick Transport, Inc., offers to sell a truckload of palettes to Rapid Delivery Company. Before accepting the offer, Rapid learns that the palettes have been sold to Speedy Trucking Corporation. Quick is a. liable to Rapid for breach of contract. b. liable to Speedy for breach of contract. c. not liable, because the sale revoked the offer to Rapid. d. not liable, if Quick offers substitute goods to Rapid.

Q: In a(n) ________ franchise, the franchisor authorizes the franchisee to negotiate and sell franchises on behalf of the franchisor. A) chain-style B) area C) distributorship D) processing plant

Q: Brick Products, Inc., files a suit against City Trucking Service for breach of contract, based on what Brick claims was City's offer. For a court to de­termine if a contract has been breached, under the common law, the offer must include terms that are a. exactly precise. b. reasonably definite. c. unequivocally approximate. d. vague or uncertain.

Q: Rio-Werner Corporation owns Rio's Sandwiches, a fast-food restaurant in New Jersey. It wants to operate in five cities on the west coast by means of franchisees that make and sell all menu items from Rio's Sandwiches. Which of the following franchises would best suit the Rio-Werner Corporation's franchise plan? A) processing plant B) area C) distributorship D) chain-style

Q: Elmo advertises a reward for the return of his lost dog. Floyd, who does not know of the reward, finds and returns the dog. Floyd cannot recover the re­ward because he a. did not confer a benefit on Elmo by returning the dog. b. did not know of the reward when he found and returned the dog. c. does not need the money. d. returned the dog.

Q: In a(n) ________ franchise, the franchisor licenses the franchisee to make and sell its products or services to the public from a retail outlet serving an exclusive geographical territory. A) chain-style B) area C) distributorship D) processing plant

Q: Consumer Sales, Inc. (CSI), sends its catalogue to Dean and includes a "person­alized" letter inviting him to buy any item in the catalogue at the advertised price. This is a. an offer because of the "person­alized" letter. b. an offer because there is no room for price negotiation. c. an offer only if Dean previously bought items from CSI. d. not an offer.

Q: Limonelle Corporation owns the secret formula for a popular beverage brand, Limonelle. The corporation operates through franchises in over 50 countries. It uses a secret formula to prepare the drink concentrate that is dispatched to the franchises world over. These franchises then prepare and bottle the beverage for distribution. Which type of franchise has Limonelle adopted? A) chain-style franchise B) processing plant franchise C) distributorship franchise D) area franchise

Q: Which of the following laws made ʺclosed shopsʺ unlawful?A) Taft-Hartley Act B) National Industrial Recovery ActC) National Labor Relations Act D) Railway Workers Act

Q: Nate tells Opal, "I might sell the skis that I bought last fall since I haven"t used them and the skiing season is almost over." This is a. an acceptance of an offer. b. an invitation to accept an offer. c. an offer. d. a statement of future intent.

Q: In which of the following types of franchises does a franchisor provide a secret formula or process to the franchisee? A) chain-style franchise B) area franchise C) distributorship franchise D) processing plant franchise

Q: John says to Kris, "I would like to sell you my sports memorabilia collec­tion." This is not an offer because it a. does not describe the subject matter specifically. b. does not include a price term. c. only expresses an opinion. d. only invites Kris to negotiate.

Q: In a(n) ________ franchise, the franchisor manufactures a product and licenses a retail dealer to sell the product to the public. A) processing plant B) area C) distributorship D) chain-style

Q: Fanny tells Eden that she will sign a lease if it includes a clause permitting Fanny to ex­tend the lease at the same amount of rent. Fanny's intent to sign the lease is determined by reference to Fanny's a. assumptions. b. beliefs. c. unspoken opinions. d. words and action.

Q: Which of the following is true of a franchise? A) The franchisor and franchisee are established as separate legal entities. B) A franchisee does not need a license to use the franchisor's trademark. C) The franchisee does not have access to the franchisor's knowledge. D) A franchise is considered a joint venture.

Q: Jill tells Ken, who has no knowledge of literary comedy, that she will tutor him in the subject for $50. As an offer, this is a. effective. b. not effective, because comedy is not a serious subject. c. not effective, because Jill's tutoring will be subjective. d. not effective, because Ken has no knowledge of the subject.

Q: Which of the following would cause the price elasticity of demand for a variable input to be greater?A) The smaller the price elasticity of demand for the final productB) The longer the time period being consideredC) The smaller the proportion of total costs accounted for by the variable inputD) The harder it is for a variable input to be substituted for by other inputs

Q: A(n) ________ is established when one party licenses another party to use the first party's trade name, trademarks, commercial symbols, patents, copyrights, and other property in the distribution and selling of goods and services. A) proprietorship B) franchise C) implicit contract D) general partnership

Q: An e-record is considered received under the UETA only if a person is aware of its receipt.

Q: An LLP has a(n) ________ tax benefit, where no tax is paid at the partnership level, and all profits and losses are reported on the individual partners' income tax returns.

Q: The UETA applies to all writings and signatures.

Q: Partners of LLPs are personally liable for the LLPs' debts, obligations, and liabilities.

Q: Contracting parties cannot opt out of the terms of the UETA.

Q: ________ refer to the formal documents that must be filed at the secretary of state's office of the state of organization of an LLP to form the LLP. A) Articles of LLP B) Agreements of conversion C) Articles of organization of LLP D) Articles of amendment of LLC

Q: The agency that deals with issues of ʺunfair and deceptive acts or practices in commerceʺ is theA) Federal Trade Commission. B) Federal Products Commission.C) Federal Consumer Protection Agency. D) Federal Advertising Commission.

Q: The UETA does not apply to a transaction unless the parties agreed to conduct the transaction electronically.

Q: A(n) ________ is a special form of partnership in which all partners are limited partners, and there are no general partners. A) domestic LLC B) proprietorship C) LLC D) LLP

Q: The UETA covers only e-records and e-signatures relating to a transaction.

Q: Distinguish between a member-managed and a manager-managed LLC. Mention the exceptional actions that cannot be delegated to managers.

Q: Under federal law, an electronic document can be as enforceable as a paper one.

Q: What is a distributional interest? Explain the terms of its transfer.

Q: Browse-wrap terms are often unenforceable.

Q: Explain the process that exempts members of an LLC from double taxation.

Q: U.S. government regulation of social and economic activityA) only began after World War II. B) costs less now than it did in the 1980s.C) has increased steadily since 1970. D) is confined to antitrust law.

Q: Terms in a shrink-wrap agreement have been enforced in the same way as the terms of other contracts.

Q: A company operating its business as a(n) ________ cannot have more than 100 shareholders.

Q: An e-contract must meet the same basic requirements as a paper contract.

Q: A nonmanager member of a(n) ________ LLC is treated equally to a shareholder in a corporation.

Q: Under the mailbox rule, an acceptance takes effect at the time it is sent.

Q: In a(n) ________ LLC, the managers have authority to bind the LLC to contracts, but nonmanager members cannot bind the LLC to contracts.

Q: If an offeror does not expressly authorize a certain mode of acceptance, then acceptance may be made by any reasonable means.

Q: In a(n) ________ LLC, each member has equal rights in the management of the business of the LLC, regardless of the size of his or her capital contribution.

Q: Which of the following statements about concentration ratios is correct?A) A high concentration ratio indicates that the industry is a monopoly.B) A high concentration ratio indicates that the industry is monopolistically competitive. C) A high concentration ratio suggests that the industry is characterized by strategic independence.D) A high concentration ratio suggests that the industry is characterized by strategic dependence.

Q: An acceptance subject to new conditions implicitly rejects the offer.

Q: A person who intentionally or unintentionally (negligently) causes injury or death to another person is called a(n) ________.

Q: No offer can be accepted by silence.

Q: A member's ownership interest in an LLC is known as a(n) ________.

Q: An unequivocal acceptance operates as a rejection of the original offer.

Q: An LLC is formed by delivering ________ to the office of the secretary of state of the state of organization for filing.

Q: A monopolistically competitive firm maximizes profits when it A) produces the quantity at which marginal cost equals the market price. B) produces the quantity at which marginal cost equals marginal revenue and uses the demand curve to determine the market price. C) produces the quantity at which marginal cost equals marginal revenue and sets the price equal to the marginal cost. D) produces the quantity at which marginal cost equals marginal revenue and sets the price equal to the marginal revenue.

Q: An offer that a statute makes illegal automatically terminates the offer.

Q: The ________ codifies LLC laws and tries to establish comprehensive LLC law that is uniform throughout the United States.

Q: An offeree's power of acceptance is terminated when the offeror dies unless the offer is irrevocable.

Q: The creation of an LLC is pursuant to laws stated by the ________ government.

Q: A counteroffer does not terminate but continues an offer.

Q: A(n) ________ is an unincorporated business entity that combines the most favorable attributes of general partnerships, limited partnerships, and corporations.

Q: A limited liability partnership has no general partner.

Q: If no time for acceptance is specified in an offer, the offer terminates at the end of a reasonable time.

Q: How does a monopoly maximize profits? What price does it charge?

Q: An offer may invite an acceptance to be worded in such specific terms that the contract is made definite.

Q: A member of a manager-managed LLC who is not a manager owes no fiduciary duty of loyalty or care to the LLC or its other members.

Q: A contract lacking a quantity term, when appropriate, may not be enforceable.

Q: The duty of care for managers and members includes the duty not to usurp the LLC's opportunities.

Q: An auction"we ask you to bid on this item"is an offer.

Q: A manager does not owe a duty of loyalty to the LLC as he or she is not a member of the LLC.

Q: An advertisement"this property for sale"is an offer.

Q: In a manager-managed LLC, amending the articles of organization cannot be delegated to the managers.

Q: A situation in which the price charged is equal to societyʹs opportunity cost is known asA) market failure. B) marginal monopoly pricing.C) marginal profits. D) marginal cost pricing.

Q: A price list is an offer.

Q: In a manager-managed LLC, it is necessary that the manager is a member of that LLC.

Q: A statement of future intent"I plan to sell my 700-pound sow"is an offer.

Q: The United States does not permit an LLC to be member-managed.

Q: An expression of opinion"your customers will like this"is an of­fer.

Q: If a member or manager of an LLC is found to be a tortfeasor, he or she is not personally liable for the injury or death of another person.

Q: Managers of LLCs are not personally liable for the debts, obligations, and liabilities of the LLC they manage.

Q: A firm should continue producing untilA) the cost of producing the output equals the revenues obtainable from selling the output.B) the cost of increasing output by one more unit equals the revenues obtainable from selling the extra unit.C) average costs are at a minimum.D) the average cost when another unit is produced equals the average revenue obtainable from selling the extra unit.

Q: An invitation to negotiate"can you afford this?"is an offer.

Q: Members of LLCs are not personally liable for the LLC's debts, obligations, and liabilities.

Q: An invitation to submit bids"how much would you charge to do this work?"is an offer.

Q: An LLC is not liable for any injury caused by an LLC member while acting within the ordinary course of business of the LLC.