Appendix
C for Unit Three
Questions
on the Features
chapter 12—contemporary Legal Debates:
promissory estoppel and employment contracts
A1. Ben works for Consumer Industries, Inc (CII). When CII fires Ben, he
files a suit against the firm. The court will most likely hold that CII is not liable if
a. Ben’s employment is at-will.
b. Ben falls under the protection of a
federal or state statute.
c. Ben has an employment contract.
d. Ben quit a previous job and moved to
a new city to
work for CII.
ANSWER: A PAGE: 260 TYPE: =
NAT:
AACSB Reflective AICPA
Legal
B1. Digital Services Corporation (DSC) promises to hire Ellen. The day before
Ellen is to start work, DSC revokes the promise. In Ellen’s suit against DSC,
the court is most likely to hold that DSC is not liable to Ellen if
a. Ellen’s promised employment is
at-will.
b. Ellen falls under the protection of a
federal or state statute.
c. Ellen has an employment contract.
d. Ellen quit a previous job and moved
to a new city
to work for DSC.
ANSWER: A PAGE: 260 TYPE: =
NAT:
AACSB Reflective AICPA
Legal
chapter 13—contemporary Legal Debates:
Are ONline Fantasy Sports Gambling?
A2. Jen participates in fantasy football games online by creating a fantasy
team composed of real-life players from different teams and competing against
teams created by other “owners.” Jen pays a fee to the sponsoring site, which
awards prizes at the end of the season. This is illegal gambling activity
according to
a. a federal court.
b. Congress.
c. ESPN.
d. none of the choices.
ANSWER: D PAGE: 274 TYPE: N
NAT:
AACSB Reflective AICPA
Legal
B2. Van gambles online on the outcomes of football games by creating a
fantasy team composed of real-life players from different teams and betting a
given amount each week on the performances of those players. At the end of the
season, the team “owner” with the most points wins the pot. This is illegal
gambling activity according to
a. a federal court.
b. Congress.
c. ESPN.
d. none of the choices.
ANSWER: D PAGE: 274 TYPE: N
NAT: AACSB Reflective AICPA
Legal
chapter 14—insight into ethics:
internet click fraud
A3. Chet repeatedly clicks on Delight Loan
Company’s ad, which is displayed on E-Search’s Web site, with the intent of
increasing Delight’s ad costs. This is
a. an aggressively competitive, but
legal, act.
b. an unethical act.
c. a violation of the implied
covenant of good faith and fair dealing.
d. unjust enrichment.
ANSWER: B PAGE: 292 TYPE: N
NAT:
AACSB Reflective AICPA
Legal
B3. Dale repeatedly clicks on EZ Online Order
Company’s ad, which is displayed on Dale’s Web site and for which Dale charges
EZ a fee based on the number of clicks on the ad. This is
a. an aggressive, legitimate
attempt to increase profits.
b. an unethical but legal act.
c. a violation of the implied
covenant of good faith and fair dealing.
d. undue influence.
ANSWER: C PAGE: 292 TYPE: N
NAT:
AACSB Reflective AICPA
Legal
chapter 15—contemporary Legal Debates:
prenuptial agreements and advice of counsel
A4. Jack and Jill sign a prenuptial agreement.
A court will most likely hold that Jill did not sign the agreement voluntarily if,
before signing the agreement, she
a. did not have the advice of
independent counsel.
b. followed the advice of independent
counsel.
c. refused to follow the advice of
independent counsel.
d. refused to obtain the advice of
independent counsel.
ANSWER: B PAGE: 312 TYPE: =
NAT:
AACSB Reflective AICPA
Legal
B4. Alice and Bob sign a prenuptial agreement
that includes a waiver of all support in the case of divorce. A court will most
likely hold that this waiver is
a. enforceable according to public
policy.
b. enforceable by the financially weaker
party only.
c. unenforceable as contrary to public
policy.
d. unenforceable by the financially
stronger party only.
ANSWER: C PAGE: 312 TYPE: =
NAT:
AACSB Reflective AICPA
Legal
chapter 19—insight into the global environment:
interrnational use and regulation of the internet
A5. Blanco , S.A. , a Chilean firm, and Ciao, Ltd.,, an
Italian firm, enter into a contract that includes a clause designating the New York state courts as
the forum for resolving disputes under the contract. A treaty that may support
this clause is
a. the Convention on the Choice of Court
Agreement.
b. the Convention on the Use of Electronic
Communications in International Contracts.
c. the Cyber-Crime Convention.
d. the New York Arbitration Convention.
ANSWER: A PAGE: 380 TYPE: N
NAT:
AACSB Reflective AICPA
Legal
B5. Tony Textiles, Ltd. (TTL), is a piecework
contract bidder in Europe . Without
authorization, TTL accesses the computer system of Upright Clothes, Inc.—TTL’s
competitor in the United
States —to disrupt and destroy Uprught’s
business. A treaty that may provide mechanisms to stop TTL’s activity is
a. the Convention on the Choice of Court
Agreement.
b. the Convention on the Use of Electronic
Communications in International Contracts.
c. the Cyber-Crime Convention.
d. the New York Arbitration Convention.
ANSWER: C PAGE: 380 TYPE: N
NAT:
AACSB Reflective AICPA
Legal
Unit three—focus on ethics:
Contract lAw and the Application of ethics
A6. Topographical Engineers, Inc.,
which is new to its business, offers its services at less than half their
possible market price to United Road Crew Construction, Inc., which knows the
services’ value. United’s decision to accept the offer without commenting on
the price could be justified by
a. the concept of unconscionability.
b. the doctrine of promissory
estoppel.
c. the principle of freedom of
contract.
d. the Statute of Frauds.
ANSWER: C PAGE: 387 TYPE: =
NAT:
AACSB Reflective AICPA
Legal
B6. Ray and Strip Mines, Inc., enter
into a contract for a sale of the coal beneath Ray’s land for a fraction of the
value of the coal and the cost to restore the land. A court is most likely to
determine that this deal is unfair under
a. the concept of unconscionability.
b. the doctrine of promissory
estoppel.
c. the principle of freedom of
contract.
d. the Statute of Frauds.
ANSWER: A PAGE: 387 TYPE: +
NAT:
AACSB Reflective AICPA
Legal
A7. Merchandise Presentation Company
enters into a contract with Newt to perform certain services for a certain
price. Newt is later dissatisfied with what he claims is a low level of service
for a high price. Whether this deal is unconscionable is subject to
a. the interpretation of a court.
b. the opinion of the buyer.
c. the position of the seller.
d. the precise definition in UCC 2–302.
ANSWER: A PAGE: 387 TYPE: +
NAT:
AACSB Reflective AICPA
Legal
B7. To bid on a job, Budget Construction
Company relies on the oral promise of Coldwater Plumbing, Inc., to perform
certain work at a certain price. Coldwater fails to perform. Budget can
a. not recover due to the principle
of freedom of contract.
b. not recover due to the Statute
of Frauds.
c. recover under the concept of
unconscionability.
d. recover under the doctrine of
promissory estoppel.
ANSWER: D PAGE: 389 TYPE: +
NAT:
AACSB Reflective AICPA
Legal
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