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QUESTION

Mar 05, 2019

QUESTION 1 Sal A. Mander towed a tiny house to a 20 acre farm property and lives in the tiny house (see photo). The tiny house has a composting...

QUESTION 1

Sal A. Mander towed a tiny house to a 20 acre farm property and lives in the tiny house (see photo). The tiny house has a composting toilet and uses water collected from rain. Sal pays the landowner $100/month to live in the house on the farm. Is Sal's tiny house real property or personal property?

Real property

Intangible property

Personal property

QUESTION 2

Examine the Northchase Industrial Park Warehouse Lease (below) between H.R. Puffinstuff Properties, Inc. and Hipster Hats LLC. Hipster Hats LLC occupied Space A (10,000 square feet) of a warehouse. H.R. Puffinstuff Properties, Inc. was acquired (purchased) by South Carolina Realty, Inc. in on March 1, 2015. Does South Carolina Realty, Inc. have to honor (abide by) the contract between H.R. Puffinstuff Properties, Inc. and Hipster Hats LLC?

Yes

2.7 points

QUESTION 3

In the mid-2000s, plaintiff EPA added the Ward Transformer Company's facility in Raleigh, which had become contaminated with polychlorinated biphenyls, to its National Priorities List and initiated a costly removal action under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), for which defendants Consolidated Coal Company (Consolidated) and PCS Phosphate Company (PCS) have borne much of the cost. Which of the following terms (under CERCLA) applies to Consolidated and PCS?

Potentially responsible parties

Polluter respondents

Responsible toxic polluters

Primary polluting parties

2.75 points

QUESTION 4

Sassy Pantz is owned by Sassy Sauzie, Ellie Pantz, and 50 other shareholders. The company suffers from double taxation, but the owners are shielded from personal liability. Is Sassy Pantz a "legal person" for purposes of doing business?

Yes

2.7 points

QUESTION 5

The photo shows two energy drinks. The company that manufactures "5 Hour Energy" drink (Innovation Ventures) has manufactured the drink for well over a decade and has used the mark ever since beginning production of the product. The company that manufactures "6 Hour Energy Shot" (N2G Distribution) began manufacturing the drink a couple years ago and admitted to copying the "warning" information on their bottle from the "5 Hour Energy" bottle. Innovation Ventures (the "5 Hour Energy" drink) filed a trademark infringement lawsuit against N2G Distribution ("6 Hour Energy Shot") because the "6 Hour" drink too closely resembled the trademark and trade dress of the "5 Hour Energy" drink.

Question: Is this trademark infringement?

Yes

2.7 points

QUESTION 6

Cloud-computing company Rackspace Hosting Inc. has a two-story tube slide as the centerpiece of its headquarters in San Antonio, Texas. (see photo) Daniel Dunkel, an executive of New Era Associates LLC, broke his leg on the slide while touring the Rackspace office. Dunkel's company was about to hire Rackspace for cloud computing services. The Rackspace employee giving Dunkel a tour told him "the only way down from" the building's upper floor was by the slide and that the slide was a "rite of passage." Dunkel took a ride on the slide. Unfortunately, Dunkel's leather-soled dress shoe caught on the inside of the slide, causing him to break his tibia and fibula which had to be surgically repaired one month later. Dunkel sued Rackspace, Wiegand Sports LLC (the Utah company that built the slide), and Metropolitan Contracting Co. LLC (which installed the slide). Each defendant company follows all the formalities of running a corporation or LLC. Rackspace argues that the warning sign at the top of the slide says that wearing rubber-soled shoes on the slide could result in injury and to keep feet raised while using the slide. Which of the following statements is FALSE?

In general, Rackspace Hosting Inc. is liable for injuries to invitees that occur on the company's property.

The sign at the top of the slide is an effort to transfer responsibility (assume the risk) from Rackspace to the individual person using the slide.

Dunkel will be able to reach the personal assets of the individual owners of Rackspace, Wiegand Sports, and Metropolitan Contracting Co.

2.7 points

QUESTION 7

In Nov. 8, 2015, the parking lot of an IHOP (International House of Pancakes) caved in (collapsed) and swallowed 12 cars that became submerged in mud and pavement pieces. Fortunately, no person was injured, but the customers who lost their cars want compensation for the loss of their cars. The lease agreement between the IHOP franchisee (Lessee Lala Enterprises, Inc.) and the lessor of the land (Meridian Hospitality, LLC) stated:

The construction company responsible for the parking lot was the lessee of the land, Lala Enterprises, Inc. The founder of the company, Abdul Lala, had two engineering degrees and used these skills to construct several hotels in the area as well as the IHOP property.

Investigators immediately concluded that this was NOT a typical sinkhole, but was a construction defect. The photograph shown demonstrates that the drainage pipe collapsed under the weight of the cars and pavement. There is no doubt that the cause of this collapse was faulty and inadequate design and construction of the parking lot and drainage system.

Which of the following statements is TRUE about this situation?

Along with their companies, the individual owners of Lala Enterprises and Meridian Hospitality are personally liable for payment of compensation to the car owners.

Lala Enterprises is liable for the damage to the cars.

Meridian Hospitality, LLC is liable for the damage to the cars.

Lessor Meridian Hospitality, LLC breached the warranty of habitability.

Owners cannot sue IHOP, Lessee or Lessor and their only remedy is to file a claim with their automobile insurance companies. After all, accidents happen.

2.75 points

QUESTION 8

Tom's Turkeys is owned by Thomas Jeffs, sister Jenny Jeffs, plus 300 other shareholders. A competitor turkey farm in the Wilmington regional area is Heartline Turkeys, which opened in 2009. Anna Graham and Ima Nutt are the sole owners of the company. Anna and Ima are both members and managers of the company. Their company is known for turkeys "raised with love," and the turkeys are very large-sized and priced for major grocery store chains (e.g., Food Lion, Wal-Mart). Of the following, which is false about Heartline Turkeys?

Heartline Turkeys is taxed like a partnership

Anna Graham and Ima Nutt have full personal liability for the busines

Anna Graham and Ima Nutt are member-managers, sharing in management and sharing profits and losses in accordance with an Operating Agreement

Heartline Turkeys, in its current form, cannot sell ownership shares on a national stock exchange

2.7 points

QUESTION 9

For Sale: 3.82 Acre lot available in the Dollar General Plaza shopping center. Lot 2 is accessed by a 30 feet access easement that runs across the northern side of the Dollar General store parking lot. Other tenants of the Dollar General Plaza shopping center include Subway and a Pawn Shop. There is an existing 0.92 acre retention pond located at the northeastern corner of the property. There is no other way to get to Lot 2 except by using the easement. See the photos. Do the tenants of the Dollar General Plaza shopping center have the right to block the road leading to Lot 2?

No, because the road to Lot 2 is an easement by necessity.

Yes, because the road belongs to the Dollar General Plaza shopping center, not Lot 2.

Yes, but the tenants of the Dollar General Plaza shopping center could also decide to charge a fee to the owner of Lot 2 to reach the Lot 2 property through the Dollar General roadway.

2.7 points

QUESTION 10

In February 2014, a pipe collapsed under a coal ash dump at the Duke Energy Eden plant, spilling tons of coal ash into the Dan River and coating 70 miles of the river in gray sludge. Duke Energy was not permitted to dump the coal ash into the river. What law did Duke Energy violate?

Clean Water Act

National Environmental Policy Act

Toxic Substances Control Act

Comprehensive Environmental Response, Compensation, and Liability Act

2.7 points

QUESTION 11

Tom's Turkeys is owned by Thomas Jeffs, sister Jenny Jeffs, plus 300 other shareholders. Residents of Wilmington, NC, Thomas and Jenny formed the company twenty years ago under North Carolina laws. Tom's Turkeys made a large profit last year and the company's management team decided to make some real estate investments. If Tom's Turkeys buys a parcel of land in Georgia in order to sell it later at a higher price, is it "doing business" there?

No, because an investment isn't "doing business."

Yes, because the company will have a legal and physical presence in the state

Maybe, but only if Tom's Turkeys earns a profit in Georgia

No, because "doing business" only applies if the company organizes under Georgia law

2.7 points

QUESTION 12

Bud Light lives in a beautiful apartment on the top of his company's building. Bud's penthouse apartment has a living area with bookcases built into the wall next to the fireplace. (see photo) Are the decorative items on the shelves of the bookcases real or personal property?

Real property

Personal property

A license

Trade fixtures that Bud will take with him if he moves

2.7 points

QUESTION 13

Sondra rented a house in Carolina Beach, North Carolina, from Landlord "Beach Rentals, Inc." for one year at the price of $1,200 per month. A couple months after living there, Sondra began to have trouble breathing a noticed an odd smell in the house. Sondra's friends noticed the smell as well and after an investigation, discovered there was black mold in the air conditioning and heating vents and in various places in the corners of the ceiling; this indicated that some water damage had occurred and mold had started to develop. Sondra notified the Landlord about the problem, but the Landlord said that there wasn't a problem and they weren't going to fix it.

North Carolina law states that black mold renders an apartment or house "uninhabitable" because it is an environmental and health hazard. Sondra has 3 more months of her lease. Can Sondra do anything to protect her health and get out of the lease?

Yes. Sondra can claim that the property is uninhabitable and that the Landlord has constructively evicted her from the property; however, Sondra will have to immediately move. Sondra should report the problem to the NC Attorney General's Office. If the Landlord sues for the remainder of the rent, Sondra will have a legal defense and the Landlord will lose the case.

No. Sondra is doomed and will have to stay the remainder of the 3 months and continue to pay rent in a timely manner.

2.7 points (Extra Credit)

QUESTION 14

Maggie Smart lived in a planned community like Northchase, Porter's Neck, Brunswick Forest, or Landfall in Wilmington. Maggie Smart was angry with her Home Owners' Association for charging her a late fee when she was one day late paying her annual homeowner dues, so she decided to paint her house like a rainbow in protest (see photo). The HOA bylaws and rules, which are in Ms. Smart's deed to her house, state that houses may only be painted one of eight (8) colors approved by the HOA. A multi-colored house is not one of the approved colors (or combination of colors) in the planned community. The HOA fined Ms. Smart for the house color and ordered her to repaint her house in an approved color. May Ms. Smart keep the unique paint job on her house?

No. The HOA covenants, bylaws and rules are part of her deed and she must paint her house an approved color to comply with the rules or be subjected to additional fines.

No, because she lives in a community and you must always comply with the rules established by other community members.

Yes. She is engaging in free speech and free speech always prevails in disputes.

2.7 points

QUESTION 15

Schreder Lighting hired Edmund Morel to sell and perform "tunnel and transit" lighting projects to regional governmental units (e.g., cities). Morel worked a 40 hour work-week and, for his labor, Schreder Lighting paid Morel a monthly salary as well as his employment taxes. Morel also had an office in the Schreder Lighting headquarters, health insurance, and a company car. However, in 2006, Morel formed his own lighting company and from 2006 to 2010, Morel began to use and disclose Schreder's confidential, proprietary and trade-secret information for his own personal benefit and the benefit of his covert personal business. Which of the following is true?

Morel used the free market to create and grow his own company

As an independent contractor, Morel has the right to use his experience and information gained on the job to his own benefit.

Morel breached his fiduciary duty to Schreder Lighting

2.7 points

QUESTION 16

In the photo below, how would you classify these display cases?

Trade fixtures (and personal property)

Personal property

Trade fixtures that are part of the real property

Intangible property

2.7 points

QUESTION 17

The Dog House Day Care and Boarding opened in 2014 and the photo below shows the image used to identify the company. The Dog House Day Care and Boarding caters to both large and small dogs, but most of their customers own large dogs. Another company called The Dog House (image also shown) opened in January 2015 just three miles away from the The Dog House Day Care and Boarding facility. Both companies offer pet boarding, grooming, and day care. Both companies have a very similar color scheme and offer indoor and outdoor play areas with toys and games for the dogs. The Dog House that opened in 2015 tends to cater to small dogs, but takes all dogs. Shortly after The Dog House opened in 2015, The Dog House Day Care and Boarding (that opened in 2014) noticed a decline in sales. The owners of The Dog House Day Care and Boarding (that opened in 2014) want to file a lawsuit against The Dog House (that opened in 2015) and have asked you for business law advice. Which of the following statements would you tell them?

Under the Constitution, The Dog House (that opened in 2015) has an absolute right to free speech and can create any name or image it desires to identify its company, including one just like that of The Dog House Day Care and Boarding (that opened in 2014).

The two names are similar, but the big difference in logo design and target market means that The Dog House Day Care and Boarding (the 2014 company) probably would not win a lawsuit against The Dog House (the 2015 company) for intellectual property infringement.

In order for The Dog House Day Care and Boarding (that opened in 2014) to have a legal claim against The Dog House (that opened in 2015), The Dog House Day Care and Boarding company must have registered its image with the U.S. Copyright Office.

The images and names are so similar that they would be confusing to customers. The Dog House Day Care and Boarding should file a lawsuit against The Dog House for intellectual property infringement.

2.7 points

QUESTION 18

Hobie Carpenter was the sole owner of Carpenter's Carpentry, a small contracting company that builds sheds, pergolas, decks, and room additions for customers. The company was never formally organized under any state law. Hobie has about 10 employees working for him, but he does all the design, planning, and purchasing for the finished product. Hobie and his company began working on a very large, 9 month construction job for the University of North Carolina. The contract between UNCW and Carpenter's Carpentry had a non-assignment and non-delegation clause. About half way through the UNCW project, Hobie decided that he could make more money working at Lowe's Home Improvement and decided to close his company. But Hobie found another company, Dewey Cheatum Contractors, to finish the project. Unfortunately, Dewey Cheatum Contractors was not nearly as good as Carpenter's Carpentry. UNCW found out that Hobie left the project when a major problem arose with the construction and Dewey Cheatum Contractors was responsible. UNCW decided to sue Hobie Carpenter and Carpenter's Carpentry for breach of contract. Which of the following is false?

Non-assignment clauses are illegal, so Hobie is not liable, and UNCW may only sue Dewey Cheatum Contractors for damages.

Hobie Carpenter will be personally liable for any damages caused by his company.

Hobie, Carpenter's Carpentry, and Dewey Cheatum Contractors are all liable to UNCW for any damages UNCW suffers.

Dewey Cheamtum Contractors are liable for negligence in construction.

2.7 points

QUESTION 19

Jennifer Lynn Pedroza (Pedroza) and Amanda Hayward created The Writer's Coffee Shop (TWCS) in 2009 as a fan-based website. In 2010, it became a publishing house. In May 2011, it published "Fifty Shades of Grey." From 2009 through 2011, evidence shows that Pedroza and Hayward shared profits and losses of the company, jointly made decisions about company strategy, referred to each other as "partner," and third parties considered them to be partners. After the book reached the top of the bestseller lists, Hayward signed a contract with Random House to sell publishing rights, but never gave a copy of the contract to Pedroza. Instead, Hayward arranged for all payments (in the multi-million dollar range) to go to a bank account she controlled in Australia. In Nov. 2012, Hayward made a one-time payment of $100,000 to Pedroza from the "Fifty Shades" trilogy and forced Pedroza to sign an agreement under which Pedroza would receive $50,000 and $5,000 per month for work as a marketing manager for TWCS. In Oct. 2013, "TWCS/Hayward" terminated Pedroza's employment. Pedroza sued Hayward for breach of fiduciary duty, fraud, and partnership agreement. Will Pedroza win her case against Hayward?

Given the evidence and behavior by Hayward, yes, Pedroza will win.

Pedroza cannot win because there is no written partnership agreement.

2.7 points

QUESTION 20

Ed "Bat" Masterson owns and operates a cattle operation called The Cattle Range, Inc. The company boards (shelters and feeds) and provides other services (including breeding facilities) for cattle and their owners. Connie Mann owned four prize Santa Gertrudis bulls that he boards at The Cattle Range, Inc. Under a contract, The Cattle Range, Inc. agreed to (a) board all four bulls, (b) sell one of the bulls (Brazos) for Connie Mann, and (c) in return for 10% of the sales price as commission, distribute the remainder of the sales proceeds (profit) to Connie Mann. Which of the following is true? (The photo shows Brazos, but it is not essential for answering the question.)

The contract between The Cattle Range, Inc. and Connie Mann was a lease contract

The Cattle Range, Inc. and Ed "Bat" Masterson are bailors

Connie Mann is a bailee

Connie Mann is a bailor

2.7 points

QUESTION 21

Tom's Turkeys is owned by Thomas Jeffs, sister Jenny Jeffs, plus 300 other shareholders. Residents of Wilmington, NC, Thomas and Jenny formed the company twenty years ago under North Carolina laws. Thomas and Jenny are shareholders and officers of Tom's Turkeys. The company suffers from double taxation, but Thomas and Jenny like knowing that none of the 302 shareholders are personally liable for company activities. Also, they plan to list the company on a national stock exchange someday soon. As stated in the company's bylaws, the company is known for free-range turkeys fed organic grains. Of the following, which best describes the organizational form of Tom's Turkeys?

Tom's Turkeys is a "Regular C" corporation

Tom's Turkeys is a partnership

Tom's Turkeys is a Limited Liability Company

Tom's Turkeys is a "Subchapter S" corporation

2.7 points

QUESTION 22

A trust corporation

A general partnership

A regular "C" corporation

A "sub-chapter S" corporation

2.7 points

QUESTION 23

Jill raised 5 chickens in the backyard of her Wilmington home. Jill sold her house to Jack. Jill wants to take her chicken coop with her and argues that the coop is her personal property. Jack will let Jill keep her 5 chickens, but demands that the chicken coop is part of the real property and must stay in the backyard. The disputed chicken coop is built of red cedar and "chicken wire" and is 4 feet tall by 8 feet long by 3 feet wide. The coop has a closed "box" area for nesting and open wire mesh area for the chickens to move about. See the photo of Jill moving her coop to a different location in her backyard. Who is correct about the chicken coop?

Jill is correct that the chicken coop is her personal property; she may take it with her when she moves out.

Neither Jack nor Jill since the chicken coop is a fixture and only a judge can make the final decision.

Jack is correct that the chicken coop is real property and must remain in the backyard of the house when Jill moves out.

Neither Jack nor Jill since the chicken coop is both real property and intellectual property; a judge must make the decision.

2.7 points

QUESTION 24

Before he died, Joffrey Lanister sued Roberts & Finger for one million dollars. Roberts & Finger is a Limited Partnership with Roberts as general partner and Finger as limited partner. Which of the following is true?

Roberts and Finger are both personally and fully liable for any claims against the partnership

Roberts and Finger both have limited personal liability for any claims against the partnership

The partnership is taxed as an entity and the funds are taxed again when Roberts and Finger earn a salary or partnership profits

Roberts has full personal liability for claims against the partnership, but Finger has liability only to the amount he invested in the firm

2.7 points

QUESTION 25

A full-time, salaried employee who writes a new software program while working at his/her company has made a work-for-hire and the employer owns the intellectual property.

True

False

2.7 points

QUESTION 26

H.R. Puffinstuff Properties, Inc. leased warehouse property to Hipster Hats LLC (see contract). On November 12, 2014, Auden Ames (President of Hipster Hats LLC) left work late when it was dark outside. Walking to his car, Auden stepped in a large pothole in the parking lot and fell, breaking his ankle. Auden might have been able to see the pothole if all the security lights had been working, but only a few lights were working. Two weeks earlier, several tenants had complained about the pothole to H.R. Puffinstuff Properties, Inc. The day after Auden Ames' fall, Auden had one of his employees mark the pothole with chalk (see photo). Given the lease agreement, which party (if any) is liable to Auden Ames for his injury?

Tenant Hipster Hats LLC is liable because tenants are responsible for maintaining areas that their employees might use.

Landlord H.R. Puffinstuff Properties, Inc. is liable because the landlord is responsible for maintaining common areas.

Only Auden Ames is liable for his injury because neither landlord nor tenant can be responsible for potholes.

Only Auden Ames is liable for his injury because if it was dark, he should have had a flashlight, especially since every hipster has a flashlight on his iPhone.

2.7 points

QUESTION 27

Examine the Northchase Industrial Park Warehouse Lease (below). H.R. Puffinstuff Properties, Inc. rented a building in Wilmington, NC to T. Ruble Enterprises, LLC. No express warranties were stated in the lease. One week after the lease began and while T. Ruble Enterprises, LLC was still moving in to the warehouse space, the roof collapsed due to heavy snow and ice (and inadequate roof beams) during a major winter storm. T. Ruble Enterprises, LLC told H.R. Puffinstuff Properties, Inc., "We are moving out! We are NOT repairing the roof!" The next day, T. Ruble Enterprises, LLC actually did move out and found another warehouse to lease just one mile away from the Northchase Industrial Park warehouse.

H. R. Puffinstuff Properties, Inc. filed a lawsuit against T. Ruble Enterprises, LLC in Richland County, South Carolina because Columbia, South Carolina (Richland County) is where H.R. Puffinstuff Properties, Inc. is headquartered. T. Ruble Enterprises, LLC argued to the South Carolina Court that the Court should dismiss the case. Is T. Ruble Enterprises, LLC correct in their argument to the South Carolina Court?

No, because H.R. Puffinstuff Properties, Inc. is headquartered in Columbia (Richland County), South Carolina, so jurisdiction is proper in Richland County.

Yes, because the contract specifies jurisdiction in case of dispute.

2.7 points

QUESTION 28

Bling Inc. has been in business for 10 years manufacturing jewelry and hair accessories in New York City. Bud Light formed the corporation in New York State to protect his personal assets. The company is currently owned and operated solely byBud Light (Bud). Since Bud is the only owner, he has never had an annual meeting or kept any corporate records, but does pay the annual fee to maintain the business as a New York state entity. Bud uses one bank account for his personal use and for company funds. Bud signs every employee's check personally and makes all the decisions for the company. Bling Inc. has no insurance coverage. The company has capital assets of $3,500 (three thousand five hundred dollars), but had sales of $4 Million last year. Bud lives in a beautiful penthouse apartment on the top of the company building. Given the information above, could a person suing Bling Inc. pierce the corporate veil to reach Bud's personal assets?

No, because Bud has complied with the only required formalities of a corporation.

Once a corporation has been formed, nobody (not even the state) is able to reach the personal assets of the owners.

A plaintiff would be able to reach Bud's personal assets only if Bud had committed a crime.

Yes, because Bud has not complied with the formalities of a corporation.

2.7 points

QUESTION 29

Jim Locker and Keri Oki were discussing what to do about a problem Jim Locker had on his 100-acre ranch located high on a cliff overlooking the ocean (see photo). In one area of the ranch at the very edge of the cliffs, there was a 10-acre parcel of land owned by an eccentric man named Rusty Keyes. Rusty Keyes could leave his property and reach State Highway 5 by driving on the County Road, but Rusty Keyes preferred to drive over a gravel road that went from Rusty's property through Jim Locker's property to State Highway 5. Every time Rusty Keyes passed Jim Locker's house, Rusty would honk his horn and yell at Jim Locker. Jim Locker said he didn't know what to do about Rusty. Keri Oki said, "Jim, you should secretly visit Rusty's property and see if he's doing illegal things so you can drive that old snake out!" Which of the following statements is true?

If Jim Locker followed Keri Oki's advice, he would be acting legally (within the law) because Jim Locker has probable cause to go onto Rusty's property to inspect for illegal activity.

If Jim Locker followed Keri Oki's advice, he would be acting illegally because he would be trespassing on Rusty's property.

Jim Locker may not prevent Rusty Keyes from driving on the gravel roadway across Jim Locker's land because Rusty Keyes has an easement of necessity.

2.7 points

QUESTION 30

Which of the following is NOT a bailment?

You leave your car with the hotel valet while you are at the business meeting

Your friend borrows your car for an hour

Downloading a song from the Internet to the hard drive on your computer or phone.

Sending a package with the U.S. Post Office (government shipper).

You send a package to your friend using Federal Express or UPS (private shippers).

2.7 points

QUESTION 31

If a person downloads a song from the Internet without paying for the song or without the artist's or publisher's permission, the person has:

Violated the Lanham Act.

Violated the Copyright Act.

Violated the Patent Act.

Violated the Trademarks Act.

2.7 points

QUESTION 32

A de facto corporation exists when promoters and incorporators comply in fact (fully) with each mandatory requirement to incorporate the business.

True

False

2.7 points

QUESTION 33

Sassy Pantz is an apparel company owned by Sassy Sauzie, Ellie Pantz, and 50 other shareholders. Ellie and Sassy are shareholders and are the only two officers of Sassy Pantz. On five occasions, Ellie Pantz and Sassy Sauzie used company funds for travel to attend apparel shows where they meet potential buyers for their clothing line. The Sassy Pantz officers charged the travel expense of the meetings to the company because apparel shows are the best way to sell and market their product. The apparel shows and related meetings resulted in valuable sales for the firm, but the company has been struggling financially lately. Despite the possibility that Sassy Pantz might have to file for bankruptcy, Ellie Pantz and Sassy Sauzie used company funds to pay for their luxury Volvo automobiles and salaries for drivers because (they said), "It makes us look famous." Photo shows Ellie Pantz riding in her new Volvo and her driver, Marc. Which of the following is true?

Shareholders would NOT win a lawsuit against Ellie Pantz and Sassy Sauzie for breach of fiduciary duty to the company

According to the business judgment rule, the officers made legitimate charges to the company

A plaintiff harmed by the company's activities could use the information about the apparel shows and meetings as evidence to pierce the corporate veil and hold the officers personally liable for company activities

Under the business judgment rule, the officers failed to act in the best interests of the company when they paid for the cars and drivers with company funds

2.7 points

QUESTION 34

Sam Appleby designed a poster for "Fake News" (see below, logo on left) and sold it on Zazzle for $40. The image went viral and several hundred thousand people saw it within a week after he created it. Sam has sold hundreds of posters. Unfortunately, Fox News (see below, logo on right) was not happy about the poster and the message and sent a letter to Mr. Appleby threatening to sue him for trademark dilution. Which of the following best describes the situation Mr. Appleby faces:

Mr. Appleby infringed on the Fox News trademark, but his defense to the Fox News threatening letter is fair use and obvious parody. He would prevail at trial if Fox News sued him.

Mr. Appleby did not infringe on any trademark belonging to Fox News.

Mr. Appleby infringed on the Fox News trademark and, if he is sued, he will be held liable for damages to Fox News for damages to the company's reputation and dilution of their mark.

2.7 points

QUESTION 35

Jim Locker and Keri Oki were discussing what to do about a problem Jim Locker had next to his 100-acre ranch located high on a cliff overlooking the ocean. In one corner of Jim Locker's ranch, there was a 10-acre parcel of land owned by an eccentric man named Rusty Keyes. On Rusty's property, there are dangerous cliffs with rocks at the base and hidden under the ocean surface. Sometimes, the edge of the cliffs is difficult to see. Last week, Rusty Keyes started selling fresh eggs from his property. Yesterday, Jim Locker decided to visit Rusty's property during the night to see if Rusty Keyes was doing anything illegal on his property. Which of the following statements is false?

Rusty Keyes has a legal duty to warn the people who come to buy eggs about the dangerous cliffs, but does not need to protect them from the dangerous cliffs.

Rusty Keyes ordered Time Warner Cable service. Rusty Keyes has a duty to warn the cable company employee about the dangerous cliffs, but does not need to protect the Time Warner Cable employee from the cliffs.

If Jim Locker goes onto Rusty's property during the night to see if Rusty Keyes is doing something illegal, Rusty Keyes does not have a legal duty to warn or protect Jim from the dangerous cliffs.

2.7 points

QUESTION 36

The Dog House Day Care and Boarding opened in 2014 and is recognized by the image below. Which of the following best describes the Dog House Day Care and Boarding image?

The image is real property, specifically a copyright.

The image is personal property, specifically a trademark.

The image is personal property, specifically a patent.

The image is real property, specifically a profit.

2.7 points

QUESTION 37

Examine the essential part of the Northchase Industrial Park Warehouse Lease (below). H.R. Puffinstuff Properties, Inc. rented a building to T. Ruble Enterprises, LLC. No express warranties were stated in the lease. One week after the lease began and while T. Ruble Enterprises, LLC was still moving in to the warehouse space, the roof collapsed due to heavy snow and ice (and inadequate roof beams) during a major winter storm. The photo shows the damage, but is not necessary to see in order to answer the question. The warehouse space was impossible to use for warehousing the goods sold by T. Ruble Enterprises, LLC. Repair would take at least 3 months. H. R. Puffinstuff Properties, Inc. told T. Ruble Enterprises, LLC, "Roof repair is the Tenant's problem." Of the following choices, what should T. Ruble and T. Ruble Enterprises, LLC do?

T. Ruble Enterprises, LLC signed an enforceable contract. However, T. Ruble Enterprises, LLC should withhold rent until landlord H.R. Puffinstuff Properties, Inc. repairs the building and reimburses T. Ruble Enterprises, LLC for damages to the leased property.

T. Ruble Enterprises, LLC signed a contract without any warranties. Therefore, T. Ruble Enterprises, LLC should clean up the place, repair the roof, and accept the added costs of the lease.

T. Ruble Enterprises, LLC should sue landlord H.R. Puffinstuff Properties, Inc. for breach of contract and intentional infliction of emotional distress.

T. Ruble Enterprises, LLC should notify landlord H. R. Puffinstuff Properties, Inc. that the contract is void because of landlord's breach of the implied warranty of habitability, claim constructive eviction under Clause 3, and find another lease space.

2.7 points

QUESTION 38

Masterson and The Cattle Range, Inc. sold Brazos within one month after Mann began boarding his bulls at The Cattle Range, Inc. Two months later, one of the remaining three bulls (Son of a Brazos) became ill and died due to contaminated feed. The Cattle Range, Inc. had stored some feed in a barn that became too damp, the feed got moldy, and the employee who was feeding didn't notice that the feed had gone bad. In addition to the untimely death of the bull, Connie Mann (bull owner) discovered and proved to the judge and jury that Masterson and The Cattle Range, Inc. intentionally provided a false and misleading account of the sale of Brazos for the sole purpose of keeping more of the sales proceeds. Which of the following is false?

Masterson and The Cattle Range, Inc.breached the contract of bailment

Masterson and The Cattle Range, Inc. engaged in fraud

Connie Mann's bulls were personal property

Connie Mann assumed all risk that one or more of the bulls might die during boarding and has no legal claim against the Masterson and The Cattle Range, Inc.