Q&A Hero

Q: A franchisee normally pays an initial lump sum for a franchise license.

Q: Normally, fraud occurs only when there is reliance on a statement of truth.

Q: In winding up a general partnership, partners receive distributions of profits before non-partner creditors are paid.

Q: A franchisee may be required to pay for certain of the franchisor's administrative expenses.

Q: On a partner's dissociation, his or her interest in the partnership must be purchased.

Q: An illegal search can be an invasion of privacy.

Q: An unauthorized scan of a bank account cannot be an invasion of privacy.

Q: A franchisee normally does not pay a fee for a franchise license until after the first year of using it.

Q: On a partner's dissociation, his or her right to participate in the management and conduct of the business terminates.

Q: A partnership dissolves if any partner ceases to "carry on" partnership business.

Q: If a party to a franchise contract fails to perform, he or she may be subject to a suit for breach of contract.

Q: An individual's right to privacy includes the exclusive use of his or her likeness.

Q: Some states require that a franchisor submit advertising aimed at prospective franchisees to the state for approval.

Q: A partner cannot "wrongfully" dissociate from a partnership.

Q: An oral defamatory statement must be communicated to a third party to be actionable.

Q: In most states, a general partner is jointly and severally liable for all partnership obligations.

Q: Some states require franchisors to provide presale disclosures to prospective franchisees.

Q: One cannot recover damages for severe emotional distress absent a showing of personal injury.

Q: The extent of implied authority is generally broader for agents than for partners.

Q: The laws governing franchising are primarily designed to protect franchisors from dishonest franchisees.

Q: False imprisonment is a tort only if the confinement or restraint is justified.

Q: In a manufacturing arrangement, a franchisor transmits to a franchisee the ingredients to make a particular product.

Q: Any limit on a partner's capacity to act on the partnership's behalf does not affect a third party who does not know about it.

Q: A franchise is a contractual arrangement.

Q: A battery occurs only if the victim suffers actual physical harm.

Q: To commit an intentional tort, a person need not act with an evil motive.

Q: General principles of agency law pertain to a partner's authority to bind a part­nership in contract.

Q: Laws governing franchising are designed in part to prevent franchisors from terminating franchises without good cause.

Q: A partner's fiduciary duties may be waived or eliminated in the partnership agreement.

Q: To commit an intentional tort, a person must act with a harmful motive.

Q: A franchise exists when the owner of a trademark licenses its use to an­other party to sell goods or services.

Q: A partner may not pursue his or her own interest without vio­lating the fiduciary duties that he or she owes to the firm.

Q: To commit an intentional tort, a person must intend the consequences of his or her act or know with substantial certainty that certain consequences will result.

Q: Tort law provides legal remedies for both personal injury and property damage.

Q: A franchise exists when the owner of a copyright licenses its use to an­other party to sell goods or services.

Q: A partner owes a partnership and its partners a duty of gross negligence and reckless conduct.

Q: A franchisee can operate as an independent businessperson but still obtain the advantages of a national organization.

Q: A partner may use and possess partnership property for any purpose.

Q: Fran, an executive with Global Sales Corporation, has to decide whether to market a product that might have undesirable side effects for a small percentage of users. What is the balance that must be struck in her deciding whether to sell the product?

Q: A franchisor is the purchaser of a franchise.

Q: For most purposes, the law recognizes a partnership as an aggregate of its members.

Q: Kitchen Appliances, Inc., markets a product that is capable of seriously injuring consumers who misuse the product in a foreseeable way. Does the firm owe an ethical duty to take this product off the market? What conflicts might arise if the firm stops selling this product?

Q: A sole proprietorship lacks continuity on the death of the proprietor.

Q: An association cannot be a partnership without an express agreement.

Q: International Manufacturing Corporation's side payments to government officials in exchange for favorable business contracts in foreign countries are considered, in the United States, a. illegal only. b. unethical only. c. illegal and unethical. d. none of the above.

Q: Ace Tool Company's decision makers view a particular risk in the use of Ace's product as open and obvious. Continuing to market the product without telling consumers of the risk could be justified from a perspective of a. duty-based ethics. b. Kantian ethics. c. rights-based ethics. d. utilitarian ethics.

Q: In raising capital, a sole proprietor is limited to his or her personal funds'a loan is not possible.

Q: A corporation can be a partner.

Q: Nora's best criticism of utilitarianism is that it a. encourages unethical behavior. b. fosters conformance with society's standards. c. mandates acting in an employer's best interest. d. results in human costs many persons find unacceptable.

Q: A sharing of profits from the sale of the goodwill of a business creates a presumption that a partnership exists.

Q: A sole proprietor has unlimited liability for all obligations that arise in doing business.

Q: A sole proprietor must create a separate business organization to create a sole proprietorship.

Q: Joint ownership of property in and of itself creates a partnership.

Q: Consumer Products, Inc., asks its employees, many of whom are members of the National Machinists Union, to apply the utilitarian theory of ethics. This theory does not require a. a choice among alternative actions that will produce maximum societal utility. b. a determination of what individuals will be affected by an action. c. an assessment of the negative and positive effects of alternative actions on individuals affected. d. the acquiring of the means of production by workers.

Q: In a sole proprietorship, the owner receives 90 percent of the profits and the government receives 10 percent.

Q: The Uniform Partnership Act has done much to reduce controversies in the law relating to partnerships.

Q: Bob, research manager for Agri-Products, Inc., applies utilitarian ethics to determine that an action is morally correct when it produces a. the greatest good for Bob. b. the greatest good for the most people. c. the least good for the fewest people. d. the least good for the most people.

Q: In a sole proprietorship, the proprietor shares the burden of any losses or liabilities incurred by the business enterprise with the government.

Q: The Uniform Commercial Code governs the operation of partnerships.

Q: Biotech Research Associates asks its employees to consider ethical behavior from both the "categorical imperative" perspective and the Golden Rule approach. Unlike the latter, the categorical imperative a. allows a person to control the behavior of persons who behave unethically. b. does not permit individuals to submit to the dictates of an unjust government. c. focuses on personal survival. d. forces a person to consider the consequences of his or her actions if everyone behaved in a similar way.

Q: A sole proprietor may own and manage any type of business.

Q: An agreement that requires a franchisee to buy materials exclusively from the franchisor may violate antitrust laws.

Q: In making business decisions, Owen, a certified financial planner with Private Investment Corporation, attempts to apply his belief that human beings have fundamental rights. This belief is implied by a. duty-based ethical standards only. b. Kantian ethics only. c. duty-based ethical standards and Kantian ethics. d. none of the above.

Q: Matt, vice-president of sales for Natural Resources, Inc., adheres to religious ethical standards. Their application involves an element of a. compassion. b. cost-benefit analysis. c. discretion. d. utilitarianism.

Q: Most franchise agreements provide that termination must be "for cause."

Q: The simplest form of business is a sole proprietorship.

Q: A franchisor can suggest retail prices but cannot mandate them.

Q: In business negotiations, Carol, the chief executive officer of Design Associates, Inc., follows "The Golden Rule," which a. encourages the accumulation of as much personal wealth as possible. b. mandates compassionate treatment of others in all situations. c. permits taking advantage of others in financial terms. d. requires an increase of business profits over a certain period.

Q: In choosing a form of business organization for a new enterprise, important factors include the liability of the owner.

Q: In choosing a form of business organization for a new enterprise, important factors include the ease of creation.

Q: State law determines the duration of a franchise.

Q: Dan, an accountant for Engineering Associates, Inc., attempts to apply the duty-based approach to ethical reasoning in conflicts that occur on the job. This approach is based on the idea that a person a. has a duty not to engage in unethical behavior no matter how desirable the consequences may be. b. has a duty to conform one's behavior to society's ethical standards. c. has a duty to one's employer and family that is superior to any duty owed to society as a whole. d. may engage in unethical behavior if it achieves a greater good.

Q: Gelato Cheese Company, a major processor of cheese sold throughout the United States, employs one hundred workers at its principal processing plant. The plant is located in Heartland Corners, which has a population that is 50 percent white and 25 percent African American, with the balance Hispanic American, Asian American, and others. Gelato requires a high school diploma as a condition of employment for its cleaning crew. Three-fourths of the white population completed high school, compared with only one-fourth of those in the minority groups. Gelato has an all-white cleaning crew. Has Gelato violated the Civil Rights Act of 1964? Explain.

Q: A franchisor cannot impose quality stan­dards on a franchisee.

Q: For twenty years, Ozzie works for Players Paradise, a destination for vacationers from across the United States, maintaining golf carts. After a steady stream of positive job evaluations and merit pay raises, Ozzie is promoted to the position of supervisor of golf-cart maintenance at three of Players's courses. Five years later, a new employee, Quentin, is hired to oversee operations at all ten of Players's courses. Quentin demotes Ozzie, who is now over the age of forty, to running only one of the three cart facilities, and freezes his salary. Quentin demotes five other employees over the age of forty and places one of Ozzie's former facilities under the supervision of Richie, who is twenty-three. Ozzie overhears Richie say, "Were going to have to do away with these old, senile men." Less than a year later, Quentin reconsolidates the three cart facilitie' operations under Richie's charge. Ozzie quits and files a suit against Players for employment discrimination. Should he prevail? Explain.

Q: Eve, the chief executive officer of Federated Corporation (FC), wants to ensure that FC's activities are legal and ethical. The best course of Eve and FC is to act in a. good faith. b. ignorance of the law. c. regard for the firm's shareholders only. d. their own self interest.

Q: Alpha, Inc., makes and sells a variety of household products. With a fair amount of certainty, Alpha's decision makers can predict whether a given business action would be legal in a. all situations. b. many situations. c. no situations. d. practically no situations.

Q: Normally, a franchisee determines the territory that it will serve.

Q: Jason and Katrina work on the loading dock for Longhaul Transport Company. Jason has a disability. Katrina has seniority. Jason asks for a transfer, which would represent an accommodation for his disability. Longhaul gives the transfer to Katrina on the basis of her seniority. Jason files a suit against Longhaul for discrimination on the basis of his disability. The court is most likely to rule that a. Katrina's seniority is a good defense. b. Jason's disability is a sufficient basis for relief. c. Longhaul's action was a business necessity. d. Longhaul's action was a reasonable accommodation.

Q: Delta Equity Corporation provides other firms with capital to expand operations. If Delta strictly complies with existing laws, the firm will a. fulfill all business ethics obligations. b. fulfill no business ethics obligations. c. fulfill some business ethics obligations. d. not need to fulfill any business ethics obligations.