Question 31

Blake owns Carrington Oil Company. Blake uses Carrington money to buy himself a car, transfers Carrington assets to Blake's personal bank account, and fails to buy enough insurance for Carrington to keep it financially secure if there was a lawsuit. This most likely warrants

Group of answer choices

a bonus to Blake for effectively eliminating the firms debts.

a discharge for Carrington in bankruptcy.

a pierce of the corporate veil.

the application of the business judgment rule to Blake's activities.

Question 32

When deciding which form of business organization would be most appropriate, an entrepreneur would normally take into account all of the following except

Group of answer choices

the liability of the owners.

the forms of competitors business organizations.

tax considerations.

the need for capital.

Question 33

A shareholder demands the right to inspect corporate records to determine whether management has given significant business to other companies owned by the members of the management team. If the company refuses and the shareholder sues, a court is likely to hold that the request

Group of answer choices

is harassment and the shareholder can't review the records.

is a request for unreasonable access to trade secrets and other confidential information.

is for a proper purpose.

is the potential abuse of the management team.

Question 34

Jonah has a contract to buy a condominium from Granger Inc. Granger backs out of the sale. Jonah's remedy is most likely

Group of answer choices

the amount that Jonah invested in the project to the date of the closing.

nothingGranger still owns the land.

the difference between the contract and market prices of the land.

specific performance.

Question 35

Mitigation of damages means that the innocent party in a contract breach situation must

Group of answer choices

sue within six months of the breach.

take reasonable steps to minimize their losses.

perform their promises.

set an example to deter similar misconduct in the future.

Question 36

The remedy of specific performance will

Group of answer choices

return the parties to the positions they occupied before the contract.

obtain the exact bargain promised in the contract.

reform the contract to reflect the parties true intentions.

make the terms reasonable and enforce the contract as reformed.

Question 37

Corben agrees to work for Logan Photos during summer break for $6,000. On April 30, Logan cancels the contract. Corben gets an offer to do a similar job with Allie Pics, which would have paid $4,500. Corben files a suit against Logan. As compensatory damages, Corben can recover

Group of answer choices

$6,000.

$4,500.

$1,500.

$0.

Question 38

McFly Motors agrees to sell a DeLorean to Biff. The contract provides that if McFly does not close the deal by a specific date, it must pay the Biff one-half of the value of the car. This provision is not enforceable if it is

Group of answer choices

meant to pay for additional work in the event of damage.

a reasonable estimate of the loss on the breach.

designed to penalize McFly.

intended to quickly provide cash to Biff.

Question 39

Franchise law regulates agreements between typically large franchisors and smaller franchisees primarily to protect

Group of answer choices

certain types of anticompetitive agreements.

franchisors from dishonest prospective franchisees.

prospective franchisees from dishonest franchisors.

the governments power to restrict freedom of contract.

Question 40

Franchise relationships primarily are governed by

Group of answer choices

contract law.

the Federal Franchise Code.

the Uniform Franchise Code.

international treaties and conventions.