Trade Secrets and Shareholder Taxation

Which of the following is true of a violation of trade secrets’ rights?

One must misappropriate another’s information.

Explanation: Under the Economic Espionage Act of 1996 (18 U.S.C. §§ 1831–1839) a trade secret violation must occur with theft of misappropriation of hidden or secret information. Theft of public or commercial intellectual property is not the same as trade secret theft. In most modern cases, trade secret violations occur via computer hacking and cyber crime.

Which of the following states that parties to a written contract may not introduce oral evidence to change written terms?

The parol evidence rule

Explanation: The parol evidence rule is a component of common contract law that governs the degree of extrinsic evidence that can be used to argue a case. This includes any oral discussions, past written contracts, and any other ambiguous evidence outside the written terms of the final contract.

In a(n) ___________, the shareholders are taxed only on income distributed.


Explanation: A corporation is its own distinct legal entity that pays taxes on its own earnings. The corporation can distribute these earnings as dividends, at which point the shareholders will be taxed accordingly.

____________ is a court created rule that limits when courts can review administrative decisions.

The doctrine of exhaustion of remedies

Explanation: The purpose of the exhaustion of the remedies is to prevent litigants from pursuing remedies from multiple courts at once.

An employee at-will can be fired for which of the following?

Taking time off from work to care for a dependent without informing the employer.

Explanation: At-will employees must not change their schedule without informing their employer. This is the only option in this scenario that could be a legal basis for firing.

  • Student: Gilbert Henderson
  • Textbook: Corporate Ethics and Moral Principles
  • Course: ETH 321

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