BUSINESS L 110 Business Law Final Practice Questions and Answers 1 Business law consists of the enforceable rules of conduct that govern commercial relationships. True 2 Because of the law, we re... ly on the goodwill and dependability of one another. False 3 Public law controls disputes between private individuals or between groups and their government. True 4 Cyberlaw is based primarily on existing laws. True 5 Another name for case law is common law. True 6 Case law interpretations are law unless they are revoked later by new statutory law. True 7 The term "stare decisis" means "reversing the decision." False 8 The decision of a state supreme court is binding on a lower state court located in the state. True 9 Constitutions and statutes are complete in the sense of covering the detailed rules that affect government and business relations. False 10 Presidents claim the power to issue executive orders on the basis of their Article II, Section 1, constitutional power to "take care that the laws be faithfully executed." True 11 The term "natural law" is another word for "legal positivism." False 12 Joan comes to Mike's law office to ask him about the law in regard to dogs running at large in her neighborhood. Mike tells Joan that he will research the issue and get back with her. Where should Mike look first in order to locate applicable law? State Statutes 13 Which of the following refers to the ability to understand the structure of what someone is saying and then apply a set of criteria to evaluate its worth? Critical Thinking Skills 14 Which of the following would be relevant areas of business law to a human resource manager? Contracts, employment and labor law, and employment discrimination 15 Laws are enforced by which of the following? Courts 16 A majority of citizens in a democracy can agree to permit certain authorities to make and enforce rules describing what behavior is permitted and encouraged in their community. These rules are what we refer to as the . Law 17 Assume a business person who owns a computer equipment store is delinquent in paying rent to the landlord. The resulting dispute focuses on law. Private law 18 If a computer store dumps waste behind its building in violation of local, state, or federal environmental regulations, the resulting dispute focuses on law. Public 19 Which type of law delineates the rights and responsibilities involved in relationships between persons and their government? Civil 20 Which type of law involves incidents in which someone commits an act against the public as a unit? Criminal 21 Assume a restaurant chain is forced to pay damages for breach of contract to a supplier. What type of law is involved? Private law and civil law 22 Assume the Securities and Exchange Commission prosecutes someone for insider trading. This prosecution is an example of law. Criminal "The Stolen Book." Susan is told by Betty that Bob stole her business law book out of her car. The next day Susan confronts Bob and slaps him for stealing her book. Bob had Susan arrested for slapping him, and the local district attorney is prepared to prosecute that matter on behalf of the state. Susan sues Bob for damages to the book and for maliciously having her arrested. Claiming that she lied, Bob sues Betty for defamation. 23 Which of the following is true regarding Susan's claim against Bob for damages involving the book and her claim that Bob maliciously had her arrested? The claim for damages involving the book and also the claim that Bob maliciously had her arrested are civil claims involving private law. 24 The prosecution against Susan for slapping Bob involves which of the following? Public law and criminal law 25 The action Bob has against Betty for defamation involves which of the following? Civil law and Private law "Inattentive Driving." Molly, a first year law student, decided to skip class and drive off campus to check on her new dress for the upcoming school dance. While driving, Molly is busy talking on her cell phone with her friend Sharon to convince her to going to the dance with Molly's brother who has a big crush on Sharon. Unfortunately for Molly, there is a statute in her state outlawing talking on a cell phone while operating a motor vehicle. Molly crashes into the side of Sam's new convertible when she looks down to pick up a can of soda she just dropped onto her new jeans. A police officer just down the street comes over to investigate. Molly explains to him that it was difficult to hold the cell phone in one hand, the soda in the other, and also drive. The officer was not impressed. Around that time Sam comes along. He is furious regarding the significant dent in his new car. Molly says she has insurance and that she will cover the whole incident. Sam says that is insufficient; but Molly says that under case precedent, that is his only remedy. The officer is annoyed because it is his lunch break. He tells Molly that she must obey duly authorized law, and proceeds to write several citations to her. 26 Which type of law is involved in the above situation considering Molly's interaction with both the officer and Sam? Public law, private law, civil law, and criminal law 27 Which of the following is true regarding Molly's predicament? Molly can be sued in a civil action by Sam, and she can also be prosecuted by the government for a criminal violation. 28 The law in Molly's state regulating cell phone usage would be classified as which of the following? A statute 29 The officer's reference to the need for Molly to obey duly authorized law is a reference to which of the following? Legal Positivism 30 Molly's reference to precedent involves which of the following? Common law that is law unless revoked by new statutory law 31 The is the supreme law of the land. US Constitution 32 The rules and regulations put forth by legislatures are referred to as Statutory law. 33 Legislative acts passed by state legislatures can be found in the . State Codes 34 Legislative acts passed by the U.S. Congress can be found in the . US State Codes 35 The group that urges states to enact model laws to provide greater uniformity of law is called the . National Conference of Commissioners on Uniform State Laws 36 When the organization in charge of proposing uniform laws proposes a statute, which of the following is true? A state legislature can ignore the proposed uniform law, adopt it in full, or adopt it in part. 37 Case law can be revoked by . New Statutes 38 The term involves the use of past decisions to guide future decisions. Precedent 39 The is a body of law significant to business activities including sales, banking, and warranty. Uniform Commercial Code 40 When courts rely on precedent, they are obeying . Stare Decisis 41 "International Expansion." Zach wants to expand his coffee business internationally - into Zeno, a small remote country. He moves there temporarily in order to oversee operations. His best friend Zora asks him if he plans to hire legal counsel for the expansion. Zach replies, "Of course not. The U.S. has the strictest laws regarding contracts, employment, and business practices in the world. So long as I'm legal in the U.S., I'm legal anywhere. Besides, I studied up on Zeno law ten years ago, and I know it all." Zach proceeds and lands in jail in Zeno for violating recently passed laws protecting employees and mandating certain benefits. Authorities there claim that he sexually harassed an employee, failed to pay sufficient wages, and failed to give employees Zeno's mandated 12 weeks of paid vacation per year. 41 Which of the following is true regarding Zach's defense that he thought he knew the law of Zeno because he had studied it some years before and that the laws under which he was arrested were new? (Assume the law of Zeno is the same as the U.S. on this issue.) Rules change and Zach had a duty to stay current. It is not a defense that he studied the law at one time and that the laws at issue were new. 42 The type of law involved in comparing laws between the U.S. and Zeno is . Comparative Law 43 Which of the following is true regarding Zach's legal problems in Zeno? Zach must obey the laws of Zeno when operating a business in Zeno and cannot rely upon U.S. laws as a defense. 44 Which of the following cases overturned prior precedent? Brown v. Board of Education 45 Which of the following is true regarding administrative agencies? Administrative agencies exist at the federal, state, and local level. 46 Which of the following is true regarding treaties at the federal level? A treaty is generally negotiated by the executive branch and must then be approved by two-thirds of the Senate. 47 Which of the following contains summaries of common law rules in a particular area of the law? Restatements of the Law 48 Which of the following is an independent agency? The Consumer Product Safety Commission 49 Which of the following is an executive agency? The Federal Deposit Insurance Corporation "To the Dogs." Alice loves all animals and is starting a new grooming business for them. She believes that animals are very important and plans to exceed any applicable regulations regarding cleanliness and health standards. Alice thinks, however, some local regulations make no sense. For example, there is a local ordinance that all dogs must be kept on a leash at all times when not in an inside area. Although Alice is placing her business on a large lot with a fenced outside area allowing plenty of room for dogs to run free, she plans to obey the leash regulation and all others. She is aware, however, that some members of the community have had success in changing local regulations by petitioning city council. Alice plans to proceed in that manner to attempt a change in the leash law. 50 Alice's idea that dogs have basic rights, and her plan to exceed laws involving cleanliness and health standards is rooted in which of the following? Natural Law 51 Alice's plan to obey all laws and regulations even if she does not agree with them is rooted in which of the following? Legal Positivism 52 Alice's plan to seek change through following what others have done in the past, petitioning city council, is rooted in which of the following? The historical school 53 The concept of suggests that individuals should have the freedom to disobey a law enacted by people if their conscience goes against the law and they believe the law is wrong. Natural Law 54 Assume a judge writes that she is deciding to enforce a law in question but that her decision does not mean that she sees the law as the morally correct rule. The judge would have leanings in the direction of . Legal positivism 55 In which school of jurisprudence is the concept of stare decisis rooted? The historical school 56 Which of the following is reported in the Federal Reporter? Common Law 57 Which of the following is reported in the United States Code? Statutes 58 Which of the following is reported in the Code of Federal Regulations? Administrative law 59 Which of the following is based on the idea that, when ruling on a case, judges consider more than just the law; they also weigh factors such as social and economic conditions? Legal Realism 60 Which approach to jurisprudence is based on choosing alternatives that maximize benefits and minimize costs, and is tied to the pursuit of efficiency? Cost-benefit analysis 61 Candy wants to start an Internet business doing business domestically as well as internationally. She is told by the Chinese government that certain items on her site are objectionable and illegal, and that if she wants to do business in China, she must remove the objectionable material. Which of the following is true? If Candy wants to do business in China, she must abide by Chinese law. 62 Ethical conversation is primarily about finding the one and only right thing to do. False 63 Business ethics is the application of ethics to the special problems and opportunities experienced by business people. True 64 The social responsibility of business consists only of the expectations employees have of employers. False 65 Insurer American International Group (AIG) is well known in the insurance industry for its ethical and cautious investments protecting investors. False 66 In some countries, businesses must pay bribes in order to receive legitimate supplies. True 67 In an ethical analysis using the WPH Framework referenced in the text, owners are the most important stakeholders and should receive the greatest consideration in decision making regardless of the type of problem addressed. False 68 The definition of stakeholder is the same as the definition of shareholder. False 69 The community in which a firm operates would not be considered a stakeholder of the firm. True 70 Situational ethics is the same thing as ethical relativism. False 71 Consequentialism provides a rigid set of rules to follow regardless of the situation. False 72 Utilitarianism is a form of consequentialism. True 73 Ethics is not an issue in accounting because of the primarily objective data involved in that field. False 74 Juries decide questions of law. False 75 Usually the issue of ripeness arises when one party claims that a case is moot. True 76 The word "jurisdiction" comes from the Latin terms juris, meaning "law," and diction, meaning "to speak." True 77 In rem jurisdiction references jurisdiction over a person. False 78 Under federal statutory law, Internet transactions cannot be the basis for a finding of in personam jurisdiction. False 79 Subject-matter jurisdiction is a court's power to hear certain kinds of cases. True 80 State courts have the power to hear all cases not within the exclusive jurisdiction of the federal court system. True 81 Concurrent federal jurisdiction means that both state and federal courts have jurisdiction over a case. True 82 Once a case is in the proper court system, venue determines which trial court in the system will hear the case. True 83 In some cases, the U.S. Supreme Court functions as a trial court of limited jurisdiction. True 84 A person who has the legal right to bring an action in court has standing. True 85 Intermediate courts of appeal in the state court system exist in all states. False 86 Under our system of justice, courts may issue advisory opinions. False 87 The defendant responds to a complaint with an answer. False 88 Because of its complicated nature, any complaint should be at least three pages long. False 89 A defendant who believes that he or she has a claim against the plaintiff would include a counterclaim with the answer. True 90 A reply is an answer to a counterclaim. True 91 A party only has a limited number of challenges for cause in jury selection. True 92 Peremptory challenges in jury selection may not be racially based. True 93 In most civil cases, a plaintiff must prove her case beyond a reasonable doubt. False 94 Only one party may appeal from a final judgment. False 95 If an appellate judge agrees with the majority's decision, but for different reasons, the judge may write a "concurring" opinion. True 96 On average, the U.S. Supreme Court hears 300 cases a year. False 97 Mike, a resident of Georgia, sues Company A in state court in Georgia for negligence alleging personal injury and property damage of $100,000 after a truck driven by an employee of Company A strikes his pick-up truck in the rear. Company A is incorporated in Delaware, has its headquarters in New York, but does a substantial amount of business in Georgia. Company A seeks removal to federal district court, but Mike opposes the motion. Which of the following is true regarding whether the case may be properly removed to federal district court? The amount in controversy satisfies diversity requirements; and if Company A's nerve center is in a state other than Georgia, then the case may be properly removed to federal court. 98 In what state is XYZ Bank, a federally chartered bank, considered a citizen? The bank is considered a citizen of the state in which it is located, meaning the state in which its main office as specified in its articles of incorporation is located. 99 Which of the following is true regarding the use of peremptory challenges based on gender? Peremptory challenges may not be based on gender. 100 Ann, a Massachusetts resident, breached a contract entered into in Florida with Bruce. Bruce successfully obtains a judgment against Ann for $150,000 in a Florida state court. Ann lives in a nice apartment in Massachusetts, and her only substantial asset is a vacation beach house in North Carolina. Which of the following is true regarding Bruce's ability to obtain funds from a sale of the beach house? Bruce will be able to sell the beach house in North Carolina through attachment jurisdiction, but he must return to Ann any funds obtained in excess of amounts owed. 101 Doctor Sally was sued for malpractice based on allegedly removing the wrong body part. Following discovery, it becomes clear that the plaintiff has no credible evidence against Doctor Sally and that no reasonable jury could rule in the plaintiff's favor. How should Sally's lawyer proceed? The lawyer should make a motion for summary judgment. 102 Which of the following do appellate courts primarily handle? Questions of law 103 Which of the following is a question of fact? Did the vehicle run the traffic light? 104 Laws which enable the court to serve a defendant outside the state as long as the defendant has sufficient minimum contacts within the state and it seems fair to assert jurisdiction are called . Long Arm Statues 105 Which of the following is the same as attachment jurisdiction? Subject-matter jurisdiction 106 Paul lives in Florida but owns property in Tennessee for which he has not paid property tax in several years. Assuming the state meets procedural requirements, which of the following is true? The court can exert in rem jurisdiction over the property and sell it to satisfy the tax debt. 107 Will a plaintiff be allowed to assert jurisdiction over a defendant in the plaintiff's state for a cause of action arising out of the defendant's website? It depends on the nature and quality of commercial activity that an entity conducts over the Internet. 108 Which of the following is true regarding state and federal court jurisdiction? In some cases, state courts have exclusive jurisdiction; in some cases, state courts have concurrent jurisdiction with the federal courts; and state courts also have the power to hear all cases not within the exclusive jurisdiction of the federal court system. 109 Which of the following is true regarding federal jurisdiction? Some cases fall within both federal jurisdiction and state jurisdiction, but the federal court system has exclusive jurisdiction over some cases. 110 Over which of the following does the federal court system have exclusive jurisdiction? Admiralty, bankruptcy, and federal copyright cases 111 Which of the following is a court's power to hear certain kinds of cases? Subject-matter jurisdiction 112 Which of the following is needed for diversity-of- citizenship? That the plaintiff and the defendant reside in different states and that the controversy concerns an amount in excess of $75,000. 113 For purposes of diversity-of-citizenship, where does a corporation reside? The state in which the corporation has its principal place of business and the state of incorporation. 114 Assume a plaintiff files a case in state court that could also have been filed in federal court. Does the defendant have any choice in the matter? The defendant has a right to move the case to federal court. 115 Which of the following is typically an appropriate venue in a lawsuit? The trial court where the defendant resides and also the location where the dispute occurred if the lawsuit focuses on a particular incident. 116 Billy knows that he can bring his case against Bob in a state court in Tennessee. He is unsure, however, of which county in which to proceed. Which of the following address the proper county? Venue 117 What are the trial courts in the federal court system called? U.S. district courts 118 How many circuits does the U.S. Court of Appeals have? 12 119 Assuming there are no vacancies, how many U.S. Supreme Court justices are there? 9 120 Which of the following is true regarding the court system in the Republic of China (Taiwan)? Responsibility for interpreting the country's constitution falls to the Constitutional Court of the Judicial Yuan. 121 Which of the following is true regarding trials in Japan? Trial involves a series of discrete meetings between the parties and the judge. "Appellate Court." Jim, who is a bit eccentric, says that he is fed up with the way a certain employer in his town treats employees and that he is going to sue on behalf of all those employees. Jim also says that he is going to start his case at the appellate court level, skipping over all those "lesser" judges. Jim says that those justices will surely hear him out and that he will also seek a jury. 122 Will an appellate court hear Jim's case? No, because Jim is required to first file the case in the appropriate trial court. 123 Regardless of what court is involved, can Jim act as plaintiff for the employees? No, because he lacks standing. 124 Assuming Jim ends up initially, or at some later point, at the appellate level, is he entitled to a jury at the appellate level? No, jurors are not used at the appellate court level. 125 Yolanda found a better job and quit Robert's employment. Yolanda, however, wants to sue Robert because she believes that he may have terminated her employment in the future based on age discrimination. At this point, which of the following would be Robert's best defense to a lawsuit filed by Yolanda in the state in which she worked? That the case is moot. 126 Which of the following is true regarding state courts of appeal? Not all states have intermediate courts of appeal; in those states, appeals go to the state court of last resort. "Revenge." Jane, a first year law student, while walking to school in inclement weather, accidentally slipped on ice knocking down Greg, another first year law student, breaking his glasses. He was very angry with Jane and let the air out of one of her car tires. Greg also decided to sue Jane for negligence claiming as damages $300 for his broken glasses. He decided that he already knew all about the law and did not need a lawyer. Greg sued Jane in state court. Jane, in the same lawsuit, brought an action against Greg for letting the air out of her tire. At the trial in state court, Jane told the judge that a friend, Susie, told her that she saw Greg let the air out of Jane's tire. The judge disallowed Jane's testimony on that issue. Susie, however, who was in the courtroom also came and testified to that effect. The state court judge ruled in favor of Jane. Greg said that he was not giving up and that he would seek double damages on appeal in federal court. Jane and Greg live in different states when not attending school. After the trial, Jane reported Greg's action of letting the air out of her tire to the police who said that they would proceed with a criminal action against Greg. Greg goes to see Alex, a recent graduate who had just passed the bar, and asked Alex to represent him in a federal court appeal. 127 What advice should Alex give to Greg regarding an appeal filed in federal court? He should tell Greg to forget about a federal court appeal because an appeal from a state trial court would not be to federal court. 128 Jane's action against Greg for the tire is called a . Counterclaim 129 Was the judge correct in disallowing Jane's testimony regarding what Susie told her about the tire? Yes, the judge was correct to disallow the testimony because it was hearsay. 130 What standard of proof would the trial judge have applied when ruling on the case? A preponderance of the evidence standard 131 What standard of proof would the judge apply in a criminal action against Greg? A standard of proof beyond a reasonable doubt 132 The requirement ensures that courts do not render advisory opinions. Case or Controversy 133 Bob sued Jane over a motor vehicle accident. Bob and Jane settled the case prior to the trial for $1,000. The lawsuit is now . Moot 134 A[n] is a judgment in favor of the plaintiff that occurs when the defendant fails to answer the complaint, and the plaintiff's complaint alleges facts that would support such a judgment. Default judgment 135 A defendant uses a[n] when her or his answer admits that the facts contained in the complaint are accurate but also includes additional facts that justify the defendant's actions and provide a legally sound reason to deny relief to the plaintiff. Affirmative Defense 136 The plaintiff must provide the defendant in a lawsuit with a copy of the complaint. That process is called . Service of process 137 Which of the following is a document that notifies the defendant of the lawsuit and explains that if the defendant does not respond to the lawsuit within a certain period of time, a default judgment will be entered? Summons 138 The court may grant a if after reviewing the pleadings, the judge determines that the only reasonable decision is in favor of the moving party. Motion for judgment on the pleadings 139 The court may grant a if after reviewing the evidence in the case, there is no factual dispute and one party is entitled to judgment prior to trial. Motion for summary judgment 140 Which of the following is true regarding tools of discovery? Interrogatories, depositions, and requests to produce documents are all tools of discovery available to all parties. 141 Which of the following are written questions that one party sends to another to answer under oath? Interrogatories 142 At a[n] , attorneys examine a witness under oath with a court reporter present. Deposition 143 Billy, a witness to a motor vehicle accident, is gravely ill with cancer. Pat, who was injured in the accident, would like to preserve his testimony for trial in case he dies before the trial date. What should Pat do? Take Billy's deposition. "Puppy Woes." Sam promised to sell Linda a Welsh Corgi puppy for $700 but backed out of the deal. Linda sued Sam in state court for breach of contract and asked for a jury to hear the case. During jury selection, one juror, Ann, said that she did not think she could be fair to Linda because Linda did not appear to be a dog lover. Linda's lawyer asked that Ann not hear the case on the basis that she could not be fair, and the judge excused Ann. Linda also decided that another juror, Sandy, looked at her in a grumpy manner so, without a reason given, Linda's lawyer asked the judge to excuse that juror from serving. The judge did so. After the jury was chosen, Linda's lawyer made a statement to the jury as did Sam's lawyer. Linda's lawyer then called to the witness stand Brenda, a friend of Linda, who heard the discussion held between Linda and Sam regarding the purchase of the puppy. Brenda testified under questioning by Linda's lawyer that she heard Linda say that she would pay $700 for the puppy and that she also heard Sam say that he would sell the dog for that amount. Unfortunately for Linda, Brenda also testified in response to questioning by Sam's lawyer that Sam distinctly told Linda that he would only sell the puppy to her if Linda came with cash for the puppy within seven days. Linda did not show up with the money for ten days and Sam had already sold the dog to someone else. The judge ruled in favor of Sam. 144 In choosing the jury, the lawyers were engaged in . Voir dire 145 The challenge to the juror who said that they could not be fair is referred to as a[n] . Challenge for cause 146 The challenge to the juror who seemed grumpy is referred to as a[n] . Peremptory challenge 147 The statements made to the jury by the lawyers immediately after the jury was chosen are referred to as . Opening statements 148 The questioning of Brenda by Linda's lawyer is called , and the questioning of Brenda by Sam's lawyer is called . Direct examination; cross-examination 149 The term ADR refers to the resolution of legal disputes through methods other than litigation. True 150 Courts are generally critical and unsupportive of ADR methods. False 151 A person must have a law degree in order to be a mediator. False 152 A person must be a lawyer in order to perform arbitration. False 153 An arbitrator is more likely to issue a compromise decision than a judge. True 154 Med-arb is a type of ADR method. True 155 A summary jury trial leads to a binding jury verdict. False 156 In an early neutral case evaluation, the neutral provides a binding ruling. False 157 Negotiation is a bargaining process in which disputing parties interact informally, but only with lawyers, to attempt to resolve their dispute. False 158 ADR is a process done only in the U.S., not in foreign countries. False 159 The U.S. Constitution establishes a system of government based on the principle of federalism. True 160 Congress has the power to enact legislation, but the president can veto a law that Congress passes. True 161 The U.S. Constitution explicitly allows courts to review legislative and executive actions to determine whether they are constitutional. False 162 The landmark early U.S. Supreme Court case of Marbury v. Madison recognized the right of courts to exercise judicial review in order to determine the constitutionality of laws. True 163 The primary source of authority for federal regulation of business is the First Amendment to the U.S. Constitution. False 164 Federal laws include laws passed by federal administrative agencies. True 165 Congress can use its spending power to achieve social welfare objectives. True 166 The fourteenth amendment is part of the Bill of Rights. False 167 No First Amendment protections apply to corporations. False 168 Not all corporate speech is political speech. True 169 According to the principle of federalism established by the U.S. Constitution, how is the authority to govern allocated? It is divided between federal and state governments. 170 According to the Amendment to the Constitution, all powers that the Constitution neither gives exclusively to the federal government nor takes from the states are reserved for the states. Tenth 171 Why must federal legislation that affects business be based on an expressed constitutional grant of authority? Because the federal government has only those powers granted to it by the Constitution. 172 The U.S. Constitution allocates the power of the federal government among branches of the government. Three 173 What are the three independent branches of the federal government? Legislative, executive, and judicial. 174 How was the process of judicial review established under which courts review legislative and executive actions to determine whether they are constitutional? By early common law 175 Which clause provides that the Constitution, laws, and treaties of the United States constitute the supreme law of the land? The supremacy clause 176 Which of the following is true regarding laws passed by the U.S. Congress under the authority of the commerce clause? As long as the law affects commerce among the states, or interstate commerce, in some way, the regulation is generally constitutional. "Junk Food." Mary Dogood, a member of the school board in ABC County, is appalled at the amount of junk food in the schools. She convinces the state legislature to pass an ordinance that no stores may sell any unhealthy junk food within 500 feet of any school or day care center. A teacher of political science raises the issue of whether the regulation is valid and is told that it is a valid exercise of the jurisdiction's police power to protect its citizens. Convenience stores balk at the regulation and challenge it in court claiming that the law impermissibly affects interstate commerce. 177 What does the term "police power" reference? The residual powers retained by each state to safeguard the health and welfare of its citizenry. 178 What do courts generally presume regarding laws passed in accordance with states' police power? The laws are valid. 179 Restrictions on states' authority to pass laws that substantially affect interstate commerce are referenced by which of the following? The dormant commerce clause 180 Which of the following was the result in Family Winemakers of California v. Jenkins, the case brought by winemakers from California challenging a Massachusetts law distinguishing between how large and small winemakers could distribute their wines in Massachusetts? That the law impermissibly discriminated against out-of-state winemakers in violation of the Commerce Clause. "Animal Care." Susan, a licensed veterinarian, was recently elected to the U.S. Senate. Susan is very concerned about the lack of care for homeless cats and dogs. She proposes legislation that citizens of all states be taxed sufficiently to provide for no-kill animal shelters that citizens in states with higher than average incomes be taxed at a higher rate than citizens of other states. She also proposed that federal funds for state highways be denied to any state that fails to provide assistance to low income citizens in covering pet vaccinations. Bill, another new senator, tells Susan that, apart from the mandated federal income tax, Congress lacks the authority to tax states because the U.S. Constitution expressly reserves that right to the states. Sam, another senator, tells Susan that Congress has no authority to link highway funds or any other funds with social welfare objectives. Ellen, a clerk in the Senate, tells Susan that Congress is absolutely prohibited from taxing residents of one state at a higher rate than citizens of another state. 181 Which of the following was the result at the U.S. Supreme Court level in United States v. Lopez, the case in which the Court addressed the constitutionality of the Gun- Free School Zone Act? The Court ruled that Congress exceeded its commerce clause authority when it passed the act. 182 Which of the following prohibits states from discriminating against citizens of other states when those nonresidents engage in ordinary and essential activities such as seeking employment? The privileges and immunities clause 183 Which of the following requires that courts in all states uphold contracts and public acts of every state thereby protecting wills, divorce decrees, and judgments in civil courts? The full faith and credit clause 184 Is Bill correct? He is incorrect. The U.S. Constitution contains no such reservation. 185 Which of the following is true regarding Sam's statement? Sam is incorrect 186 Which of the following is true regarding Ellen's statement? Is Correct. 187 The first amendments to the U.S. Constitution are known as the Bill of Rights. Ten 188 Which amendment extends most of the provisions of the Bill of Rights to the states? Fourteenth 189 Which amendment provides that the government cannot infringe on citizens' right to bear arms? Second 190 Which amendment prohibits cruel and unusual punishment? Eighth 191 Today, when the First Amendment is concerned, what does the term "political speech" reference? Speech that occurs when corporations support political candidates. 192 Which of the following is true regarding the protection of "fighting words" under the First Amendment? Fighting words are unprotected speech under the First Amendment. 193 Which amendment protects freedom of religion? First 194 As expressed in the text, which of the following expresses the United Nations declaration on hate speech? The United Nations' declaration states that hate speech is not a protected form of expression. 195 What does the establishment clause of the First Amendment provide? Government cannot make a law establishing a religion. 196 What does the free-exercise clause of the First Amendment provide? Government cannot make a law prohibiting choice in relation to religion. 197 A is a court order that authorizes law enforcement agents to search for or seize items specifically described in the warrant. Search warrant 198 When can government agents obtain a search warrant? When they can establish probable cause. 199 Which amendment protects citizens from unreasonable searches and seizures? Fourth 200 When may government agents search without a search warrant? When law enforcement officials believe it is likely that the items sought will be removed before they can obtain a warrant. 201 Which of the following is an exception to the rule that administrative searches usually require search warrants? The pervasive-regulation exception 202 Which of the following is true regarding the right of the federal government to obtain business books and records? Obtaining books and records from a sole proprietor based only on a subpoena from a grand jury violates the owner's rights against self-incrimination, but seizing records from a sole shareholder of a corporation in that manner does not violate rights against self-incrimination. "Thermal Imaging." Sam was engaged in the criminal activity of growing marijuana in his home using heat lamps in the process. The police randomly selected his street to search for illegal activity. Without any kind of a warrant, they used a thermal imager, an instrument that detects heat emissions, to determine that he was possibly engaged in illegal activity. The police immediately broke down Sam's door, searched his home, and arrested him. The police officer in charge told Sam that he had no right to keep silent and that he might as well confess. Sam proceeded to confess to growing marijuana and a number of other crimes. The judge was so angry with Sam that he threw him in jail for two months without any kind of hearing. Sam's lawyer, who just graduated from law school, is not sure if the police acted legally in Sam's case by using the thermal imager. Sam's lawyer also questions whether Sam had a right to remain silent, and he is concerned that the judge has not granted Sam a hearing. 203 Which of the following is true on the issue of whether the police acted within their rights by using the thermal imager? The police violated Sam's Fourth Amendment rights in using the thermal imager. 204 Which of the following is true on the issue of whether Sam had a right to remain silent? The officer was incorrect, and Sam had the right to remain silent based on his constitutional protection against self- incrimination. 205 Which of the following references rights Sam had in regard to a hearing? Sam's right to procedural due process. 206 Which of the following is true regarding the Fifth Amendment's protection against self-incrimination? A person does not have to be a witness against himself or herself in a criminal case. 207 Which amendment protects against double jeopardy? The Fifth Amendment 208 What does protection against "double jeopardy" mean? The government cannot try a person more than once for the same crime. 209 Which of the following are types of due process? Procedural and substantive 210 Which of the following refers to the basic fairness of laws that may deprive an individual of her life, liberty, or property? Substantive due process 211 What does the Fifth Amendment's takings clause reference? The requirement that the government pay the owner just compensation if the government wants to take private property for public use. 212 Which of the following is true regarding privacy rights? The U.S. Supreme Court has found that U.S. citizens have a right to privacy based upon the U.S. Constitution. 213 If a law prevents individuals from exercising a fundamental right, the law will be subject to . Strict scrutiny 214 If the law's classification scheme is based on gender, the law will be subject to . Intermediate scrutiny 215 Which of the following is true regarding rights of the citizens of Belarus? Citizens accused of crimes are presumed innocent until proven guilty. 216 What did the U.S. Supreme Court rule in South Dakota v. Dole, the case involving the validity of a federal statute granting federal funds for state highways to only those states in which 21 is the legal drinking age? The Court upheld the statute. 217 What was the result at the U.S. Supreme Court level in the Case Opener involving the constitutionality of the "individual mandate" contained within the Affordable Care Act requiring that most Americans obtain minimum essential health insurance contained within the Affordable Care Act? The Supreme Court upheld the "individual mandate" of the Affordable Care Act on the basis that it was a valid exercise of congressional power under the taxing clause. 218 Which of the following was the result at the U.S. Supreme Court level in Christy Brzonkala v. Antonio Morrison, the case in the text involving the constitutionality of the section of the Violence Against Women Act providing for a civil remedy? That Congress lacked authority under the Commerce Clause to pass the section at issue. 219 What was the result at the federal appellate court level in Trunk v. San Diego, the case in the text involving whether the presence of a cross on federal land near a Korean War memorial violated the First Amendment? The court ruled that the presence of the cross violated the First Amendment. 220 Which of the following is true regarding the ability of individual states to collect sales tax on Internet transactions? A state can collect sales tax from a merchant only if the merchant has a store or distribution center in the state. 221 Which of the following best describes the term "comparative law?" It is the study of the legal systems of different states. 222 A reference to laws governing the conduct of states and international organizations and their relationships with one another is . International law 223 Which of the following is true regarding international organizations? The United Nations, the International Monetary Fund, and the International Bank for Reconstruction and Development (World Bank) are all international organizations. 224 Which of the following is an international agreement? A written agreement made between states governed by international law and relating to international subject matter. 225 A company that sends its products to a foreign marketplace for sale has engaged in . Exportation 226 An agent who distributes, represents, or sells goods on behalf of a foreign seller is referred to as a[n] . Foreign sales representative 227 A[n] purchases goods from a seller for resale in a foreign market and actually takes title to the goods assuming the risk of being unable to resell them. Distributor 228 How does ratification of international agreements occur in the U.S.? Through the advice and consent of two-thirds of the Senate after the president submits the agreement for consideration. 229 prohibits U.S. companies from offering or paying bribes to foreign government officials, political parties, and candidates for office for the purpose of obtaining or retaining business. The Foreign Corrupt Practices Act 230 Which of the following is a tax levied on imported goods? Tariff 231 Which of the following is true regarding nontariff barriers? Quotas, embargoes, and indirect barriers are all nontariff barriers. 232 Which of the following is a comprehensive multilateral trading system designed to achieve distortion-free international trade through the minimization of tariffs and removal of artificial barriers? The General Agreement on Tariffs and Trade 233 The facilitates international cooperation in opening markets and provides a forum for future trade negotiations and the settlement of international trade disputes. World Trade Organization 234 principle requires that World Trade Organization member states treat like goods coming from other World Trade Organization member states on an equal basis. The normal trade relations 235 Which of the following is a practice wherein an exporter sells products in a foreign state for less than the price charged for the same or comparable goods in the exporter's home market? Dumping 236 Which of the following is one of the three basic types of subsidies? Actionable subsidy 237 The allows recognized governments of WTO member states to bring an action alleging a violation of the GATT. Dispute settlement understanding 238 Which of the following countries are signatories to the North American Free Trade Agreement? United States, Canada, and Mexico 239 A is a free trade area with the additional feature of a common external tariff on products originating from outside the union. Customs union 240 Many are derived from Roman law. Civil law systems 241 Which of the following is a characteristic of civil law? Civil law systems use a form of system of separation of powers. 242 In the civil law system, which of the following has the primary responsibility for the development of evidence? The judge 243 Which of the following systems originated from the English legal system? Common law 244 Which of the following is literally the "law of merchants?" Lex Mercatoria 245 Which of the following is false regarding the Convention on the International Sale of Goods? The Convention on the International Sale of Goods was adopted in 2000. 246 The Convention on the International Sale of Goods recognizes a concept by which a buyer may give notice to the seller that delivery will be accepted beyond the time prescribed in the contract. That concept is known as . Nachfrist 247 Which of the following references a standard meaning that either the employer or the employee may terminate the employment relationship at any time? Employment-at-will 248 Which of the following is true regarding minimum-wage laws? Australia has a national minimum-wage law. 249 Which of the following prohibits slavery and grants everyone the right to free choice of employment, just and favorable conditions of work, reasonable limitations on working hours, and compensation adequate to provide for the worker's health and that of his or her family? The Universal Declaration of Human Rights of 1948 250 Which of the following refers to the power of a court over persons appearing before it? Personal jurisdiction 251 permits adjudication of any claims against a defendant regardless of whether the claim has anything to do with the forum. General personal jurisdiction 252 Which of the following is a multilateral convention establishing procedures for transnational discovery between private persons in different states? Hague Evidence Convention 253 Which of the following is an international agreement governing the arbitration of private international disputes that has been ratified by the U.S.? The New York Convention 254 is the type of alternative dispute resolution procedure wherein disputes are submitted for resolution to private, nonofficial persons selected in a manner provided by law or the agreement of the parties. Arbitration 255 Which of the following is true regarding the enforceability of foreign judgments in the United States? Foreign judgments are not entitled to full faith and credit, but are only evidence of the justice of the plaintiff's claims. 256 What is the federal minimum wage per hour in the U.S.? $7.25 257 Which of the following is a doctrine that permits courts to decline to exercise jurisdiction where there is a more convenient forum to hear the case? Forum non conveniens 258 What was the result at the U.S. Supreme Court level in Goodyear Dunlop Tires Operations, S.A. v. Brown, involving whether a court in North Carolina could exercise jurisdiction over the defendant tire manufacturer and its subsidiaries who were based in Turkey and France? (The underlying lawsuit involved the deaths of North Carolina residents in France when a bus in which they were riding allegedly overturned due to problems with its tires.) The court ruled that the North Carolina court could not exercise jurisdiction over the defendants. 259 The primary purpose of criminal law is to compensate a victim. False 260 Commission of the offense of grand larceny involves the theft of larger items as opposed to smaller items that can be hidden, for example, in a purse. False 261 Under our criminal laws that exist today, white-collar crime is not punishable by imprisonment. False 262 By broadening the scope of actions covered and the definition of a public official, Congress amended the Foreign Corrupt Practices Act to conform to the antibribery convention adopted by the Organization for Economic Cooperation and Development. True 263 Mail fraud is a federal crime. True 264 Embezzlement is distinguished from larceny because in embezzlement the individual does not take the property from another and is already in possession of the property. True 265 China punishes embezzlement and bank fraud less severely than the U.S. False 266 Under the common law, a corporation could not be considered a criminal because it was not an actual person and, thus, did not have a mind. True 267 Under current law, corporations cannot be held criminally accountable for strict-liability offenses. False 268 A person who is considered an infant under the law cannot be tried as an adult under any circumstances. False 269 The test used to establish one's mental state when insanity is claimed is the same regardless of the jurisdiction involved. False 270 The majority of the U.S. Supreme Court Berghuis v. Thompkins ruled that absent an explicit invocation of the right to remain silent, police may continue to interrogate a suspect, and what the suspect says may be used against him in court. False 271 Tort law is primarily state law. True 272 When it comes to assault, apprehension and fear are considered as the same thing. False 273 Consent, if proven, is a defense to battery. True 274 Defense of property cannot be a defense to a claim of battery. False 275 Subjective opinions are subject to an action for defamation in the same way as statements of alleged fact. False 276 In China, defamation can be a civil or criminal action. True 277 Privilege is an affirmative defense in a defamation action. False 278 If a defamation statement was originally broadcast by a company in the United States and was rebroadcast in the United Kingdom without the consent of the originator of the broadcast, the U.S. company may still be held liable in the United Kingdom court. True 279 The use of moral pressure is insufficient to establish false imprisonment. True 280 Simply offering a better deal is not enough to create liability for intentional interference with contract when only a prospective contract exists. True 281 Which of the following is a tort? A wrong or injury to another, other than a breach of contract. 282 Which of the following is true of the term "tort"? It is a French word meaning "wrong." 283 Which of the following is true regarding tort litigation? Tort litigation has been declining gradually since 1990. 284 Which of the following are common classifications of torts? Intentional, negligent, and strict liability. 285 torts occur when the defendant takes an action intending certain consequences will result or knowing certain consequences are likely to result. Intentional 286 torts occur when the defendant is careless and acts in a way that subjects other people to an unreasonable risk of harm. Negligent 287 torts occur when the defendant takes an action that is inherently dangerous and cannot ever be undertaken safely, no matter what precautions the defendant takes. Strict-liability 288 Which of the following is true regarding the intent needed for an intentional tort? The intent at issue is not intent to harm but, rather, is intent to engage in a specific act, which ultimately results in an injury, physical or economic, to another. 289 What did the court rule in regard to the plaintiff's claim of intentional infliction of emotional distress in Olson v. CenturyLink, the case in the text in which the plaintiff alleged that representatives of the defendant, a provider of telephone services, wrongly failed to process his application, disconnected his telephone service, and hung up on him during telephone conversations? That the conduct complained of by the plaintiff failed to meet the level of conduct required for a finding of the intentional infliction of emotional distress. 290 A(n) occurs when one person places another in fear or apprehension of an immediate, offensive bodily contact. Assault 291 Which of the following is true regarding the apprehension necessary for the tort of assault? A person may be in apprehension of physical harm, even if the same person is too courageous to be afraid of that physical harm. 292 Robby calls Bobby on the telephone and threatened to come over and break his nose. Which of the following is true? Robby's conduct does not constitute an assault because there is no question of immediate bodily harm. 293 Which of the following was the result in Thomas P. Lamb v. Tony Rizzo, the case in the text in which the defending newspaper reporter claimed that he could not be held liable to the plaintiff for making alleged defamatory statements because the plaintiff's reputation as a kidnapper and murderer serving three life sentences was so bad that his reputation could not be further harmed? The court dismissed the lawsuit recognizing that the facts fit within the jurisdiction's description of when the libel-proof doctrine might apply based upon the plaintiff's already bad reputation. 294 Mike gets angry because Ben made a better grade on a test than he did. They get into an argument, and Mike takes a swing at Ben intending to hit him. Ben shoves Mike in order to avoid the blow. Which of the following is true regarding Ben's actions? Ben has not committed an assault or a battery because he acted in self-defense. 295 Which of the following gives immunity to providers of interactive computer services for liability they might otherwise incur on account of material disseminated by them but created by others? The Communications Decency Act of 1996. 296 Which of the following may a person accused of defamation raise as a defense? Truth and privilege. 297 When a[n] privilege exists, one cannot be sued for defamation for any false statements made, regardless of intent or knowledge of the falsity of the claim. Absolute 298 Under a conditional privilege, a party will not be held liable for defamation unless the false statement was made . with actual malice 299 Which of the following is true regarding the groups generally considered to be public figures for purposes of the public figure privilege to actions for defamation? Politicians and entertainers, but not small business owners, are generally considered to be public figures. 300 Which of the following would constitute the privacy tort of false light? Attributing characteristics or beliefs to a person that he or she does not possess. 301 Which of the following is true regarding awards of punitive damages in the U.S.? It is not always easy to predict what a court will do in any given case. 302 Without obtaining advance permission, Annie places an unflattering photograph of the president of the college which she attends on folders that she is selling outside of class for extra money. Which of the following is true? Annie has appropriated for commercial gain the photograph which constitutes an invasion of privacy. 303 Which of the following are defenses to an action for libel brought by a public figure in the United Kingdom regarding a statement made in the United Kingdom? That the statements were true, that the statements were made in Parliament, or that the statements were made in court. 304 Bill decides to install two-way mirrors in the dressing room of his ladies' clothing store. He has a habit of watching ladies while they try on clothing. Which of the following has Bill committed? Intrusion on an individual's affairs or seclusion. 305 Which of the following occurs when an individual is confined or restrained against his or her will for an appreciable period of time? False imprisonment. 306 Which of the following would constitute false imprisonment? Threatening to use immediate physical force to detain someone; refusing to release property; and physical restraint, such as tying someone to a chair; but not moral pressure. 307 Which of the following is generally true regarding a storekeeper who detains a suspected shoplifter? When a retailer has a reason to believe that a person is guilty of shoplifting, the store may question the person about said shoplifting in a reasonable manner and for a reasonable length of time. 308 Which of the following occurs when someone engages in outrageous, intentional conduct likely to cause extreme emotional distress to the party toward whom the conduct is directed? Intentional infliction of emotional distress. 309 Which of the following torts seek to compensate people wrongfully subjected to litigation? Malicious prosecution, wrongful civil proceedings, and abuse of process. 310 Jane is unhappy with her neighbor, Sam, because Sam will not allow her to swim in his swimming pool. She tells him that unless he lets her swim in the pool, she will bring an action against him for nuisance because he plays his stereo late at night at times. While the stereo does not bother Jane because she is up late anyway, she thinks that will encourage Sam to let her swim in the pool. Sam, however, continues to refuse to allow Jane to swim in his pool, and Jane proceeds to sue Sam for nuisance. Which of the following is true? Sam can sue Jane for abuse of process and win regardless of whether or not he wins the nuisance action. 311 Under which of the following situations does the tort of trespass to realty occur? When a person intentionally enters the land of another without permission; causes an object to be placed on the land of another without the landowner's permission; stays on the land of another when the owner tells him to depart; or refuses to remove something he placed on the property that the owner of the property asked him remove. 312 Which of the following is defamation of a business product or service? Disparagement. 313 A false statement of a material fact regarding ownership of business property that results in a loss of sales is referred to as . Slander of title 314 Bob, who has a large trust fund, is angry at Alice because she stopped dating him. Alice ran a successful dog grooming shop but Bob decided to open a dog grooming shop next door solely to run her out of business because he was angry over the break up. Which of the following is correct? Bob has committed the tort of unfair competition. 315 The primary type of damages in tort law is referred to as . Compensatory damages 316 A person who commits a tort is often referred to as a . Tortfeasor 317 Which of the following is not a typical type of compensatory damage? Damages to punish the defendant for wrongdoing. 318 damages are a small amount of money given to recognize that a defendant did indeed commit a tort in a case in which there were no compensable damages suffered by the plaintiff. Nominal 319 damages are damages awarded to punish the defendant and to deter others from similar conduct. Punitive "Pet Police." Millie breeds German Shepherd dogs. Bernard, who lives down the street, took in a stray dog loosely identified as a Corgi-plus. The dog, Casanova, would definitely be classified as a mixed breed. Bernard allowed Casanova to roam freely. Unfortunately, Casanova went to visit Millie's pure-bred German Shepherd. Puppies resulted which were Shepherd and Corgi-plus puppies. Millie was incensed. She started a campaign to round up all of the stray dogs, including Casanova, and haul them off to the animal shelter. She picked up a few cats as well. She posted signs all over the neighborhood saying that no animal, neither dog, cat, nor fowl, should come into her yard and that she was going to begin shooting the next time, period. Understandably, Bernard and some of the other neighbors took offense. Bernard comes to Millie's house while she is working in the yard. He walks behind her and shoves her. Millie did not see him coming. Millie turned around and proceeded to have a heated conversation with Bernard. Millie drew her fist back and told Bernard that she was going to punch him in the nose. Millie raised back her arm and started to punch Bernard but he stepped back, and all she managed to do was jab him in the shoulder, causing no actual pain. Sally, who was going by on the street, saw Millie attempting to hit Bernard. Sally came over and grabbed Millie's hands, pinning Millie's hands behind her back. 320 Considering Bernard's shoving of Millie in the back, which of the following is true? By shoving her in the back, Bernard committed a battery. 321 Millie's threat to punch Bernard in the nose and her action in raising back her arm in support constitute a[n] . Assault 322 Millie's action in jabbing Bernard after she missed his nose, constitutes which of the following? Battery. 323 Which of the following is true regarding Sally's actions toward Millie? Sally did not commit any offense because she was acting in the defense of Bernard. "Feuding Neighbors." Annette, who is angry because her neighbor, William, allows his dog to chase her cat, decides to get even. She moves a number of farm animals into her backyard and begins playing music at all hours of the night. She also steals a nice lawn chair off of William's deck. She intends to keep the chair and not give it back. Annette further took a rake off of William's deck that she plans to return after she finishes raking her leaves. William did not give her permission to take the rake or the chair. William is not happy about the farm animals and the loud music.324 The defamation printed in the school newspaper would be which of the following? Libel but not slander. 325 As far as the editorial is concerned, which of the following is true in regards to Maryann's statement that Candy cannot recover because she cannot show loss of income? Maryann is incorrect because general damages would be presumed. 326 Statements made by Maryann to her friends that were defamatory of Candy are what type of defamation? Slander but not libel. 327 As far as the statements made to her friends are concerned, which of the following is true in regards to Maryann's statement that Candy cannot recover because Candy has not suffered a loss of income? Maryann is incorrect because her statements constituted slander per se. 328 Which of the following would be the most appropriate cause of action, if any, against Annette based upon the farm animals and the music? Private nuisance. 329 What claim would William have against Annette for taking the lawn chair? Conversion. 330 What action would William have against Annette for taking the rake? Trespass to property. 331 List the three objectives of tort law and discuss whether you believe that additional tort reform should occur. Torts laws objectives are to provide compensation to injured parties, it also keeps order by discourgaging retaliation from private injured parties and friends, and the last objective is to give citizens a sense that they live in a just society. 332 Discuss what is needed in order to establish damages in defamation actions. Address whether special proof is needed and, if so, under what circumstances. Libel typically with Libel general damages are presumed and the victim is compensated with damages that flow from defamation. Slander, the plantiff must proof damages in the form of monetary loss. Slander Per Se, there are 4 types. 1 the plantiff has a loathsome disease. 2 Has committed a crime for which imprisonment is possible. 3 Is professionally incomptetent. 4 If a women had engaged in sexual misconduct. 333 Explain the concept of absolute privilege in the context of defamation and set forth the two situations listed in the text in which it is applied. Discuss whether you believe each category of absolute privileges should be eliminated. Absolute privelege exist when one cannot be sued for false statements made regardless of the intent or knowledge of the falsity of the claim. The speech and debate clause of the U.S. Constitution gives an absolute privilege to individuals speaking on the House and Senate floors during congressional debate and no Absolute Privelege should not be eliminated because we might get less information out of people. 334 List and explain the four different types of privacy torts. False Light, public disclosure of private facts, appropriation for commercial gain, and intrusion of an individuals affairs or seclusion. False Light - false light is closely related to defamation and happens when information is publicly put out about someone that creates a false impression about them that is not true. Public disclousre of private facts - when someone publiclizes private facts about an individual that a reasonable person would find highly offensive. Appropriation for commercial gain - when someone uses a persons likeness, or other identifying charatcteristics for commercial gain without the persons consent. Intrusion on an individuals affairs or seclusion - when somone invades a persons solitude, seclusion, and personal affairs when the person has the right to privacy. 335 Susie Starr, a highly successful movie star in both the United States and the United Kingdom is concerned because a tabloid based in the United States with distribution in both the United States and the United Kingdom falsely claimed that she has a problem with alcohol and had an affair with best friend's husband. She is considering a lawsuit for defamation. She asked you whether it would be easier to win the case in the United States or in the United Kingdom. What would you tell her and why? How does the defamation law of the United Kingdom differ from that of the U.S.? Also discuss whether Susie has an option to sue in the United Kingdom since the tabloid is published in the United States. It would be easier to win the case in the United Kingdom because media outlets in the US can put out false information about public figures if they can proof they are doing it without malice. To win the case the public figure must proof that the defamatory statements were communicated in the United Kingdom and proof that their reputation was damaged. 336 Explain the fair report privilege in relation to defamation and list the conditions required for it to apply. Fair report privilege in relation to defamation, if you relied upon a official public document or statement by a public official for the false information, and made it clear that the document was your source, and fairly and accurately used the source. The the privelege allows you to freely report. Applicable to, Statements made by a judge in trial. Testimony during trial. Facts recorded in a final police report. analysis provided in an environmental protection agency. 337 In some situations, the law specifies the duty of care one individual owes to another. True 338 The courts generally hold that landowners have a duty to protect individuals on their property. True 339 When negligence per se applies, the plaintiff is required to show that a reasonable person would exercise a heightened duty of care toward the plaintiff. False 340 A plaintiff in a negligence suit may choose whether the plaintiff wishes pure comparative negligence or modified comparative negligence to be applied by the court. False 341 According to the pure comparative negligence defense, a defendant must be more than 50% at fault before the plaintiff can recover. False 342 Assumption of the risk is a doctrine which makes it easier for a plaintiff to prevail in a lawsuit. False 343 More than half the states remain contributory negligence states. False 344 To use the assumption of the risk defense successfully, a defendant must prove that the plaintiff voluntarily and unreasonably encountered the risk of the actual harm the defendant caused. True 345 Implied assumption of the risk occurs when the plaintiff expressly agrees, usually in a written contract, to assume the risk posed by the defendant's behavior. False 346 Good Samaritan statutes impose liability upon people for refusing to stop at accident scenes. False 347 Strict liability is liability without fault. True 348 In District of Columbia v. Wayne Singleton, the case in the text involving the single-vehicle bus accident, the court applied the doctrine of res ipsa loquitur because a single- vehicle accident is a type that does not normally occur in the absence of negligence. False 349 The term "consideration" in relation to contracts involves parties acting in an ethical manner. False 350 Whether a contract is bilateral or unilateral depends upon what response the offeror expects from the offeree. True 351 Today, courts hold that once an offeree begins performance on a unilateral contract, the offeror must hold the offer open for a reasonable time to allow the offeree to complete the performance. True 352 Quasi-contracts are actual contracts. False 353 In order to recover under quasi-contract, there is no requirement that enrichment be unjust. False 354 In order to recover under quasi-contract, there is no requirement that enrichment be unjust. False 355 If a contract is valid, then it is enforceable. False 356 Any contract that is not a formal contract is an informal contract, also called a simple contract. True 357 In the employer/employee context, the purpose of a covenant not to compete is to restrict what an employee may do after leaving a company. True 358 Congress passed the Uniform Electronic Transactions Act (UETA). False 359 A person who is intoxicated when signing a contract may not avoid the contract based on being intoxicated because being intoxicated is a voluntary condition. False 360 Which of the following is true regarding the type of marriage contract discussed in the text called the muta'a? It is a temporary type of arrangement called a "pleasure marriage" in which the female is paid for sexual intimacy. 361 Which of the following was the result on appeal in Reisenfeld & Co. v. The Network Group Inc.; Builders Square Inc.; Kmart Corp., the case in the text involving whether the plaintiff could recover from BSI in the situation in which BSI contracted with Network Group to lease property, and Network Group contracted with the plaintiff agreeing to pay a certain commission for his work but then defaulted on the contract? The court ruled that because a quasi-contract was involved, BSI was required to pay the plaintiff the reasonable value of the services rendered, not necessarily the contractual amount promised for commissions. 362 Which of the following was the result in the Case Opener in which Hallmark claimed that an arbitration ruling against a former employee should be upheld? The former employee could proceed with an action in court because there was no consideration for the arbitration agreement and, therefore, no valid agreement. 363 A[n] is a promise or set of promises for the breach of which the law gives a remedy or the performance of which the law in some way recognizes a duty. Contract 364 Which of the following consists of an offer by one party and an acceptance of the terms by another party? Agreement 365 The person who makes an offer is called a[n] . Offeror 366 The person who agrees to the terms of an offer made by the other party is called the . Offeree 367 Which of the following is a definition for consideration? The bargained-for exchange. 368 Which of the following represents the legal ability to enter into a binding agreement? Contractual capacity 369 Which of the following references the requirement that a contract not be either illegal or against public policy? Legal object 370 Which of the following may represent a lack of genuine assent? Acceptance secured through fraud, duress, undue influence, or misrepresentation. 371 An attorney who says that a contract lacks "the proper form" is typically referencing which of the following? The contract lacked a writing. 372 Contract law is said to be based on a[n] theory, meaning that the existence and interpretation of the contract is based on the outward manifestations of intent by the parties. Objective 373 As a general rule, the intent of the parties is not relevant when determining whether a contract exists; rather, what is relevant is how they represented their intent through their actions and words. Subjective 374 If a[n] misunderstanding between the parties exists, and as a result of that misunderstanding the parties do not really come to a meeting of the minds, there is no contract. Mutual 375 In the U.S., which of the following are the two most important sources of contract law? Case law and the Uniform Commercial Code. 376 Today's law of contracts originated from judicial decisions in . England 377 The law of contracts is primarily law. Common 378 Which of the following was propounded by prominent legal scholars, recruited by the American Law Institute? The Restatement of the Law Second, Contracts. 379 Which of the following is the reason the Uniform Commercial Code was drafted? Different states had different laws governing contracts which did not result in a smooth flow of interstate commerce. 380 Which of the following is the part of the Uniform Commercial code governing contracts for the sale of goods? Article 2 381 All contracts can be categorized as either or . Unilateral; bilateral 382 A[n] contract is commonly defined as a promise in exchange for a promise. Bilateral 383 Harry and Frank are in agreement that Harry will pay Frank $2,000 for a used car. At what point is there a binding contract? When the agreement is made. 384 In a[n] contract, the offeror wants a performance to form the contract. Unilateral 385 In which of the following does a contract arise not from words but from the conduct of the parties? Implied contracts 386 Which of the following is sometimes referred to as an implied-in-law contract? Quasi-contracts 387 Which of the following is the most likely measure of recovery when a quasi-contract is involved? The fair market value of the matter involved. 388 A[n] contract is one that contains all the legal elements of a contract. Valid 389 A valid contract may be valid but when there is some law that prohibits the courts from enforcing it. Unenforceable 390 Which of the following is in effect not a contract at all? A void contract 391 A contract is if one or both of the parties, without breaching the contract, have the ability to either withdraw from the contract or enforce it. Voidable 392 Which of the following contracts are usually voidable? Contracts entered into as a result of fraud, duress, or undue influence. 393 Once all the terms of the contract have been fully performed, the contract is said to be . Executed 394 As long as some of the duties under a contract have not yet been performed, the contract is considered . Executory 395 Which of the following is an example of a formal contract? Contracts under seal letters of credit, but not executory contracts. 396 The reference to comes from the days when the contract was literally sealed by a piece of soft wax into which an impression was made. Contracts under seal 397 How many states still allow a contract without consideration to be enforced if it is under seal? Ten 398 A[n] arises when a person acknowledges in court that he or she will perform some specified act or will pay a price upon failure to do so. Recognizance 399 A is an agreement by the person who issues a letter to pay a sum of money on receipt of an invoice and other documents. Letter of credit 400 Which of the following are written documents signed by a party that makes an unconditional promise to pay a specific sum of money on demand or at a certain time to the holder of the instrument? Negotiable instruments 401 Which of the following states that if a writing, or term in question, appears to be plain and unambiguous on its face, its meaning must be determined from the four corners of the instrument without resort to outside evidence, with the words being given their ordinary meaning? The Plain Meaning Rule 402 Which of the following was the result in In Re Zappos.com Inc., v. Customer Data Security Breach Litigation, the case in the text in which customers of Zappos claimed that they were not bound to an arbitration agreement contained in a contract with Zappos? The court ruled for the plaintiffs for the following two reasons: (1) there was no contract because plaintiffs did not assent to it, and (2) even if a contract existed, the contract was illusory and unenforceable because Zappos could avoid promises at any time. "Book Sale." Beverly offered to sell Rick a used business law book for $50. She told him that he could use it in his upcoming business law class the next semester. In fact, there was a problem with the book; it was several editions old. Rick was not aware of that fact, and neither was Beverly. When Rick took the book to class and realized the problem, he went back to Beverly requesting a refund. Beverly refused to return his money. She claimed that subjectively she thought that the book was correct, that she did not commit fraud, and that a binding contract existed. The book, however, is outdated and cannot be appropriately used in the class. 403 Which of the following would describe Beverly's role in the transaction? She was the offeror. 404 Which of the following describes Rick's role in the transaction? He was the offeree. 405 Which of the following is the term representing the $50 to be provided by Rick and the book to be provided by Beverly? Encouragement Material Consideration 406 Which of the following is true regarding Beverly's claim that she subjectively believed the book was an appropriate edition and that an enforceable contract, therefore, existed? She is incorrect because her subjective belief would not be the basis for a determination of whether the contract would be enforced in this case and also because fraud is not necessary in order to find a breach of contract. 407 Which of the following would be the correct analysis of the effect of the discovery that Rick has a book that is not appropriate for the class? Because the parties had a mutual misunderstanding, the parties did not come to a meeting of the minds, and there is no contract. "Refusal to Pay." Business law teacher Debby needed some yard work done. She told her class that she would give $50 to the first person who mowed her yard. She also entered into an agreement with Betty who agreed to trim some shrubbery for $40. Max went to mow Debby's yard. Unfortunately, just as he finished mowing, a neighborhood dog bit him, and he had to go to the emergency room for a couple of stitches. Debby refused to pay Max because she said that he had angered the neighbors and their dog, and that he was more trouble than he was worth. Secretly, Debby was glad about the dog bite because she felt it gave her an excuse not to pay. Max refused to pay the emergency room because he said that they did not have a binding, bilateral contract. Betty refused to trim the shrubbery because she got a better offer and claimed that she was not bound on the contract until she started to perform. 408 Which of the following is correct regarding Betty's statement that there was no contract? Betty is incorrect because there was a bilateral, express agreement. 409 Which of the following is an appropriate characterization of the agreement between Debby and Max? They had a unilateral, express agreement. 410 Which of the following is true regarding Max's statement that he did not have to pay the emergency room charges? He is incorrect because there was a binding implied contract. 411 What was the status of the agreement between Jackson and Penny as of Tuesday when they agreed upon the price for the job? The contract was executory. 412 Which of the following is correct regarding Penny's assertion that the neighbor will be required to pay Jackson? She is incorrect. The neighbor will not be required to pay Jackson. 413 Which of the following is true regarding Jackson's assertion that Penny must pay him at this point if the neighbor fails to do so? He is incorrect unless he can somehow establish that Penny gave him poor directions or was otherwise at fault in informing him which deck to paint, and the contract remains executory. 414 Courts interpret contracts using an objective standard. True 415 Only the offeree to whom an offer is directed can accept the offer. True 416 Once an offer is made, an offeror has no right to terminate it before receiving a reply. False 417 An offer by a retailer to purchase seasonal goods from a wholesaler would not lapse sooner than an offer to purchase goods that could easily be sold all year long. False 418 There are a limited number of circumstances under which silence can be an acceptance. True 419 If the subject matter of an offer is destroyed, the offer terminates after 10 days or notice of the death to the offeree, whichever comes first. False 420 If an offeree makes a mistake and sends an acceptance to the wrong address, there is an acceptance upon dispatch. False 421 An "instructed authorization" occurs if the means by which an acceptance can be communicated to the offeror is expressly stated in the offer. False 422 If an acceptance is received after a rejection is received, the acceptance is still valid. False 423 Under the Mailbox Rule, a valid contract has been formed if a rejection is dispatched, but before it is received, the acceptance is communicated to the offeror. True 424 Which of the following was the result in Alexander v. Lafayette Crime Stoppers Inc., the case in the text in which the plaintiffs sued for collection of reward money offered to catch a serial killer by the defending publications, and the publications defended on the basis that the plaintiffs failed to provide notice as required by the reward offers because the plaintiffs provided relevant information to law enforcement, not the defendants? That defendants did not receive acceptance of the reward offer and that, therefore, no contract was formed. 425 What was the result in the Opening Case in which the plaintiff attempted to buy a jet from Pepsi for Pepsi points and some additional funds? The plaintiff did not prevail because Pepsi reserved the details of the offer to a separate writing, and Pepsi had the authority to reject the plaintiff's offer to purchase. 426 What was the result in the case in the text Lucy v. Zehmer involving whether allegations of joking prevented the formation of the contract involved? The court ruled that the agreement would be enforced because under the applicable standard, it was not apparent that joking was involved. 427 Constance asks Kathy if Kathy would consider selling her car for $2,000. What is the status of the negotiation? No offer has been made. 428 What was the result in the case nugget, Lefkowitz v. Great Minneapolis Surplus Store Inc., involving an advertisement for the sale of fur coats? The court ruled that the ad was an offer and that the plaintiff properly accepted it.offers, only invitations for customers to make an offer. The court ruled that the ad was an offer and that the plaintiff properly accepted it. 429 If nothing is stated to the contrary in the terms of an auction, an auction is presumed to be . With reserve 430 In an auction , the seller is treated as making an offer to accept the highest bid. Without reserve 431 The terms of a contract are those terms that would allow a court to determine what the damages would be in the event that one of the parties breaches the contract. Material 432 Which of the following terms would be considered material terms? Subject matter, price, parties, quality, and quantity 433 What was the result in the case discussed in the text Andrus v. State Department of Transportation, and City of Olympia in which the plaintiff sued because a job offer was allegedly revoked? The defendant won because the purported job offer contained insufficient information to be considered reasonably certain in regard to its terms. 434 Which of the following is true when an offer authorizes a certain mode of acceptance but does not require it, and an offeree attempts to accept the offer through a method other than the authorized means? The contract is not formed until the acceptance is received by the offeror. 435 Which of the following refers to the right of an offeror to revoke an offer? The offeror is the "master of his offer." 436 If a person wishes to ensure that an offer will in fact be held open for a set period of time, the person may do so by entering into a[n] contract with the offeror. Option 437 As a general rule, when is revocation effective? When it is received by the offeree. 438 Which of the following is true regarding the termination of an offer based on a rejection? Regardless of how long an offeror states that an offer will be held open, once the offeree rejects it, the offer is terminated. 439 Which of the following is an offer made by an offeree to an offeror relating to the same matter as the original offer and proposing a substituted bargain differing from that proposed by the original offer? A counteroffer 440 If a[n] contract exists, the administrator of an offeror's estate must hold the offer open until it expires in accordance with the contract. Option 441 If the subject matter of an offer is destroyed, the offer . Immediately terminates 442 If the subject matter of an offer becomes illegal, what is the result? The offer immediately terminates. 443 In the absence of a time condition in an offer, the offer will expire . After a reasonable amount of time 444 Which of the following is presumed to be a reasonable amount of time when considering whether an offer has expired? There is no set amount of time, and what constitutes a reasonable amount of time varies depending upon the subject matter of the offer. 445 Which of the following is true regarding acceptable means of acceptance if no means of communicating an acceptance is specified in an offer? If no means of communicating the acceptance is specified, any reasonable means is generally acceptable. 446 In which of the following ways may an offeree accept a unilateral contract? By performance only. 447 Gretchen offers $100 to anyone who can return her lost dog, Sparky. Haley returns the dog and requests the money. Gretchen says that there is no binding contract. Which of the following is true regarding Gretchen's statement? Gretchen is incorrect because there is a binding unilateral contract which Haley accepted by performing. 448 When acceptance is examined under the common law, how do the basic requirements for a valid acceptance compare with those for a valid offer? The basic requirements for a valid acceptance parallel those for a valid offer. 449 Trudy signs a contract with ABC Book Club without reading it. The contract provides that new books will be sent to her eBook reader every month unless she sends notification rejecting the receipt of new books. Which of the following is true regarding whether the contract is binding? The contract is binding. 450 Which of the following is false regarding how the Japanese tend to view contracts? The Japanese do not desire that any terms be left to be decided later. 451 What have most states done with regard to unsolicited merchandise received from a seller? Most states have passed laws providing that unsolicited merchandise does not have to be returned and the recipient may keep it as a gift, with no contract being formed. 452 Inez, wishing to sell a used business law book, calls Janice and tells her that if she does not hear from her within twenty-four hours, she will assume that Janice wishes to purchase the book for $50. Which of the following is correct regarding the status of the proposed book sale? There is no contract because in this situation silence cannot be used to form a contract. 453 Which of the following sets forth the common law rule that the terms of an acceptance must mirror the terms of an offer? The Mirror Image Rule 454 Which of the following is generally true if no means of communicating an acceptance is specified in an offer? Acceptance may be made by any reasonable means. 455 Which of the following provides that an acceptance is valid when it is placed in the mailbox? The Mailbox Rule 456 Which of the following provides that a revocation is effective only when received by the offeree? The Mailbox Rule 457 Tina tells Barry that she will mow his yard for the summer for $800. Barry thinks about it and drops a note in the mail to Tina telling her that he rejects her offer. He thinks about it, however, and calls her to tell her that he accepts the offer before she receives his rejection. Which of the following is true under the mailbox rule? The acceptance is valid, and the rejection has no effect. 458 Which of the following is true regarding the Uniform Commercial Code? Some elements of a contract under the common law have been modified under the UCC for contracts for the sale of goods. 459 Which of the following is true regarding distinguishing an offer from an invitation to negotiate? Whether an offer in fact existed is a question of fact. 460 Which of the following was the result in the case in the text Adone v. Paletto involving the rejection of a purported acceptance of an offer of compromise because it was not made within the time limit of 10 days specified in the offer? Rejection of the acceptance was enforceable because the 10 days in which the other party had to accept had expired. 461 Prudence, a mean business law teacher, offers $50 to any student who will mow her lawn. Sam goes right over and begins mowing. Just before he finishes, Prudence goes over and tells him that she revokes her offer. Which of the following is true regarding Sam's entitlement to payment? Sam is entitled to recover because a unilateral contract was involved, and he was entitled to a reasonable amount of time to complete the job. 462 Which doctrine may courts use to estop, or prevent, an offeror from revoking an offer based on a party's taking steps in reasonable reliance on an offer? Promissory estoppel 463 Which of the following is true regarding the Uniform Electronic Transactions Act? It seems to create an electronic version of the mailbox rule. "Used Car Sales." Walter sells used cars. He is seeking a way to increase sales and profits because he would like to take his girlfriend on a nice diving trip to the Grand Cayman Islands. The first thing that Walter does is say that during the first week of December, he will give a $500 rebate on used cars that are under two years old. To spice things up, he also offers to sell any car on the lot that is over five years old for $1,000 to the first three customers who can hula hoop ten hours straight on December 7th. (Hula hooping was a practice popular some years ago in which a large hoop would be swung around by a person, usually around the waist.) Walter was not very concerned about the hula hooping issue because he thought that no one would be able to hula hoop for ten hours straight. Walter put an advertisement pertaining to the rebate and the hula hoop opportunity in the local newspaper. The promotion went over very well. Although Walter had several cars available, he ran out of cars under two years old within one day. During the rest of the week shoppers were told that no cars of that description were available. Sam was very angry at Walter for not having a car available that was under two years old so that he could get a good deal and a $500 rebate. On December 7th, while Walter was watching the hula hoopers, Sally was shopping for a car. She was in college and did not have much money. She saw one, an older car, a real clunker, that she liked; but she really did not know if it could be repaired sufficiently to be dependable. Walter had not even put a price on it because he planned to have it crushed. Sally was going to talk to her parents about it. Walter eventually approached her, and Sally asked him if he would take $450 for the car. Walter said, "Yes, sold." Sally tried to explain that she needed to talk to her parents first, but Walter would not hear of it. While Walter was still fuming from his encounter with Sally, Zack walked up and started to criticize the nature of Walter's inventory. Walter told him that he had great cars. Zack pointed at an old jalopy that was banged up, had 200,000 miles on it, and a cracked windshield. Zack said, "Sure, I'll pay $100,000 for that car!" Walter said, "Sold." Zack said, "Wait a minute. I was only kidding." Walter said, "No way." Meanwhile all the hula hoopers dropped out well prior to ten hours of hula hooping except for Barbara. She completed the hula hooping and asked for her car for $1,000. Walter refused saying that the offer was revoked. Sam and Barbara sued Walter, and Walter sued Zack and Sally. Under the applicable law in Walter's state, common law will be applied, and there are no state statutes impacting the situation. 464 Which of the following is the most likely result in the lawsuit brought by Sam complaining that Walter ran out of cars available for a rebate? Sam will lose because a court would interpret the intent of Walter as being to invite readers to make an offer that Walter was free to reject. 465 What is the most likely result in Walter's lawsuit against Sally in which he claims that she must pay $3,000 for the car at issue? Walter will win because Sally made an offer that he properly accepted. Walter will win because Sally agreed to pay a reasonable amount for the vehicle. Sally will win because she merely expressed interest and did not make an offer. 466 What is the most likely result in the lawsuit brought by Walter against Zack? Zack will win because under an objective standard, it appears he was joking. 467 What is the most likely result in the lawsuit brought by Barbara against Walter? Barbara will win because she properly made an offer that was accepted by Walter when she did the hula hooping. 468 In the lawsuit in which Barry sues Helen for return of the $5,000, which of the following is the most likely result? Helen will win because the auction was without reserve, and she properly bid on and bought the cash register with everyone knowing that the cash drawer was stuck. 469 What is the likely result in the lawsuit brought by Mary against Barry for the table? Mary will win because the auction was without reserve, and Barry had agreed to accept the highest bid. 470 What is the likely result in the lawsuit Barry brought against Chris? Chris will win because he properly revoked his bid before it was accepted. 471 Which of the following is correct regarding the final status of the negotiations between Charles and Constance? Charles made an offer which was rejected by Constance when she made a counteroffer for $400. 472 Which of the following is correct regarding the final status of the negotiations between Donna and Charles? Donna did not reject Charles' offer because she merely made an inquiry. 473 What effect does the accidental destruction of the personal watercraft have on the deal between Charles and Joan? Charles is not in breach of contract because of destruction of the subject matter. 474 Consideration is optional in every contract. False 475 In a bilateral contract, the consideration for a promise is a completed act. False 476 An exception to the rule requiring consideration is promissory estoppel. True 477 An illusory promise is not a consideration. True 478 As a general rule, past consideration qualifies as consideration. False 479 In some cases, if past consideration was given with expectation of future payment, the court may enforce the promise. True 480 A promise to do something that you are already obligated to do is generally a valid consideration. False 481 One consideration in determining whether consideration is sufficient to support a contract for the sale of goods under the UCC is whether both parties received a good deal under UCC rules and principles. True 482 Partial payment of a debt may or may not be valid consideration, depending on whether the debt is liquidated or unliquidated. True 483 A liquidated debt may be the subject of an accord and satisfaction. False 484 Which of the following was the result on appeal in the Case Opener involving the alleged breach of an oral contract based on the plaintiff lawyer loaning a corporate client funds and the client later reneging on a promise, made in gratitude, to give the lawyer 3 percent of the company's stock? That the promise was not enforceable because it was a gift. 485 Which of the following was the judge's ruling in Jamil Blackmon v. Allen Iverson, the case in the text in which the plaintiff alleged that the defendant, a professional athlete, wrongfully failed to pay him a percentage of proceeds received from using the nickname "The Answer" in merchandising although the defendant agreed to do so after the plaintiff suggested the use of the nickname? That the defendant's promise to pay was past consideration insufficient to create a binding contract. 486 Which of the following was the result on appeal in Thelma Agnes Smith v. David Phillip Riley, the case in the text in which the plaintiff who had lived with the defendant out of wedlock for several years sought after they broke up to enforce two agreements regarding the sale and assignment of property to her? The court ruled in favor of the plaintiff on the basis that a recitation of nominal consideration of $1 along with consideration of love and affection was adequate consideration to support the agreements. 487 Sue is three months behind on her mortgage, and her lender filed negative information affecting her credit rating. Sue mailed one monthly payment to the lender along with a letter providing that she was making the payment on condition that the lender removes negative material sent to credit reporting agencies affecting her credit rating. The lender cashed the check but did not remove the negative information. Sue sues the bank for breach of contract. Which of the following is the most likely result? The bank will win because under the preexisting duty rule, Sue was already legally obligated to make the payment, and there was no consideration to support the contract. 488 Which of the following is what a person will receive in return for performing a contract obligation? Consideration 489 Sam promises his uncle, Bob, that he will lose 10 pounds and exercise every day during the spring semester in exchange for having his tuition paid for the fall semester. The uncle agrees; but after Sam has lost 10 pounds and exercised all semester, Bob refuses to pay saying that no contract existed. Which of the following is true? Consideration was present, there was an enforceable contract, and Bob has wrongfully refused to pay. 490 Which of the following is not an example of consideration? A promise to stay in a job until a particular project is complete. A promise to buy skis for $300 if you like them. 491 In a bilateral contract, the consideration for each promise is . A return promise 492 In a unilateral contract, the consideration for a promise is a[n] . Action 493 Which of the following is an exception to the rule requiring consideration? Promissory estoppel 494 Which of the following occurs when three conditions are met: one party makes a promise knowing the other party will rely on it; the other party does rely on it; the only way to avoid injustice is to enforce the promise? Promissory estoppel 495 Which of the following would not be considered an example of consideration? A promise to pay your employees as required by law. 496 Which of the following is true regarding the adequacy of consideration? Courts seldom consider the adequacy of consideration but will do so if fraud is involved. 497 As discussed in the case of Double AA Builders Ltd., v. Grand State Construction L.L.C., which of the following may be used to necessitate that a subcontractor perform according to the terms of its bid because the contractor has relied on the subcontractor's bid? Promissory estoppel 498 Which of the following is true regarding illusory promises? Illusory promises are not consideration. 499 Sam offers Betty his bicycle for $75. Which of the following is an example of an illusory promise on the part of Betty? "I'll take it if I decide to do so." 500 For a court to enforce a promise, must offer consideration. Each side to the contract 501 A promise to do something that you are already obligated to do is . Not valid consideration 502 Yolanda agrees to bathe and groom Wendy's dog, Fluffy Puff, for $30. Yolanda agreed to the price before seeing Fluffy Puff who is a chubby dog with lots of hair. Yolanda tells Wendy that if she is going to groom Fluffy Puff, the price will be $40. Wendy reluctantly agrees but tells Yolanda that she should not have been surprised that a dog named Fluffy Puff would have lots of hair. Yolanda bathes and grooms Fluffy Puff, but Wendy will only pay $30. Which of the following is correct regarding Yolanda's entitlement to the extra $10? Assuming the unforeseen circumstances rule does not apply, Yolanda is not entitled to the extra $10 because she had a preexisting duty to bathe and groom Fluffy Puff for $30. 503 Which of the following is true regarding the preexisting duty rule? Unforeseen circumstances and additional work are exceptions, but past consideration is not an exception. 504 Sally goes to have her hair trimmed and agrees to pay $40 to the stylist. While there, Sally decides that she would also like highlights. The stylist informs her that highlights will cost an additional $30. Sally agrees to the price, gets the highlights, but refuses to pay the extra amount. What is the likely result in a dispute between Sally and the stylist and why? The stylist will win because she did additional work in exchange for the extra payment; and, therefore, Sally's promise was supported by valid consideration. 505 Which of the following is true regarding the rating the World Bank gives China in relation to the ease of doing business there? China is rated in the top 10. 506 Which of the following is true regarding whether an accepted offer to pay part of a debt is consideration? Partial payment is consideration if an unliquidated debt is involved. 507 In a[n] debt, there is no dispute about the fact that money is owed and the amount of money owed. Liquidated 508 In a[n] debt, the parties either dispute the fact that any money is owed or agree that some money is owed but dispute the amount. Unliquidated 509 In return for his oral promise to pay her $100, Penny promises her uncle that she will not violate laws against speeding for one year. Penny abides by her promise, but her uncle refuses to pay. Which of the following is true regarding whether Penny is entitled to the money? Penny is not entitled to recover because she had a preexisting duty to obey laws against speeding. 510 When an accord and satisfaction is at issue, the is the new agreement to pay less than the creditor claims is owed. Accord 511 When an accord and satisfaction is at issue, the is the payment, by the debtor, of the reduced amount. Satisfaction 512 Which of the following is true regarding an accord and satisfaction? When amounts agreed upon are paid, the debt is fully discharged. 513 Which of the following is true under the UCC regarding checks marked "paid-in-full"? If a business inadvertently cashes such a check, the business has 90 days from the date it cashed that check to offer repayment in the same amount to the debtor and avoid an accord and satisfaction. 514 Which of the following is true regarding the effect of a debtor offering to pay less money than is owed as full payment on a debt when the debt itself, in its entirety, is in dispute, and the creditor agrees? An unliquidated debt is involved, and there is an accord and satisfaction. 515 Assuming no exception applies, which of the following is true regarding the effect of a debtor offering to pay less money than is owed as full payment on a debt for which there is no dispute over the amount or existence of the debt, and the creditor agrees? A liquidated debt is involved, and there is neither a satisfaction nor an accord. 516 Assuming no exception applies, which of the following is true regarding the effect of a debtor offering to pay less money than is owed as full payment on a debt for which there is a dispute over the amount of the debt, and the creditor agrees? An unliquidated debt is involved, and there is an accord and satisfaction. 517 Which of the following is true regarding the effect of a debtor offering to pay a different type of payment, for example, goods instead of money, on a debt for which there is not a dispute over the amount or existence of the debt, and the creditor agrees? A liquidated debt is involved, and there is an accord and satisfaction. 518 Which of the following was involved when the government, in attempting to help AIG, agreed with AIG to lend AIG up to $85 billion in exchange for nearly 80 percent of AIG's stock? A bilateral contract 519 Christen graduates from college, receives a job offer across the country, and moves there giving up her apartment and cancelling all the other job interviews. After she gets there, she is told that there is no job. What may she recover in most states? Reliance damages 520 Tina, an experienced pool contractor, and Bruce agree on a price for Tina to build a pool in Bruce's backyard. While the area is not known for rocks, unfortunately Tina unexpectedly encounters a significant problem with solid rock in the backyard when she starts to dig. She tells Bruce that unless she receives an extra $5,000, she cannot complete the job. Bruce agrees thinking to himself that he has a way out. When Tina finishes the pool, Bruce refuses to pay the additional $5,000. Which of the following is the most likely result of their dispute? Bruce will be required to pay because unforeseen circumstances are an exception to the preexisting duty rule. 521 Tina, an experienced pool contractor, and Bruce agree on a price for Tina to build a pool in Bruce's backyard. Tina discovers that she did not initially figure in enough of a charge for labor. She tells Bruce that unless she receives an extra $5,000 with which to hire workers, she cannot complete the job. Bruce agrees thinking to himself that he has a way out. When Tina finishes the pool, Bruce refuses to pay the additional $5,000. Which of the following is the most likely result of their dispute? Bruce will not be required to pay because he provided no additional consideration, and the preexisting duty rule applies. 522 Which of the following was the result in the case in the text Hamer v. Sidway, in which, after performance by his nephew, an uncle reneged on a promise to the nephew to pay him $5,000 if the nephew refrained from drinking liquor, using tobacco, swearing, and playing cards or billiards for money until he was 21 years of age? That the nephew could recover because he supplied consideration. "Garage Sale." Richard, who is cleaning out his garage, offers to sell Dawn a used computer for $200. Dawn replies that "I'll think about it and buy it if I decide to do so." Richard also calls Denise and offers to sell Denise a used business law book for $50. She asks if she can clean his apartment in return for the book instead of pay cash, and he agrees. Richard also agrees to sell a communications book for $5 to Jill who promises to pick it up the next day. Meanwhile, Sam comes to visit and offers Richard $45 for the business law book. Richard sells it to him because he decides his apartment is clean enough. Sam also offers Richard $50 for the used computer. Richard sells it to Sam because he does not expect to hear from Dawn. Sam sees the communications book and offers Richard $45 for it. Richard decides to forget about Jill and proceeds to sell the book to Sam for $45. The next day Denise shows up to clean Richard's apartment and is very angry because Richard did not save the book for her. Denise claims that Richard breached their contract because they had a deal. Richard says that they never had a deal because no consideration was present. He also said that even if cleaning house would be considered consideration, any housekeeping done would have been wholly inadequate to support receipt of the book because his house was already clean. Jill is also angry because Richard sold the communications book and informs him that he breached the contract he had with her. Richard tells her that he had no obligation to hold the book for her because they had a unilateral contract. Two days after they first talked, Dawn tells Richard that she would like the computer. She tells him that her response bound him and that he should have awaited her action. Richard tells Sam that he needs to return everything for a full refund. Sam refuses. 523 Which of the following is true regarding whether Richard breached a contract with Dawn? Dawn's statement created an illusory promise which cannot be enforced. 524 Which of the following is true regarding Richard's claim regarding the inadequacy of house cleaning as consideration? Richard is incorrect because house cleaning would constitute consideration that would support a contract, and the court would not likely be concerned with the fact that the cleaning duties would be light. 525 Which of the following is true regarding Jill's claim that by selling the communications book for a higher price, Richard breached the contract he had with her? Jill is correct. 526 Which of the following is true regarding the dispute between Richard and Sam regarding whether Sam must return anything? Sam does not legally have to return anything. "Bank Robbery." Safe Bank was robbed of a significant sum of cash by a robber later identified as Victor Victory. Safe Bank offered a reward of $10,000 to anyone who captured or provided information leading to the capture of Victor. Ted, a police officer in town, promised Safe Bank officials that he would apprehend Victor. While on duty, Ted arrested Victor at a hamburger joint in town. He found Victor based upon a hunch he had after Ursula, who dated Victor, told him about various places Victor enjoyed eating. The bank refuses to pay either Ursula or Ted any of the reward money. 527 Which of the following is true regarding the offer of the reward? It pertained to a unilateral contract that could be accepted with consideration consisting of performance. 528 In a lawsuit between the bank and Ted regarding the reward funds, who is likely to prevail and why? The bank is likely to prevail because Ted had a preexisting duty to catch Victor. 529 In a lawsuit between the bank and Ursula, regarding the reward funds, who is likely to prevail and why? Ursula is likely to prevail because an enforceable unilateral contract exists based on her provision of information leading to the capture of Victor. "Trick or Treat?" Penny has significant credit card debt following her diving trip with her boyfriend, Sam, to the Grand Cayman islands. Some of the diving trips cost more than she expected, and these extra expenses were unforeseen. Penny recently took a business law class and thought that she might be able to find a way out of her troubles. She owed $2,000 to Credit Card Company A and $3,000 to Credit Card Company B. She also owed $2,000 to the local dive shop for diving equipment she purchased for the trip. Penny is in negotiations with the dive shop over that amount because she had a problem with a mask fogging on the trip and had to replace it while on the trip at a charge of $100. While the mask issue did not significantly interfere with the trip, Penny thought that she should get at least some deduction on the overall bill. Penny called Credit Card Company A and told them that she was a poor student and could not afford to pay the entire $3,000 she owed. The representative of Credit Card Company A, who was working her last day, told Penny just to pay $50, and that would be considered payment in full. The representative sent Penny an e-mail to that effect. Penny was very pleased and went right out and quit her job at the campus bookstore because she did not really like dealing with student problems and thought that with the reduction from Credit Card Company A, she would have no problem in regard to having extra money. Although her parents supplied her with a large monthly allowance, Penny had the job at the bookstore so that she would have more money for clothes shopping and fun activities. In relation to Credit Card Company B, Penny called up and once again pled her case as a poor student. She talked Credit Card Company B into taking a used car with a blown-up engine worth around $1,000 in exchange for the debt. Penny did not lie about the value of the car, but she made it sound as good as possible. Transfer details regarding the car were worked out through e-mail. Finally, Penny sent the dive shop a check for $1,000 marked "paid in full." Much to her surprise and pleasure, the dive shop did indeed cash the check. Penny, however, was distraught to find that within 30 days, Credit Card Company A sent her a bill for $1,950; Credit Card Company B sent her a bill for $3,000; and from the dive shop she received a check for $1,000 along with a bill for $2,000. Faced with all these claims, Penny decided to look for work. She ended up two weeks later with a job selling beauty products that she liked much better than the bookstore job. It did not require dealing with pesky students. Assume all credit card company representatives had authority to make the agreements at issue. 530 What is Credit Card Company A's best argument in relation to enforcing Penny's obligations? That no consideration existed for its promise, and that based on Penny's circumstances and behavior, enforcing the debt would not result in injustice to Penny. 531 What is Penny's best argument in attempting to avoid obligations to Credit Card Company A? That she reasonably relied to her detriment and that she should be able to enforce the company's promise under a theory of promissory estoppel. 532 Which of the following should be the result in regard to Penny's obligation to Credit Card Company B? That because Penny offered and the company accepted a different performance in discharge of the obligation, the company is bound. 533 Which of the following would be the result in a majority of states in regard to Penny's obligation to the dive shop? That because the dive shop offered, through issuance of the check, full repayment, no accord and satisfaction existed; Penny owes the full $2,000. 534 Today, married women have been removed from the category of those lacking contractual capacity, although in a few states their capacity to enter into certain kinds of contracts is still limited. True 535 Both a minor and the adult with whom the minor contracted may disaffirm a contract based upon the minor's lack of majority. False 536 In all states parents are responsible for the torts of their minor children. False 537 As a general rule, parents are not liable for contracts entered into by their minor children. True 538 If a person's mental deficiencies have resulted in his being adjudicated insane and a guardian has been appointed for him, he has no capacity to enter into contracts; and any contract he attempts to enter into is void. True 539 For purposes of determining capacity, intoxicated persons include those under the influence of alcohol, but not drugs. False 540 A contract of an intoxicated person for necessaries will be enforced for the reasonable value of the necessaries. True 541 A contract overturned due to having illegal subject matter or for being illegal to perform is generally declared voidable. False 542 All exculpatory clauses are unlawful. False 543 In the law when both parties are equally responsible for an illegal agreement, it is known as in pari delicto. True 544 What was the result in the Case Opener in which customers of Apple attempted to disaffirm purchases of game currency by their children? The court refused to dismiss the lawsuit because no case law was provided to prove that Apple's Terms of Service served as a contract for all subsequent transactions. 545 Which of the following was the result on appeal in King v. Riedl, the case in the text in which the plaintiffs claimed that the defendant lacked the right to proceed against them for sums allegedly owed because the contractor was not licensed as a residential home builder as required by state law? The court ruled in favor of the plaintiffs on the basis that the contractor was statutorily barred from bringing an action to enforce payment because he lacked a residential home builder license and the amount of the contract satisfied statutory requirements. 546 Which of the following was the result on appeal in Eric Lucier and Karen Haley v. Angela and James Williams, Cambridge Associates LTD., and Al Vasys, the case in the text in which, after finding significant problems with their roof, the plaintiffs claimed that provisions in a home inspection contract illegally limited the liability of the defendants? The court ruled in favor of the plaintiffs on the basis that the limitation of liability provision in the contract was unconscionable and violated the public policy of the state. 547 What did the U.S. Supreme Court rule in Buckeye Check Cashing Inc., v. Cardegnaet, the case in the text involving whether the court or the arbitrator should determine decide the issues of a case when illegality in relation to a contract is claimed? That when an arbitration provision in a contract is not specifically challenged, an arbitrator should address a charge of illegality to a contract as a whole. 548 Which of the following is an element of a legally binding contract? Capacity 549 A person who has legal to contract is one who has the mental ability to understand his or her rights and obligations under a contract and, therefore, will presumably be able to understand how to comply with the terms of the agreement. Capacity 550 Which of the following is some sort of mental or physical defect that prevents a person from being able to enter into a legally binding contract? Incapacity 551 In most states a person is given full legal capacity to enter into contracts when he or she becomes before reaching the age of majority. Emancipated 552 Which of the following occurs when a minor's parents or legal guardians give up their right to exercise legal control over the minor, typically when the minor moves out of the parents' house and begins supporting himself or herself? Emancipation 553 In most cases, when a minor marries, she or he is considered . Emancipated 554 Because their contracts are , minors have the right, until a reasonable time after reaching the age of majority, to or void their contracts. Voidable; disaffirm 555 Which of the following is the age of majority in regard to the right to contract in Great Britain? There is not a set age of majority 556 Which of the following is true regarding the obligation of a minor on disaffirmance? The obligations of a minor upon disaffirmance vary from state to state. 557 When must a disaffirmance of a contract based on minority occur? Before or within a reasonable time of the minor's reaching the age of majority. 558 As a general rule, most states will not allow a minor to disaffirm contracts for which of the following? Life insurance, health insurance, and psychological counseling 559 Which of the following is the majority rule regarding a minor's misrepresentation of his or her age? That misrepresentation does not affect the minor's right to disaffirm the contract. 560 Which of the following is false regarding contracts for necessaries entered into by minors? A minor cannot disaffirm contracts for necessaries. 561 Which of the following occurs when a person reaches the age of majority and states, either orally or in writing, that he or she intends to be bound by the contract entered in to as a minor? Express ratification 562 A[n] occurs when a former minor does not specifically state that he affirms a contract entered into as a minor but takes some action that is consistent with intent to ratify the contract. Implied ratification 563 Which of the following is true regarding the ability of persons suffering from a mental illness to enter into a binding contract? Persons suffering from a mental illness may have full, limited, or no legal capacity to enter into a binding contract depending on the nature and extent of their mental deficiency. 564 Which of the following is true once a guardian has been appointed for a person who has been adjudicated insane? If a person has been adjudicated insane and has a guardian appointed, that person has no capacity to enter into contracts and any contract he does attempt to enter into is void. 565 Which of the following is true if a contract is disaffirmed on the basis of intoxication? Each party to the contract must return the other to the condition he or she was in at the time the contract was entered into. 566 Because does not favor intoxication, the courts tend to be unsympathetic to intoxicated parties and will fairly liberally interpret behavior that seems like ratification as ratifying the contract. Public policy 567 Which of the following is true regarding an agreement to commit a crime or a tort? An agreement to commit a crime is unenforceable, and an agreement to commit a tort is unenforceable. 568 If a legal contract is formed and the subject of the contract then becomes illegal under a new statute, the contract is . Discharged 569 How many states have statutes requiring that people working in certain professions obtain a license before practicing their craft? 50 570 If a licensing statute is intended to protect the public's health, safety, and welfare, an agreement with an unlicensed professional is typically deemed . Illegal and unenforceable 571 Which of the following occurs when a party gives a loan at an interest rate exceeding the legal maximum? Usury 572 Which of the following is the maximum interest rate? It varies depending on the state involved. 573 How many states engage in at least some regulation of gambling? 50 574 Which of the following is a term for laws that limit the types of business activities in which parties may legally engage on Sundays? Blue laws 575 Bob is hired to do computer sales for an electronics store. He agrees that if he leaves his employment, he will not work for another computer store within 25 miles for a period of two years. That type of agreement is called a[n] . Covenant not to compete 576 The term refers to the fact that an agreement is so unfair that it is void of conscience. Unconscionable 577 A party who claims that he or she could not understand contractual terms because of tiny, hard-to-read print on the back of an agreement and the excessive use of legalese is referring to which of the following? Procedural unconscionability. 578 Which of the following involves overly harsh or lopsided substance in an agreement? Substantive unconscionability. 579 A[n] contract is a contract created by a party to an agreement that is presented to the other party on a take- it-or-leave-it basis. Adhesion 580 A statement releasing one of the parties to an agreement from all liability, regardless of who is at fault or what the injury suffered is, would be referred to as a[n] agreement. Exculpatory 581 In the law, when both parties are equally responsible for an illegal agreement, it is known as . In pari delicto 582 Which of the following are contracts that contain multiple parts which can each be performed separately and for which separate consideration is offered? Severable contracts 583 A[n] contract is one requiring complete performance by both parties, even if it appears as if the contract contains multiple parts. Indivisible 584 Which of the following was the result in the case in the text William Cavanaugh v. Margaret McKenna, the case in which the plaintiff was sued for opening a funeral home after she agreed to refrain from doing so in her divorce as part of a covenant not to compete with her ex-husband? That the agreement was invalid because it was entered into in connection with a divorce, not in connection with either an employment agreement or the sale of a business. That the covenant was reasonable and valid and construed liberally because it was most analogous to the sale of a business. "Irresponsible Teen." At age 17, in a state in which the age of majority is 18, Sally purchased a prom dress from Formal Stuff. She wore it to the prom and then attempted to return it to the store claiming that she was a minor and that she was entitled to a refund. The dress had clearly been worn and had a purple stain which Sally claimed was from grape juice. Additionally, a few days before she turned 18, Sally purchased a used car from Dings and Dents used cars. She had a deal whereby she paid $100 per month on the car. She drove the car and made payments for six months after she turned 18. Sally then returned the car to Dings and Dents, informed the owner that she was under 18 when she entered into the contract to purchase the car, and told the owner that she was returning the car for a full refund. Dings and Dents claimed the car was a necessity. Sally and her parents disagreed claiming that the parents were ready and willing to provide a car to Sally, and that she only purchased the car from Dings and Dents because she liked that particular style and color. When purchases of the dress and car were made, the sellers knew that Sally was under the age of 18. 585 Which of the following is true regarding Sally's attempt to return the damaged dress? In some states Sally would have an obligation of restitution to the store. 586 In the dispute between Sally and the owner of Dings and Dents, which of the following is true regarding the claim of Sally and her parents that the car was a necessary? Even if a minor disaffirms a contract for a necessary, the minor will still be held liable for the reasonable value of the necessary. 587 In the dispute between Sally and the owner of Dings and Dents, which of the following is true regarding the effect of Sally turning 18 before she attempts to disaffirm the contract? So long as, after reaching the age of majority, Sally did not state orally or in writing that she intended to be bound by the contract, then she did not commit an express ratification. "Useless Friend." Charles, who is very gullible, is friends with Bobby. Bobby, who cannot be trusted, decides to try to bind Charles to a contract in Bobby's favor. Bobby has Charles sign a contract promising to wash Bobby's car once a week for a month for $80 per month in payment. The contract incorporated by reference terms on the back. The terms on the back were in very small print and required Charles for one year to cook dinner for Bobby, do his laundry, and clean his apartment. Bobby is also very angry with his former girlfriend, Tessa, and decides to start rumors, that would constitute the tort of defamation, such as that she has a vile disease, cheated on tests, and stole from friends. Bobby wants to enlist the help of Charles in smearing Tessa but knows that Charles would be hesitant to assist in his endeavors. One evening, however, Charles drank too much beer and was clearly intoxicated - a fact apparent to Bobby. Bobby had him sign a contract agreeing to defame Tessa for $50. When he sobers up, Charles tells Bobby that he was drunk and that he has no intention of defaming Tessa, who also happens to be Charles' new girlfriend. He also finally takes a look at the contract involving work for Bobby and tells Bobby that the contract is outrageous. 588 Which of the following is true under the Restatement of Contracts, Section 16, regarding the claim of Charles that he should be able to avoid the contract involving Tessa because he was intoxicated? Contracts of an intoxicated person are voidable if the other party had reason to know that because of the intoxicated person's condition, that person was unable to understand the nature and consequences of the transaction or was unable to act in a reasonable manner in relation to the transaction. 589 Which of the following is true regarding Charles' claim that he had no obligation to defame Tessa? Charles is correct in that he could not be legally obligated to commit defamation. 590 Which of the following would be a possible defense to Bobby's contract involving chores based upon the size of the print on the back of the contract? Procedural unconscionability 591 Which of the following would be a possible defense to Bobby's contract involving the harsh and lopsided terms in the contract involving chores? Substantive unconscionability "Beauty Shop Woes." When Janice went to work as a hair stylist in Rick's beauty shop, she entered into an agreement with Rick whereby if she left she would not work for another beauty shop within 50 miles for 2 years. Rick trained Janice in a number of new techniques. After nine months, Janice was offered a great job down the street at a new beauty shop, she quit Rick, and had a number of customers follow her down the street to her new job. Rick claimed that she had signed a contract and had no right to go to work at the new shop. Janice disagreed and told Rick that no judge in the country would enforce such an agreement. Janice told Rick that she was more worried about a customer who was threatening to sue her because her hair turned green after Janice worked on it. Janice said that she knew that the customer's hair was damaged; but that she told the customer that odd results could result from a dye attempt, and had her sign a contract that she released Janice from all liability and would not sue. The customer, however, sued anyway. 592 The agreement Rick and Janice entered into is referred to as which of the following? A covenant not to compete 593 Which of the following is true regarding Janice's claim that no judge in the country would enforce such an agreement? She is incorrect because courts across the country vary in regards to the enforceability of such agreements. 594 What type of agreement did Janice have the customer with green hair sign? Exculpatory 595 There is no certain age of majority in Great Britain, typically deals with immaturity and is dealt with on a case by case basis. If the person seems that they are able to look out for their own best interest, also if the agreement favors the adult the person is considered to have lacked maturity. 600 A mistake of fact is an erroneous belief about the facts of the contract at the time the contract is concluded. True 601 Mistakes in contract law result from untrue statements made by one party to the contract. False 602 For fraudulent misrepresentation to be the basis for a contract rescission, the statement of fact need not be an actual assertion. True 603 A negligent misrepresentation results when the party making the statement would have known the truth about the fact had he used reasonable care to discover or reveal it. True 604 When a fraudulent misrepresentation is at issue, intent to deceive may not be inferred. False 605 Nondisclosure involves the active hiding of the truth about a material fact. False 606 Scienter is present when the party accused of making the fraudulent assertion believed that the assertion was false or made the claim without any regard for whether it was true or false. True 607 Undue influence refers to those special relationships in which one person has taken advantage of his or her dominant position in a relationship to unduly persuade the other person and interfere with that person's ability to make his or her own decision. True 608 Threatening physical harm or extortion to gain consent to a contract is classified as undue influence. False 609 Unconscionability is a concept strictly limited today to the sale of goods. False 610 Susie and Sam have significant funds invested with a stock broker named Will and also with other brokers. Susie and Sam decided to divorce. Susie was really interested in investments, so the divorce decree provided that Susie would retain "all investment accounts," and Sam would receive a "cash settlement" from funds the parties had in the bank. Six months after the divorce was final, it was discovered that Will had absconded to parts unknown with all the money invested with him. Susie could have withdrawn the funds at the time of the divorce, before Will left town, but she had no reason for concern and left the funds there for investment purposes. After discovering Will's wrongdoing, Susie asked Sam to renegotiate the divorce agreement, but he refused. Which of the following is the most likely result of their dispute if the court follows the decision of the court in Simkin v. Blank, discussed in the text? The original divorce agreement will be enforced only in part because based on their mutual mistake in regard to investing with Will, the parties will be required to renegotiate the part of the contract involving the investments with Will. 611 Which of the following was the result in Orville Arnold and Maxine Arnold v. United Companies and Michael T. Searls, involving the issue of whether an arbitration agreement entered into as part of a consumer loan transaction containing a substantial waiver of the consumer's rights, including access to the courts, while preserving for all practical purposes the lender's right to a judicial forum, is void as a matter of law? The court found that the waiver of the plaintiffs' rights to a judicial forum considered along with the defendants' retention of such rights and other unfair aspects of the agreement required a finding that the arbitration agreement was void. 612 Which of the following involves a promise to buy or sell that the courts will require the parties to obey? Legal assent 613 Without legal assent a contract may be . Voidable 614 When a contract is voidable, it may be . Rescinded 615 Which of the following was the result on appeal in the Case Opener involving the claim that Michael Jordan owed $5 million based on his agreement to pay the plaintiff's mother on the premise that he was the father although it was later determined that the child was not his? That the agreement to pay $5 million could be rescinded based on either a mutual mistake of fact or based on the mother's fraud. 616 Which of the following is true regarding European courts? European courts permit rescission of the contract for a mistake of value when the mistake involves more than 50 percent of the value at the time of the contract. 617 When a mistake of fact occurs, is absent. Legal assent 618 A[n] mistake is the result of an error by one party about a material fact. Unilateral 619 A[n] mistake is a mistake that is shared by both parties to an agreement. Mutual 620 Why is it important to distinguish between unilateral and mutual mistakes? Because it determines which contracts are voidable. 621 Although there are some exceptions, a[n] mistake does not generally void a contract. Unilateral 622 In cases where both parties to a contract are mistaken about either a current or a past material fact, either can choose to the contract. Rescind 623 George offers to sell Penelope a ring that George found in his yard. He and Penelope look at the ring and decide that they are not sure what it is, probably just a shiny stone. Penelope pays George $10 for the ring. The ring turns out to be a diamond worth much more than $10. George wants the ring back, and Penelope refuses. What is the most likely result? The ring will remain with Penelope because the parties contracted on the assumption that they did not know the value of the ring. 624 Which of the following is true regarding the elements that must be satisfied in order for a mutual mistake to interfere with legal consent? The required elements are: (1) a basic assumption about the subject matter of the contract, (2) an adverse effect on a party who did not agree to bear the risk of mistake at the time of the agreement, and (3) a material effect on the agreement. 625 What was the result in the Peerless case discussed in the text in which there were two ships named Peerless and the parties disagreed over which ship was the subject of the contract? The court rescinded the contract. 626 A[n] misrepresentation results from a false statement about a fact material to an agreement that the person making the statement believed to be true. Innocent 627 When a person who makes a misrepresentation has no knowledge about the falsity of the claim, it is said that the person lacked . Scienter 628 Which of the following is true regarding the effect of an innocent misrepresentation on a contract? It permits the party that was misled by the false statement to rescind the contract, but damages are not available. 629 Which of the following was the result on appeal in the case of Evan Rothberg v. Walt Disney Pictures, the case in the text in which the defendant allegedly used undue influence to obtain a release of employee benefits from a person in the hospital dying of AIDS? The court ruled that a jury question was presented as to whether undue influence was present. 630 Which of the following is true on appeal regarding the case of Mary W. Scott v. Mid-Carolina Homes Inc., discussed in the "Case Nugget" in which the plaintiff sued to recover damages after a salesperson allegedly mistakenly agreed to sell a mobile home to her for a price that was too low, later told her the mobile home could not be sold because of a bent frame, and then proceeded to sell it for a higher price to other buyers? The court refused to find that the defendant had the right to rescind the contract based on the alleged unilateral mistake. 631 In China which of the following is true regarding the treatment of fraudulent misrepresentations by outsiders? Outsiders have been fined heavily and refused permission to enter into more agreements with Chinese firms. 632 A[n] is a false representation of a material fact that is consciously false and intended to mislead the other party. Fraudulent misrepresentation 633 Which of the following involves the active hiding of the truth about a material fact? Concealment 634 Which of the following refers to an intentional failure to provide pertinent information about a projected contract? Nondisclosure 635 In determining whether a mistake of fact occurred, what of the following is true? Courts look to determine whether a mistake of fact occurred at the time the contract was concluded. 636 Which of the following refers to special relationships in which one person has taken advantage of his or her dominant position in a relationship to unduly persuade the other person? Undue influence 637 Which of the following is found when one party was forced into an agreement by the wrongful act of another? Duress 638 Which of the following is involved in a situation in which a person refuses to perform according to a contract unless the other person either signs another contract with the one making the threat or pays that person a higher price than was specified in the original agreement? Economic duress 639 Mary and Jason discuss the fact that a new teacher is being hired for business law at their school. Jason mentions that he does not yet have a book, and Mary agreed to sell Jason a used business law book for $30 for the upcoming semester. When the new semester begins, the new business law teacher announces that a new custom business law text will be used that is only available in the campus bookstore. Jason wants a refund. Which of the following is Mary's best defense? That Jason knew of the change of change of teacher and bore the risk of mistake. 640 Which of the following occurs when a party threatens to file a criminal lawsuit unless consent is given to the terms of a contract? Duress 641 Selma agreed to buy a used car from Hillary for $2,000. Hillary drew up the contract providing that the exchange would occur the next week. Unfortunately, Hillary was not very good with the keyboard and typed in $1,200 as the price of the car. Selma noticed that the contract said $1,200, not $2,000, and was very pleased. She signed it without saying anything. When it was time to make the exchange, Selma gave Hillary $1,200. In response to Hillary's inquiry regarding an additional $800, Selma pulled out the contract and showed her that it said $1,200. Hillary immediately responded that she had made a typographical error. Selma said that there was no mistake on her part because she knew exactly what she was doing and that she thought that Hillary had decided to give her a deal on the car. Which of the following is Hillary's best argument for a rescission of the contract? That the mistake resulted from an accidental clerical error and that it would be unconscionable to enforce the contract. 642 Which of the following was the result on appeal in the case in the text, Gary W. Cruse and Venita R. Cruse v. Coldwell Banker/Graben Real Estate Inc., in which the court considered whether the plaintiffs could prevail based on alleged misrepresentations by a salesman that a house was new when it was actually not new leading the plaintiffs to forego a home inspection? That a jury question was presented on whether the plaintiffs could have justifiably relied on the defendants' misrepresentation. 643 When duress is at issue, the needed for legal consent has been removed by the specifics of the threat. Free will 644 Which of the following occurs when one of the parties to a contract has so much more bargaining power than the other that he or she dictates the terms of the agreement? Unconscionability 645 The resulting contract from an agreement reached because one of the parties has so much more bargaining power than the other that he or she dictates the terms of the agreement is called which of the following? An adhesion contract 646 Which of the following occurs in Australia whenever an illegitimate threat is made to hold on to goods unless a payment is made or an agreement is entered into? Duress of goods 647 The reasoning in innocent misrepresentation cases resembles the reasoning in a[n] case. Mutual mistake 648 As discussed in the text, which of the following is true regarding Japanese law and consumers? A special Consumer Contracts Law was developed to place consumers and businesses on a more equal footing in transactions. "Pet Pig Farm." Marcy wanted to buy Lucy's land and use it to breed small pigs to be kept as pets. Marcy told Lucy that having water on the property was very important although she did not mention to Lucy her plan to breed small pigs. Lucy assured her that a spring ran through one corner of the property. Therefore, Marcy agreed to buy the farm. Marcy, who loved pigs, assumed that the neighbors would be pleased with the pigs being in the area. Lucy also agreed to sell Marcy a used truck for $5,000. After the contract for the land sale was entered into, Marcy had a land survey done, and it was discovered that actually the spring did not run through the corner of Lucy's property. The area in which the spring ran actually belonged to a neighbor. Additionally, when Lucy brought Marcy the used truck, Marcy said, "That's not the truck!" It was discovered that Lucy, who had two trucks, thought that Marcy had bought the older truck although Marcy thought she had purchased the newer truck. Marcy was also surprised when she received a petition signed by all surrounding landowners objecting to the presence of the pigs and threatening to sue Marcy for nuisance. It will cost Marcy more than she had agreed to pay Lucy in order for Marcy to obtain a similar farm which actually has a spring on it. 649 Assuming that Lucy innocently made a misrepresentation regarding the spring running through the corner of the farm with no reason to believe that was incorrect, which of the following is true, considering only the lack of a spring issue, if Marcy does not want to go through with the sale? Marcy may rescind the contract, but she may not recover damages. 650 Assuming that Lucy fraudulently made a misrepresentation regarding the spring running through the corner of the farm knowing the statement was not correct, which of the following is true, considering only the lack of a spring issue, if Marcy does not want to go through with the sale? Marcy may rescind the contract, or she may keep the contract and sue for damages. 651 Which of the following would be the result if Marcy attempts to rescind the contract and recover damages only on the basis of the neighbor's objection to a pig farm? Marcy may not rescind the contract nor may she recover damages because she, Marcy, made a unilateral mistake. 652 Which of the following is the most likely result in the dispute between Marcy and Lucy regarding which used truck was sold assuming that both Marcy and Lucy were innocently mistaken and did not intend to defraud the other? The contract will be rescinded. "Cheap Motorcycle." Tony, a hateful, disgruntled, business law teacher notices that a student, Peter, who is past the age of majority, has a nice motorcycle that is for sale. Peter has struggled through school, is in his last semester, and needs to pass business law in order to graduate. Tony tells Peter that he would like to see Peter pass and, in the next sentence, says that he wants to buy the motorcycle for $100, a price far below the value of the motorcycle. Peter asks if Tony is serious about the price, and Tony replies, "I have the power here! Take it or leave it!" Tony proceeds to draw up a contract for the sale of the motorcycle for $100 which Peter signs. Peter does some research and finds that Tony has had several arrests for driving under the influence in a nearby town. As an act of revenge, Peter tells Tony that unless Tony sells Peter his new Mustang convertible for $50, he is publishing the facts about the arrests in the school newspaper. Tony reluctantly agreed to the deal. 653 Which of the following is true if Peter seeks to rescind the contract for the sale of the motorcycle? Peter may rescind the contract on grounds of duress or on grounds of unconscionability. 654 Which of the following is an appropriate term for the contract drawn up by Tony? Adhesion 655 Which of the following is true if Tony seeks to rescind the contract for the sale of the Mustang? Tony may rescind the contract on grounds of duress. "Scheming Friends." Willy very much wants to rent a basement apartment in Weaver's home. Willy threatens to tell all Weaver's friends that he and Weaver had been arrested for illegally smoking marijuana unless Weaver rents the apartment to him for $100 per month. (The information regarding the arrests is true.) Weaver reluctantly agrees to rent the apartment to Willy for $100 per month. Willy also wants to buy Weaver's car. Weaver runs back the odometer on the car before Willy test drives it. Willy is impressed by the low mileage and agrees to buy the car. Weaver offers to sell Willy a ring for Willy's fiancée. Weaver tells Willy that the ring is a diamond and believes that to be true. After the deal is made, however, a jeweler friend of Weaver informs him that the ring is a fake. When Willy shows up with the money, Weaver says nothing. He just hands Willy the ring and takes the money. Later, Willy finds out that the odometer was run backwards from another friend to whom Weaver confided. Willy also finds out from his girlfriend that the ring is a fake. 656 Of which of the following is Willy guilty in threatening to tell friends about the arrest unless Weaver rents the apartment? Duress 657 Which of the following would be the most likely result if Weaver attempts to rescind the agreement to rent the apartment? He will be able to rescind the agreement based upon Willy's threat of extortion. 658 Which of the following is the proper legal term, if any, for Weaver's action in regard to running back the odometer? Concealment. 659 Which of the following is true regarding Willy's rights in regards to the car purchase? He will be able to rescind the contract because of the fraudulent misrepresentation on the part of Weaver. 660 Which of the following is true regarding Willy's rights in regards to the ring purchase? He will be able to rescind the agreement because Weaver was guilty of fraudulent misrepresentation. 661 There is federal U.S. legislation titled "Statute of Frauds". False 662 Contracts related to an interest in land fall within the statute of frauds. True 663 In some states a promise to pay a debt that has already been discharged in bankruptcy must be in writing in order to be enforceable. True 664 The concept of performance has no effect on the statute of frauds. True 665 In order for the statute of frauds to be satisfied, all parties to a contract must sign the writing. False 666 If a contract's terms require that modification be in writing, oral modifications are inadmissible and unenforceable. True 667 The purpose of the parol evidence rule is to prevent attempts to use only oral evidence to prove agreements. False 668 Whenever a written agreement under the statute of frauds contains a serious, and obvious, typographical error, parol evidence is admissible to demonstrate that the error was indeed an error, as well as to set forth the proper term. True 669 When a court deems a contract integrated, parol evidence is admissible. False 670 The Uniform Electronic Transactions Act reflects the decision that electronic transactions do not constitute a written copy because the electronic transaction is not technically a written document. False 671 Sally has a large farm and significant other assets. She agreed to loan her nephew Todd $100,000 with payments of principle and interest to be made yearly. A few years later she and Todd got into a dispute because Sally did not like his new girlfriend, Polly. Soon thereafter Todd got notice that Sally was suing him for not paying interest on the note. Todd defended on the basis that two years after the initial loan agreement was entered into, he and Sally entered into an oral agreement that he would perform services on her farm in lieu of paying interest on the note. If the court follows the reasoning of the court in the Case Opener involving Monroe Bradstad and Jeanne Garland, which of the following is the most likely result of the dispute between Sally and Todd involving whether he owes past interest amounts? Assuming the court credits Todd's account of events, Todd will not be required to pay the interest amounts because the oral agreement will be considered a separate enforceable agreement. 672 Which of the following was the result in the Case Nugget in the text involving the dispute between Dr. Ralph M. Aurigemma and New Castle Care, LLC, involving whether an oral agreement entered into on September 4 involving Dr. Aurigemma serving as medical director from October 1 of that year until October 1 of the next year was enforceable? That the contract was not in writing and, therefore, could not be enforced. 673 Blaine and Amanda orally agreed with Medical Center X for an in vitro fertilization procedure that would not result in the birth of an autistic child. They later signed a written contract stating that the medical center could not promise an absence of physical or mental defects and assumed no responsibility for such defects. The child conceived had autism. Which of the following is the most likely result of the parents' suit for breach of the oral agreement if the court follows the decision Scalisi et al. v. New York University Medical Center discussed in the text? The medical center will prevail based upon the written contract. 674 [Show More]
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