LEG 100 Unit two Milestone business law 1 Which of the following statements about torts and crimes is true? • Torts carry a legal remedy of damages, while crimes do not. • A criminal act is immora... l, while a tortious act is not. • Tort law is more concerned than criminal law about the reasons for a defendant’s actions. • An act may either be a crime or a tort, but not both. CONCEPT Introduction to Tort Law 2 An example of foreseeable damages from a faulty repair of your car that led to an accident would be __________. • your loss of one year's wages from a job, since you were fired that day for being late after the accident • additional hotel and travel charges that you incurred, because you missed your flight that day as a result of the accident • your loss of a winning lottery ticket that blew away in the wind during the accident • the cost to repair your vehicle, as well as all damage to other vehicles involved in the accident CONCEPT Limitations on Contract Remedies 3 To be enforceable, a contract typically must __________. • have mutual assent, legal value exchanged by both parties, legal capacity of both parties, and be for a legal purpose • have mutual assent and legal capacity of both parties, and be in written form • have assent and consideration from at least one party, and have legal capacity and purpose from both parties • have mutual assent, legal value exchanged by both parties, and be entered into in good faith CONCEPT Contract Formation 4 A laundry detergent company advertises that its new product can remove any stain from clothes in just one wash, although company testing has shown that it oftentimes takes two or three washes for a stain to disappear. Which type of intentional tort does this represent? • Tortious interference with contract • Misrepresentation • This action does not rise to the level of an intentional tort. • Defamation CONCEPT Intentional Torts 5 The Uniform Commercial Code (UCC) is the primary source of law for contracts regarding __________. • the sale or lease of goods only • the sale of goods and services • the sale of goods, services, and real estate • the sale of goods and real estate CONCEPT Sources of Contract Law 6 A red car crashes into a blue car at night on a dark road. The driver of the blue car sues the other driver for negligence. Assuming it is true, which of the following would represent a strong defense against the negligence claim? • The driver of the blue car was drunk and driving erratically, which caused the accident. • The red car was rushing to the scene of another accident to provide medical care. • Both drivers assumed the increased risk associated with driving at night. • Neither driver was wearing a seatbelt. CONCEPT Negligent Torts: Damages and Defenses 7 Contracts function as a symbol of __________ in modern society. • wealth • free will • disorder • oppression CONCEPT General Perspectives on Contracts 8 Which of the following conditions always renders a contract unenforceable? • If the contract is informal (i.e., verbal rather than written) • If the contract is deemed to be unfair to one party • If a party to the contract is unable to fulfill the terms of the contract • If a party to the contract is deemed incapacitated by intoxication or mental state CONCEPT Unenforceable Contracts 9 Heidi purchases an original work by one of her favorite sculptors from an art dealer for $8,000. When the sculpture is delivered, Heidi has it inspected by an art appraiser, who informs her that the sculpture is a fake. When Heidi calls the art dealer to tell him the news, he is honestly shocked and appalled. What remedy does Heidi have in this scenario? • Heidi is entitled to recover the purchase price of the sculpture, as well as the money she spent to have the sculpture appraised. • Heidi is only entitled to recover the money that she paid for the sculpture. • Heidi has no recourse in this scenario, because she accepted delivery of a non-conforming good. • Heidi may sue the art dealer for specific performance and require the dealer to secure the original sculpture in any way possible. CONCEPT Buyer's Remedies Under the Uniform Commercial Code 10 An adult climbs over a fence onto a neighbor's property and falls into the pool, which is also surrounded by a fence. Assuming the adult is injured in a legally recognizable way, is the neighbor liable for negligence if the adult then sues? • No, because the adult was trespassing on his neighbor's property. • Yes, because homeowners have a duty of care to anyone on their property at all times, no matter the circumstances. • Yes, because the adult had legally recognizable injuries. • No, because the neighbor exercised a reasonable degree of care by fencing in her property and her pool. CONCEPT Negligent Torts: Liability 11 Last September, you and I discussed you cutting my lawn this summer for $50 per week. This June, you began cutting my lawn every week. We have a(n) __________. • implied contract • express contract • quasi-contract • unenforceable contract CONCEPT Different Types of Contracts 12 Select the statement that is true of consumer law prior to the 20th century. • It was rooted in the fact that consumers had much more direct contact with producers than they do now. • It essentially functioned in the same way as current products liability law. • It relied primarily on the threat of litigation to ensure product safety. • Its central tenet was "seller beware." CONCEPT Products Liability 13 A manufacturer of a portable circular saw is sued by Dennis, who, while using the saw, put it down on the ground in front of him after it was shut off but while the blade was still turning. The still-circulating saw creeped across the floor, causing significant personal injury to Dennis' foot. Dennis sued the manufacturer for defective design of the circular saw based on it not having a brake mechanism or a retractable cover for the blade once the saw was turned off. How strong of a case does Dennis have in his strict liability lawsuit against the manufacturer based on the defective design of the circular saw? • Weak, because Dennis assumed the risk of injury when he chose to use a circular saw, which is known to be dangerous. • Weak, because there is no evidence that the saw was unreasonably dangerous in normal use. • Strong, but only if Dennis can prove that the saw was less safe when turned off than other saws on the market. • Strong, because the saw was unreasonably dangerous under circumstances that would be foreseeable as normal use by a consumer. CONCEPT Strict Products Liability 14 Cynthia orders 100 shirts in a variety of colors for her screenprinting business from Juan, a shirt supplier. Before Juan ships the shirts, Cynthia calls him to inform him that she is going out of business and no longer needs the shirts. Juan decides to resell the 100 shirts at public auction. What further remedy does Juan have in this scenario? • Juan may sell the shirts at public auction without notifying Cynthia, since she is in breach of contract. • If Juan sells the shirts at auction for more that the original contract price, he is obligated to share the profits, less any incidental costs, with Cynthia. • If Cynthia becomes aware of the public auction, Juan may refuse to allow Cynthia to bid on the shirts since she is in breach of contract. • Since Juan is reselling the shirts at public auction and they are not a perishable good, he must notify Cynthia of the public sale and allow her to bid if she wishes. CONCEPT Seller's Remedies Under the Uniform Commercial Code 15 Select the example that is inconsistent with the provisions of the UCC for contract remedies for a seller's breach of contract. • The sales contract for a swimming pool supply store allows for a single remedy for any contract breaches. • In its sales contract, a maker of musical instruments gives buyers a maximum of two years to raise any concerns relating to breach of contract. • The sales contract for a lumber mill that sells building materials includes a liquidated damages clause for the amount of $50 million in the event of a breach of contract. • The sales contract for a consumer electronics company excludes specific performance as a remedy for non-delivery of items ordered by the buyer, but it allows for refunds. CONCEPT Remedies in General Under the Uniform Commercial Code 16 Malia signs a contract to purchase a used car. The seller breaches the contract, but Malia is able to buy the exact same car from another dealer at a better price. Malia sues the original seller and is awarded $2. This is an example of which type of monetary award? • Nominal damages • Punitive damages • Restitution • Incidental damages CONCEPT Monetary Awards 17 A children's highchair is recalled after numerous reports emerge of children slipping out of the safety restraint and falling to the floor, injuring themselves. The product has a label that warns parents to strap children in while they are sitting in the highchair. Several parents sue for negligence. How strong is their negligence case against the product manufacturer? • Weak, because proximate cause is difficult to establish. • Weak, because parents can't expect children to sit still in a highchair. • Strong, because the highchair clearly has a defective design that makes it unsafe. • Strong, because the highchair's manufacturer failed to warn users of its potential dangers. CONCEPT Negligent Products Liability 18 Which of the following scenarios would likely result in an order for specific performance or an injunction, rather than a monetary award? • Uma buys a copy of a photograph she loves from a local home decor shop. When she has the photograph framed, the framing company damages it and refuses to pay for its restoration. Uma sues the framing company for breach of contract. • Cheryl has all of her employees sign non-compete agreements that extend for two years after their employment ends. Cheryl's former employee, Jen, starts working for a competitor three months after she stops working for Cheryl. Cheryl files a suit against Jen for breach of contract. • Darien buys a new car from a dealership that is supposed to come with leather seating. When he takes possession of the car, it has regular fabric seating. Darien sues the car dealership for breach of contract. • Martina pays Omar $250 to deliver a cord of firewood to her home. Omar never delivers the wood, and Martina eventually sues him for breach of contract. CONCEPT Equitable Remedies: Specific Performance and Injunction 19 In which scenario would strict liability most likely apply? • A lightbulb burns out prematurely. • A car's radio sometimes stops working. • An airplane's brakes fail in freezing weather. • A dishwasher fails to fully clean the dishes. CONCEPT Strict Liability 20 A drug manufacturer of an oral contraceptive is sued for strict product liability when Alana suffered severe side effects from the drug. The manufacturer defends against the claim on the basis of assumption of risk and proves that both the prescribing physician and Alana knew of the potential side effects, and that Alana continued to use the drug after she experienced those side effects. How strong is the manufacturer's defense against Alana's claim? • Strong, because Alana knew of the potential for side effects, actually suffered these side effects, and decided to continue to use the drug anyway. • Strong, because the utility of oral contraceptives outweighs their known side effects. • Weak, because assumption of risk is not a recognized defense to strict product liability claims involving pharmaceuticals. • The strength of the defense cannot be determined without knowing if the drug came with a written warning about potential side effects. CONCEPT Problems with Strict Products Liability 21 Which contract generally must be in writing under the Statute of Frauds? • Miguel agrees to replace his neighbor's roof in three months for $15,000. • Harlow agrees to pay $50 to anyone who can help her find her lost dog. • Neesa agrees to co-sign a loan for her daughter to pay for college tuition. • Finn agrees to buy a watch from a friend for $300. CONCEPT Statute of Frauds [Show More]
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